Laos is one of Asia's poorest nations. Agriculture employs most of the Laotian workforce and accounts for about half of its gross domestic product. Rice is by far the chief crop; sweet potatoes, vegetables, corn, and peanuts are also grown. Commercial crops include coffee, sugarcane, tobacco, cotton, and tea. Illegal opium and cannabis were long produced in the northwest, part of the "Golden Triangle" (which also includes neighboring portions of Thailand and Myanmar), but production there was largely eradicated by 2005. Water buffalo, pigs, cattle, and poultry are raised, and fish from the rivers supplement the diet. Forests cover over half of the country; teak is cut and lac is extracted, but poor transportation and the lack of industry limit production. Copper, tin, and gypsum are mined; other mineral resources include gold and gemstones. Manufacturing is limited; textiles and garments are the most important products. Tourism has become increasingly significant in the 21st cent, providing service jobs for Laotians. Laos Shopping, Products made in Laos.

Laos has significant hydroelectric potential and, despite a relative lack of development, electricity is a prime export, mainly to Thailand. The other principal exports are textiles and garments, timber and wood products, coffee, and tin. Since machinery and equipment, vehicles, fuel, and most consumer goods have to be imported, there is a continuing foreign trade deficit. Leading trade partners are Thailand, Vietnam, and China. In an attempt to expand the nation's economy, a foreign investment law was passed in 1989; the statute was further liberalized in 1994.

The Mekong River, most of which flows in a broad valley, forms much of the boundaries with Myanmar and Thailand. For two stretches, however—one greater than 300 mi (480 km)—the Mekong flows entirely through the territory of Laos. Except for the Mekong lowlands and three major plateaus, the terrain of Laos is rugged, mountainous, and heavily forested; jagged crests in the north tower over 9,000 ft (2,740 m). In addition to the capital, important cities include Savannaket, Pakse, and Luang Phabang (the former royal capital).

Laos is one of the nations of Southeast Asia least touched by modern civilization. There are no railroads; roads and trails are limited; and use of the country's main communications artery, the Mekong River, is impeded by many falls and rapids. More than half the people live along the Mekong and its tributaries, and most are subsistence farmers. There is also a small class of prosperous urban elite drawn mainly from the Communist bureaucracy.

About two thirds of the population are Lao Loum, a people ethnically related to the Thai, who live along the Mekong River valley. The Lao Theung or Mountain Mon Khmer (about 22% of the population) generally reside in upland valleys. Highland groups include the Hmong (Meo), Yao (Mien), Black Thai, Dao, and several Tibeto-Burman speaking peoples. There are also important minorities of Vietnamese and Chinese. A majority of Laotians are Theravada Buddhists; although the mountain peoples are generally animists, some have adopted Buddhism. Lao is the official language; French and English are also spoken.

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