Thread by @Xy5Z89

Long Threade

#Laos #China #Vientiane #Debts #Sovereignty

China's economy is growing, even in times of pandemic. And with their political, the political and economic influence of the country. But under Prime Minister Xi Jinping,

external foreign policy has become strikingly aggressive. That belongs especially to the neighboring countries. What is it like to be a neighbor of the new China? In a mini-series, the situation exists in four neighboring countries.

Laos is actually a rich country. Many precious metals are mined, especially copper, but also gold, iron, silver and tin. And hydropower helped a lot in the Mekong Basin. That is why the Laotian government belongs in the right for a lot of money.

Laos owns more electricity than it deserves, the main customers are neighboring Thailand and temporarily also Vietnam. On the Laotian Mekong, two mega-trains plus another 62 dams on the tributaries will be monitored, and more are open.

The government's idea is to become the "battery of Southeast Asia," as it is said. Only: So far, the seven million inhabitants have not received much of the wealth. In contrast, the country is one of the poorest in Southeast Asia,

the majority of the citizens live from agriculture, despite the economic economy, the standard of living, education and health protection are backward. The mountainous country is geographically and ethnically fissured and the state is weak.

Since 1975 the Leninist Lao People's Revolutionary Party has been allowed, which is its own autocratic as well as corrupt and, as it turned out, probably also incompetent. Eleven Megastaud tribes in China and two in Laos hold back the Mekong waters.

"There is a need for reform, above all, in one's own rights, democracy and the rule of law, as well as perception," says the German Development Ministry. But Laos now has one more problem, the consequences of which are geopolitically serious:

It is on the verge of national bankruptcy. Its international currency reserves fell to $ 864 million in June, but it will have to buy over $ 1 billion by the end of 2024. According to the International Monetary Fund,

Laos gross domestic product (GDP) is around 19 billion US dollars in 2019. According to the World Bank, Laos' debts will have to amount to 59 percent of GDP in 2019, and in 2020 they will be down to 68 percent.

For this reason, the rating agency Fitch downgraded Laos' credit rights to CCC in the fall, which means that there is a high probability of default. One difference reason for Laos' indebtedness is neighbor China.

Today, Laos is part of what has been known as the "Belt and Road" (BRI) or "New Silk Road" in China for a few years, the international infrastructure initiative for large-scale contracts such as ports, bridges, railway lines and energy networks.

For a poor country, they can be a blessing on construction projects involving Chinese loans and state-owned companies. But you can also go at the expense of sovereignty. In Laos this is a good thing because it is heavily indebted to China.

Without a doubt, the coronavirus in 2020 also tasted the economic growth in Laos, it has closed from 5.5 billion in 2019 to 0.5 in 2020. That has a lot to do with the fact that the virus paralyzed tourist tourism.

But even before the Covid 19 crisis, elected diplomats and rating agencies had warned of Laos' rising foreign debt. They have mainly run through energy projects that Laos' government administration has to deal with.

Many international investors from countries such as South Korea, Malaysia or Thailand are involved in Laos' energy sector, companies and banks from China are involved in around half of all hydroelectric projects on the Laotian Mekong and its tributaries.

So far, China has pumped less eleven US dollars in its neighboring country, in energy projects, in roads or in special economic zones.

global development policy center from Boston University that has employed 24 hydropower projects in Laos alone that are linked to Chinese money and companies, are under construction or are already. China is now a major investor in

Laos, the next largest is Thailand - that's not even half of the same volume. China is also becoming a real prestige object, the express train line from southwest China to Laos' capital Vientiane.

Laos ruling hope so that the country's economy and political market rights, the vision of China's Belt and Road planners, is to allow the line to cross Thailand to Singapore.

China's southwest provinces maintained relations with it and managed the following economies of Southeast Asia and world trade.

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