The weakening U.S. dollar is affecting Laos' economy across the board, but the sector bearing the brunt of the impact is its garment industry. The value of the dollar has gone down from more than 10,000 kips to a dollar in early 2007 to currently 9,230 kips to a dollar.
Garment factory owners say their exports to the U.S. are most affected because they receive payments in dollars but have to pay their wages in kip, and that the devaluation of the dollar causes them to incur an additional cost of 20% when they convert the dollar into the kip.
Laos' garment industry employs over 30,000 workers, more than any other sector. Although the U.S. holds a 20-30% share of the market for Laos' garment exports, far behind the European Union, but industry officials express concern that if the dollar continues to weaken, they might jsut have to stop their exports to the U.S. And that would mean laying off workers, which would send a ripple effect throughout Laos economy, because most of the garment workers are women who work to send money to feed their families in rural Laos.
Listen to our report for more details in Laos.