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Laos Laos

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Laos – Quick View
ECR score9.52 (Mar 2011)
ECR rank178 (Mar 2011)
Economic
GDP (2010e)USD 6.41 billion
GNI per capita PPP (2010)USD 2,321
FDI inflow (2009e)USD 157 million
Inflation (2010e)5.41%
Central bank assets (2009)USD 0.74 million
Unemployment rate (2005)37.5%
Government deficit (2009)USD 0.31 billion
Tax revenue (2009)USD 0.71 billion
Political
Government typeDemocratic
Recent political crisisNA
Economic freedom score (2011)141st
Freedom of information score (2010)168th
Corruption perception index (2010)154th
Structural
Birth rate (2005-2010e)27.6 per '000
Population balance (2010e)Up to 14 years - 36.99%
Population balance (2010e)Above 60 years - 3.76%
Life expectancy years (2005-2010e)Males - 63.4 years
Life expectancy years (2005-2010e)Females - 66.2 years
Mortality rate (2005-2010e)7.1 per '000
Literacy rate (2005)73%
Internet access (2009)39.8%

[Top] Economic Overview

Laos has a small economy and is highly dependent on its agricultural sector. The agricultural sector employs about 75% of the total population and contributes around 29% to the overall GDP of the country. Laos has an under-developed infrastructure and the lack of an effective communication system are some of the major  development challenges the economy faces.

 

(Source: state.gov, spainexchange.com, uschamber.com)

 

Gross domestic product (GDP) 

GDP in 2010 was LAK 53,727.20 billion at current prices, an increase of 12.95% from 2009. GDP per capita was LAK 8,338,809.17 in 2010.

 

Laos GDP and growth rate

e=estimated

(Source: IMF)

 

Gross national income (GNI)

 

In 2010, GNI per capita at PPP was USD 2,321. 

(Source:UNDP (pg4))

Laos GNI per capita at PPP (USD)

(Source:UNDP (pg4))

 

Income tax rate

 

The highest tax rate on individual income in Laos is 25%.

 

(Source: heritage.org)

 

Corporate tax rate

 

Laos charges a single corporate tax rate of 35% on profits earned by corporations. VAT in Laos is charged at 5% and 10% depending on gross sales.

 

(Source: doingbusiness.org)

 

Inflation rate 

In 2010, the inflation rate (based on annual average consumer prices) in Laos was 5.41%.

Laos Inflation rate

e=estimated

(Source: IMF)

 

Foreign direct investment (FDI)

 

In 2009, FDI inflows to Laos were estimated to be USD 157 million compared to USD 228 million in 2008.

Laos FDI inflow

e=estimated

(Source: UNCTAD (pg 207))

 

Central bank assets 

Since December 2009, net domestic and foreign assets of Bank of the Lao PDR (central bank) has amounted to LAK 6,427.65 million.

Central Bank Assets (LAK billion)

Period

Net foreign assets

Net domestic assets

December 2009

4,561.29

1,866.36

December 2008

5,230.23

-454.08

December 2007

4,802.53

-828.98

December 2006

2,984.29

-482.53

(Source: Central BankPDF file (pg 63))

 

Non performing loan ratio (NPLR)

 

In 2009, NPLR of the central bank was 2.99%. 

(Source: Central BankPDF file (pg 37))

[Top] Financial Indicators & Government Financial

Consumer price index (CPI)

 

In December 2009, annual CPI was 118.53 compared to 114.06 in December 2008.

 

Annual CPI (end of year)

Year

CPI

2009

118.53

2008

114.06

2007

110.56

2006

104.70

2005

182.30

Base year = 2005 = 100

(Source: Central BankPDF file (pg 58))

 

Interest rates

 

In Laos, banks provide an interest rate of 2.5%-3% on saving deposits and 3%-6% on three-month time deposits. In 2009, interest rates on loans varied between 9-15% per annum depending on the type of customer.

 

Interest Rates on Loans and Deposits (% range)

Loan/Deposit

Interest rate

Saving deposits

2.5-3

Time deposits

3 months

3-6

6 months

4-8

12 months

5-10

Above 12 months

8-12

(Source: Central BankPDF file (pg 65 and 66))

 

Money supply

 

Money Supply (LAK billion)

Year

M2

2009

15,175.90

2008

11,563.95

2007

9,774.22

2006

7,046.11

2005

5,416.34

2004

4,999.85

2003

4,094.80

2002

3,435.50

(Source: Central BankPDF file (pg 28))

 

Government expenditure

 

In 2009, total government expenditure and lending was LAK 9,761.56 billion.

 

Laos Government expenditure and lending

(Source: Central BankPDF file (pg 24))

 

Public debt level

 

In 2009, total outstanding government external debt was USD 2,679 million.

 

Laos External debts

(Source: Central BankPDF file (pg 71))

 

Official exchange rate

 

In 2009, the official exchange rate of the Laos Kip (LAK) against the USD was LAK 8,473.08 and was was LAK 255.26 against the Thailand Baht (THB).

 

Official Exchange Rates (LAK)

Year

USD

THB

2009

8,473.08

255.26

2008

8,499.65

243.35

2007

9,382.13

280.33

(Source: Central BankPDF file (pg 72))

 

 

Government finances

 

Fiscal balance

 

In 2009, the government was running a fiscal deficit of LAK 2,731.13 billion compared to a deficit of LAK 2,626.51 billion in 2008.

 

(Source: Central BankPDF file (pg 23 and 24))

 

Government revenue

 

In 2009, the government of Laos's total government revenue was LAK 7,030.43 billion. Taxes made up the biggest proportion of government revenue with 88%.

 

(Source: Central BankPDF file (pg 23))

 

Laos Government Revenue

(Source: Central BankPDF file (pg 23))

 

Tax revenue

 

In 2009, government tax revenue was LAK 6,207.58 billion compared to LAK 5,627.09 billion in 2008.

 

(Source: Central BankPDF file (pg 23))

 

Total grants

 

In 2009, the government received grants in total of LAK 1,143.17 billion.

 

Laos Government grants

(Source: Central BankPDF file (pg 60))

 

Current account balance

 

Laos Current account balance

(Source: IMF)

 

Balance of payments

 

In 2009, the current account recorded a deficit of USD 132.15 million, with a trade deficit of USD 408.20 million. The balance of capital and financial accounts was USD 616.40 million for the same year.

 

The balance of payments was running a deficit of USD 3.72 million compared to a surplus of USD 100.51 million in 2008.

 

(Source: Central BankPDF file (pg 40 and 43))

[Top] Labour Force and Employment Overview

Labour force

 

In 2010, the total economically active population (labour force) was estimated at 3,179,000, of which approximately 78% were in the 15 to 44 year age group.

 

(Source: ILO)

 

Unemployment rate

 

In 2005, the unemployment rate in Laos stood at 37.5%. The unemployment rate for men was 18.6% and 18.9% for women.

 

(Source: ILO)

 

Minimum wage

 

Laos has a monthly minimum wage of LAK 348,000 for private sector workers and LAK 405,000 for civil servants and employees of state-owned enterprises.

 

(Source: state.gov)

 

Level of unionisation

 

There is only one trade union in the country – the Lao Federation of Trade Unions (LFTU), which operates under the control of the ruling party. The law prohibits the formation of any other independent union.

 

(Source: ituc-csi.org)

[Top] Political Stability

Laos is a republic and has a democratic form of government. It has its own written constitution describing the legislative, executive and judicial powers of the country. The president is the head of state and supervises and controls the legislative and executive branches of the country.          

 

The legislative powers are exercised by the national assembly. The national assembly is made up of 115 members, who are directly elected for a term of five years.

The executive powers are exercised by the government of Laos. The government is lead by the prime minister and also has a deputy prime minister(s), ministers, chairmen of ministries and other statutory bodies. All the members of the government are elected for five year terms.

 

(Source: Constitution of Laos (pg 3, 10, 11, 13, 14 and 15))

 

Lao People's Revolutionary Party (LPRP) is the main political party in the country.

 

(Source: ipu.org)

 

Regulatory environment

 

Laos is ranked 141st on the 2011 Index of Economic Freedom. Its economic freedom score is 51.3 (out of 100), an increase of 0.2 points from the previous year. The rise in ranking was due to increased property rights and higher levels of monetary freedom.

 

Laos Economic Freedom Index

(Source: heritage.org)

 

Corruption perception

 

Laos was ranked 154th on the Corruption Perceptions Index 2010. Laos scored 2.1 (out of 10) on the index, indicating high levels of corruption.

 

(Source: transperancy.org)

 

Freedom of information

 

Laos ranked 168th on the Press Freedom Index 2010 and indicates that the media is highly restricted.

 

(Source: rsf.org)

 

The main newspapers in the country are:

 

·         Vientiane Times

·         Le Renovateur

·         Vientiane Mai

·         Pasaxon

 

(Source: bbc.co.uk)

 

Judicial system


The judicial system of the country consists of the following courts:

 

·         People’s Supreme Court

·         Appellate courts

·         People’s provincial courts and city courts

·         People’s District courts

·         Military courts

 

The Supreme Court is the apex judiciary of Laos. The Supreme Court supervises the people’s courts and the military courts.

 

(Source: Constitution of Laos (pg 17))

[Top] Demographic Overview

Laos’ population is estimated to be 6,230,200, with an equal population of men and women. Approximately 84% of the total population is in the 0-44 year age group.

 

(Source: LSB)

 

Laos Population by gender

(Source: LSB)

 

Population by age-group (2010)*

Age group (years)

Population (%)

0-14

36.99

15-44

47.20

45-64

12.05

65 and above

3.76

*estimated

(Source: LSB)

 

Birth and death rate

 

Between 2005 and 2010, the crude birth rate was estimated to be 27.6 births per 1,000 people and the crude death rate at 7.1 deaths per 1,000 people.

 

(Source: UNDATA, UNDATA)

 

Infant mortality rate

 

Between 2005 and 2010, the infant mortality rate iwas estimated at 50 deaths per 1,000 live births. (Source: UNDATA)

 

Life expectancy

 

Between 2005 and 2010, life expectancy at birth was estimated at 63.4 years for males and 66.2 years for females.

 

Life Expectancy* (age in years)

Period

Males

Females

2005-2010

63.4

66.2

2000-2005

61.1

63.5

1995-2000

58.4

60.9

1990-1995

55.1

57.6

*estimated

(Source: UNDATA, UNDATA) 

 

Migration and urbanisation 

 

By mid-2010, Laos had 18,900 immigrants, representing 0.3% of the total population. In 2007, about 29.7% of the total population resided in urban areas. 

 

(Source: UNDATA)

 

Ethnic environment

 

The various ethnic groups in Laos include the Tai-Kadai language family; Austro-Asiatic (Mon-Khmer and Viet-Muong) language family; Hmong-Yao; Tibeto-Burman; and other ethnic groups.

 

About 65% of the total population follow Buddhism, while 1.3% follows Christianity. Laos also has people who follow Islam, Baha’i and Animism.

 

(Source: state.gov) 

 

Human development index (HDI) 

 

Laos ranked 122nd on the HDI 2010. The HDI provides a composite measure of three dimensions of human development which are measured by life expectancy, adult literacy & enrolment in education and per capita GNP at Purchasing Power Parity (PPP). 

 

(Source: HDR UNDPPDF file)

[Top] Soft Infrastructure

Literacy Rate

 

In 2005, the adult literacy rate (people aged 15 years and above) in Laos was 73% and the youth literacy rate (people between 15-24 years of age) was 84%.

 

(Source: World Bank, World Bank)

 

Education

 

Laos follows a multi-level education system. The different levels of education include pre-primary, primary, secondary and higher education.

 

Pre-primary education is three years of pre-school training for children between 3-5 years of age. Primary education consists of five years of compulsory education. Secondary education is made up of 6 years and is divided into two three year cycles. Higher education ranges from three to seven years.

 

(Source: UNESCO)

 

In 2008, Laos had 29,541 teachers in primary education and 18,117 teachers in secondary education.

 

(Source: World Bank, World Bank)

 

Healthcare

 

In 2005, Laos had 12 hospital beds per 10,000 people.

 

Healthcare statistics (per 10,000 persons)

Facilities

Number

Hospital beds (2005)

12

Physicians (2004)

4

Nurses and midwives (2004)

10

(Source: UNDATA, UNDATA, UNDATA)

 

Per capita spending on healthcare was USD 27 in 2007.

 

(Source: World Bank)

[Top] Hard Infrastructure

Mass public transportation 

 

In Laos, road travel is the main mode of transport. Approximately 98% of the total population travel by road.

 

(Source: World Bank)

 

Roadways

 

In 2004, the road network in Laos was approximately 31,210 kilometres.

 

(Source: World Bank)

 

Railways

 

Laos does not have railway services.

 

(Source: World Bank)

 

Ports

 

The country does not have any ports.

 

(Source: World Bank)

 

Airports

 

There are approximately 24 airports in Laos. Some of the airports are listed below:

 

·         Wattay International Airport

·         Luang Prabang Airport

·         Paksane Airport

·         Xieng Khouang Airport

·         Ban Houei Airport

·         Saravane Airport

 

(Source: airport-authority.com)

 

Wattay International Airport is located in the capital city – Vientiane. It is the largest airport in Laos with a 3,000 metres runway.

 

(Source: ourairports.com)

 

Telecommunications

 

In 2009, Laos had 3,234,642 mobile phone subscribers and 100,228 fixed landline subscribers, with a penetration rate of 1.59% and 51.18% respectively.

 

(Source: itu.int, itu.int)

 

In December 2009, there were around 527,400 internet users in Laos, indicating a penetration rate of 39.8%.

 

(Source: internetworldstats.com)

 

Subscription statistics (number of subscribers)

Service

2009

2008

2007

Fixed telephone

100,228

127,799

94,828

Fixed line penetration rate (%)

1.59

2.06

1.56

Mobile

3,234,642

2,022,133

1,478,409

Mobile penetration rate (%)

51.18

32.59

24.27

(Source: itu.int, itu.int)

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