New railway brings more risk than opportunity for Laos

Significance

The new link has the potential to boost landlocked Laos’s economy markedly, especially as there are plans for it ultimately to form part of a ‘pan-Asian’ railway. However, there are concerns that it will increase the country’s indebtedness to China.

Impacts

• Laos will rely increasingly on international aid as well as financial assistance from China.
• Vientiane will be drawn further into Beijing’s orbit politically.
• The government will aim to build more railway lines, including ones linking with Vietnam.