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Laos Gains Prestige, Economic Boost From Southeast Asia Games

A woman stops her motorbike outside a shop in Vientiane, 18 Dec 2009

A woman stops her motorbike outside a shop in Vientiane, 18 Dec 2009

The small Southeast Asian nation Laos has for the first time held the Southeast Asian Games, gaining prestige and an economic boost. The landlocked nation's growth is dependent on exporting natural resources but Laos increasingly looks to tourism to play a larger economic role.

The 25th Southeast Asian Games opened in Laos with great fanfare as athletes from 11 nations marched through the new national stadium.

Laos received widespread praise and recognition from holding the games, although it had to rely on China to build the stadium, Vietnam for the athletes' village, and financial help from South Korea, Japan, and others.

Tho Phom Ponh runs a souvenir and snack shop just across from the new stadium. He says Laos should be proud to host the games.

"Laos hosting the SEA [Southeast Asia] Games is really important and makes tourists know Laos as well. Laos has beautiful landscape and many places for sightseeing," he said. "It also helps Lao people to make more money."

Laos is an impoverished one-party communist state and its isolation from the international community gave it some protection from the global financial crisis.

The economy is growing at about seven percent a year, mainly from exports of minerals resources and hydropower. Laos, however, remains a mainly subsistence agricultural nation.

Khan To fills her watering can. She has been farming for 20 years and says she earns just enough money for her family of eight to get by.

"I work as a farmer every day," she said. "My income is about $1.50 per day and I use all of it to buy [food] to feed my family."

Laos has long been dependent on foreign aid and loans.

Economists say its fast growth helps reduce its debts but its economic reliance on natural resources not created enough small businesses or local jobs.

Gil-Hong Kim, the Asian Development Bank's country director for Laos, says the country should not rely only on exports of raw materials for growth.

"In order to share these benefits from natural resource sectors with all and more peoples, more Lao peoples, it's very critical to have more balanced economic structures," said Kim.

The Lao government is promoting tourism to better diversify its economy and promote local business.

Kim says hosting the Southeast Asian Games gives a short-term boost to the economy.

But, perhaps more importantly, he says the games will help improve Laos's image to the outside world.