Laos is a landlocked nation in the southeastern region of Asia that covers an area of about 91,875 square miles, and in 2016 it was home to 6,758,353 people, which was the 104th highest population in the world at the time. According to Trading Economics, the gross domestic product of Laos in 2017 was estimated to be $16.85 billion which was a significant increase from 2016 when the gross domestic product was estimated to be $15.81 billion. One of the major drivers of the economy of Laos is investment from nations such as China, Vietnam, and Thailand. Transparency International considers Laos to be one of the most corrupt nations globally which have deterred other nations from investing in the country. Another factor that limited foreign investment in Laos was the creation of communist policies by the government that overthrew the monarchy. To stimulate economic growth the government introduced the New Economic Mechanism in 1986. Initially, the scope of the New Economic Mechanism was limited, but the government expanded it upon realizing that it could lead to economic growth. The reforms that the government introduced had a positive impact on the economy as nations such as Australia began investing in Laos. One of the most significant challenges facing the economy of Laos is the migration of skilled workers out of the country in search of better job opportunities.
Data indicates that about 4% of Laos' total area, which is roughly 3,475 square miles, is used for agriculture although 19,305 square miles is considered arable land. During the 1990s, agriculture was one of the major industries in Laos. It contributed significantly to the gross domestic product and provided jobs to nearly 80% of the workforce according to the World Bank. The contribution of the agricultural industry to Laos' gross domestic product decreased from 65% in 1980 to around 57% in 1991. During this period the World Bank indicated that the number of people working in the sector remained relatively constant. Laos' agricultural industry faced a significant challenge in 1987 and 1988 due to the long drought that reduced the country's agricultural output. One of the primary crops grown in Laos is rice which occupied about 80% of the country's cultivated land from 1989 to 1990. Irrigation is mainly used to supply water in the rice fields. The government worked hard to increase the land under irrigation to boost the country's agricultural output. Apart from increasing the land under irrigation, the government of Laos also urged farmers to utilize farm inputs such as fertilizers. Apart from rice, other major crops grown in Laos include coffee, opium, and corn. The people of Laos also keep animals such as cattle, goats, and pigs. One of the major challenges that face livestock keeping in Laos is a shortage of animal feeds and the spread of diseases. To overcome the challenges the government has made veterinary services more accessible and encouraged farmers to grow pasture crops.
Mining is one of the main industries in Laos and in 2012 it contributed 7% to the country's economy. Laos is considered one of Asia's most resource-rich nations due to the wealth of mineral resources in the country such as lead, copper, and gold. Laos' mineral wealth has attracted a large number of foreign investors from countries such as China and Australia. The first mining project in Laos was the Sepon mine, and it was developed in 2003. Apart from the Sepon mine, other important mines in Laos include the Hongsa coal mine, the Ban laomakkha mine, and the Phu Kham mine. The Sepon mine is considered one of the world's largest gold mines due to the vast size of the gold reserves which are estimated to be 7.65 million oz. Apart from gold, copper is also extracted from the Sepon mine. The Phu Kham mine is also vital to the economy of Laos since it has reserves of gold, copper, and silver. Laos also has vast deposits of gypsum mainly mined at the Ban laomakkha mine. The mine's gypsum deposits are estimated to be around 42 million tons. The Sepon and Phu Kham mines are the most important to Laos' economy since they accounted for more than 90% of the country's mineral production in 2012.
The textile industry also plays a significant role in the economy of Laos and in 2006 more than 30,000 residents of Lao worked in the industry. The textile industry in Laos grew exponentially from 1990 when only two companies were dealing with textiles to more than 110 companies in 2006. Most of the textile products from Laos are exported to nations in the European Union. The textile industry in Laos attracts large numbers of foreign investors although the government indicates that the shortage of skilled workers has discouraged more investment in the sector. Some of the countries that have huge investments in Laos' textile industry include Japan and Thailand.
Tourism is one of the most important industries in Laos and it earns the country vast amounts of foreign exchange. Data from the government indicates that Laos' tourism industry grows faster than any other industry in the country. The data also indicates that in 2017 the number of tourists who visited the country was approximately 3,860,000. Tourists from several countries visit Laos with the largest number of visitors coming from Thailand, Vietnam, and China. One of the main tourist attraction sites in Laos is the Buddha Park that was established in 1958 by Bunleua Sulilat, one of Laos' most well-known sculpture artists.Buddha Park's main attractions include the collection of more than 200 statues from Buddhist and Hindu traditions. Other major tourist attraction sites in Lao include the Lao National Museum and the Wat Si Muang among many others.
Economic Growth In Laos
The World Bank indicates that Laos is one of the fastest growing economies in East Asia. Laos has a relatively low unemployment rate as data from Trading Economics shows that in 2017 the unemployment rate was approximately 0.7%. The low unemployment rate can be attributed to the nation's rapid economic growth.Some of the factors that contribute to Laos' rapid economic growth include the generation of hydroelectricity that provides power to factories and the implementation of laws that favor economic growth.The World Bank expects the economy of Laos to continue growing at a fast rate due to the economic policies implemented in the country.
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