Laos Economic Sectors

Laos Mobile fruit stand

After more than six hundred years of monarchy, 1975 saw the change towards a socialist one-party system. In times of globalization and regional integration, the party is faced with the great challenge of continuing to legitimize itself, to open up the country to a market economy and to present itself uniformly and cohesively to the outside and inside.

Economy & Development

According to ezinereligion, more than two thirds of the Lao population are employed in agriculture and generate just over a quarter of GDP in this sector. The Laotian economy is growing steadily by around seven to eight percent annually, and by 2024 Laos wants to have left the status of a “Least Developed Country (LDC)” behind. The international donor community is supporting Laos in this. Rural development, education, health care and social security systems are central issues within the national development plans under the overarching goal of poverty reduction.


In the course of the Greater Mekong Subregion (GMS), tourism is also being further developed in Laos. In order to develop a uniform marketing strategy for Laos, the national tourism authority established a Lao Tourism Marketing Board in March 2011. With its help, the public and private sectors are brought together and a global long-term marketing strategy is implemented.

In 2005 the goal was to attract a million tourists to the country, ten years later almost 4.6 million tourists visited the country annually. The income from the tourism sector is now at US $ 725 million (2015), second only to income from hydropower.

For the third time, the Lao government announced a “Visit Laos Year” for 2018. The aim was to bring around 5.2 million tourists into the country in 2018 and thus break the 5 million mark for the first time. According to information from the Ministry of Information, Culture and Tourism, however, only around 4.1 million tourists visited the country. The reasons given were short-term announcements, sometimes poor performance and natural disasters.

Previously there was a so-called “Visit Laos Year” in 1999/2000 and 2011/2012. Three million tourists visited the country in 2012, including around 1.5 million from Thailand and 50,000 from South Korea. By 2015 the number rose to 4.6 million visitors, but in 2016 it dropped by ten percent compared to the previous year. Bosengkham Vongdara, Minister for Information, Culture and Tourism attributes this to complicated entry procedures and higher prices than in neighboring countries.

An example of the negative effects of tourism could be seen in the small village of Vang Vieng, around 160 kilometers north of Vientiane, until the end of 2012. The village was a favorite destination for many young backpackers who partied extensively there. Vang Vieng is idyllically situated on the river, surrounded by karst mountains with many caves that invite you to cave. One of the main attractions was cable cars that led into the water, and travelers were particularly attracted by ” tubing ” – drifting down the river in a rubber tire as a sporting pleasure. Too much alcohol and drugs, underestimating the rapids and the often insufficiently secured cable cars, however, led to many accidents and also deaths. After there were almost 30 deaths in 2011 alone and the worldwide negative publicity increased, many of the restaurants and bars were closed in 2012: “The time of drinking orgies is over,” headlined the world.


The inland location of Laos is particularly detrimental to foreign trade, especially overseas trade. According to the CIA Factbook, goods worth US $ 4.9 billion were imported in 2017, but only goods worth US $ 3.6 billion were exported. This results in a negative trade balance of US $ 1.3 billion.

The most important import and export partner countries are Thailand, China and Vietnam.

The most important export goods from Laos are precious woods and wood products as well as electricity. In addition, the export of clothing articles (85% to the EU) has risen sharply in recent years, as there has been an increase in production companies, mostly foreign manufacturers, in this area, mainly due to the relatively low wage costs.

Laotians who have studied or lived abroad also support the Laotian economy.

According to the World Bank, trading opportunities with Laos have improved significantly.

Laos Mobile fruit stand

Poverty reduction

The overriding goal of all measures is to leave the status of one of the poorest countries / least developed countries (LDC) behind by 2024.

The National Poverty Reduction Strategy Paper (NGPES) from 2004 identified over 40 districts as very poor.

The report ” Where are the Poor ?” combines provincial and district-level data from the 2015 census and an earlier survey.

The first successes in the fight against poverty in Laos can now be recorded. The Human Development Index (HDI) certifies Laos progress in the field of human development, but also indicates that social inequality remains a major challenge in the country’s development.

Laos is currently ranked 139th (out of 189) and ranks in the “medium human development” category, but is still one of the ten least developed countries in the Asia-Pacific region.