Laos, a landlocked country of some three and a half million people, is now at the halfway stage of a three-year development plan which is seeking to improve the living conditions of a people who earn a per capital income of ninety dollars a year. The government has been in the hands of the Communist Pathet Lao since 1975.

SYNOPSIS: The Communists took over a country virtually without any combinations network. Under French rule, and despite more recent American aid, little had ben done to improve the infrastructure. Laos has no rail system and the Mekong River remains a major north-south transport route. Now efforts are being made to improve the road links essential for economic development.

Much of the manufacturing is small scale, with production largely confined to handicraft goods, processing domestic raw materials and supplying basic consumer goods. Many small factories. are still feeling the effects of twenty years of civil war, during which three-quarters of a million people became refugees.

To try to overcome the problems caused by war, the Laotian government is intent on advancing its development plan, using foreign aid. This fisheries project, fifteen kilometres from the capital Vientiane, is financed with funds from the United Nations. Fish forms a large part of the national diet, and fish framing is being encouraged; thousands of pounds have been dug since 1977.

More than eighty percent of the people work in agriculture, and international specialists say progress int he sector is one key to future success. Observers, and the Laotian authorities, are confident there are good prospects for agriculture, though it has been badly hit in the past two years by drought and floods. The government has set up more than one thousand co-operatives throughout the country, as part of its aim of improving output--but it's a constant struggle to grow enough food for the country's population.

Building a pig and poultry feed processing complex at Thangone is part of the aim of improving productivity. It is being built largely with money fro the International Development Agency, with the work supervised by six French technicians. The complex is expected to begin operating later this year, and should produce enough animal feed to supply the needs of farmers around the capital Vientiane -- and end the need to buy from abroad.

For these children, born under a monarchy, and now learning under a communist government, there is confidence about the future. International specialists are optimistic about the long-term economic future of Laos -- and development of natural resources that make the country potentially the richest in Indochina.