Fastest Growing Country in Asia
Annual Growth Rate 7.8%
Laos has long been classified as one of the poorest and least developed countries in the world. Since early 2000s, Laos government has committed to graduate the country from the “least developedd country” status by year 2020. Some of the key measures taken by the government include enhancing its geographical location as a land link country for ASEAN and China; and enacting laws in favor of privavte and foreign investments.
Bordering five countries (China, Thailand, Vietnam, Cambodia and Burma) and strategically located within the ASEAN-China Free Trade Area, Greater Mekong Subregion, and Pan-Beibu Gulf Economic Cooperation Zone, Laos provides cross borders access to a regional market of 500 million people. The fact that Laos is a land link country for China and ASEAN makes it an excellent regional transport hub. A good example is the US$6.04 billion 427KM high speed railway financed by China. It’s part of the 3,000KM regional rail link that will run from Southern China through Laos, Thailand and Malaysia into Singapore. This development will bring a lot of trades into Laos, and is expected to enhance the country’s economic efficiency with an estimated 32% economic growth.
Along with the government’s plan to attract foreign investment, laws and regulations in favour of private businesses and foreign companies have been enacted to spur business development and expansion. A number of investment incentives are also given to businesses within the 10 Special Economic Zones (SEZ) throughout the country.
With its status as one of UN-classified least developed countries in the world, and WTO’s Most-Favoured-Nation, Laos enjoys specific trade advantages with many countries around the world. Under these two systems, Laos commodities receive special preferential tariff treatment and import tax exemption in countries including China and countries in European Union.
With strong exports, a burgeoning service sector and surging foreign investment, it is therefore no surprise that despite its status as one of the poorest and least developed country in the world, Laos is also the fastest growing country in Asia. Indeed, the economy in Laos has been growing at an average of 7.8% per year, never dipping below 6.4% since 2012.