{"id":34819,"date":"2023-10-17T14:18:34","date_gmt":"2023-10-17T12:18:34","guid":{"rendered":"https:\/\/europeanvalues.cz\/?p=34819"},"modified":"2024-03-11T15:30:13","modified_gmt":"2024-03-11T13:30:13","slug":"belt-and-road-initiative-in-laos-a-success-story","status":"publish","type":"post","link":"https:\/\/europeanvalues.cz\/en\/belt-and-road-initiative-in-laos-a-success-story\/","title":{"rendered":"Belt and Road Initiative in Laos: A Success Story?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"34819\" class=\"elementor elementor-34819\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-51cc9c00 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"51cc9c00\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2df9a9c3\" data-id=\"2df9a9c3\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-3ff27b72 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"3ff27b72\" data-element_type=\"section\" data-e-type=\"section\" data-no-translation=\"\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-inner-column elementor-element elementor-element-25d6bf28\" data-id=\"25d6bf28\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-48407c8a elementor-widget elementor-widget-text-editor\" data-id=\"48407c8a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h2>What is happening?<\/h2><p>This year marks the decennial of the Belt and Road Initiative (\u4e00\u5e36\u4e00\u8def <em>Yidai Yilu<\/em>, BRI), and\u00a0<a href=\"http:\/\/www.beltandroadforum.org\/english\/index.html\" target=\"_blank\" rel=\"noopener\">this week, the third Belt and Road forum will take place in Beijing<\/a>. Lets look at one of the most significant infrastructure projects to remember the decade we have lived with the BRI.\u00a0<\/p><p>It has been almost two years since the\u00a0<strong>China-backed high-speed railway launched its operations in Laos<\/strong>. As the first real railway in Laos (before the construction began, Laos had had only four kilometers of railways) and\u00a0<strong>one of the biggest and costliest infrastructure projects in Laos<\/strong>, which is among the world&#8217;s poorest countries, it was subject to huge expectations from the Lao government. Vientiane, Laos capital, hoped that the &#8220;Iron River&#8221; \u2014 a Lao monicker for the railroad \u2014 would transform the country\u00a0<strong>from &#8220;landlocked&#8221; to &#8220;land-linked<\/strong>,&#8221; attracting foreign investment and enhancing tourism, logistics, and people-to-people exchanges. For Laos, the railway is undoubtedly an essential step towards its people&#8217;s economic development and welfare. But at what cost?\u00a0<\/p><h2>\u00a0<\/h2><h2>What is the broader picture?<\/h2><p>Laos had engaged with Chinese infrastructure projects long before the BRI. Since the early 2000s, China has bolstered its economic presence in Laos, increasing its demand for the country&#8217;s natural resources and agricultural products. Through its state-owned enterprises and large private companies, Beijing invested in the construction of roads, dams, telecommunication networks, development of mining, agriculture, etc.\u00a0<\/p><p>The new railway cuts through 417 kilometers of rugged terrain between the Lao capital of Vientiane and Boten, the country&#8217;s main border town with China. Having been known for gambling, prostitution, and crime, Boten became one of the special economic zones. The road travel time between the two cities is 15 hours, but\u00a0<strong>the high-speed train cuts to just four hours<\/strong>. On the other hand, the price tag of US$5.9 billion makes it <strong>the costliest and most controversial infrastructure project in Laos<\/strong>.\u00a0<\/p><p>Despite propaganda efforts showing\u00a0<a href=\"https:\/\/www.youtube.com\/watch?v=RmtHDbe5YU0&amp;ab_channel=ReportsonChina\" target=\"_blank\" rel=\"noopener\">only the project&#8217;s benefits<\/a>, in reality, the construction of the railway abounded with serious\u00a0<a href=\"https:\/\/www.rfa.org\/english\/news\/laos\/laos-china-railway-12052022173402.html\" target=\"_blank\" rel=\"noopener\">controversy<\/a>. China received criticism for its unfair compensation to the resettled Lao people, damage to water and irrigation systems, employing\u00a0<a href=\"https:\/\/www.researchgate.net\/publication\/356425429_Laos's_Enthusiastic_Embrace_of_China's_Belt_and_Road_Initiative\" target=\"_blank\" rel=\"noopener\">mainly Chinese workers and companies<\/a>, and several cases of labor exploitation. After the railways launched its operation, controversy continued: there were strict goods controls on the Chinese borders, and\u00a0<a href=\"https:\/\/www.rfa.org\/english\/news\/laos\/bri-china-laos-09292023124018.html\" target=\"_blank\" rel=\"noopener\">Chinese companies began to dominate the tourism<\/a>\u00a0sector in Laos. Currently, the &#8220;Iron River&#8221; flows only one way\u2014it facilitates the export of Chinese goods to Laos, while Lao exports to China remain minuscule. Further, there are serious concerns related to using underground\u00a0<strong>mineral resources as loan guarantees,\u00a0<\/strong>which allows China to extract natural resources if the revenues are too low. The MoU signed between the two countries in 2010 &#8220;guaranteed repayment of China&#8217;s loan with the income and assets of the railway and\u00a0<a href=\"https:\/\/www.researchgate.net\/publication\/356425429_Laos's_Enthusiastic_Embrace_of_China's_Belt_and_Road_Initiative\" target=\"_blank\" rel=\"noopener\">two unspecified mining areas<\/a>.&#8221;\u00a0<\/p><h2>\u00a0<\/h2><h2>Why it matters?<\/h2><p>As in other BRI projects, the Boten\u2013Vientiane railway is an example of\u00a0<strong>asymmetrical power relations<\/strong>\u00a0between China and its partners. Laos and China established the Laos\u2013China Railway Joined Venture Company to carry out the project. Chinese state-owned enterprises own 70 percent, and only 30 percent belong to the Lao State Railway. The joint venture contributed 40 percent of the total project cost, and the remaining 60 percent ($3.54 billion) came from a loan from the Chinese Exim Bank. According to\u00a0<a href=\"https:\/\/docs.aiddata.org\/ad4\/pdfs\/Banking_on_the_Belt_and_Road__Insights_from_a_new_global_dataset_of_13427_Chinese_development_projects.pdf\" target=\"_blank\" rel=\"noopener\">AidData<\/a>, the Lao government has been trapped in a \u201chidden debt\u201d as the project is \u201ctoo big to fail.\u201d As a result, the \u201cLaotian government\u2019s\u00a0<strong>true level of contingent liability due to lending from China\u00a0<\/strong>may be as high as\u00a0<strong>35 percent of GDP.\u201d\u00a0<\/strong><\/p><p>Currently, Laos faces\u00a0<strong>enormous public debt<\/strong>, which contributes to \u201c<a href=\"https:\/\/thedocs.worldbank.org\/en\/doc\/df7b578ac035fe4dad0129a278b8c850-0070062022\/original\/LaoPDREconomicMonitorOctober2022.pdf\" target=\"_blank\" rel=\"noopener\">economic instability and undermines development prospects<\/a>.\u201d International credit agencies decreased Laos\u2019 credit rating. Similarly to other BRI projects, it is questionable who is the real beneficiary. Foreign investment is essential, especially for developing countries. In the last decade, China has been a generous loan provider. However, through the construction of the Vientiane\u2013Boten railway, China sought to\u00a0<strong>extend its sphere of influence\u00a0<\/strong>beyond its borders. It is vital that recipients of China-backed infrastructural projects carefully distinguish between corrosive and constructive capital and do not engage in business that can destabilize or threaten their national security and sovereignty.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>What is happening? This year marks the decennial of the Belt and Road Initiative (\u4e00\u5e36\u4e00\u8def Yidai Yilu, BRI), and\u00a0this week, the third Belt and Road forum will take place in Beijing. Lets look at one of the most significant infrastructure projects to remember the decade we have lived with the BRI. It has been almost [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":34820,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[500],"tags":[534],"class_list":["post-34819","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-zuzana-koskova"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.1 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Belt and Road Initiative in Laos: A Success Story? - European Values Center for Security Policy<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/europeanvalues.cz\/en\/belt-and-road-initiative-in-laos-a-success-story\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Belt and Road Initiative in Laos: A Success Story? - European Values Center for Security Policy\" \/>\n<meta property=\"og:description\" content=\"What is happening? This year marks the decennial of the Belt and Road Initiative (\u4e00\u5e36\u4e00\u8def Yidai Yilu, BRI), and\u00a0this week, the third Belt and Road forum will take place in Beijing. Lets look at one of the most significant infrastructure projects to remember the decade we have lived with the BRI. 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