The people of Laos are called "Laotian", an internationally recognized name.
Here's a link that shows you how to say Laotian (a two-syllable word: Lao-tian).
http://www.youtube.com/watch?v=lbgn5rwRgK0
Simply put, it's "Lao-shen".
http://eye-in-the-blue-sky.blogspot.com/2011/05/hai-ma-matias-seafood-restaurant-sta.html