Information on Laos


1. Early history : of Laos begins with migration of Tai people from South of China into the Siam region and Vietnam comprising modern-day Thailand, Laos and Vietnam. The Theravada branch of Buddhism made its entry early into the region with records indicating civilizational ties with India dating back to 2nd Century B.C. when the then King of Luang Prabang sent emissaries to India to bring relics of Lord Buddha which were then encased in the That Luang Stupa presently located in Vientiane. Luang Prabang and That Luang in that sense represent the pinnacle of friendly ties between the two regions. Yet another symbol of high civilizational significance attached to India is Wat Phou where oldest temple of Shiva dates back to 5th Century A.D. The Kings from India then constructed the Champa city in the pre-Angkorian period of the 11th century A.D., and the present complex, which is in the ruins, from that period. It predates Angkor Vat.

2. Modern-day Laos has its roots in the ancient Lao kingdom of Lang Xang, established in the 14th Century under King FA NGUM. For three hundred years Lang Xang had influence reaching into present-day Cambodia and Thailand, as well as over all of what is now Laos. After centuries of gradual decline, Laos came under the domination of Siam (Thailand) from the late 18th century until the late 19th century when it became part of French Indochina. The Franco-Siamese Treaty of 1907 defined the current Lao border with Thailand. It got its independence from France on 19 July 1949. In 1975, the Communist Pathet Lao took control of the government ending a six-century-old monarchy and instituting a strict socialist regime closely aligned to Vietnam. It celebrates its National Day on 2nd December [1975]. A gradual return to private enterprise and the liberalization of foreign investment laws began in 1986. Its constitution was promulgated on 14th August 1991. Laos became a member of ASEAN in 1997.

3. Political System: According to the present constitution, which was amended in 2003, the Lao People's Revolutionary Party (LPRP) is responsible for setting broad policy guidelines, while the government manages the day-to-day administration. In reality, the two are almost indistinguishable. The National Assembly is subservient to the LPRP. The National Assembly meets twice a year and is elected for a period of five years. The National Assembly's powers have increased since the early 1990s, and its role is now viewed as one of overseeing the government and the judiciary. Government policies are determined by the party through the powerful 11-member Politburo and the 50-member Central Committee. Important government decisions are vetted by the Politburo. The unicameral National Assembly has 132 MPs [LPRP- 128 and non-Party legislators-4] representing 16 provinces and Vientiane capital. Members are elected by popular vote from a list of candidates selected by the Party for a 5
year term. The last National Assembly elections took place in April 2011.

4.Membership of UN and other International organizations: Laos is State Party to a number of UN Conventions on environment, Law of Sea etc. Laos is also a member of many International and UN organizations. It is an important member of ASEAN community. Laos has been accepted as Member of WTO in October 2012.

Laos successfully organised ASEM-9 Summit in Vientiane from November 5-6, 2012. The Summit was attended by 11 Heads of State and 21 Prime Ministers, as well as one Deputy Prime Minister, 12 Ministers and the Presidents of the European Commission and the European Council and the Secretary General of ASEAN.

5.Economy : The government of Laos began decentralizing control and encouraging private enterprise in 1986. The results, starting from an extremely low base, were striking - growth averaged 6% per year in 1988-2007 except during the short-lived drop caused by the Asian financial crisis beginning in 1997. Laos is a landlocked LDC with underdeveloped economy particularly in the rural agricultural areas.

6.The economy of Laos is essentially a free market system with active central planning by the government. Laos has negligible industrial capacity, an undeveloped and underproductive system of agriculture, and increasingly relies on its rich natural resources to earn much needed foreign reserves. In particular, the hydropower, mining, precious metals, and timber sectors have attracted major investment from Thailand, Vietnam, and in the last decade, China. Vietnam is now the largest source of foreign direct investment (FDI) in Laos.

7. The government relies heavily on foreign assistance for public investment, and despite escalating revenues from the natural resources sector, shows no signs of significantly reversing this trend. The seventh 5-year plan (2011-15) calls for a budget of U.S. $5 billion for public investment, U.S. $3.8 billion (76%) of which would come from foreign assistance. Tourism remains a bright spot of the Lao economy, offering real future potential, solid growth, and substantial job creation. Laos has begun the World Trade Organization accession process, with the intention of joining the organization as soon as possible. International indices rate Laos poorly on transparency and ease of doing business.

Trade Figures:
Exports of goods fob : US$ 1.60 billion (2012)
Exports - commodities : Copper, gold, timber, garments, electricity, and coffee, cassava
Exports – main destinations (2010) : Thailand 33%, China 23.4%, Vietnam 13.4%. Other major countries of exports are UK, US, France, and Germany.
Imports of goods cif : US$ 2.72 billion (2012)
Imports - commodities : Capital goods, machinery and equipment, vehicles, fuel, consumer goods
Imports – main origins (2010) : Thailand 65.2%, China 11.1%, Vietnam 6.5%. Other major countries of imports are South Korea, Japan, Singapore and Germany
Foreign Exchange Reserves excl gold : US$ 699 million (March 2013)
GDP : US$ 9.269 billion (2012 est.)
GDP Per Capita : US$ 1505 (2012-13)
Real GDP growth : 8.3% (2012 est)
Debt - external : US$ 5.599 billion (31 December 2010 est.)

8 Agriculture: Agriculture is mostly subsistence rice farming, dominates the economy, employing an estimated 75% of the population and producing 33% of GDP. Laos relies heavily on foreign assistance and concessional loans as investment sources for economic development. In 2010, donor-funded programs accounted for approximately 8.5% of GDP and 90% of the government’s capital budget.

9 Hydropower potential: The water resources of the Mekong River and its tributaries are estimated to hold a hydropower potential of 23,000 MW in Lao PDR. Of this, about 15,000 MW are internal to the country, and the remaining 8,000 MW represent the country’s share in the mainstream Mekong, jointly with one or more riparian countries. At present, Laos has 17 operational power plants with installed power production capacity of about 2,560 MW. In addition, about 70 power plants are now in the planning and feasibility stages.

In the first six months of the fiscal year (1st October 2010 – 30th September 2011), Laos exported 64% of the electricity generated to Thailand and Vietnam which was of the value of US$ 340 million. Despite the increase in output, Laos imported about 735 million KWH from Thailand, Vietnam and China to secure electricity for border areas not accessed by the national power grid. Laos hopes to end electricity imports in 2015. At present, about 78% of households have access to electricity. The government plans to ensure 90% of house holds have access to electricity by 2020.

 

10 Natural resources and the environment: Laos is a mountainous, landlocked country, bordered by China to the north, Vietnam to the east, Cambodia to the south, Thailand to the west and Myanmar to the north-west. Southern Laos is less hilly but still rugged. Forests covered 17m ha, or 70% of Laos's land area, in the 1940s, a figure that has now dropped to about 40%, largely owing to serious deforestation. Of the many rivers, the most important is the Mekong, which constitutes a natural border with Thailand and Myanmar.

11. The most valuable natural resources of Laos are its forests and rivers. However, there are concerns about the sustainability of the exploitation of the forests, and not just because of the logging industry; hydroelectric facilities, commercial plantations and slash-and-burn agriculture are also contributing to deforestation. Laos is endowed with a wide range of mineral deposits, the most important of which are tin, lead, gravel, gypsum and salt, although there are also small deposits of coal, iron ore, gold, and oil and gas. Surveys to determine the extent of natural resource deposits are incomplete.

12. Demography: With a population of 6.44 million, Laos is considerably smaller than that of its neighbours, and this limits its attractiveness as a consumer market. Around 27% of the population lives in urban areas, which is a growing proportion but one which still reflects an overwhelmingly rural society. The country is sparsely populated. The south is much poorer than the central and northern parts of Laos. The main ethnic groups consist of Lao Loum (lowlanders) 68%, Lao Theung (lower mountain dwellers) 22% and Lao Soung (highlanders) 9%, ethnic Vietnamese/Chinese 1%.

13. Education: The poor quality of the education system is one of the major constraints to development prospects. Although the situation is improving, only 68.7% of the adult population is literate, according to the UNDP. Laos suffers from a shortage of schools, a lack of textbooks, poorly qualified teachers and low school enrolment and completion levels, especially among girls. Net enrolment rates are rising very slowly, reaching 94% in primary level but only 40% at secondary level.

14.  Health: Health standards in Laos are low compared with countries in the region. Underlying these poor standards is a public health system that has been inadequately maintained and that is inaccessible to a large percentage of the population. According to the UNDP's Human Development Report, public healthcare expenditure stood at only 0.8% of GDP, with the number of people seeking private healthcare steadily increasing. The government is focusing on the development of a more efficient primary healthcare system and in recent years has managed to reverse the trend of falling immunisation rates. Much of the funding for these initiatives comes from international donors. Water and sanitation are a serious problem throughout the country.

15. Transnational Issues: Talks continue on completion of demarcation with Thailand but disputes remain over islands in the Mekong River. There are concerns among Mekong Commission members including Laos that China's construction of dams on the Mekong River is impacting navigation along the key Southeast Asian artery and destroying fishing resources.

16.Unexploded Ordnance (UXO): Lao PDR is the world’s most heavily bombed country per capita. Two-thirds of the country, mainly in the uplands, is still contaminated with the unexploded ordnance from the Indo-China war. Besides killing or injuring about 300 people each year, it prevents the use of land for agriculture and animal husbandry. It also adversely impacts development and poverty reduction. A number of international donors are helping Laos in clearing the UXOs.




 
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