China’s promise of prosperity brought Laos debt — and distress

[Reashot Xigwin]

More than $1 trillion in Chinese loans to the developing world is building sparkling infrastructure, but the cost is still being tallied​

People at the artificial That Luang Lake in the That Luang Lake special economic zone in Vientiane, Laos's capital. Chinese developers are constructing high-rise residential towers across the special economic zone that are geared to Chinese investors, unaffordable to the vast majority of Lao.
By Shibani Mahtani and
Ore Huiying
Oct. 12 at 5:00 p.m.


175
VIENTIANE, Laos — At speeds of almost 100 miles an hour, the Chinese-built train zips over the Mekong River and careers through dozens of newly bored tunnels as it travels north from the capital. At its last stop, near the Chinese border, brand-new residential towers rise out of the jungle.
China funded much of the glistening new infrastructure that has transformed this landlocked country of 7.5 million people. The building boom showcases the kind of modernity China says it can offer the world, notably the high-speed Laos-China railway that in a feat of engineering transformed a two-day journey across the country into a sleek three-hour trip. The line was built by Chinese engineers to Chinese rail standards, allowing it to connect to China’s high-speed network.
But Laos is also an economy in distress. Inflation rose to more than 41 percent at its peak this spring. The Laotian kip has depreciated more than 43 percent against the U.S. dollar. In a country where virtually everything is imported, the statistics translate into sacrifice: farmers who can no longer afford fertilizer, children who have dropped out of school to work and families cutting back on health care.
The China-led strategy was meant to protect Laos from these shocks — instead, it led to them. Laos is struggling to repay the billions it borrowed from China to fund the hydroelectric dams, trains and highways, which have drained the country of foreign reserves. As repayments drag, external debt is rising, a vulnerability exacerbated by the pandemic and rising global fuel and food prices.

The AidData research lab at William & Mary, which tracks China’s lending, calculates Laos’s total debt to China over an 18-year period starting in 2000 to be at $12.2 billion — about 65 percent of gross domestic product. Add in loans from other agencies and countries, and Laos’s debt stands at more than 120 percent, according to AidData.

read the rest here:

https://www.washingtonpost.com/world/interactive/2023/laos-debt-china-belt-road/

Also related:

China’s Global Mega-Projects Are Falling Apart

Many of China’s Belt and Road infrastructure projects are plagued with construction flaws, including a giant hydropower plant in Ecuador, adding more costs to a program criticized for leading countries deeper into debt; “They’re falling apart bit by bit.”

www.wsj.com

 

[etylo]

Lol, another report by possibly Indian from the US Washington Post and WSJ, what the report suppose to say anything relating to China, good job, lol ? Lol, doesn't the huge depreciation of Laotian currency against US dollar as in many currencies in other countries has to do with the irresponsible US monetary policy of grossly inflating its currency by US gov ? Lol, the US reporter has the gall to blame on China instead, no shame, Laos didn't have any problems with paying Chinese loans before the current currency and economic crisis around the world created by US. Anyone who is not an idiot can see through this.

 

[Reashot Xigwin]

Lol, another report by possibly Indian from the US Washington Post, what the report suppose to say anything relating to China, good job, lol ? Lol, doesn't the huge depreciation of Laotian currency against US dollar as in many currencies in other countries has to do with the irresponsible US monetary policy of grossly inflating it by US gov ? Lol, the US reporter has the gall to blame on China instead, no shame, Laos didn't have any problems with paying Chinese loans before the current currency and economic crisis around the world created by US. Anyone who is not an idiot can see through this.

Only an idiot can read & understand this word salad

 

[StraightEdge]

Is this some sick joke from US media? Considering what US did to Laos, that's 100000x better. At least they have some railway and connection to trade.

Why Laos Has Been Bombed More Than Any Other Country | HISTORY

During the conflict in Vietnam, American bombers dropped some two million tons of bombs over the country as part of a covert attempt to wrest power from communist forces.

www.history.com

Before they complain, why don't they build something better and show it? I am sure Laos will take if US can build their railway for cheaper.

 

[etylo]

Only an idiot can read & understand this word salad

Stupid fool, read:

A road of prosperity -- China-Laos Railway promotes common development

A road of prosperity -- China-Laos Railway promotes common development-

english.news.cn

Sour grapes green welled fake Yankee frogs, that's what you are.

 

[Cheepek]

Facing BOP issues-> currency weakening -> inflation ~25%

 

[third eye]

Carpet baggers , money lenders .. the usual story

 

[SoulSpokesman]

@Cheepek Anna

Facing BOP issues-> currency weakening -> inflation ~25%

Why does this sound familiar?

Regards

 

[Bilal9]

OK there are variations in these belt and road success stories - but the fault is not that of China's.

In Laos case, OP's article is the usual pack of mixed spins and lies.

Laos is doing just fine, Thank You.

Sri Lanka had problems because the revenue-earning rate-of-return for the freeways and ports were miscalculated and not predicted properly by the Sri Lankans ahead of time. If a project does not offer good returns - why would you ask for financing the loan from the Chinese? The Sri Lankan leadership had massive corruption issues which resulted in massive debt and bankruptcy.

I can say in Bangladesh case all Chinese projects have been planned exceptionally well by our planning commission, which is an exception in a country that is largely mismanaged like all 3rd world countries.

Chinese mega-projects like river-crossing road tunnels, power stations, cross-country railways, huge bridges etc. were all part of the effort to increase GDP in Bangladesh. Connecting power to urban centers and building export zones with road infra to new ports are all meant to deliver returns.

The Chinese are not the sole country which are development partners in Bangladesh, the Japanese and Koreans (and even Russians with a Nuclear power plant) are also equally involved.

Even with all the frenetic development activity (majority of it financed by China) - Bangladesh' debt-to-GDP-ratio is still significantly lower than a lot of other countries that do not avail of Chinese loans (way lower than our large neighbor to the West, theirs is 52% while ours is 36%).

 

[SoulSpokesman]

@Bilal9

Bilal bhai,

Not every developing country is fortunate enough to have a sagacious leader like SHW.

Regards

 

[beijingwalker]

Lol, China should've bombed them like US did to Afghanistan, Iraq, Libya and Syria. Creative destruction...

 

[etylo]

OK there are variations in these belt and road success stories - but the fault is not that of China's.

In Laos case, OP's article is the usual pack of mixed spins and lies.

Laos is doing just fine, Thank You.

That's what I hear Laos is doing fine with the Chinese investments esp the newly built railway that is bringing good profits in both tourism and freights. And then, out of nowhere comes this American moronic BS report that Laos is unable to repay its loans from China becos of Laotian currency has depreciated 43% against US dollar and blame that on China. Lol, do the Americans have any sense of shame.

 

[Reashot Xigwin]

OK there are variations in these belt and road success stories - but the fault is not that of China's.

In Laos case, OP's article is the usual pack of mixed spins and lies.

Laos is doing just fine, Thank You.

Sri Lanka had problems because the revenue-earning rate-of-return for the freeways and ports were miscalculated and not predicted properly by the Sri Lankans ahead of time. If a project does not offer good returns - why would you ask for financing the loan from the Chinese? The Sri Lankan leadership had massive corruption issues which resulted in massive debt and bankruptcy.

I can say in Bangladesh case all Chinese projects have been planned exceptionally well by our planning commission, which is an exception in a country that is largely mismanaged like all 3rd world countries.

Chinese mega-projects like river-crossing road tunnels, power stations, cross-country railways, huge bridges etc. were all part of the effort to increase GDP in Bangladesh. Connecting power to urban centers and building export zones with road infra to new ports are all meant to deliver returns.

The Chinese are not the sole country which are development partners in Bangladesh, the Japanese and Koreans (and even Russians with a Nuclear power plant) are also equally involved.

Even with all the frenetic development activity (majority of it financed by China) - Bangladesh' debt-to-GDP-ratio is still significantly lower than a lot of other countries that do not avail of Chinese loans (way lower than our large neighbor to the West, theirs is 52% while ours is 36%).

Laos ain't doing fine that's the point of the news. Also Laos ain't Bangladesh. Their country is a communist dictatorship where the people don't have a say in the running of their country, Yet the Chinese keep giving them loans without even considering this.

Lol, China should've bombed them like US did to Afghanistan, Iraq, Libya and Syria. Creative destruction...

Meanwhile in China backed Cambodia...

The Killing Tree​

We reached the Killing Tree, a giant tree looming over the orchard, whose beauty belies the horrors of its past. The tree claimed the lives of many innocent children whose tiny bodies were bashed off the tree as a means of execution. The rationale was to stop them growing up and taking revenge for their parents’ deaths.



A huge collection of frendship bracelets adorns the base of the tree, a small gesture of solidarity from the visitors desperate to give something back to the victims.

If we just use body count as measurement the Chinese got the US beat.

 

[etylo]

Laos ain't doing fine that's the point of the news. Also Laos ain't Bangladesh. Their country is a communist dictatorship where the people don't have a say in the running of their country, Yet the Chinese keep giving them loans without even considering this.


Meanwhile in China backed Cambodia...

The Killing Tree​

We reached the Killing Tree, a giant tree looming over the orchard, whose beauty belies the horrors of its past. The tree claimed the lives of many innocent children whose tiny bodies were bashed off the tree as a means of execution. The rationale was to stop them growing up and taking revenge for their parents’ deaths.



A huge collection of frendship bracelets adorns the base of the tree, a small gesture of solidarity from the visitors desperate to give something back to the victims.

If we just use body count as measurement the Chinese got the US beat.

Fake Yankee green welled frog, how many wars and invasions US has waged and how many people Yankees have killed in those wars since WW II ? give me a number if you have no guilt and shame. Besides, Cambodia is Cambodia, an independent country, China never dictated to them.

 

[Bilal9]

@Bilal9

Bilal bhai,

Not every developing country is fortunate enough to have a sagacious leader like SHW.

Regards

Going by your "Stuti-Gaana" of Hasina and her "Pujaniya self" being the "mother of humanity" like Maa kali and Maa Durga, are you going to hang her picture draped with Ganda flowers and start worshipping her?

Sure seems like it....

That's what I hear Laos is doing fine with the Chinese investments esp the newly built railway that is bringing good profits in both tourism and freights. And then, out of nowhere comes this American moronic BS report that Laos is unable to repay its loans from China becos of Laotian currency has depreciated 43% against US dollar and blame that on China. Lol, do the Americans have any sense of shame.

Yeah devaluation of Laotian Kip against the dollar is because of their internal economic issues as well as inflation and completely unrelated to their debt to China.

The more an economy is related to exports, the more shock you are going to get from global inflation nowadays.