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Faced with a steadily worsening economy, the government of the Lao Peoples Democratic Republic took its first steps toward reforming its centrally planned economy in December 1979. The reform process gathered momentum with the introduction of the New Economic Mechanism in 1985, as the authorities began a series of far-reaching policy reforms in virtually all economic areas. This paper provides a much-needed overview of the Lao P.D.R.'s experience with systemic transformation and macroeconomic adjustments in recent years and highlights challenges that the country is likely to face in the coming years.

International finance --- Laos --- Economic stabilization --- Structural adjustment (Economic policy) --- Economic policy --- -Economic stabilization --- -338.22 <598> --- laos --- politique economique --- LA / Laos --- 331.31 --- 331.30 --- 331.33 --- 330.05 --- 330.9594 --- Adjustment, Economic --- Business stabilization --- Economic adjustment --- Stabilization, Economic --- Economische organisatieleer. Economisch beleid. Economische politiek--Laos --- economisch beleid --- Economisch beleid. --- Economische toestand. --- Structureel beleid. Reglementering. Dereglementering. Ordnungspolitik. --- Economic conditions. --- Economic policy. --- Working papers --- -Laos --- 338.22 <598> Economische organisatieleer. Economisch beleid. Economische politiek--Laos --- -Structural adjustment (Economic policy) --- 338.22 <598> --- Economische toestand --- Economisch beleid --- Structureel beleid. Reglementering. Dereglementering. Ordnungspolitik --- Lao People's Democratic Republic --- Sathalanalat Paxathipatai Paxaxôn Lao --- People's Democratic Republic of Laos --- République démocratique populaire Lao --- Lao PDR --- Lao-Issara --- Laosskai︠a︡ Narodno-Demokraticheskai︠a︡ Respublika --- Sāthālanalat Pasāthipatai Pasāson Lāo --- Phrarātsaʻānāchak Lāo --- LNDR --- Lanxang --- Lan Xang --- Lan Sang --- Lan Chang --- ʻĀnāchak Lāo --- RDP lao --- Sō̜. Pō̜. Pō̜. Lāo --- Sō̜pō̜pō̜ Lāo --- Lao P.D.R. --- Saathiaranarath Prachhathipatay Prachhachhon Lao --- Cộng hòa dân chủ nhân dân Lào --- Royaume du Laos --- French Indochina --- RDP Lao --- Economic stabilization - Laos --- Structural adjustment (Economic policy) - Laos --- Laos - Economic policy --- Banks and Banking --- Exports and Imports --- Foreign Exchange --- Macroeconomics --- Public Finance --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Trade: General --- International Investment --- Long-term Capital Movements --- Comparison of Public and Private Enterprises and Nonprofit Institutions --- Privatization --- Contracting Out --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Banking --- Public finance & taxation --- International economics --- Currency --- Foreign exchange --- Finance --- Commercial banks --- Foreign direct investment --- Exports --- Financial institutions --- Balance of payments --- Economic sectors --- International trade --- Credit --- Money --- Imports --- Banks and banking --- Investments, Foreign