Laos looks to be the next Southeast Asian to start experiencing rapid economic growth. Its 2009 GDP growth rate was tops in the region, at 6.4 percent according to the World Bank (or 7.6 percent according to the government.)

Laos has been experiencing an average of 7-percent growth for the past five years, and is expected to continue on this pace in 2010. The country mines copper and gold (the two minerals are often found in the same places), and sells a lot of it to China. Its tourism sector is also strong.

What intrigues me is its growth as a producer of hydroelectric power. Investors from adjoining Thailand have in mind to create 8,000 megawatts of power. Agreements have already been signed to export this juice to Thailand, Vietnam, and Cambodia.

About 1,000 megawatts of that just went online today, as generators at the Nam Theun 2 dam began cranking. Laos has designs on becoming the so-called "Battery of Asia" with its hydroelectric potential.

Could there server farms in the future of Laos?

The Nam Theun 2 dam was built at a cost of almost $1.5 billion US. Meanwhile, the Russians are coming, too, investing in a series of four dams that will generate 1,200 megawatts by 2013 at a planned construction cost of $1.7 billion.

Compare these numbers to the GDP of the entire country of about $5.4 billion and you get an idea of the ambitions of the investors, not only from Thailand but also Vietnam and China.

Despite the economic progress of the last five years, Laos remains in the bottom third of GDP per capita, at a little more than $2,000 per year in local buying power. This is only 60% of the Philippines, for example, which is hardly a wealthy country.

But with a population of less than 7 million, Laos does not face the crushing pressures that face most countries in Southeast Asia. Perhaps it can become a sort-of Canada of Southeast Asia--a low population sustained by abundant natural resources and beauty--without those pesky nine months of winter.

http://readnowmag.blogspot.com/2010/03/laos-on-economic-radar-screen.html