Business Profile
Economy
Laos is one of the world’s poorest countries, and its predominantly agricultural economy operates almost entirely at subsistence level. Rice, the main crop, is grown in several different varieties; other crops include maize, cassava, pulses, groundnuts, fruits, sugar cane, tobacco and coffee. Though little known outside the region, Laotian coffee is highly rated among connoisseurs and is now the country’s single largest export commodity. The country has considerable, though largely untapped, reserves of tin, lead and zinc, as well as iron ore, coal and timber. Industry is mostly concerned with processing raw materials, principally timber and food; textiles and basic consumer goods are also produced. Despite its relative obscurity and secretive nature, a tourism industry has developed which is now Laos’ single largest source of income. Development is hampered by chronic shortages of skilled labour and foreign exchange, and the Laotian economy relies heavily on foreign aid (80 per cent of public sector investment is financed by aid) from Japan and Scandinavia, and more recently Thailand, Taiwan and Australia.
Economic reforms began in the early 1990s and included an extensive programme of privatisation. These initially attracted the support of the IMF but the government’s failure to meet successive financial targets led to a withdrawal of the Fund’s support in 1998. Compounded by the regional financial crisis, the economy was in serious difficulties by the beginning of 1999 with 100 per cent annual inflation, a collapsed currency value and a desperate shortage of foreign and domestic currency. Since then, something of a recovery has taken place: the economy is now growing at around 6 per cent annually while inflation has been cut to a more manageable 25 per cent. Nonetheless, the country’s economic prospects are uncertain. Laos is a member of the Asian Development Bank and the Colombo Plan, which promotes economic and social development in Asia and the Pacific.
Business
Punctuality is appreciated. Lightweight suits, shirt and tie should be worn. English is not spoken by all officials and a knowledge of French is useful. Business cards should have a Laotian translation on the reverse. Best time to visit is during the dry season, from November to April. Office hours: Mon-Fri 0800-1200 and 1330-1730.
Commercial Information
The following organisations can offer advice: Lao National Chamber of Commerce and Industry, BP 4596, Sihom Road, Ban Haisok, Vientiane (tel/fax: (21) 219 223; e-mail: ccilcciv@laotel.com); or Ministry of Finance, Luang Prabang Road, Ban Phonxang, Vientiane (tel: (21) 412 401; fax: (21) 412 415).
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