This article provides an overview of the Lao People’s Democratic Republic for those keen on exploring the possibility of living and working there. The information presented is gathered from open sources and is not exhaustive or meant to supplement or substitute legal and professional advice.
(Last updated on: 3rd April 2019)
Official name: Lao People’s Democratic Republic
Land area: 236,800 sq km
Population (2017): 6.9 million
Gross domestic product (GDP) (2017): US$16.853 billion
GDP per capita (2017): US$2,457.38
Currency: Kip (LAK)
Head of State: President Bounnhang Vorachith
Lao People’s Democratic Republic (PDR) is a landlocked, mountainous country that is widely covered with tropical rainforests. It is bordered by China and Myanmar to the north, Cambodia to the south, Vietnam to the east and Thailand to the west. The Mekong River is a major transportation route.
Lao PDR’s economy is set to grow by 6.9 percent in 2019. Growth is driven by the expansion of infrastructure-related construction activities, electricity exports, and growth in wholesale and retail trade. It hopes to make hydropower the largest source of state revenue by 2025 and thus become the “battery of Southeast Asia. If the expected construction of the first high-speed 414 km rail line between Kunming, southern China and Vientiane, the capital city of Lao PDR, as part of the Kunming-Singapore railway is realised in 2022, it will be the “leap towards full connectivity with the region.”
Foreign direct investment (FDI) inflows to Lao PDR has increased in recent years. From US$300 million in 2013, it reached US$1.7 billion in 2017. Infrastructure, particularly electricity generation, remains the largest recipient of FDI in Lao PDR. Inflows in this sector increased from US$1.1 billion in 2016 to US$1.7 billion in 2017. This is followed by construction (US$413 billion) and mining and quarrying (US$207 million).
The country has also opened up a number of economic zones to encourage investment inflows. These include the Savan-Seno Special Economic Zone, Boten Beautiful Land Specific Economic Zone, Golden Triangle Special Economic Zone, Thatluang Lake Specific Economic Zone, Thakhek Special Economic Zone, Longthanh – Vientiane Specific Economic Zone, Dongphosy Specific Economic Zone, Phoukhyo Specific Economic Zone and the Pakse – Japan SME Special Economic Zone.
Singapore – Lao PDR Trade and Investments
Bilateral trade between Singapore and Lao PDR amounted to US$51 million in 2016. Singapore has invested US$284 million in Lao PDR so far. To further strengthen economic ties between Lao PDR and Singapore, the Singapore Chinese Chamber of Commerce and Industry (SCCCI) signed a memorandum of understanding (MOU) with the Lao National Chamber of Commerce and Industry on 1 May 2017. The MOU sought to “ensure sharing of information between the two chambers, and to offer businessmen here more understanding of the investment opportunities in Laos”. It would also help Singapore firms link up with potential partners in Lao PDR to explore opportunities there. In addition, on 1 September 2017, Surbana Jurong Consultants Pte Ltd, Mekong Group Pte Ltd and Laos Phonsavanh Group signed an MOU to jointly pursue business opportunities in Lao PDR.
Kuang Si Falls. Image source: Pixabay.com
Tourist arrivals grew from 1,095,315 in 2005 to 4,684,429 in 2015, averaging 16.45 percent year-on year. However, visitor arrivals decreased to 4,239,047 and 3,868,838 in 2016 and 2017 respectively, thus registering a 10 percent and 8,73 percent decline respectively. On average, their average length of stay between 2007 and 2017 was 4.7 days. In 2017, tourism receipts amounted to around US$648 million, which is a decrease from US$724,191,957 received in 2016. Chinese tourists form the largest source of tourist arrivals, with its 639,185 nationals accounting for 16.52 percent of all visitor arrivals in Lao PDR in 2017. Singapore accounted for 6,829 visitors or 0.18 percent of tourist arrivals during the same period.