ntries of the former Soviet Union in
carrying out market reforms. Following a successful stabilization
program, which lowered inflation from 88% in 1994 to 15% for 1997,
attention is turning toward stimulating growth. Much of the
government's stock in enterprises has been sold. Drops in production
had been severe since the breakup of the Soviet Union in December
1991, but by mid-1995 production began to recover and exports began
to increase. Pensioners, unemployed workers, and government workers
with salary arrears continue to suffer. Foreign assistance played a
substantial role in the country's economic turnaround in 1996-97.
Growth was held down to 2.1% in 1998 largely because of the
spillover from Russia's economic difficulties, but moved ahead to
3.6% in 1999 and an estimated 5.7% in 2000. The government has
adopted a series of measures to combat such persistent problems as
excessive external debt, inflation, and inadequate revenue
collection.

Laos:
The government of Laos - one of the few remaining official
communist states - began decentralizing control and encouraging
private enterprise in 1986. The results, starting from an extremely
low base, were striking - growth averaged 7% during 1988-97. Reform
efforts subsequently slowed, and GDP growth dropped an average of 3
percentage points. Because Laos depends heavily on its trade with
Thailand, it was damaged by the regional financial crisis beginning
in 1997. Government mismanagement deepened the crisis, and from June
1997 to June 1999 the Lao kip lost 87% of its value. Laos' foreign
exchange problems peaked in September 1999 when the kip fell from
3,500 kip to the dollar to 9,000 kip to the dollar in a matter of
weeks. Now that the currency has stabilized, however, the government
seems content to let the current situation persist, despite limited
government revenue and foreign exchange reserves. A landlocked
country with a primitive infrastructure, Laos has no railroads, a
rudimentary road system, and limited external and internal
telecommunications. Electricity is available in only a few urban
areas. Subsistence agriculture accounts for half of GDP and provides
80% of total employment. For the foreseeable future the economy will
continue to depend on aid from the IMF and other international
sources; Japan is currently the largest bilateral aid donor; aid
from the former USSR/Eastern Euro