4Despite huge strides to become middle income by 2020 and an admirable growth forecast of 7% in 2017, there are signs that not everything is rosy.

The economy of the Lao People’s Democratic Republic is on track to meet forecasts ofslightly higher economic growth this year and next. Electricity generation from the growing number of hydropower plants and the Hongsa lignite-powered plant is trending up.

Construction on new hydropower projects, residential and commercial buildings, and facilities in special economic zones are contributing to the growth in GDP.

Better weather in 2016 has improved prospects for agriculture, though the risk remains that monsoon rains could cause floods. Gold output from the two major mines rose by 15% in the first half of 2016, but copper production declined by 4%. Tourist arrivals also fell by 4% in this period.


Laos has traditionally taken pride in its aura of laidback cool. But that sleepy image is taking a battering amidst the building frenzy currently underway in the country’s capital. Numerous shopping malls are going up around the city, most notably the Vientiane New World project, a mix of shops, restaurants and offices stretching along the Mekong riverfront. Away from the downtown area, meanwhile, new arrivals and real estate initiatives continue to leave their imprint at six Special Economic Zones (SEZs), sites implemented by the government to attract investors. Incentives here include exemption from duties and taxes on equipment and construction materials and reduced income taxes, effective carrots when attracting big-name foreign companies such as Japan’s Nikon and Toyota, both of which have set up factories there.

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