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
ADB is one of Lao PDR's largest sources of official development assistance, with an average annual lending of $100 million over the 5 years to 2021.
Cambodia and the Lao People’s Democratic Republic have reported a steady drop in average COVID-19 cases per day in April 2022, according to a report on “Vaccination Rates, Effectiveness, and Safety” by the Asian Development Bank (ADB). In Cambodia, the average COVID-19 cases per day dropped from 164 to 18.4, and deaths decreased from 1 to 0.06, marking a fall in case fatality rate from 0.43% to 0.35%. In Lao PDR, daily infection rates declined steadily, averaging at 986 for April 2022 from 1102 in March 2022, while average deaths per day plateaued between 1 to 3.
The fifth friendship bridge between the Lao People‘s Democratic Republic (Lao PDR) and Thailand is set to further enhance Lao PDR’s connectivity with its neighbors in the Greater Mekong Subregion. It will link Borikhamxay province (Lao PDR) to Bueng Kan province (Thailand), becoming a vital road link between Laos, Thailand and Vietnam. Spanning over 150km, it promises to be the shortest connecting link between the three countries and opens another regional trade and transit route.
Cambodia, Lao PDR, and Viet Nam (CLV) are looking to revitalize tourism in the CLV subregion, and held a meeting on 4 May to discuss implementing the Tourism Development Plan for the Development Triangle Region (2020-2025) and Vision 2030. The working group plans to promote tourism in the triangle region through exhibitions, videos, logos and brands, with a focus on digital advertising.
A feasibility study will be undertaken for the construction of an expressway from Houaphanh, a province in eastern Lao People’s Democratic Republic (PDR), to its border with Viet Nam, reported the Vientiane Times. The project is part of a larger expressway construction project linking Houaphanh with the Lao PDR capital of Vientiane.
The Urban Management Platform of the Lao People’s Democratic Republic supported by the Japan International Cooperation Agency (JICA) aims to tackle urban development policies and issues in Vientiane, such as land administration, investment in urban development, and revision of the transport master plan. The first meeting reviewed current land management practices. Government officials and JICA specialists attended, reported the Vientiane Times on 18 February 2022.
Electricity trade between Cambodia and the Lao People’s Democratic Republic raised the annual value of bilateral trade to more than $100 million in 2020 from a previous value of $10 million-$20 million. This was noted by Cambodia Deputy Prime Minister, Minister of Foreign Affairs and International Cooperation Prak Sokhonn and Lao Foreign Affairs Minister Saleumxay Kommasith in their meeting on 16 February. Mr. Kommasith was in Phnom Penh, Cambodia, from 15-17 February 2022 to attend the ASEAN Foreign Ministers’ Retreat.
The 25th Meeting of ASEAN Tourism Ministers held on 19 January 2022 in Sihanoukville, Cambodia, exchanged views on the way forward for the recovery of the region’s tourism industry. Bearing the theme “ASEAN – A Community of Peace and Shared Future,” the Meeting discussed the impact of COVID-19 on each ASEAN member state and emphasized the development of the tourism sector amid the coronavirus disease (COVID-19) pandemic.
Decline in Tourist Growth
Thailand will accelerate its railway connectivity, in line with the opening of the railway link between the People’s Republic of China (PRC) and Lao People’s Democratic Republic (Lao PDR) in December 2021.
This report explores potential links between the agriculture and tourism sectors that could strengthen infrastructure development and inclusive growth in the Lao People's Democratic Republic.