China’s Belt and Road Keeps Steaming Ahead In Laos

Via The Asia Times, commentary on how China’s Belt and Road keeps steaming ahead in Laos:

Under fire for bullying neighbors in the South China Sea, China is patting itself on the back for the progress it is making on the 411-kilometer China-Laos railway through a sparsely populated nation that has barely been touched by the Covid-19 pandemic.   

The official Xinhua News Agency reported on April 25 that all the beams are now in place for the 1,458-meter Luang Prabang cross-Mekong super-bridge, one of the biggest undertakings on a track that includes 169 other bridges and 72 mountain-blasting tunnels.

Construction resumed on the signature Belt and Road project only 23 days after Vientiane’s communist government closed its borders on April 1 with China, Thailand, Vietnam and Cambodia in response to the discovery of its eighth Covid-19 case.

Although there is skepticism about the official figures, landlocked Laos still has only 19 confirmed coronavirus infections among its 7.3 million people, less than any of the 10 Association of Southeast Asian Nation (ASEAN) states, ahead of Cambodia (122), Myanmar (178) and Vietnam (288).

Short of a cover-up, the only explanation for the small number of cases lies in Laos’ sparse population, few major urban centers and bare-bones public transportation. Vientiane, the capital and biggest city, has only a million people.

Foreign health experts point to the same apparent mitigating factors in neighboring Cambodia, coupled with the fact that hugging, cheek kissing and hand shaking are not part of either culture.

World Health Organization (WHO) figures seem to speak for themselves: With a total of 56,981 confirmed cases and 1,848 deaths, the ASEAN nationsand their collective 620 million population have less victims than 14 individual countries around the globe.

Laos has recently joined China and Vietnam in moving to ban the sale and consumption of rodents and exotic animals, whether wild-caught or captive bred, which were believed to be the cause of the original Covid-19 outbreak in Wuhan.

Laos’ Wildlife Conservation Society says over the past 10 years the Department of Livestock and Fisheries has detected known and novel coronaviruses in rodents, bats and other wildlife being sold in wet markets across the country.

It is not clear whether the Chinese workers on the railway were required to return home, or were merely placed in partial lockdown when the Lao government closed its borders and introduced other stricter social distancing measures on April 1.

But as Xinhua pointed out: “Taking advantage of the experiences of epidemic prevention and control in China, the Chinese engineering team took multiple measures, including strictly implementing a safety production management system.”

The railway originates in Kunming, the capital of China’s southern Yunnan province 572 kilometers north of the Lao border, and broadly aims to connect China to mainland Southeast Asia by a 160-kilometer-per-hour link all the way through Thailand and Malaysia to Singapore.

It may still take a decade or more for that dream to be realized given the different stages of development and commitment, but creating an alternative transport infrastructure for the importation of energy, food and other vital resources has always been a long-term Chinese goal.

Apart from helping to bring the broader region into its sphere of influence, Beijing would avoid its dependency on coastal areas which could become vulnerable to potential Western sanctions and naval blockades, particularly in a more volatile post-pandemic world.

Spanning spectacular ravines and burrowing under rugged mountains, the 504-kilometer-long Xuxi-Mohan section between Kunming and the Laos frontier is still expected to be finished by 2022, despite a two-month delay caused by the pandemic.

Across the border, Xinhua reports that work has only recently been completed on the nine-kilometer Na Mor tunnel in Laos’ northern Oudomxay province, 50 kilometers southeast of the new Boten economic zone where the track crosses from China.

Engineers have had to proceed carefully because of unexploded mines and other ordnance dropped by US aircraft during the Indochina War – a hazard confronted by road-building crews across most parts of the country.

The Lao government already claims to have spent US$1 billion on developing the 700-hectare Boten zone, which it expects will eventually attract as much as $10 billion in new Chinese investment and generate 300,000 jobs.

Further to the south, the new rail link crosses the Mekong River twice on the approach to Luang Prabang, the former royal capital and a major destination for a tourist industry that last year earned $785 million in foreign exchange.

The China-Lao railway is eventually designed to link with a planned 630-km high-speed line between the Thai Mekong border city of Nong Khai and Bangkok, part of which was originally due to open in  2023.

Wary of being loaded down with Chinese debt and the implication of that for the future relationship, Thailand has declined Beijing’s offer of high-interest loans to finance the $5.85 billion first phase to Nakhon Ratchasima on Thailand’s central plains.

Already with an external debt burden of $9.7 billion that concerns the International Monetary Fund (IMF), Laos will have to pay $900 million towards the $6 billion cost of the project, about 60% of which will supposedly be borne by private and state-owned enterprises.

Much of the financing arrangements, however, are far from transparent and if past experience is any indication, Laos will have to pay in land concessions and natural resources if it can’t meet its obligations for a project that, in the end, is part of a Chinese grand design.

This entry was posted on Monday, May 11th, 2020 at 5:17 am and is filed under China, Laos, New Silk Road.  You can follow any responses to this entry through the RSS 2.0 feed.  You can leave a response, or trackback from your own site. 

Leave a Reply

You must be logged in to post a comment.

About This Blog
Wildcats & Black Sheep is a personal interest blog dedicated to the identification and evaluation of maverick investment opportunities arising in frontier - and, what some may consider to be, “rogue” or “black sheep” - markets around the world.

Focusing primarily on The New Seven Sisters - the largely state owned petroleum companies from the emerging world that have become key players in the oil & gas industry as identified by Carola Hoyos, Chief Energy Correspondent for The Financial Times - but spanning other nascent opportunities around the globe that may hold potential in the years ahead, Wildcats & Black Sheep is a place for the adventurous to contemplate & evaluate the emerging markets of tomorrow.