Ten Thought Provoking Slides on the Lao EconomyRichard Taylor President Austcham Lao
2
1. The Lao economy has been the fastest growing economy in Asia over the past decade and is closing the per capita income gap with its neighbours
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
0
200
400
600
800
1000
1200
Per Capita GDP
Lao PDR Vietnam Cambodia
2006
2007
2008
2009
2010
2011
2012
2013
2014
est
2015
est
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Laos Growth % GDP
Source: Austcham and World Bank
3
2. Laos is the battery of Asia but domestic energy demand is a proxy for growth and growth appears to have moderated
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
500
1000
1500
2000
2500
3000
3500
Demand
Megaw
att
s
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
0
2000
4000
6000
8000
10000
12000
Supply
Megaw
att
s
4
3. What can the nightlights tell us about regional economic activity?
Source: Austcham and NASA Geostat Database
5
4. What would a supply and demand curve for energy tell us about future hydropower projects in Laos?
1995 2000 2005 2010 2015 20200
1
2
3
4
5
6
7
8
9
US$cents
per
Kw
h
Thai energy price
Laos Sells
Note the rising marginal cost of production of Lao hydropower
Source: Austcham , EDL, Maunsell
6
5. Can Laos match Cambodia and can tourism be the next driver of economic growth in Laos?
Source: Austcham and Lao Tourism Association, Cambodia Tourism Statistics
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
est
2015
est
0
1000000
2000000
3000000
4000000
5000000
6000000
0
500
1000
1500
2000
2500
3000
3500
Laos CambodiaCambodia expenditure Laos expenditure
Axis Title
Touri
st A
rriv
als
$U
S A
nnual
Spend i
n M
illi
ons
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6. Is Agriculture capable of sustaining poverty eradication?
0% 10% 20% 30% 40% 50% 60% 70% $-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
f(x) = 206.067543936567 x^-1.05957347497078
Cabba
ges
Locus
t Bea
ns
Raw S
ugar
Corn
Rubbe
r
Coffee
Sawn
Woo
d
Rough
Woo
d$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
Agricultural Exports by Value
Source: Austcham and UNCTAD 2013 data
Correlation of Agricultural Dependence and Poverty
Source: Austcham and World Bank Database
Laos 35%
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7. Beggar thy neighbour: Can Lao industry survive Thailand’s hard ball tactics?
“develop high growth sectors that can be economicdrivers: hydropower, processing industries, construction materials, manufacturingtourism agriculture & mining .8thNDSP MPI 2016-2020
Lao SEZs
Thai proposed SEZs
“target industries are agriculture and fisheries, furniture, garments, textiles and leather products, logistics, industrial estates and tourism”.
BOI Thailand 2015
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8. How many cars and motorbikes are on the roads in Laos and Vientiane?
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 est
2015 est
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
Vehicle & Motorbike Ownership in Laos
Motorbikes Vehicles
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9. Whither Vietnam? China and Thailand unmatched
Source: Austcham and UNCTAD Database
Germany
Japan
India
China
Thailand
0 200 400 600 800 1000 1200
Top Trade Partners
Trade (Millions US)
France
South Korea
Vietnam
Thailand
China
0100020003000400050006000
Top Investors
Investments (Millions US)
Source: Austcham and MPI
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10. What is happening with the budget and revenues?