In terms of diversification, by all measures, the structure of Laos‟ exports has been
rather rigid and little diversification occurred during the study period. These findings would
imply that the accession to ASEAN and joining AFTA have so far not brought the expected
positive effects to the country‟s competitiveness. On the other hand, intra-industry
diversification has been found to occur in the wood processing and garment industry. In other
words, specialization tends to occur in the simple product lines (e.g. simply worked wood;
wood in rough or squared; men‟s and women‟s cloth), while the more sophisticated
commodities like wood manufactures and non-textile clothing have not gained
competitiveness. These findings would partly point to the fact that the skill levels of Lao labor force are not yet sufficient to meet investors‟ requirements for more sophisticated products with higher value added.