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Laos

Economically, Laos has become more open since the mid-1980s and has introduced market elements.
Reforms are needed, in particular, in the areas of sustainability, democracy and the rule of law, and transparency.

Capital

Vientiane

Offical Language

Lao, French

Area

236,800 km²

Population

approx. 7.04 Million

Population growth

1.53 %

Rural Population

65 % of the overall population

Gross Domestic Product

18.12 Billion US Dollars

Annual Income per Capita

Approx. 2565 US Dollars

Agriculture as a share of GDP

15.71 % (as of 2018)

Severity of hunger according to the World Hunger Index

serious (WHI: 25.7)

Human Development Index

Index: 0,604 / Rank: 140 of 189

A booming economy and great need for reforms

For centuries, Laos was the subject of the expansionist ambitions of its powerful neighbours Burma, Siam (Thailand) and Viet Nam. Then in 1893, it was made part of the French colony of Indochina. Laos gained independence in 1954 but then plunged into twenty years of civil war, which finally ended in 1975 when the communist people's front Pathet Lao took power. Since then, the Lao People's Democratic Republic has been a socialist single-party system.
It is the declared goal of the Lao government to enable the country to graduate from the group of least developed countries (LDCs) by 2024. Economically, Laos has become more open since the mid-1980s and has introduced market elements.
Reforms are needed, in particular, in the areas of sustainability, democracy and the rule of law, and transparency.
The remarkable economic growth Laos has seen in the past few years has been generated mainly by export activities, with little diversification of the economy and strong reliance on commodities (especially hydropower, mining and agriculture). The level of industrial processing and the impact in terms jobs are low. The growth has been based on the expansion of plantations and on major mining projects and the construction of dams. The current growth model has considerable negative impacts on the environment. Its effects in terms of poverty reduction are insufficient.

Lao-German relations

The Federal Republic of Germany and Laos have maintained diplomatic relations since 1958. After the communists seized power in Laos in 1975, bilateral development cooperation with the then Federal Republic of Germany (West Germany) was suspended until 1990. During this period, however, Laos was a partner country of the German Democratic Republic (GDR/East Germany). This was the starting point for the Federal Republic of Germany to restart its cooperation with the country in 1990.
Current priority areas of Lao-German development cooperation are rural development and sustainable economic development.