China-Laos Railway, a game changer for the economy
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China-Laos Railway, a game changer for the economy
Laos launches high-speed
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On December 3, 2021, the AFP news agency reported that High speed train route between Boten city near the chinese border to Vientiane Officially opened for service after 5 years of construction. This is a mega-project investment in transport infrastructure that China has invested in Laos worth more than US$6 billion. Part of China's Belt and Road project
The Vientiane government expects this railway line to be It has been a catalyst for the country's economy that has been mired for a long time due to many factors, especially geographical constraints. to connect with Kunming to make Laos easier to access the world market
Lao officials said the railway would reduce transportation costs. increase export and bring in more foreign tourists As the COVID-19 outbreak subsided and borders were reopened, Chinese Foreign Ministry spokesman Wang Wenbin said. said on Wednesday that This flagship project will help “Promote Laos' strategy of transforming itself from a landlocked country into a land hub.”
However, experts warn that the project could put Laos under the Beijing government's debt freeze. Fitch Ratings Asia Pacific revealed to the Financial Times that The disadvantage of this train line is that it is quite expensive. So the question is, are these margins reasonable in terms of economic value in terms of cost benefit and benefit?
For example, in the case of a port built by China in Hambantota, Sri Lanka, the Colombo government eventually faced debt settlement. It had to allow China Merchant Port Holdings to lease the port for decades.
Analysts therefore question whether Laos, which is still an infrastructure poor country in many respects. to the low income of the population How can $1.06 billion in debt be settled? And how ready are you to take advantage of this modern transportation system?
Like Greg Raymond, a professor at the Australian National University, there is little transparency about how Laos will use its debt. “The problem for Laos is their economy… How much can the private sector take advantage of this transport system? This is a huge test for the country's predominantly agricultural economy. which does not have a large merchant class,” Raymond told AFP.
The World Bank stated that Laos has been severely affected by the COVID outbreak. Economic growth has dropped to 0.4% in 2020, the lowest level in three decades, which the World Bank sees. This train line may be able to stimulate the economy of Laos. But the government needs to implement major reforms. This includes improving the border management system. |
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