Laos - Economic sectors

Like many undeveloped countries, Laos generates a majority of its GDP from the agricultural sector. Agriculture accounted for 51 percent of the GDP in 1999 and employs about 80 percent of the total workforce of 2,220,000. In most areas of the country, 90 percent of the people work in agriculture. Industry accounted for 22 percent of the GDP but employed only 3.3 percent of the people (though this figure was 20 percent in the capital). The services sector accounts for 27 percent of the GDP and roughly 10.3 percent of the workforce.

Traditionally, Laos has been a subsistence agricultural economy. That remains true today, though other economic sectors are growing in the Lao PDR. While the Lao PDR has no intention to develop heavy industry, it is developing its light industry, particularly the production of garments and textiles. The Lao PDR has excellent capability in producing attractive traditional textiles and handicrafts. Lao silk and cotton textiles are becoming known for their quality around the world.

The Lao PDR is also developing an important service sector, which has 2 new components: banking and tourism. There are now many newly established foreign banks located in the Vientiane area, most of which were established in the 1990s. Among 6 such Thai banks are the Bangkok Bank and Siam Commercial Bank. The 1999-2000 year was called the "Visit Laos Year" to promote tourism. In the late 1990s travel to Laos was dramatically liberalized with visas available on arrival. The tourist infrastructure was also improved substantially. Tourism has expanded dramatically in the 1990s from only 14,400 visitors in 1990 to 500,200 in 1998. In 1997 tourism contributed US$73.3 million to the economy,

representing 23 percent of export earnings. The designation of Luang Prabang, perhaps the best preserved traditional Southeast Asian city, as a world heritage site was definitely a positive development for Lao tourism. Other important tourist attractions in Laos are the Wat Phu ancient Khmer ruins in southern Laos, the Khon waterfalls in the same region, and the Plain of Jars in Xiengkuang Province. The latter area was heavily bombed during the U.S. War in Vietnam. In fact, as of 2001 Laos is the most heavily bombed country in the history of the world.