Specifics and Perspectives of Laos’ Socialist Market Economy

Abstract

Laos is a remarkable country situated at the crossroads of the political and economic processes in the region of Southeast Asia. The country is rich in natural wealth, which is exploited mainly by foreign actors and influences the distribution of prosperity for the benefit of domestic political elites. This paper focuses on the peculiarities of the current economic development, the structure of the national economy, involvement in international economic relations, and the current economic dynamics of the national economy. We will try to point out the perspectives of economic development as well. To reach the purpose of the paper, we use the basic methods of research, including synthesis, deduction, comparison, or mathematical methods, and work with scientific literature, statistics of international databases and data of national institutions. The results suggest that Laos, as the least developed country, is still dependent on exogenous factors that prevent productivity gains and, consequently, qualitative economic growth. Economic structure hinders economic growth and socio-economic development as well. Capital-intensive but low-tech industries do not create highly qualified jobs, thus producing low standards of living.

JEL: O11, O13, N55