Laos Table of Contents
The total external debt grew by an average annual rate of 22.5 percent from 1985 to 1989, slowing to 8.5 percent annually through 1991. Debt to the nonconvertible currency area is large but difficult to quantify, in part because available statistics often use different ruble-to-dollar exchange rates. World Bank figures showed that between 68 and 77 percent of the external debt was held by countries from the nonconvertible currency area through 1991. However, debt service to nonconvertible currency area countries as a percentage of total debt service decreased from about 33 percent of the total in 1984 to less than 10 percent in 1990. Debt service as a ratio of total exports increased from 10.2 percent in 1984 to a high of 16 percent in 1988, when it began a slow decline to nearly 10 percent in 1990, as exports increased (see table 13, Appendix). Although statistics on debt as a percentage of GDP are highly variable, sources agree that external debt constituted considerably more than 60 percent of GDP throughout the 1980s, surpassing total GDP in 1987 or 1988.
Through mid-1987, Laos was able to meet its non-ruble debt repayment schedule mainly because many multilateral loans had been made on highly concessional terms--about 99 percent of all longterm debt throughout the 1980s. Japan, which accounted for approximately 33 to 45 percent of all debt to bilateral donors in the convertible currency area in the late 1980s, eased debt pressures by forgiving parts of its debt. In the nonconvertible currency area, the Soviet Union allowed trade deficits of up to 400 percent of the value of imports annually; deficits at year's end were then converted into long-term loans. In 1991 the Soviet Union agreed to reschedule some of its long-run debt payments and to continue accepting repayments in commodities, rather than switching over to a hard currency basis as had previously been agreed by the Soviet-Lao Cooperation Commission.
Data as of July 1994