Despite statistics indicating that Laos is one of the poorest counties in the world, it has for the most part been spared the acute problems often associated with underdevelopment and poverty. Famine and serious epidemics have been absent in the twentieth century, urban slums have not existed, and debt bondage has been unknown. Because the rural economy was not effectively monetized through at least the early 1980s, households usually countered seasonal crop shortages by increasing their gathering activities and relying on wild tubers and other foods as insurance crops. Most villages have customs regarding the provision of rice loans-- sometimes interest-free--to families experiencing a bad year. Most shelter in rural areas is self-built and not dependent on land ownership or access to money. Thus, it is possible for most families to survive at least at a subsistence level, although for many the material standard of living is not high. Chronic marginal food production and lack of access to or inability to afford medical care and education remain pervasive problems, however.

No reliable statistics regarding income distribution or the extent of poverty were available as of mid-1994. A 1988 survey of income distribution in urban Vientiane found an average household monthly income of about K35,000 (for value of the kip--see Glossary), or US$70, with the most common income of between K25,000 and K30,000 per month--about $US55 at the 1988 exchange rate. With 4.5 persons per average household, the modal figure implied an annual per capita income of about US$150, far below the UN poverty line of US$275. Whether this survey included noncash income from agricultural production or other exchange was unknown, however family crop production was still an important element in the economy of many urban Vientiane families. These limited statistics emphasize the relative sensitivity of urban residents to prices and cash income, particularly when compared with rural villagers who were more insulated from the effects of inflation and market behavior.

The government does not maintain a social welfare system, but the National Committee for Social Welfare and War Veterans operates a number of "orphan's schools" in some province centers and administers retirement pay to government officials. This retirement pay, however, is as insignificant as their salaries were before retirement. Orphans, handicapped persons, and elderly persons living in rural villages are usually supported and cared for by their relatives, although the level of support depends on the economic resources of the caretakers. Lowland Lao are traditionally tolerant of mentally handicapped members of their community, and these persons, although not economically productive, are allowed to live with their families and move around the village at will. This family approach to social welfare operates in the towns as well, often on a neighborhood basis but particularly relying on extended kinship networks. As a consequence, urban beggars were unknown between 1975 and about 1987, although a small numb8ae mber appeared in Vientiane after that date, perhaps reflecting the increase in urban economic differentiation as much as any increase in acute poverty.

Regional and ethnic discrepancies remain the greatest source of poverty and poor living conditions. Many lowland villages are prosperous, regularly produce a rice surplus, and assist a small number of less well-off households within their boundaries. Other villages, particularly those in the uplands or of minorities who had recently relocated to lowland sites, are less well off and often unable to produce enough rice for village consumption. In these situations, the ability to produce other salable commodities, whether livestock, opium, or vegetables, or to find wage-labor jobs, is critical to the well-being of the household and the village. In settings where an entire village is rice-deficient, interfamily exchanges and rice loans cannot ameliorate the basic shortage affecting the community. Acute regional crop shortfalls in several years between 1989 and 1993 were largely met by rice imports provided through foreign aid. As market networks expand and as the economy becomes increasingly monetized and population growth and resettlement increase pressure on land resources, the number of villages in marginal economic situations can be expected to increase.

Data as of July 1994