Lao Democratic Republic

ສາທາລະນະລັດ ປະຊາທິປະໄຕ ປະຊາຊົນລາວ Sathalanalat Paxathipatai Paxaxon Lao Lao People's Democratic Republic


Motto ສັນຕິພາບ ເອກະລາດ ປະຊາທິປະໄຕ ເອກະພາບ ວັດທະນາຖາວອນ Peace, Independence, Democracy, Unity and Prosperity
Anthem Pheng Xat Lao
Location of Laos

Capital	Vientiane

Government	Socialist republic
President
- From 2006	Choummaly Sayasone
Chairman of the Council of Ministers
- From 2010	Thongsing Thammavong

History
- December 2, 1975	Established

Area	236,800 km²

Population
- 2009	6,800,000
Density	28.7/km²

GDP	2009 (PPP)
- Total	US$ 16.5 billion
- Per capita	US$ 2,435

Currency	Kip

Kingdom of Laos
v

The Lao People's Democratic Republic is a socialist republic in Southeast Asia.

Background

Modern-day Laos has its roots in the ancient Lao kingdom of Lan Xang, established in the 14th Century under King FA NGUM. For 300 years Lan 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. 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. A gradual, limited return to private enterprise and the liberalization of foreign investment laws began in 1988. Laos became a member of ASEAN in 1997.^[1]

Economy

The government of Laos, one of the few remaining one-party Communist states, began decentralizing control and encouraging private enterprise in 1986. The results, starting from an extremely low base, were striking - growth averaged 6% per year from 1988-2008 except during the short-lived drop caused by the Asian financial crisis that began in 1997. Despite this high growth rate, Laos remains a country with an underdeveloped infrastructure, particularly in rural areas. It has a rudimentary, but improving, road system, and limited external and internal telecommunications. China has signed a deal with the Lao to build a high speed rail system in the country. Construction on the $7 billion project is slated to begin in April 2011 and will take five years. Electricity is available in urban areas and in many rural districts. Subsistence agriculture, dominated by rice cultivation in lowland areas, accounts for about 30% of GDP and 75% of total employment. The government in FY09/10 received $586 million from international donors. Economic growth has reduced official poverty rates from 46% in 1992 to 26% in 2010. The economy has benefited from high foreign investment in hydropower, mining, and construction. Laos gained Normal Trade Relations status with the US in 2004, and is taking steps required to join the World Trade Organization, such as reforming import licensing. Related trade policy reforms will improve the business environment. On the fiscal side, Laos initiated a VAT tax system in 2010. Simplified investment procedures and expanded bank credits for small farmers and small entrepreneurs will improve Lao's economic prospects. The government appears committed to raising the country's profile among investors. The World Bank has declared that Laos's goal of graduating from the UN Development Program's list of least-developed countries by 2020 is achievable. According Laotian officials, the 7th Socio-Economic Development Plan for 2011-15 will outline efforts to achieve Millennium Development Goals.^[2]