This country diagnostic study provides comprehensive analysis and identifies promising new drivers of growth which the Lao PDR can develop to diversify its production.

The Lao People’s Democratic Republic (Lao PDR) has shown remarkable progress by consistently building itself into a market-oriented economy, with economic growth in 1986–2016 averaging around 6.5% per annum. The rapid and sustained growth brought about changes in the structure of output, but did not alter job composition: resource-based products still dominate in industry, low value-added jobs in services, and 65% of the labor force in agriculture.

To address the lack of employment opportunities in high productivity sectors and accelerate the process of structural transformation, the Lao PDR country diagnostic study highlights the need to diversify the production structure toward more high value-added products and emphasizes the need to develop new drivers of growth. The study provides a comprehensive analysis and identifies the promising venues for upgrading the production structure of the economy.