8 ms·

Thriving on China's Belt and Road, Laos border town ditches kip for yuan

60 points by zinekeller 4y ago

jitl 4y ago
I traveled from Kunming to Vientiane overland over a decade ago. At the time, the best way from Kunming to Laos was to take a sleeper bus to Luang Prabang. The roads were adequate on the China side of the border but unsafe in any kind of rain on the Laos side. On one Kunming—Luang Prabang trip to refresh my visa stay in China, I had to remain in LP for 3-4 extra days because the road washed out. This sort of thing was fairly regular so I was prepared, but still. In that context, the China-Laos railway is mind blowing. It sounds like it comes at a very steep cost to Laos. Never the less, it’s an exciting development and I look forward to riding it north to Kunming once travel into China is less restricted by the zero COVID policy.
bArray 4y ago
So the success story here is: > [..] the yuan is now its main currency of trade. 1. They lost their own currency. > [..] it is also increasingly populated by many from across the border hoping to benefit [..] 2. The 'investment' into the local area is actually being used to employ imported Chinese workers. > Jua, a 24-year-old truck driver, feels he has been "kept alive" by China. He is paid in yuan every month by a Chinese cargo owner. 3. Local businesses are being purchased or replaced with Chinese owners. When they fail to pay back some loans [0], they will be forced to hand over large strategic areas, such as their mining lands [1] on a 99 year lease. Over the next 10 years we will likely see the erosion of Laos sovereignty. [0] https://www.voanews.com/a/laos-faces-debt-crisis-after-borrowing-billions-from-china-/6641633.html https://www.voanews.com/a/laos-faces-debt-crisis-after-borro... [1] https://en.wikipedia.org/wiki/File:Laos_Product_Exports_(2019).svg https://en.wikipedia.org/wiki/File:Laos_Product_Exports_(201...
- Yeahsureok 4y ago
  What happens when you fail to pay back loans to western companies? "oh no worries, we'll just write it off and you keep all your assets"? This handwringing on stuff like this is fairly transparent.
  - bArray 4y ago
    There is supposed to be due diligence on the issuing of loans, like a person getting a mortgage for a house, but for an entire Country. It is well known that the likes of Goldman Sachs, JP Morgan, etc, have been acting immorally in this regard. As far as I'm aware, Western loans are recouped through assets seizure, and there are large programmes in place to write off debt for those who would be perpetually bound by it. That said, the idea of a 99 year lease seems particularly troubling. It's essentially the time frame where everybody whom agreed to the arrangement will be long dead, and generations of people would have been raised not knowing the land was in fact leased. I suspect kicking people out of somewhere they have been for almost 100 years is not easy. Worse still is that the land acquired via the 99 year lease will be highly profitable land, with all profits and resources used for China's benefit. This further entraps the local Laos economy, where mining appears to make up major portion of their exports. Not only will they still be saddled with debt, they will now be less capable of repaying it.
    - Someone 4y ago
      All true, but I guess the Chinese will point to https://en.wikipedia.org/wiki/Convention_for_the_Extension_of_Hong_Kong_Territory https://en.wikipedia.org/wiki/Convention_for_the_Extension_o...: “In the wake of China's defeat in the First Sino-Japanese War (1894–1895), the British took advantage of the other European powers' scramble to carve up the country and forced the treaty on the weakened Chinese government. Between 6 March and 8 April 1898, the German government forced the Qing Empire into a 99-year lease of the Kiautschou Bay concession for a coaling station around Jiaozhou Bay on the southern coast of the Shandong Peninsula, to support a German global naval presence in direct opposition to the British network of global naval bases. This initiated a series of similar lease treaties with other European powers. On 27 March 1898, the Convention for the Lease of the Liaotung Peninsula was signed between the Russian Empire and the Qing Empire, granting Russia a 25-year lease of Port Arthur and Dalian, to support Russia's Chinese Eastern Railway interests in Manchuria. Consequently on 28 March 1898, Britain, anxious of the Russian presence in China, pressured the Qing Empire into leasing of Weihaiwei, which had been captured by the Empire of Japan in the Battle of Weihaiwei, the last major battle of the First Sino–Japanese War, for as long as the Russians occupying Port Arthur, to make checks and balances of Russia. During the negotiation, the British stated that they would further request for leasing of land if any foreign concession took place in Southern China. On 10 April 1898, the French, who also desired Chinese territory, forced the Qing Empire into a 99-year lease of Kwang-Chou-Wan to France to support France in southern China and Indochina. In order to maintain the balance of powers, Britain ordered Claude Maxwell MacDonald to pressure Qing Empire into allowing the expansion of Hong Kong for 200 miles (320 km). As a result, the Convention for the Extension of Hong Kong Territory was signed on 9 June 1898 in Beijing (Peking). The contract was signed to give the British full jurisdiction of the newly acquired land that was necessary to ensure proper military defence of the colony around the island. Some of the earliest proposals for the land's usage in 1894 included cemetery space, an exercise ground for British troops as well as land for development. From the British perspective concerns over security and territorial defence provided the major impetus for the agreement.” Over a century ago, but more forced upon them than this is upon Laos.
- rfoo 4y ago
  > employ imported Chinese workers Isn't what you quoted contradicted this? Jua is not a Chinese name.
  - bArray 4y ago
    I thought what I wrote was quite clear. They import Chinese workers to do the infrastructure development and the local people receive some small temporary benefit from the net import of Chinese migration. In this case the Chinese workers build skyscrapers that Laos cannot economically make use of using Chinese materials and Chinese workers, and a truck driver in Laos benefited from this as they need more business in the local area. The profits from his work got to the Chinese business owner.
- yarg 4y ago
  It's a Chinese invasion in slow motion. The same as Africa. One day, these people will wake up and realise that they're second class citizens in someone else's country.
- _8j50 4y ago
  Yes, Chinese workers but work still gets done. This isn't a developed nation, perhaps if the west is willing to do business your comment and sentiment has validity but sitting at Chinese workers and Chinese debt us better than sitting at a distance and pitying those poor people and occasionally tossing charity their way. Perhaps instead of criticizing China you should criticize the west for not besting China? Why isn't europe doing this, afterall they are the final destination of the belt road and they get a ton of stuff from China and can benefit to trade with the rest of asia? IMF and worldbank also hold a ton of debt on developing countries. I mean, I like to think I am the last person to support the CCP but bullshit is bullshit!
  - etempleton 4y ago
    Risk. Yes there are laws preventing or at least discouraging western companies from investment, but these are also inherently risky loans. China seems to have a larger appetite for risk. Higher risk, higher reward, but it can also backfire suddenly and spectacularly.
    - _8j50 4y ago
      That's understandable but my point was criticizing China for taking on risk (and reducing it by using their own people) when our countries and businesses aren't willing is a bit b.s. The livelihoods of people changed for the better.
  - bArray 4y ago
    > This isn't a developed nation, perhaps if the west is willing to do business your comment and sentiment has validity but sitting at Chinese workers and Chinese debt us better than sitting at a distance and pitying those poor people and occasionally tossing charity their way. I disagree. It is sometimes better to do nothing if the alternative causes more problems than it solves. Laos' time would have come naturally given stable government and consistent investment. They are now on a fast-track to failure. > Perhaps instead of criticizing China you should criticize the west for not besting China? As I said before, if a better solution cannot be proposed, it is better to do nothing, rather than an action that will most certainly end in failure. Without a stable government in Laos, all investment will likely be misused. It is up for the Laos people to decide when they are ready. China is also trying to become a world leader, it therefore opens itself up to criticism. There is a lot of responsibility if you want to wear large shoes. > Why isn't europe doing this, afterall they are the final destination of the belt road and they get a ton of stuff from China and can benefit to trade with the rest of asia? Europe isn't accepting charity from China, if anything it is the other way around. China receives favourable trading terms because they are a developing Country. The belt and road is not being built by China as a charity project, it is directly for their own economic gain. > IMF and worldbank also hold a ton of debt on developing countries. They do, but this is something that is currently a work-in-progress. Debt forgiveness is now more common and there is increasing regulation regarding issuing of loans to debt-trap companies. > I mean, I like to think I am the last person to support the CCP but bullshit is bullshit! I have no idea of your background, but you do appear (at least in this case) be supporting to actions of the CCP to debt-trap Laos.
- europeanguy 4y ago
  Forget about failing to pay loans. If the place is financially successful and lots of Chinese have interests there, the CCP will just declare it's Chinese. Straight from the Russia playbook.
  - barelysapient 4y ago
    China would never be so Loas'y.
    - bArray 4y ago
      They can just declare the local people as terrorists and send them off to re-education camps for free hard labour. It's not as if a communist Country has never done that before, or even that the CCP doesn't do exactly this today in Xinjiang and Tibet.
- dirtyid 4y ago
  The success story is Laos, a shit tier landlocked country with no development prospects has defied all sense, roughly parallelling trajectory per capita GDP growth with booming Vietnam next door, who has the option of replicating maritime export led growth. There's no reason Laos should be doing better than Cambodia unless prudently aligning with PRC interests. Laos' only short/medium term potential on her own is digging rocks or low end labour. But with PRC assistance, Laos can also become trail transit hub linking region and become energy exporter (battery of IndoChina) by having the privilege/permission as first downstream Mekong country that can harness left over hydropower, using infra PRC built. And obviously serving as PRC proxy or ceding sovereignty of control over said power network to allow PRC to influnece region via electricity and water. For landlocked Laos, that's about as, in PRC parlance, "win-win" as it gets.
rayiner 4y ago
The Belt and Road initiative is China’s Marshall Plan for Asia and Africa. I don’t think Americans realize the scale of Chinese money and engineering investment in these countries. It’s a trillion dollar endeavor, six times as large as the Marshall Plan (in today’s money). Like the Marshall Plan, it will help local economies develop. But I suspect it will lead to the same long term dependency and alignment with China that Europe has with America. I don’t think that’s necessarily a bad thing but it’s something to be cognizant of.
- cactusplant7374 4y ago
  But how much corruption and how many failed projects? It has been particularly disastrous for Ecuador. https://www.nytimes.com/2018/12/24/world/americas/ecuador-china-dam.html https://www.nytimes.com/2018/12/24/world/americas/ecuador-ch...
  - eliseumds 4y ago
    Has it? Ecuador is doing relatively well overall. Decent infrastructure, growing exports, one of the most stable economies in Latin America. Their GDP grew ~6x since 2000. They took the risk and seem to be on a good development path. Would any other country have offered them loans on better terms? Doubt it.
    - cactusplant7374 4y ago
      > Would any other country have offered them loans on better terms? Correa turned away from the US. So, probably? He then canceled some of the debt which destroyed direct foreign investment and took the country into a major recession. > Decent infrastructure The Coca Codo Sinclair Dam project is an absolute failure. It's not running at capacity and didn't lower the price of electricity. Lowering the price of electricity would have helped pull many out of poverty. The roads in Ecuador are absolutely abysmal. No interstate system, very slow to move through the country by car or bus. The smaller cities in the south receive much less support than Quito and Guayaquil. The healthcare system isn't funded. > growing exports They are experiencing the Dutch Disease. They export bananas and oil but most of the rich countries have better economies with less natural resources. They are too focused on commodities at the expense of other sectors. > one of the most stable economies in Latin America But only because of the dollarization of the economy. That prevented Correa from doing further damage by printing money and turning the country into Venezuela. > They took the risk and seem to be on a good development path. Most people I talk to say that times were better under Correa when public spending was much higher. Obviously it was unsustainable. The protests this year that shutdown Quito and Cuenca ended with the agreement that the government would spend $1 to $2 billion on oil subsidies. The demand for unsustainable public spending from the public is high. https://tradingeconomics.com/ecuador/government-spending https://tradingeconomics.com/ecuador/government-spending https://www.statista.com/statistics/531556/national-debt-of-ecuador/ https://www.statista.com/statistics/531556/national-debt-of-...
contingencies 4y ago
A few issues with this article. 1. This is old news. Northern Laos has long been fighting against disuse of the local kip. There are three major towns in the north; the border itself (Boten); Udomxai ("Muang Sai") and Luang Namtha. AFAIK all of them had large banners hung to the effect "use local currency" for many years. This effort would include both USD and Vietnamese Dong as well as Chinese Yuan Renminbi. 2. The border town area is called Mohan on the Chinese side, and Boten on the Laos side. Some of the images shown appear to be the Chinese side. 3. The initial Chinese push was for a road down to Chian Saen in Thailand. This road was built allegedly against promises from Thailand to pay for or at least allow the bridge at the end of the road to cross the Mekong. Thailand apparently rescinded and declined the bridge after the road was built. Chinese logistic influence on far northern Thailand was thereby eclipsed. Note further this area of Thailand is a stronghold of Nationalist Chinese support. 4. Much cargo travels directly from Yunnan to Thailand via boat, not so much via road and Laos. Similarly, much Thai fruit comes north to China via the same route. The boat trip can be taken by individuals. I've done it a few times and can vouch that it used to be spectacular, but widespread deforestation for rubber plantations has drastically reduced the biodiversity along the river over the last 20 years. 5. The major Chinese gambling destination was not Laos, it was Kengtung in Burma's Shan State (accessed from Menghai rather than Mengla). This was long ago closed off (10+ years), although a limited amount of covert border crossing probably continues. (Source: Previously lived in the area, transited many times.)
- nerdbert 4y ago
  The "use local currency" banners were also hanging in Vientiane, far from the (Chinese) border, back when USD was the threat. The kip has always been a tough sell.
  - philliphaydon 4y ago
    Cambodia also tried to devalue the US dollar in favor of its own currency. The last time I visited Cambodia, 1000 local currency was $1, but if you used a $2 note it was worth 25 cents. So toktok drivers would try pay you in $2 so they can offload them, but would refuse to take them as they had no value to them.
refurb 4y ago
The geopolitical aspects of this are important. China has been long fighting to expand its sphere of influence into SE Asia. Vietnam pissed off China when it invaded Cambodia to dispose the Khmer Rouge which led to the Sino-Vietnam war of 1979. The Laos government is very cozy with the Vietnamese government so no doubt the Belt and Road initiative is concerning to Vietnam in terms of its influence on Laos.
- rippercushions 4y ago
  Laos is small, weak and thinly populated. Their diplomacy consists of playing off the great(er) powers that surround them, namely Thailand, Vietnam and China, with varying degrees of success. Now that the China-Laos rail link is complete, they're busily angling for another to the port of Vung Ang in Vietnam. Fun fact: northeastern Thailand (Isaan) is ethnically and culturally Lao, and to this day has far more Lao speakers than Laos itself. The current rump state of Laos on the east bank of the Mekong was carved off by the French as a colony.
rippercushions 4y ago
One important factor not mentioned is that the local currency, the Lao kip, has had a really rough ride this year, losing almost half its value in USD terms. I was in Laos earlier this year and hotels, travel agencies, even larger restaurants were requiring payment in USD. Of course, one major reason for the kip's weakness is that Laos is now heavily indebted to China and unlikely to be able to repay its loans. The local economy has taken a major hit from China being closed, with lots of abandoned construction sites and shut-down hotels in the capital Vientiane.
- powerapple 4y ago
  the major reason of currency weakness, like in any other country in this world right now, is US dollars. Chinese Yuan lost 15% - 20% value, Japanese Yen, Pound, Euros.....
twelve40 4y ago
oh man, they get a railroad? no fair, can we get these belt and road folks to fix up caltrain while they're at it? I guess not..

60 points by zinekeller 4y ago

jitl 4y ago

I traveled from Kunming to Vientiane overland over a decade ago. At the time, the best way from Kunming to Laos was to take a sleeper bus to Luang Prabang. The roads were adequate on the China side of the border but unsafe in any kind of rain on the Laos side. On one Kunming—Luang Prabang trip to refresh my visa stay in China, I had to remain in LP for 3-4 extra days because the road washed out. This sort of thing was fairly regular so I was prepared, but still. In that context, the China-Laos railway is mind blowing. It sounds like it comes at a very steep cost to Laos. Never the less, it’s an exciting development and I look forward to riding it north to Kunming once travel into China is less restricted by the zero COVID policy.

bArray 4y ago

So the success story here is: > [..] the yuan is now its main currency of trade. 1. They lost their own currency. > [..] it is also increasingly populated by many from across the border hoping to benefit [..] 2. The 'investment' into the local area is actually being used to employ imported Chinese workers. > Jua, a 24-year-old truck driver, feels he has been "kept alive" by China. He is paid in yuan every month by a Chinese cargo owner. 3. Local businesses are being purchased or replaced with Chinese owners. When they fail to pay back some loans [0], they will be forced to hand over large strategic areas, such as their mining lands [1] on a 99 year lease. Over the next 10 years we will likely see the erosion of Laos sovereignty. [0] https://www.voanews.com/a/laos-faces-debt-crisis-after-borrowing-billions-from-china-/6641633.html https://www.voanews.com/a/laos-faces-debt-crisis-after-borro... [1] https://en.wikipedia.org/wiki/File:Laos_Product_Exports_(2019).svg https://en.wikipedia.org/wiki/File:Laos_Product_Exports_(201...

Yeahsureok 4y ago
What happens when you fail to pay back loans to western companies? "oh no worries, we'll just write it off and you keep all your assets"? This handwringing on stuff like this is fairly transparent.
- bArray 4y ago
  There is supposed to be due diligence on the issuing of loans, like a person getting a mortgage for a house, but for an entire Country. It is well known that the likes of Goldman Sachs, JP Morgan, etc, have been acting immorally in this regard. As far as I'm aware, Western loans are recouped through assets seizure, and there are large programmes in place to write off debt for those who would be perpetually bound by it. That said, the idea of a 99 year lease seems particularly troubling. It's essentially the time frame where everybody whom agreed to the arrangement will be long dead, and generations of people would have been raised not knowing the land was in fact leased. I suspect kicking people out of somewhere they have been for almost 100 years is not easy. Worse still is that the land acquired via the 99 year lease will be highly profitable land, with all profits and resources used for China's benefit. This further entraps the local Laos economy, where mining appears to make up major portion of their exports. Not only will they still be saddled with debt, they will now be less capable of repaying it.
  - Someone 4y ago
    All true, but I guess the Chinese will point to https://en.wikipedia.org/wiki/Convention_for_the_Extension_of_Hong_Kong_Territory https://en.wikipedia.org/wiki/Convention_for_the_Extension_o...: “In the wake of China's defeat in the First Sino-Japanese War (1894–1895), the British took advantage of the other European powers' scramble to carve up the country and forced the treaty on the weakened Chinese government. Between 6 March and 8 April 1898, the German government forced the Qing Empire into a 99-year lease of the Kiautschou Bay concession for a coaling station around Jiaozhou Bay on the southern coast of the Shandong Peninsula, to support a German global naval presence in direct opposition to the British network of global naval bases. This initiated a series of similar lease treaties with other European powers. On 27 March 1898, the Convention for the Lease of the Liaotung Peninsula was signed between the Russian Empire and the Qing Empire, granting Russia a 25-year lease of Port Arthur and Dalian, to support Russia's Chinese Eastern Railway interests in Manchuria. Consequently on 28 March 1898, Britain, anxious of the Russian presence in China, pressured the Qing Empire into leasing of Weihaiwei, which had been captured by the Empire of Japan in the Battle of Weihaiwei, the last major battle of the First Sino–Japanese War, for as long as the Russians occupying Port Arthur, to make checks and balances of Russia. During the negotiation, the British stated that they would further request for leasing of land if any foreign concession took place in Southern China. On 10 April 1898, the French, who also desired Chinese territory, forced the Qing Empire into a 99-year lease of Kwang-Chou-Wan to France to support France in southern China and Indochina. In order to maintain the balance of powers, Britain ordered Claude Maxwell MacDonald to pressure Qing Empire into allowing the expansion of Hong Kong for 200 miles (320 km). As a result, the Convention for the Extension of Hong Kong Territory was signed on 9 June 1898 in Beijing (Peking). The contract was signed to give the British full jurisdiction of the newly acquired land that was necessary to ensure proper military defence of the colony around the island. Some of the earliest proposals for the land's usage in 1894 included cemetery space, an exercise ground for British troops as well as land for development. From the British perspective concerns over security and territorial defence provided the major impetus for the agreement.” Over a century ago, but more forced upon them than this is upon Laos.
rfoo 4y ago
> employ imported Chinese workers Isn't what you quoted contradicted this? Jua is not a Chinese name.
- bArray 4y ago
  I thought what I wrote was quite clear. They import Chinese workers to do the infrastructure development and the local people receive some small temporary benefit from the net import of Chinese migration. In this case the Chinese workers build skyscrapers that Laos cannot economically make use of using Chinese materials and Chinese workers, and a truck driver in Laos benefited from this as they need more business in the local area. The profits from his work got to the Chinese business owner.
yarg 4y ago
It's a Chinese invasion in slow motion. The same as Africa. One day, these people will wake up and realise that they're second class citizens in someone else's country.
_8j50 4y ago
Yes, Chinese workers but work still gets done. This isn't a developed nation, perhaps if the west is willing to do business your comment and sentiment has validity but sitting at Chinese workers and Chinese debt us better than sitting at a distance and pitying those poor people and occasionally tossing charity their way. Perhaps instead of criticizing China you should criticize the west for not besting China? Why isn't europe doing this, afterall they are the final destination of the belt road and they get a ton of stuff from China and can benefit to trade with the rest of asia? IMF and worldbank also hold a ton of debt on developing countries. I mean, I like to think I am the last person to support the CCP but bullshit is bullshit!
- etempleton 4y ago
  Risk. Yes there are laws preventing or at least discouraging western companies from investment, but these are also inherently risky loans. China seems to have a larger appetite for risk. Higher risk, higher reward, but it can also backfire suddenly and spectacularly.
  - _8j50 4y ago
    That's understandable but my point was criticizing China for taking on risk (and reducing it by using their own people) when our countries and businesses aren't willing is a bit b.s. The livelihoods of people changed for the better.
- bArray 4y ago
  > This isn't a developed nation, perhaps if the west is willing to do business your comment and sentiment has validity but sitting at Chinese workers and Chinese debt us better than sitting at a distance and pitying those poor people and occasionally tossing charity their way. I disagree. It is sometimes better to do nothing if the alternative causes more problems than it solves. Laos' time would have come naturally given stable government and consistent investment. They are now on a fast-track to failure. > Perhaps instead of criticizing China you should criticize the west for not besting China? As I said before, if a better solution cannot be proposed, it is better to do nothing, rather than an action that will most certainly end in failure. Without a stable government in Laos, all investment will likely be misused. It is up for the Laos people to decide when they are ready. China is also trying to become a world leader, it therefore opens itself up to criticism. There is a lot of responsibility if you want to wear large shoes. > Why isn't europe doing this, afterall they are the final destination of the belt road and they get a ton of stuff from China and can benefit to trade with the rest of asia? Europe isn't accepting charity from China, if anything it is the other way around. China receives favourable trading terms because they are a developing Country. The belt and road is not being built by China as a charity project, it is directly for their own economic gain. > IMF and worldbank also hold a ton of debt on developing countries. They do, but this is something that is currently a work-in-progress. Debt forgiveness is now more common and there is increasing regulation regarding issuing of loans to debt-trap companies. > I mean, I like to think I am the last person to support the CCP but bullshit is bullshit! I have no idea of your background, but you do appear (at least in this case) be supporting to actions of the CCP to debt-trap Laos.
europeanguy 4y ago
Forget about failing to pay loans. If the place is financially successful and lots of Chinese have interests there, the CCP will just declare it's Chinese. Straight from the Russia playbook.
- barelysapient 4y ago
  China would never be so Loas'y.
  - bArray 4y ago
    They can just declare the local people as terrorists and send them off to re-education camps for free hard labour. It's not as if a communist Country has never done that before, or even that the CCP doesn't do exactly this today in Xinjiang and Tibet.
dirtyid 4y ago
The success story is Laos, a shit tier landlocked country with no development prospects has defied all sense, roughly parallelling trajectory per capita GDP growth with booming Vietnam next door, who has the option of replicating maritime export led growth. There's no reason Laos should be doing better than Cambodia unless prudently aligning with PRC interests. Laos' only short/medium term potential on her own is digging rocks or low end labour. But with PRC assistance, Laos can also become trail transit hub linking region and become energy exporter (battery of IndoChina) by having the privilege/permission as first downstream Mekong country that can harness left over hydropower, using infra PRC built. And obviously serving as PRC proxy or ceding sovereignty of control over said power network to allow PRC to influnece region via electricity and water. For landlocked Laos, that's about as, in PRC parlance, "win-win" as it gets.

rayiner 4y ago

The Belt and Road initiative is China’s Marshall Plan for Asia and Africa. I don’t think Americans realize the scale of Chinese money and engineering investment in these countries. It’s a trillion dollar endeavor, six times as large as the Marshall Plan (in today’s money). Like the Marshall Plan, it will help local economies develop. But I suspect it will lead to the same long term dependency and alignment with China that Europe has with America. I don’t think that’s necessarily a bad thing but it’s something to be cognizant of.

cactusplant7374 4y ago
But how much corruption and how many failed projects? It has been particularly disastrous for Ecuador. https://www.nytimes.com/2018/12/24/world/americas/ecuador-china-dam.html https://www.nytimes.com/2018/12/24/world/americas/ecuador-ch...
- eliseumds 4y ago
  Has it? Ecuador is doing relatively well overall. Decent infrastructure, growing exports, one of the most stable economies in Latin America. Their GDP grew ~6x since 2000. They took the risk and seem to be on a good development path. Would any other country have offered them loans on better terms? Doubt it.
  - cactusplant7374 4y ago
    > Would any other country have offered them loans on better terms? Correa turned away from the US. So, probably? He then canceled some of the debt which destroyed direct foreign investment and took the country into a major recession. > Decent infrastructure The Coca Codo Sinclair Dam project is an absolute failure. It's not running at capacity and didn't lower the price of electricity. Lowering the price of electricity would have helped pull many out of poverty. The roads in Ecuador are absolutely abysmal. No interstate system, very slow to move through the country by car or bus. The smaller cities in the south receive much less support than Quito and Guayaquil. The healthcare system isn't funded. > growing exports They are experiencing the Dutch Disease. They export bananas and oil but most of the rich countries have better economies with less natural resources. They are too focused on commodities at the expense of other sectors. > one of the most stable economies in Latin America But only because of the dollarization of the economy. That prevented Correa from doing further damage by printing money and turning the country into Venezuela. > They took the risk and seem to be on a good development path. Most people I talk to say that times were better under Correa when public spending was much higher. Obviously it was unsustainable. The protests this year that shutdown Quito and Cuenca ended with the agreement that the government would spend $1 to $2 billion on oil subsidies. The demand for unsustainable public spending from the public is high. https://tradingeconomics.com/ecuador/government-spending https://tradingeconomics.com/ecuador/government-spending https://www.statista.com/statistics/531556/national-debt-of-ecuador/ https://www.statista.com/statistics/531556/national-debt-of-...

contingencies 4y ago

A few issues with this article. 1. This is old news. Northern Laos has long been fighting against disuse of the local kip. There are three major towns in the north; the border itself (Boten); Udomxai ("Muang Sai") and Luang Namtha. AFAIK all of them had large banners hung to the effect "use local currency" for many years. This effort would include both USD and Vietnamese Dong as well as Chinese Yuan Renminbi. 2. The border town area is called Mohan on the Chinese side, and Boten on the Laos side. Some of the images shown appear to be the Chinese side. 3. The initial Chinese push was for a road down to Chian Saen in Thailand. This road was built allegedly against promises from Thailand to pay for or at least allow the bridge at the end of the road to cross the Mekong. Thailand apparently rescinded and declined the bridge after the road was built. Chinese logistic influence on far northern Thailand was thereby eclipsed. Note further this area of Thailand is a stronghold of Nationalist Chinese support. 4. Much cargo travels directly from Yunnan to Thailand via boat, not so much via road and Laos. Similarly, much Thai fruit comes north to China via the same route. The boat trip can be taken by individuals. I've done it a few times and can vouch that it used to be spectacular, but widespread deforestation for rubber plantations has drastically reduced the biodiversity along the river over the last 20 years. 5. The major Chinese gambling destination was not Laos, it was Kengtung in Burma's Shan State (accessed from Menghai rather than Mengla). This was long ago closed off (10+ years), although a limited amount of covert border crossing probably continues. (Source: Previously lived in the area, transited many times.)

nerdbert 4y ago
The "use local currency" banners were also hanging in Vientiane, far from the (Chinese) border, back when USD was the threat. The kip has always been a tough sell.
- philliphaydon 4y ago
  Cambodia also tried to devalue the US dollar in favor of its own currency. The last time I visited Cambodia, 1000 local currency was $1, but if you used a $2 note it was worth 25 cents. So toktok drivers would try pay you in $2 so they can offload them, but would refuse to take them as they had no value to them.

refurb 4y ago

The geopolitical aspects of this are important. China has been long fighting to expand its sphere of influence into SE Asia. Vietnam pissed off China when it invaded Cambodia to dispose the Khmer Rouge which led to the Sino-Vietnam war of 1979. The Laos government is very cozy with the Vietnamese government so no doubt the Belt and Road initiative is concerning to Vietnam in terms of its influence on Laos.

rippercushions 4y ago
Laos is small, weak and thinly populated. Their diplomacy consists of playing off the great(er) powers that surround them, namely Thailand, Vietnam and China, with varying degrees of success. Now that the China-Laos rail link is complete, they're busily angling for another to the port of Vung Ang in Vietnam. Fun fact: northeastern Thailand (Isaan) is ethnically and culturally Lao, and to this day has far more Lao speakers than Laos itself. The current rump state of Laos on the east bank of the Mekong was carved off by the French as a colony.

rippercushions 4y ago

One important factor not mentioned is that the local currency, the Lao kip, has had a really rough ride this year, losing almost half its value in USD terms. I was in Laos earlier this year and hotels, travel agencies, even larger restaurants were requiring payment in USD. Of course, one major reason for the kip's weakness is that Laos is now heavily indebted to China and unlikely to be able to repay its loans. The local economy has taken a major hit from China being closed, with lots of abandoned construction sites and shut-down hotels in the capital Vientiane.

powerapple 4y ago
the major reason of currency weakness, like in any other country in this world right now, is US dollars. Chinese Yuan lost 15% - 20% value, Japanese Yen, Pound, Euros.....

twelve40 4y ago

oh man, they get a railroad? no fair, can we get these belt and road folks to fix up caltrain while they're at it? I guess not..