Laos and China's Belt and Road Initiative – Gains and Losses

Abstract

The article analyzes the consequences of Laos' participation in the Chinese Belt and Road Initiative. The benefits acquired and possible losses are assessed. The construction of a railway in Laos, linking it to China, is the most successful Belt and Road project in Southeast Asia, which has a special place in China's strategic plans. The railway construction project is of great economic importance for Laos and in the future can stimulate its economic growth. At the same time, there is a risk of falling into debt dependence on China. The ability of Laos to meet its debt obligations will depend on the profitability of the project, which, however, raises many questions, since the project is more focused on the short-term interests of China than on the long-term interests of Laos. Whether Laos will be able to economically benefit from the construction of the railway remains questionable. But there is no doubt that China will benefit. China will not only strengthen economic presence in this country, relying on the support of the local elite, but also use Laos as a springboard to move deeper into Southeast Asia.