Policy
Lao People's Democratic Republic - Lao PDR. The Lao Republic was established on December 2, 1975, replacing the monarchy. It is a centralized state. The President of the Republic is elected by the National Assembly. The national motto of the country is: "Peace, Independence, Democracy, Unity and Prosperity". The national emblem represents the Vat That Luang of Vientiane, surrounded by a circle.
Lao People's Revolutionary Party. The former Pathet Lao became the Lao People's Revolutionary Party (LPRP) on 22 March 1955. Since 1975, it is a single party of Marxist-Leninist obedience. It includes the Central Committee (53 elected members), and the Political Bureau or Politburo (11 members). The Central Committee and the Political Bureau meet in congress every 5 years to elect their leaders.
Government. The government is composed of the President of the Republic, the members of the party's Political Bureau, the Prime Minister and the Council of Ministers. There are several ministries: Foreign Affairs, Agriculture and Forestry, Trade and Tourism, Post, Transport and Construction, National Defense and Public Health, Education, Finance, Industry and Handicrafts, Information and Culture, Interior, Justice, Labor and Social Welfare. Since March 22, 2021, Thongloun Sisoulith, the former Prime Minister of the country, is the President of the Republic, succeeding Mr. Bounnhang Vorachit, and the new Prime Minister is named Phankham Viphavanh.
National Assembly. Legislative power is held by the National Assembly, which consists of 99 members elected for 5 years. These are provincial representatives and members elected from various government agencies. The Lao Loum (Lao of the plains) are the most numerous, ahead of Lao Theung and Lao Sung. It is headed by a president, vice president, and a seven-member standing committee. The National Assembly is responsible for electing the President of the Republic and the Prime Minister (indirect suffrage).
Lao Front for National Reconstruction. The Lao Front for National Reconstruction was established in 1979. It is formed by trade unions, women's associations and representatives of local minorities. It has little authority.
Economy
In 1986, the country opened up to the "new economic mechanisms" and decentralization began, with the provinces gaining autonomy at the political level (while still following the "line" imposed by the Party) and in terms of local taxes. The Investment Code was promulgated in 1988, followed by the first structural adjustment program adopted in 1989 with the support of the IMF and the World Bank. In addition, the market for rice and other raw materials was liberalized. The process was extended: no more restrictions on trade in agricultural products between the provinces and opening up to foreign trade. No more obligation to buy "strategic products" at fixed prices. Multiple exchange rates were abandoned, as was payment in kind.
In 1998, Laos suffered the economic impact of the Thai financial crisis, as did many ASEAN member countries. Foreign investment in Laos declined and some companies even left the country. The local currency, the Lao kip (LAK) - maintaining its parity with the Thai baht - fell sharply against the US dollar. However, Laos was one of the least affected countries, as it was too poor to speculate. Today, foreign investment remains relatively modest and is focused on the tourism sector - hotels, restaurants, services - as well as on development projects such as the railway line linking China to Laos. Macroeconomic stability in terms of exchange rate and inflation appears to be holding and Laos is currently receiving assistance from the Asian Development Bank (ADB) to undertake reforms in the banking sector. The average annual per capita income is approximately US$300. Laos remains one of the poorest countries in the world; at the end of 2015, just under a quarter of the population still lives below the poverty line. International aid provides about 10% of its GDP. However, Laos' subsoil contains raw materials: coal, zinc, copper. And the mining sector contributes to more than half of the total exports.
Agriculture and industry. The agricultural sector accounts for about 22% of GDP and 73% of total employment. The main crops are rice, corn and starch, followed by coffee, peanuts, cotton and tobacco. Rice production dominates the cultivable land (4% of the territory). Laos raises livestock such as goats, bulls, buffaloes, pigs, sheep and poultry. The industry sector represents 33% of the GDP. This represents an increase of about 10% per year since the 1990s. This sector is developing in the following areas: textile manufacturing, wood exploitation, food processing and hydroelectricity. The production of electricity from the Nam Ngum and Nam Theun 2 dams is an important asset, as it enables Laos to supply neighbouring countries (China, Thailand, Vietnam), whose energy needs are constantly increasing.
Economic situation since 2000. The IMF financial aid represents 10% of the GDP, the aim being to help the country to get out of poverty. Development continues: controlled urbanization, communication routes, access to education and health services, limiting the country's debt... In short, the task is hard, even if many efforts have already been made in recent years. The average annual growth rate was 6% between 1988 and 2008, except during the Asian financial crisis of 1997. Despite this high growth rate, Laos still has an underdeveloped infrastructure, especially in rural areas. China has signed an agreement with the country to build a high-speed rail line; a project that began in 2011 (still not completed by early 2020), costing $7 billion. Economic growth has reduced the official poverty rate from 46 percent in 1992 to 26 percent in 2010. For some time, the country has been trying to meet the criteria for membership in the World Trade Organization (WTO). On the fiscal front, the government introduced VAT in 2010. The simplification of investment procedures has allowed small farmers and entrepreneurs to benefit from bank credits. In recent years, GDP has slowed down slightly. However, it is estimated at more than 7%. This decline is due to significant budgetary problems, but also to the slowdown in mining and construction. Major projects to build roads, bridges and a railroad line linking China to Laos have taken shape in recent years with massive investments from China
Place of tourism. Laos opened up to tourism in the early 1990s. In 2005, this sector represented the main source of foreign exchange before hydroelectricity. In 2009, the country welcomed 2 million visitors and more than 2.5 million visitors in 2010. The tourists are mostly nationals of ASEAN countries. The government's objective is to make Laos a world-class destination in terms of sustainable tourism and eco-tourism: to promote the traditional life of minorities under the guidance of local guides, with a concern for the environment. Of all tourists, Thais are the most numerous (about 60%), followed by Vietnamese (20%), Chinese (10%) and Europeans (French and Germans) and Americans (10%). In 2012, the Lao Ministry of Information, Culture and Tourism launched a campaign to promote tourism throughout the country and abroad. In 2013, Laos was voted the best global destination by the European Union Council for Tourism and Trade. In 2018, the country attracted over 4 million tourists. A "Visit Laos-China" campaign is being launched in 2019 to bring more travelers from China, a growing market. Despite all these awards and campaigns, Laos does not currently attract mass tourism like Thailand. This can be explained by its late opening to tourism, about 20 years ago, its enclave, and the fact that it has no access to the sea. It therefore escapes the hustle and bustle of the region and increasingly offers sustainable tourism (eco-tourism) in order to preserve its nature to the delight of visitors but especially Laotians.
Impact of foreign investment. The economy has benefited from foreign investments (China and Japan in particular) in the fields of hydroelectricity, mining and construction. In 2004, Laos signed trade agreements with the United States and Australia. On the other hand, the Vientiane Stock Exchange: a stock exchange, where shares, bonds, currencies, commodities and derivatives are traded, opened on January 11, 2011 and started its quotations. Japan provides the most important economic aid, Thailand is the main supplier and customer (64% of imports and 20% of exports). Other customers are France (8%) and Japan (3%). For the past two years, China has been increasingly present in Laos. In Vientiane, Chinese construction sites are exploding, China State Construction Engineering has started work right in front of the Palace of Congress, the Jiangsu Jiangdu Construction Group is building the future residence for foreign heads of state next to the presidential palace. The gigantic, cold and soulless Don Chan Palace Hotel on the Mekong River is also a gift from Beijing, as is the Lao National Culture Hall in the city center. And so is the Kings Romans Casino in Thongpheung district in Bokao province. Since 2010, nearly one million hectares of land have been granted as concessions, not without real consequences for many forcibly displaced peasants. Most of the recent foreign investment has come from China. Many dams, mainly financed by China, endanger villages and fishing, mainly along the Mekong. The poorest populations are the first victims of this state of affairs, and discontent among the population is becoming more and more visible.
