As you climb into the hill country, the roads get dustier and rougher, and fewer cars can be seen. Phonxay is one of the poorest districts of Laos, and many of its villages are only accessible by footpath. Our destination this hot morning is a concrete water tank that can be found just off the road. A UK organization helped to build it six years ago, and in the nearby village of Thapho, where clean drinking water is scarce, it has made a big difference. The tank feeds six taps which in turn give water to over 800 people---it has improved things for almost every family, from schoolchildren to grannies. But lately, we were told, the clean water supply has come under pressure from new arrivals, people who have come down from the hill areas, and there are concerns that there will not be enough clean water to go round. There are also serious worries about resources in Laos. The Chinese are building a 400km railway link, which could transform the landlocked country. About 150,000 Chinese workers will be involved. What will this do to local clean water supplies? How will the workers be fed? The vast majority of Laotians live on farms. But with foreign investors wanting to buy up land, local people will have to be moved to make room for them. Heavily dependent on both foreign aid and foreign investment, Laos still falls well behind its neighbours, although its economy has grown at about 6% a year in the last decade. Its biggest economic problem is the lack of locally trained skilled workforce. But there are reasons to be hopeful for the future. Laos is beautiful, and foreign tourism continues to grow: fortunately so far the fast-food chains and coffee bars common elsewhere are nowhere to be seen. Although all local media are government-run, the Internet is not controlled and the BBC and CNN are available to those with satellite dishes. The government has also achieved impressive results in rural development, with communities benefiting not just from cleaner water but the construction of new schools and regular visits from medical teams. Poverty will not be history in Laos within the next decade, but with small steps forward and a bit of outside help, the country could find itself out of the UN's least-developed category by 2020. What is the most serious limitation on Laos' economic growth?
The lack of local skilled workers. A poor transportation system. Too much foreign aid. Too many foreign workers.