Can tourism help Laos to avoid poverty?
Luang Prabang, north of Laos, is experiencing something of an economic bounce. When the author of this article last visited in 2012, the city’s Central Street and Roadway, Siswangwong Road did not have many foreign tourists, and most of the Western people were backpackers who were passing through Thailand or Vietnam only. Options were limited for tourists.But today things are different. Handicraft markets have popped up near the narrow streets leading to Wat Pa Fi Buddhist temple at the south end of the road now-a-day road. In addition, Siswangwong, international travelers and tourists can be seen as food and drinking in bizarre bar and restaurant. Even adjacent roads have improved, fancy restaurants, cocktail bars and travel agents are ready to serve their international customers.Official figures show a 162 percent increase in visitors year after April 2025. Luang Prabang is designated by Lonley Planet as the top position of Asia for 2025.
Thousands of families avoid poverty in Luang Prabang:
The Lotian province targeted for 900,000 visitors last year – and it exceeded 2 million, which led to some $ 560 million (€ 491 million) in revenue. Thanks to the money flowing in the city, officials say more than 16,000 families have gone out of poverty, which is 98.3 percent of the total population of the city.In March this year, Mayor Withong Hathschan said that the improvement in infrastructure including roads, transport and utilities has made Luang Prabang poverty-free.Laos includes stable employment, a permanent home, secondary-level education and basic health care, clean water and access to energy.
Laos pressurized inflation, public debt:
But Laos, with its 7.8 million residents, mostly living in a rural environment in an area that is almost Britain -shaped, which is struggling to increase the standard of living. By 2023, official data suggests that about 17 percent of its families were living in poverty, but assessment by international organizations suggests that the actual rate may be higher when considering factors such as education and health care access, among others. The South East Asian country is ruled by a single party, Lao People’s Revolutionary Party, and the United Nations Benchmarks classify it as one of the world’s 44 least developed countries (LCDs).And last year it was reported that Laos’s total public debt was $ 13.8 billion, which was 108 percent of the country’s GDP. Its currency, Lao Kip, US Dollar and Thai are also deprecating to record climb against Baht, making it difficult to pay any loan.The country is highly dependent on agriculture, in which a large part of the population is working in the fields or on other points of the food production chain.Laos has also invested heavily in hydroelectrics, aimed at becoming a “battery” and supplying electricity to the countries of Southeast Asia. However, this investment has been expensive, Laos is deep in debt with Chinese energy firms. On the other hand, thanks to Chinese investment, Laos now claims a high -speed train line, which connects its capital, Viantiyane to the Chinese border, and also discusses the linking of the Viantian with Cambodia.
Can Laos use tourism to be rich?
The rise of Luang Prabang, the ancient capital of Laos, Sparks hopes that the whole country can run on its footsteps and increase tourism earnings to reduce poverty. But analysts have warned that not all visitors bring new businesses to the local population.For example, more than one million Chinese tourists visited Laos in 2024. However, many of them are so-called “zero-dollars” tour groups that pay low rates and spend money only in Chinese businesses, almost completely bypassing the local economy. “While the new high-speed railways connecting China to Laos have increased arrival,” says Professor Warvut Jumlongrak at Mahasarakham University in Thailand, not translated into meaningful economic benefits for the local Lao population. “For others, such as the president of the Inthira Group and an eco-tourism specialist in Laos, Inthi Danswan, in addition to improvement in agriculture, promoting tourism is an important piece of puzzle.“Luang is with the line of Prabang Province Laos-Chinis Railway, and we can focus more on agriculture, and exports, and the railway can export giant Chinese market and it can bring benefits to the locals,” he said.“And I strongly believe in tourism because Laos is surrounded by five large population. More than 200 million tourists are traveling around Laos in a year, or next to Laos. I think the future of tourism, agriculture and logistics is that Laos will help to get rid of this poverty,” he told DW.
