E.J. DE LARA WRITES- Recently, the Laos National Assembly approved the construction of a $7 billion railroad that would extend to the China border in Luang Namntha province. The railroad was supposed to be a joint project between Laos and China until China dropped out last year fearing a lack of profit. Despite this, China is loaning Laos the full $7 billion in exchange for 5 million tons of minerals.
According to an official statement from the National Assembly, Deputy Prime Minister Somsavat Lengsavad says, “the railroad will attract more foreign investment and boost economic growth”. In addition to boosting the economy, The Vientiane Times Ekaphone Phouthonesy deputy editor believes that the people will be very pleased with the railroad and said “[they] consider the high-speed railway as a symbol of modernization”. Despite their high expectations, many other media sources have expressed concerns over the railroad.
The New York Times cites that the loan almost amounts to the country’s 8 million GDP and could put the country in national debt. As the project also needs 3000 meters of land, many of the farmlands will be affected and can turn into wastelands if not taken care of properly.
Tim Forsyth, a London economist and Time contributor says, “It sounds like an indirect form of land-grabbing because China gets access in return for its financial resources”. While China is getting the better end of the bargain, Laos is risking more money and resources. The Laotian government will have to hope that the project lives up to its full potential or they will be facing harsh consequences.
Laos’ Mammoth Train Project a Fast Track to Debt and Despair