Laos’ Debt-Fueled Economy Is Going Up in Smoke

Laos’ Debt-Fueled Economy Is Going Up in Smoke
A high-speed rail train is pictured in Vientiane, Laos, at the opening of a Chinese-built railway connecting the Lao capital to the Chinese city of Kunming, Dec. 3, 2021 (Kyodo News photo via AP Images).

Over the past few years, the Southeast Asian state of Laos has positioned itself at the center of growing trade, economic and infrastructure integration in the Mekong subregion. Its ambitious plan envisioned its dams providing electricity for Laos’ more populous neighbors and its expanding web of roads and rails—whose development is funded extensively through debt, much of it to China—connecting the region’s rising economies. But that was before Laos’ economy crashed. Today, inflation is skyrocketing. Staple goods like cooking oil are becoming scarce. And the local currency is collapsing against the dollar. The country, whose credit rating was downgraded by Moody’s in […]

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