Sorry to bump this up but in choice D and E, why is there no ambiguity about who's population it is. I understand that its obvious that it is Laos and not GB but I still thought it was unclear.
Hmm. You could possibly argue for or against such an ambiguity in D. That's a little fuzzier because there are other things wrong with D in the same "area" of the sentence. Let's look at E first.
For E, the structure of the sentence (parallelism) tells us that we're talking about Laos' population.
Laos has X (a land area...) but [Laos has] Y (a population of...)
The "but" indicates parallelism. X and Y are the parallel items. The stuff before X has to apply to both X and Y. Voila! "Laos has" applies to both.
Apply that to D. We've got "but" there too, and an attempt at the X Y structure (though not correctly done):
Laos has X (a land area...) but [Laos has] Y (only 4 million in population...)