Laos Economy

Laos remains among the few states that have not officially abandoned Marxist-Leninist ideology . Vietnam , China , Cuba and North Korea are considered “strategic friends." But at the same time, after Vietnam and China, Laos headed for market reforms .

According to the ASIAN VECTOR portal ^{[1], the} main indicators of Lao's economy are as follows: GDP amounted to $ 12.5 billion (2015), per capita GDP - $ 1779 (2015), poverty rate - 23.2% (2014), unemployment - 1.4% (2014), economic growth - 7% (in 2015)

Factors constraining the development of Laos:

• economic and social differentiation of the territory;
• the predominance of consumer agriculture and barter;
• poor development of infrastructure , primarily transport and communications;
• poor knowledge of the country - market conditions, local material and technical base and prospects opening up for foreign investors ;
• lack of domestic financial resources, which necessitates the attraction of significant investment from abroad (in 1997, foreign aid amounted to 231.5 million dollars), a significant deficit in the balance of payments ;
• lack of qualified personnel and weak institutional system;
• high transportation costs, especially tangible when exporting goods abroad, primarily due to the lack of access to the sea .

In 2017, Laos occupied ^[2] 131st place in terms of foreign trade

Export - $ 2.04 billion: copper ore (27%), various weaving and textile goods (11.5%), rubber (9.5%), gold (7.6%), raw timber (6.7%) ) and lumber (3%). The main export trading partner is China - 58%, followed by India (12%), Japan (7.2%), Germany and the USA (4.4% each).

Import - $ 1.94 billion: machinery, equipment and electronics (48%), metals and rolled products (17.6%), vehicles (12.6%), chemical products, construction materials and textile raw materials. The main import trading partner is China - 69%, followed by Japan (5.8%) and South Korea (4.8%).

Industry in Laos originated in the 1950s . Then the first factories for processing agricultural raw materials and energy enterprises were created. Before that, there were only a few French tin mines and craft shops. Since the 1960s , energy, light, food, and building materials industries have been actively developing, which occupied only 3% of GNP and where only 3% of the population was employed.

Mining

Laos has small mineral deposits. The most important for industry is tin , less - salt and gypsum . Salt has been mined near the capital since the 1960s , but it is not enough for the country's needs. Gypsum lies in powerful strata in the north in the Khua region and in the center near Savannakhet .

There are also gem deposits in the west of the country, coal nearby Luang Prabang , iron ore in the northeast, copper ore in the north and south , lead in the area of ​​the Dong and Vang Vieng settlements, gold in the center, east and south.

Tin ore deposits are located in the center of the country, north of Thakhek . The French began to mine tin when Laos was their colony . After the war, production was suspended and restored only in 1948 , and then again suspended. The largest tin deposit is Phontiu. Before the war, about 1,200 tons of tin concentrate were produced per year, for subsequent years the data are presented in the table:

Tin mining by years

¹ production increased due to the discovery of a new field

Products are uncompetitive due to transportation difficulties (lack of communication lines), lack of tin-smelting plants. Tin is exported , mainly to Malaysia and Singapore .

Since the beginning of reforms in the economy, foreign investors have been attracted to the country ^[4] , in particular, the Australian companies Oxiana Ltd and MMG ^[5]

Electricity

In Laos , only thermal and hydraulic power plants are common. They produce up to 255 million kW (1975). The greatest capacity of thermal power plants is 55 thousand kW (1975). TPPs run on diesel . The largest station is in the capital of the country. It provides 75% of all electricity . Other significant: Luang Prabang , Savannakhet , Salavan, Pakse , Thakhek .

In 1978 , a new hydroelectric power station was built on the Ngim River with a capacity of 110 thousand kW. In 1980, electricity production increased to 800 million kWh per year. The total capacity of power plants in 1994 was 261 thousand kW, electricity generation was 890 million kWh, mainly at the Ngim hydroelectric power station, but only a few cities were covered by electricity.

Processing industry

The building materials industry began to develop intensively in 1965 , when new buildings began to be mass-built, mainly residential buildings, office buildings, bridges, roads, airfields and hydraulic power plants. The factories produce cement (50 thousand tons in Thakhek and Luang Prabang in 1965), brick , and concrete products.

The forest industry is well developed. Laos harvests such valuable wood species as lard, teak , rosewood and ebony . 85 sawmills operate in the country, which process 247.5 thousand m3 per year. In 1973, 272 thousand m3 of wood and 2.8 thousand tons of charcoal were produced. Forest processing is also developed: matchmaking - 4.5 million boxes (1973), furniture industry. The woodworking industry is developed in Sainyabul, Vang Vieng, the capital, Thakhek , Savannakhet and Pakse .

Light industry is poorly developed. There are several enterprises for the production of rubber shoes (30 thousand pairs in 1973). The leather and footwear industry is developed in the capital and Luang Prabang , and the textile industry in Samnya .

The food industry has not high development indicators. In the country (1973) there was a cotton ginnery in the capital, 136 rice mills (14.5 thousand rice), a tobacco factory (31 million packs) and several sugar and fruit processing enterprises. There is also a feed mill. The largest centers are the capital, Savannakhet and Pakse .

The metal industry is represented by enterprises for the production of tin ( 1977 ) and metal tools. Centers: the capital and Samnia .

DOS types of transport in the country - automobile, water and aviation. A gas pipeline with a capacity of 100 thousand tons per year was built.

Road Transport

The transport network is very poorly developed. In 1973, the length of asphalt roads was only 756 km, which is 12% of all roads. In 1974, the length of all roads amounted to 7.4 thousand km, of which 2.9 thousand km were paved and paved. The density of roads is 26 km / thousand. km².

Main Motorway No. 13 connects Luang Prabang and the capital with the south of the country. It extends along the left bank of the Mekong River and in some places has areas with rather heavy traffic. It goes along such a route: Luang Prabang - Vientiane - Paksan - Thakhek - Savannakhet - Pakse , and then to Cambodia . From it there are branches from Savannakhet to Vietnam to the east , near the capital to the Mekong River, where the river port is located, and two branches to Vietnam through the mountains of Cheongshon . In the north, the main roads go from Luang Prabang to the west to Myanmar , east to Samnya and then to Vietnam.

The country's fleet of vehicles in 1960 was 5 thousand cars, in 1963 - 7.2 thousand, in 1974 - 16 thousand (14.1 thousand cars). Roads transported (1972) 43 thousand passengers and 1.2 thousand tons of cargo.

Waterway

The main waterway of the country is the Mekong River with several tributaries. The main areas of congestion: Luang Prabang - Vientiane (402 km), Vientiane - Savannakhet (458), Pakse - Khon (201). River ports are located in Luang Prabang, the capital, Thakhekі , Savannakhet, Pakse and Khon.

Air Transport

Developed very poorly. In the capital is the only international airport - Wattay. Significant airports are in Luang Prabang , Pakse and Seno. The country has more than 20 airfields . In 1972, 50 thousand passengers were transported.

In agriculture , which has a consumer orientation, 51% of GDP is created, of which 75% falls on crop production , 10% on livestock and 15% on forestry . In agricultural production, 80% of all employed are concentrated.

Crop

Among the main crops, rice , corn , soybeans , sweet potato , cassava , legumes (mainly peas ), vegetables and fruits ( mango , papaya , citrus fruits , bananas ) are grown ; among industrial crops, coffee , tobacco, cotton , peanuts , rubber and sugar cane , as well as spices, are common.

Rice is grown on 90% of all arable land ( 1970s ). In the field of rice cultivation, 2/3 of the total population of the country are employed. In 1997, 1.5 million tons were collected. The country distributed 22 varieties of sticky rice and 5 varieties of hard rice. The largest rice areas are in the provinces of Vientiane , Luang Prabang , Savannakhet , Salavan.

Rice crop by year:

Corn is also grown . In provinces such as Luang Prabang , Sainyabuli , Phongsali , Huaphan, corn crops prevail over rice - 75%. Total area under corn occupy 5% of all arable land in the country.

Harvest corn by year:

Coffee is grown in the south of the country. Common varieties are arabica and robusta . The area of ​​coffee plantations was 6000 ha in 1970, 5300 ha in 1973.

Harvest coffee by year:

Some data for other crops:

• tobacco - 850 tons were harvested in 1945, 4 thousand tons from 6300 hectares in 1973
• cotton - in 1973 1.9 thousand tons were harvested from 5900 ha
• peanuts - 1 thousand tons from 2000 ha, used for oil production
• citrus fruits - lemons and grapefruits
• vegetables - potatoes (15 thousand tons from 3000 ha), cassava (14 thousand tons from 2000 ha), sweet potatoes and yams (16 thousand tons from 3000 ha), others ( tomatoes , lettuce , cucumbers , peppers , onions , eggplants ; 21 thousand tons)
• opium poppy - grown in the north, 70 tons were harvested in the 1960s, 300 tons in 1975

Livestock

The industry accounts for 10% of GNP in agriculture . Livestock use 45% of agricultural land in the form of pastures and meadows (1971).

The main livestock industries:

A lot of the population is engaged in fishing , and products are processed at the capital's fish canning factory.

Forestry

Forests are an integral part of the economy of Laos . The country exports valuable tree species (lard, teak , rosewood and ebony .

In addition, benzoic resin is produced in Huaphan (35 tons in 1940, 10 tons in 1964, 1 tons in 1969) and gummilak in Huaphan (border with Cambodia ) and Luang Prabang (17 tons in 1960, 6.4 tons in 1969 )

Cardamom , a valuable spice, is being collected in the forests. Wild provinces are being harvested in the provinces of Vientiane , Paklai and Attapi , and there are cultivated plantations on the Boloven Plateau. In 1960, 4 tons of cardamom were collected, in 1969 - only 1.5 tons.

• Laos Tourism

• Hirnichy encyclopedic vocabulary : in 3 volumes / as amended. V. S. Bіletsky .—D .: Skhidny vidavnichy dim, 2004. — V. 3.— 752s. — ISBN 966-7804-78-X .

For 2017, the minimum wage amounted to 800,000 bales per month; in addition, employers must pay a benefit of 30,000 bales per day. The minimum wage for civil servants and employees of state enterprises is 1,400,000 bales per month, which is $ 100 US dollars per month; in addition, employers must pay a benefit of $ 3.74 per day. The minimum wage for civil servants and employees of state enterprises is $ 170 per month.