Why Laos’ reliance on Chinese money could bankrupt the country
Laos remains on the United Nation’s (UN) list of least developed nations. The government wants the country to graduate from this list. To try to achieve this, it has borrowed money from abroad to fund infrastructure projects. The government’s policy is risking short-term prosperity for long-term gain. The risks outweigh the rewards and Laos is now heading for bankruptcy. Is the government to blame? What can it do to ease the situation?
[…]These included a new bridge over the Mekong River. Laos also wants involvement in the high-speed rail link between China and Thailand. In the long-term, these projects should boost trade, investment, and tourism. In the short-term, it puts the country’s finances at significant risk. Laos is still repaying the money it borrowed to construct hydropower dams on the Mekong.
John Pennington
