Background Information on Laos
(kindly provided by the  Embassy of Peoples Democratic Republic of Laos to the United States of America)


Laos, or as it is officially known, the Lao People’s Democratic Republic (Lao PDR) is a landlocked country on the Indochinese Peninsular. Like other countries these days, it is facing critical changes.

Three decades ago, Laos set up a social development system. In more recent times, this has evolved to the stage of adopting a so-called "New Economic Mechanism" for economic reform that applies a capitalist economic system within the socialistic economy. The system was developed in three stages with the third stage currently underway.

Under such policy, the Lao Government allows a great deal of flexibility. Public enterprises will be able to make independent decisions and plan their own future direction. Private enterprise is also being encouraged, with some public enterprises being privatized as a result. The government now welcomes foreign investors who wish to operate businesses in Laos.

Laos is perfectly prepared for every type of investment; it is ready for development and, by its membership of ASEAN in July 1997, it intends to participate with other countries in the development of the region to keep pace with the changing world.


Essential Facts

Laos is bordered to the north by the People’s Republic of China (505 kilometers), to the south by Cambodia (435 kilometers), to the east by Vietnam (2,069 kilometers), to the northwest by Myanmar (236 kilometers), and to the west by Thailand (1, 835 kilometers).

Laos has a total area of 236,800 square kilometers, stretching a distance of approximately 1,000 kilometers form north to south. Although the country is entirely landlocked, it has the Mekong River and its tributaries as a means of communication running the of length the country.

Geographically, Laos is located in a warm and humid zone. The area is dominated by monsoons. There are only two seasons in a year, the dry season, which starts from December to April with an average temperature of 24.2 degrees and the rainy season from May to November with an average temperature of 27.3 degrees.

Cultivated land covers 667,600 hectares in 1995. Of this total, 559,900 hectares constitute alluvial plains suitable for rice planting. Laos is very rich in natural resources, and cultivation is the principle occupation of the majority of the population.

The Lao political system is run as a people’s democracy with the Lao People’s Revolutionary Party at its head. The nation’s political policy can be simply stated as a democratic government empowered by the people to work for the people.

For administrative reasons, there are 18 provinces. The country is divided into 3 regions: the north, the center and the south. They cover an area of approximately 80,536 square kilometers, 52,116 square kilometers and 104,148 square kilometers respectively.

The total population of the country in 1996 was 4,727,600. Of the total number, 2.336.500 were male and 2.391.100 female. The population density in general was around 20 inhabitants per square kilometers and specifically 138 per square kilometers in Vientiane. The whole country consists of 752.200 households, 11.640 villages, and 133 districts.

Administrative and political areas have been further sub-divided into units (each unit consists of about 10 households): ban (village), muong (district), and khoueng (province) respectively. Vientiane has been the capital city since Laos declared its independence from French control on 12 October 1945.

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Several different ethnic groups live within the borders of Laos. On the basis of ethnogeographic criteria, it is, however, usual to divide the population into three large groups. They are:


Population density 20 inhabitants per sq. km.

Population density in Vientiane 138 inhabitants per sq. km.

Population growth rate 2,6% per annum

Lao citizens 99,5%

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Linguistically, the population of Laos may be classified into six major groups:

  • Tai-Lao. Consisting of the Phutai, Tai Dam, Tai Khao, Tai Deng, Tai Neua, Tai Lue, Phuan and Yuan, they live in the upland valleys which suit their way of life, the cultivation of wet rice. The group comprises two-thirds of the total population of the country. Both the oral and written languages of this group are regarded as the official language of the country.
  • Mon-Khmer, the Khmu, Lamed, Lavae, So and Makong are all included in this group. Most of them are scattered throughout the mountainous regions of Laos. Most tribes practice a similar economy of partially nomadic slash-and-burn agriculture.
  • Hmong-Yao. Made up of the Hmong Khao, Hmong Lai, Yao, Lantan and Ah Kha, most are scattered throughout the north and the higher altitudes of the central region near Vientiane, Borikamxay and Khammuane. They also practice slash-and-burn agriculture in addition to breeding livestock.
  • Tibeto-Burman, The Kho, Khui, Sida, Lolo, Phu Noi and Musir in this linguistic group are scattered through several provinces, especially Phongsaly, Luangnamtha, Bokeo, and Oudomxay. They cultivate food crops and grow opium.
  • Viet-Mon. Consisting mainly of the Mon, Tum, Slang, Tree and Nguan, among others, they normally live along the border between Laos and Vietnam in the provinces of Huaphanh, Borikhamxay, and Khammuane, cultivating food crops and gathering forest products.
  • Hau (Haw). This group consists only of the Hau tribe, which lives in the northern provinces of Phongsaly, Luangnamtha, and Huaphanh. They practice both farming and trading.
  • In addition, about one per cent of population of Laos includes aliens moving into Laos since the end of the 19th century. These consist of nationalities such as Vietnamese, Chinese, Indian and Thai. Most are scattered throughout major provinces and districts like Vientiane, Savannakhet, Pakse and Khong.

    The official language is Lao.

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    Life expectancy rate 50.9 years

    Legalized birth rate (per 1000) 117

    Drinking water safety 29%

    Demand for nutritious food 111%

    Child health and hygiene improvement is of primary concern in Laos. The life expectancy rate is planned to be 51 years on average. Half of all children below the age of 5 years have been brought up poorly, and in many parts of the country, there is poor nutrition and a lack of sanitation. The lack of physical therapy for diarrhea, respiratory disease and the spread of germs in particular leads to malaria.

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    About 72% of men and 53% of women have access to education in Laos. Educational quantity has been increased at the secondary level since 1975. Although the number of students has increased, especially at primary level, the quality of education is not yet in line with the educational extension system that expanded by increasing the salaries of instructors and quantity of educational equipment.

    The proportion of persons with higher levels of education is relatively small. The over all literacy rate for the Lao PDR was 60% of the population aged 15 years and above. The literacy rate was highest in Vientiane municipality where 85% of the population aged 15 years and above could read and write Lao. The literacy rate was much higher for men than for women, 74 and 48% respectively.

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    The labour force is aged between 10 years and above, although statistics for 1995 showed that only 2,166,192 people or 48% of the total population of the country were employed in the government and private sectors. The employment rate was slightly higher for men than for women, 52% and 48% respectively.


    Total Population 4,574,848

    Population 10 years and above 3,157,417

    Economically active population 2,220,547

    Employed 2,166,192

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    The majority of the Lao populations are Buddhist. Laotians generally preserve religious and traditional customs, including superstitious beliefs. These values are the result of blending Buddhism with Hinduism.

    The That Luang temple in Vientiane is the Buddhist symbol of the country as well as the greatest art and cultural centre in Laos. The pagoda is 45 meters high and 49 meters wide at its base, from east to west. It is surrounded by 30 little stupas.

    It is the country’s largest and most beautiful pagoda, constructed by the skilled technicians of ancient Laos, reflecting the high historical, cultural and artistic values of the nation. Here, one can observe the beautiful architecture of the Lan Xang period in Laos during its most prosperous period.

    Six years after the establishment of Vientiane as the capital city in 1566, King Say Setthathirath led his people to construct the That-Luang in the eastern suburb of the city. A stone tablet made by the King stated that he constructed the That-Luang over a little pagoda previously situated there.

    As if to bear witness to the truth of this statement, each year in November the That-Luang attracts a huge gathering of monks and people from around the country who come to pay the pagoda their respects, and in doing so are believed to make considerable spiritual merit.

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    For more information on doing business in Laos, the Embassy of Peoples Democratic Republic of Laos to the United States of America has kindly provided extensive information in the following Guide to Doing Business in Laos.  This can be viewed online or printed to assist you in your research and business efforts.


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