Laos Turns to Vietnam and Thailand to Loosen China’s Grip

Laos has a problem with long. By some assessmentThe public debt in the country has accumulated over $ 15.9 billion, which exceeded GDP. And the balloon debt is simply the most striking symptom of a wider, long -term economic discomfort that affects the state of Southeast Asia, and the currency of depreciation and inflation on average 25 percent in the last three years.

Coid-19 pandemies worsened by Laos’s economic problems, but their fundamental source is well documented: the ruling Laoa revolutionary party or LPRP has taken a cube that Great infrastructure projects“Tacked up by Chinese companies and largely funded them with borrowers from Beijing – they would transform the country’s economy.

In the center of this plan is a large speed railway railway, which cost $ 6 billion and opened in December 2021 on many fanfars. Until now, however, early indications suggest that the project is used by China more than Laos. In the first two years after the railway became operating, Laotian export It rose only 11 percent at China, while Chinese exports to Laos rose 48 percent. The project was also left by Laos obsessed with expensive debt repayment, with more than half of the total external debts in the country now owed to China. Chinese financial support for hydroenergy dams and Laos surrounded state -owned electricity companies, which has debts exceeding $ 5 billion, the burden added. All of this prompted the narrative that Laos quickly becomes a “client” or “vassal” state of China.