Unscathed by COVID-19, Laos Gambles on Megaprojects to Revive Its Economy

Unscathed by COVID-19, Laos Gambles on Megaprojects to Revive Its Economy
A railway bridge over the Mekong River under construction in the suburbs of Luang Prabang, Laos, March 11, 2020 (Kyodo photo via AP Images).

Five months into the COVID-19 pandemic, East Asian countries like Vietnam, Taiwan and South Korea have garnered widespread praise for their effective handling of the coronavirus. Nearby Laos, with just 22 confirmed cases and no deaths, has gone largely unnoticed. While the World Health Organization has praised Laos’ prevention measures as “exemplary,” the mountainous Southeast Asian nation’s sparse rural population, limited transportation system and dearth of major cities have aided its response.

But while Laos has so far weathered the public health effects of the pandemic, the economic impacts are starting to bite. In May, the World Bank cautioned that Laos was “not immune from the global economic downturn” triggered by COVID-19, predicting its economy could shrink by 1.8 percent in 2020. Tourism and the service sector have been hit the worst, causing unemployment to surge to 25 percent. The outlook is especially concerning for a country that already has a high level of public debt.

Taking a strategic gamble, Laos has doubled down on what has regularly been blamed for its pre-coronavirus financial stresses: large-scale infrastructure projects, funded by China. Despite warnings of a “debt trap” and fears of environmental harm, the government is forging ahead with plans to build huge dams along the Mekong River and its tributaries, while the $6 billion China-Laos railway nears completion. Laotian leaders hope to make their landlocked country “land-linked,” and export electricity to its neighbors.

Keep reading for free!

Get instant access to the rest of this article by submitting your email address below. You'll also get access to three articles of your choice each month and our free newsletter:

Or, Subscribe now to get full access.

Already a subscriber? Log in here .

What you’ll get with an All-Access subscription to World Politics Review:

A WPR subscription is like no other resource — it’s like having a personal curator and expert analyst of global affairs news. Subscribe now, and you’ll get:

  • Immediate and instant access to the full searchable library of tens of thousands of articles.
  • Daily articles with original analysis, written by leading topic experts, delivered to you every weekday.
  • Regular in-depth articles with deep dives into important issues and countries.
  • The Daily Review email, with our take on the day’s most important news, the latest WPR analysis, what’s on our radar, and more.
  • The Weekly Review email, with quick summaries of the week’s most important coverage, and what’s to come.
  • Completely ad-free reading.

And all of this is available to you when you subscribe today.

More World Politics Review