Ten Thought Provoking Slides on the Lao EconomyRichard Taylor President Austcham Lao

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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

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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

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3. What can the nightlights tell us about regional economic activity?

Source: Austcham and NASA Geostat Database

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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

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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

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2000

2001

2002

2003

2004

2005

2006

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est

2015

est

0

1000000

2000000

3000000

4000000

5000000

6000000

0

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1000

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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?