Lao PDR

Communities
The only landlocked country in the ASEAN region, Lao PDR is neighbouring Vietnam, Cambodia, Myanmar, Thailand and China. It is a long, narrow country, stretching about 1,700 kilometres (km) from north to south but only about 100 km across at its narrowest width. The country’s low population of about 6.5 million in 2017 and mountainous topography limit expansion of agricultural development, with only about 10% of the country’s land area used for agriculture. Moreover, agricultural land is dispersed, especially in the northern mountains.

Lao PDR has benefited from its position sandwiched between China, Thailand and Viet Nam, and trade is increasing rapidly with these three countries, but also with Malaysia, Korea, France, Hong Kong and Netherlands. The largest trade partners are Thailand (US$ 2.11 bn. exports, US$ 4.15 bn. imports), China (US$ US$ 1.42 bn. exports, US$ 1.51 bn. imports) and Viet Nam (US$ 516 m. exports, US$ 687 m. imports). Trade with China is expected to grow rapidly as result of the transport infrastructure projects under the Belt and Road initiative. The country is primarily agrarian, with nearly 70% of the workforce employed in agriculture. The population is overwhelmingly young with 50% of the population under the age of 25 and 60% under 35. There is a small but growing middle class population centred around a few cities including Vientiane, Savannakhet and Luang Prabang. Although Lao PDR is not very globalised, the World Bank estimated that the country’s growth declined drastically in 2020 to −0.6 percent and has affected Lao PDR’s progress on poverty reduction. The sharp drop in domestic revenues has naturally led to a worsening of the fiscal situation and a rising debt issue. The government has initiated a number of relatively small actions to mitigate the worst effects of the pandemic on the economy, including removing income tax on monthly salaries under 5 million LAK (ca. US$ 550), lifting of national security fund payments and removal of certain import tariffs. It is projected that Lao PDR will have a growth rate of up between 2.8% and 4.9% in 2021, depending on further interruptions to the global economic recovery.

Source:  ASEAN Access

Facilitators

THONGVANSENG SINGDALA

Vientian - Goverment

MANYPHONE SOUDTHIDA

Technical staff - Department of Small and Medium Enterprise Promotion of Ministry of Industry and Commerce

NGUYEN MY ANH

Specialist -The Assistance Center for SMEs North, Agency of Enterprise Development, Ministry of Planning and Investment

LUONG LE BAO THANG

Specialist -The Assistance Center for SMEs South, Agency of Enterprise Development, Ministry of Planning and Investment

LUU MINH TUAN

Specialist -The Assistance Center for SMEs South, Agency of Enterprise Development, Ministry of Planning and Investment