About  |   Contact  |  Mongabay on Facebook  |  Mongabay on Twitter  |  Subscribe
Rainforests | Tropical fish | Environmental news | For kids | Madagascar | Photos

Laos-Money and Prices





MONGABAY.COM
Mongabay.com seeks to raise interest in and appreciation of wild lands and wildlife, while examining the impact of emerging trends in climate, technology, economics, and finance on conservation and development (more)







WEEKLY NEWSLETTER
Email:


Laos Index

By Decree 14 of March 1988, prices of most goods are no longer set by the government; exceptions include basic utility and mineral prices. Instead, a new system of "unified prices"--free market prices--was instituted. As a result, prices of rationed and subsidized goods such as rice, sugar, cloth, and petroleum increased, and procurement prices were raised by 50 percent to 100 percent.

In addition, in 1988 the wages of state employees, previously paid through coupons redeemable for subsidized goods at state stores, began to be gradually remonetized. Very high inflation rates soon caused a real drop in annual wages, however, and low rates of tax collection gave the government less revenue to spend on wages. As a result, large arrears built up on salaries that are quite small. In 1990 salaries were increased by 83 percent, and arrears began to be paid off, contributing to the increase of 65 percent in government expenditure. Once paid, however, salaries almost immediately go again into arrears. Moreover, the salary increase is not sufficient for state employees to recoup real losses from inflation.

Data as of July 1994











Copyright mongabay 2000-2013