Lao People's Democratic Republic
The Lao People's Democratic Republic (Lao PDR) is the only landlocked country in Southeast Asia, and it has the smallest population of the six GMS countries. But it is rich in natural resources, and has benefited from vigorous economic growth in recent years thanks to its mining, agricultural, and energy exports. The country has made impressive progress in achieving many of its Millennium Development Goals. Poverty and hunger have been greatly reduced, and education and health outcomes have improved. E‰orts to diversify the economy and strengthen connectivity and collaboration with its GMS and ASEAN partners should lead to continued growth and prosperity in the coming years.
|Population||7.23 million (2020)||Average Annual Population Growth Rate||1.6% (2015-2020)|
|GDP at PPP (current international dollars)||59.7 billion (2020)|
|GDP per capita at PPP (current international dollars)||8,563 (2020)|
Although commercial farming is on the rise, agriculture in the Lao PDR is still mostly subsistence. Rice—especially sticky rice—is the major crop, and is planted on nearly three-quarters of the cultivated land. Other important products include maize, coffee, sugarcane, and cassava, as well as industrial trees such as rubber and eucalyptus. The Lao PDR is looking to boost the contribution of agriculture to rural poverty reduction, and is collaborating with its GMS partners to modernize and commercialize the sector. This collaboration includes revising its policies on cross-border agricultural trade to attract investment and boost exports.
Utilizing its impressive water resources, the Lao PDR generates most of its electricity by hydropower, with 50 hydro dams in operation and more being built. The country intends to increase its electricity exports, and has plans to enhance its infrastructure for transmission to Cambodia, the PRC, Thailand, and Viet Nam. Meanwhile, the government’s priority is to ensure that all domestic households have access to electricity, and it has made steady progress in this regard—92% of the population are now connected, from 15% 20 years ago.
The Lao PDR’s landscape is dominated by rugged mountains and extensive rivers. In addition to water, the country is rich in natural resources such as minerals and forests, and has a great deal of biodiversity. In recent years, the Lao PDR has strengthened its biodiversity conservation eorts in important forest areas. Looking ahead, the country is aiming to establish better systems for controlling air and water pollution caused by agriculture and industry. With its GMS partners, the Lao PDR is also working on green freight solutions for developing more environmentally friendly transport.
The Lao PDR views human resource development as essential for achieving its socioeconomic development objectives. National priorities include increasing investments in the sector and ensuring that opportunities for human resource development are accessible to all. The Lao PDR has been working to expand and improve technical and vocational education and training, as well as higher education. The country has made considerable progress in improving the health of its people in recent decades. Maternal and child mortality have been reduced, malaria deaths are on the decline, and vaccination coverage is increasing. Health priorities include achieving universal health coverage, improving cross-border disease control, and reducing malnutrition.
Recognizing the importance of ICT to socioeconomic development and global connectivity, the Lao PDR has steadily improved its telecommunications infrastructure. More than 37% of the population now uses the internet through mobile broadband and fixed (wired) broadband, up from just 20% in 2015. Eorts are under way to further modernize the sector and expand its geographical reach. The targets include extending the telecommunications network to reach 91% of the villages and installing fiber-optic cables in all the country’s districts. The government is also promoting the use of ICT in schools and exploring measures to ensure internet affordability.
The Lao PDR’s tourist attractions include World Heritage sites such as the historic town of Luang Prabang and the ancient Vat Phou Temple complex (in Champasak Province). The country’s many ecotourism opportunities and vibrant capital city, Vientiane, also entice visitors from near and far. Of the GMS countries, the Lao PDR receives the highest proportion of international visitors relative to population size. National tourism priorities include local job creation, infrastructure improvement, and environmental sustainability.
The Lao PDR is actively pursuing its goal of transitioning from a landlocked to a “land-linked” country. Significant progress has been made in improving the nation’s roads, waterways, and air-transport infrastructure in recent decades. Roads remain essential for the movement of goods and people, and the country is now benefiting from better road connectivity with its GMS neighbors. The Lao PDR recognizes the importance of e¤cient transport for achieving its Sustainable Development Goals. With support from its GMS partners, it has ambitious plans for developing an extensive railway system. The country is also looking to improve its rural road network and to climate-proof its transport infrastructure.
As a landlocked nation, the Lao PDR depends on trade with its GMS partners. Together, the PRC, Thailand, and Viet Nam receive more than 80% of the country’s exports, including timber, electricity, agricultural products, and copper. These three countries provide an even higher proportion of the Lao PDR’s imports. The government is preparing to launch a road-user charging system, and has simplified the clearance procedures at the Viet Nam border. Efforts are also under way to reduce logistics costs for freight transport and to ensure that the transport and trade of food products is safe and disease-free.
In the Lao PDR, the urban areas are home to around 40% of the population. Vientiane is the only large city, with nearly a million people. The government is forging stronger linkages with towns and cities in neighboring countries by supporting the movement of goods and services along the GMS economic corridors. Its urban development goal is to create modern, livable, and environmentally friendly towns that preserve the country’s unique cultural assets.
GMS Program Officials and Contacts in Lao PDR
- Sisomboun OUNAVONG (Ms)
Department of International Cooperation
Ministry of Planning and Investment
- Chanthaly CHANSOMPHENG (Mr)
Department of International Cooperation
Ministry of Planning and Investment
The International Finance Corporation is partnering with Thailand-based Amata Corporation to develop sustainability projects for cities, towns, and industrial zones in the Greater Mekong Subregion. The projects will promote green growth and sustainable design practices.
This report presents the findings of the assessment of the Lao People's Democratic Republic component of the Greater Mekong Subregion economic corridors.
VIENTIANE, LAO PEOPLE’S DEMOCRATIC REPUBLIC (16 October 2018) —The Asian Development Bank and the Government of the Lao People’s Democratic Republic today signed grant agreements worth $125.5 million in total for three projects in the tourism and urban sectors.
VIENTIANE, LAO PEOPLE’S DEMOCRACTIC REPUBLIC (17 September 2018) — The Asian Development Bank’s Board of Directors has approved a $48 million grant to help improve urban environmental services and enhance economic connectivity in Paksan and Thakhek, two of the least developed towns along the Greater Mekong Subregion Central Corridor in the Lao People’s Democratic Republic.
The Lao People’s Democratic Republic can maximize the potential benefits from the Greater Mekong Subregion’s economic corridors through its national policies, capacities, and implementation arrangements.
The Lao People’s Democratic Republic is operating its first dry port in Savannakhet province, where it is strategically positioned along the Greater Mekong Subregion East-West Economic Corridor, at the mid-point between the nearest Vietnamese seaport of Danang, and Thai ports in Bangkok and Laem Chabang.
Vulnerable towns in Cambodia, Lao People’s Democratic Republic, and Viet Nam are using “green infrastructure” to stave off the impacts of climate change.
Green infrastructure can play a significant role in offsetting losses from climate-related disasters and contribute to building resilience through rehabilitation and expansion of natural ecosystems within built areas.
VIENTIANE, LAO PEOPLE’S DEMOCRATIC REPUBLIC (16 November 2015) – The Asian Development Bank has approved a $37 million loan, with an additional $10 million in cofinancing, to support government efforts to improve urban services in Houayxay and Luang Namtha, two towns located along a Greater Mekong Subregion main economic corridor.