In 1975, the Communist Pathet Lao took control of the
government, ending a six-century-old monarchy. Initial
closer ties to Vietnam and socialization were replaced
with a gradual return to private enterprise, a liberalization
of foreign investment laws, and the admission into ASEAN
The government of Laos - one of the few remaining official
Communist states - began decentralizing control and encouraging
private enterprise in 1986.
|The results, starting from an extremely low base, were
striking - growth averaged 7% in 1988-2001 except during
the short-lived drop caused by the Asian financial crisis
beginning in 1997. Despite this high growth rate, Laos
remains a country with a primitive infrastructure; it
has no railroads, a rudimentary road system, and limited
external and internal telecommunications. Electricity
is available in only a few urban areas. Subsistence agriculture
accounts for half of GDP and provides 80% of total employment.
The economy will continue to benefit from aid from the
IMF and other international sources and from new foreign
investment in food processing and mining.
Source: World Factbook