Author Topic: Laos merely a bystander as China pushes Belt and Road ambitions  (Read 492 times)

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Laos merely a bystander as China pushes Belt and Road ambitions

Costly China-led railway project offers questionable benefits to host
MARIMI KISHIMOTO, Nikkei staff writer
October 06, 2017 11:45 JST

https://asia.nikkei.com/Economy/Laos-merely-a-bystander-as-China-pushes-Belt-and-Road-ambitions

LUANG PRABANG, Laos -- An ambitious $6 billion high-speed railway project in Laos that would link China with the Laotian capital of Vientiane on the Thai border is meant to be a symbol of cooperation under Chinese President Xi Jinping's flagship Belt and Road Initiative. But with Beijing calling the shots and leaving out locals, it has instead become another example of the pitfalls faced by small Southeast Asian countries in relying economically on their much larger neighbor.

Situated about a 20-minute drive from this ancient former capital of Laos is a construction site that could be described as a little China. Workers' conversation is all in Chinese, as is an instruction manual for heavy machinery resting on a drum. No one at the site, not even the foreman, can speak the local language.

One worker, asked where he hailed from, curtly replied "China," adding that he was there only because his boss told him to go.

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Initial estimates indicated that building the railway would require 100,000 workers. For Laos, which lacks much notable industry aside from exporting hydroelectric power and mining such resources as copper and bauxite, this seemed like a golden opportunity to spur new activity and create jobs.

But these hopes have been dashed. All of the construction work was handed off to China Railway Group, and Chinese engineers and laborers have descended on the country in droves.

Not even the Laotian government is clear on the exact number of Chinese workers in the country. "We want to use local labor as much as possible, but ... " lamented Lattanamany Khounnyvong, vice minister of public works and transport, whose purview includes the rail project.

Lattanamany was alluding to the massive leverage held by China, which is shouldering 70% of the cost of the project. With no experience with railway construction, Laos "has no choice but to depend on China" for technology and personnel, Lattanamany said.

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Because of the country's mountainous terrain and many rivers, the project entails building dozens of tunnels and some 170 bridges. The total cost is nearly twice the Laotian government's $3.6 billion annual budget. How necessary the railway is for a country with a population of just 6.9 million is debatable.

The government is responsible for 40% of Laos' share of the costs, or $730 million. It is borrowing 65% of this sum from China -- a debt that will be burdensome to repay.

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The railway will enable Luang Prabang residents to reach Vientiane, now a day's travel away by bus, in two to three hours. And the direct link to China has the potential to transform how goods and people travel.

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