Being a socialist state (along with China, Cuba, Vietnam, and North Korea), the Lao economic model resembles the Chinese socialist market and/or Vietnamese socialist-oriented market economies by combining high degrees of state ownership with openness to foreign direct investment and private ownership in a predominantly market-based framework.

Nonetheless, Laos continues to attract foreign investment as it integrates with the broader ASEAN economic community, due to its plentiful, young workforce, and favorable tax environment.

Initially timid, the NEM was expanded to include a range of reforms designed to create conditions conducive to private sector activity.

With the collapse of communism in Eastern Europe and the Soviet Union, in 1991, the PDR Lao government reached an agreement with the World Bank and the International Monetary Fund on additional reforms.

[29] In an attempt to stimulate further international commerce, the PDR Lao government accepted Australian aid to build a bridge across the Mekong River to Thailand.

[30] The latest round of state-owned enterprise reform in 2019 aims to ensure that the remaining SOEs become profitable ventures that are efficient and sustainable sources of income for the national treasury.

These measures include closing unproductive enterprises, ensure businesses in which the state has investments are reformed into profitable ventures, and reduce corruption.

There is moreover a need to improve the efficiency of public expenditure and tackle the potential costs of state-owned enterprises and public-private partnerships.” The Lao kip currency value has fallen and inflation remains higher than before the pandemic.

The same World Bank report states that "the main factor in the kip’s falling value has been the lack of foreign currency available (...) a result of the need to repay large external debts, despite some deferrals, and limited capital inflows."

Domestic savings are low, forcing Laos to rely heavily on foreign assistance and concessional loans as investment sources for economic development.

Agricultural products include sweet potatoes, vegetables, corn, coffee, sugarcane, tobacco, cotton, tea, peanuts, rice; water buffalo, pigs, cattle, poultry.

Exchange rate – kip (LAK) per US dollar – 8,556.56 (2009), 8,760.69 (2008), 9,658 (2007), 10,235 (2006), 10,820 (2005) Of the total foreign investment in Laos in 2012, the mining industry got 27% followed by electricity generation which had a 25% share.