Laos on thin ice as China takes control of electricity grid
For almost a decade, Laos has been warned that its extravagant spending spree on infrastructure carried enormous financial risks that threatened to undermine its sovereignty and efforts to raise living standards among the poor.
Those warnings fell on deaf ears as Vientiane — hell-bent on becoming the “Battery of Asia” — borrowed heavily and built hydropower dams to sell electricity into neighboring countries, plus highways, bridges and railways.
It was an unfathomable wish list.
Like many countries in the region, Laos has felt the full economic impact of the Covid-19 pandemic. Remittances from foreign workers have evaporated alongside tourism income and exports from its state-run factories.
The upshot is that this tiny landlocked country is facing a sovereign default as its foreign reserves slump below US$1 billion, with China taking control of an electricity grid once touted for future prosperity but in reality just another debt trap.
Luke Hunt
