Case Study : Lao People 's Democratic Republic

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Chanon (Tam) Thanitcul Mr. Davis Economics Macroeconomics Case Study Research Essay: Lao People’s Democratic Republic Lao People’s Democratic Republic, or simply Laos, is a landlocked nation in Southeast Asia occupying the northwest portion of the Indochinese peninsula (“Geography”). It is surrounded by Vietnam, Myanmar, Thailand, and China (“The World Factbook”). Despite having abundance natural resources compared to other countries in the region, Laos is referred to as “one of east Asia’s poorest countries” (“Laos Profile - Overview”). Laos is one of the world’s few remaining communist states. Being strategically located and blessed with natural resources, it has been the target of neighbouring countries as well as powerful Western…show more content…
After a more than a decade of isolation, Laos opened up to the world in the 1990s. (“Laos Profile - Overview”). Economic reforms during the period include shifting from a centralized economy to a market-oriented economy (“A Brief History of Laos”), recognizing private ownership, and allowing foreigners to engage in commercial transfer. There was also re-emergence of private banking and legal and commercial consultants as a result of demand from foreign investors (“Countries and Their Cultures”) . Since the 1990s, economic growth “has reduced poverty levels significantly” (“Laos Profile - Overview”). Official poverty rates dropped from 46% in 1992 to 26% in 2010 (“The World Factbook”), and to 23% in 2013 (“Lao PDR: Economy”). Gradual economic and business reforms to liberalize its domestic markets were implemented in 2005. In 2011, a first stock market was opened as a part of a move and promise towards capitalism (“Laos Profile - Overview”). Starting from an extremely low base, Laos’ GDP growth rate has an average of 7 % since 1990s (Sondergaard) until the Asian currency crisis hit its economy in 1997 (“Laos Profile - Overview”). Laos then experienced a second economic crisis of its history. The national currency lost “more than nine-tenth of its value” (“Laos Profile - Overview”) and

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