The Lao People’s Democratic Republic (Lao PDR) remains essentially a rural country
based on population distribution. In 2005, it had a population of 5.6 million, but its high population
growth rate of 2.1% means that its population is expected to rise to 7.3 million by 2020. About
73% of the population lives in nearly 12,000 small rural villages, with the remaining 27% in urban
centers or towns. About 42% of the urban population lives in 140 small towns ranging from
2,000 to 20,000 people. 2 To date, these urban areas have not experienced the problems
associated with urbanization in other parts of Asia. They are relatively small, with low population
densities. However, the situation is changing. In 1998, agriculture accounted for over 53% of the
national gross domestic product. By 2008, it had declined to second place at 35%, behind the
services sector at 37%. During the same period, industry increased from 22% to 28%,3
including
the reemergence of agricultural processing, such as coffee and tea.