[ATimes] Laos is one of eight global countries considered of “particular concern” for a future debt crisis, according to a recent report by the Center for Global Development (CGD), a Washington-based economic think tank.The main cause of concern is the small poor country’s big rich plans for a US$6.7 billion high-speed railway that China is promoting as part of its Belt and Road Initiative (BRI). The project’s cost represents a quarter of Laos’ current gross domestic product (GDP).
One-third of that sum will be covered by a China-Lao joint venture company, of which the Lao government will contribute roughly 30%, or around US$700 million. Around US$480 of that amount will come from an Export-Import Bank of China loan. The remaining US$220 million will be drawn from the state budget.
But, as the CGD report notes, “the financial terms for many elements of the project remain a secret.” The opaque terms on the remaining US$6 billion is raising concerns about the concessions China may be able to wrest in the case of default. The project is scheduled for completion in 2021.
Beijing has already notched various long-term land concessions for plantation agricultural and other commercial ventures that have facilitated fast migration of Chinese workers and entrepreneurs. The train, designed to connect China to Laos and then through Thailand to mainland Southeast Asia, will pave the way for even faster Chinese migration southward.
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