Saturday, February 24, 2018

Why Laos’ reliance on Chinese money could bankrupt the country

By:  ASEANToday.com, February 22, 2018

Image of Lao money/currency
Photo Credit:  Christian Haugen/CC by 2.0

World Bank economists assessed that China accounted for 35% of Laos’ public debt in 2012. They claimed this figure rose to around 44% by 2015. Public debt is now at an estimated 68% of gross domestic product (GDP). Around half of the borrowed money is from China.

This level of exposure to one creditor is a severe risk. It leaves Laos subject to major losses if China’s economy slows. It leaves the country heavily reliant on Beijing. China could use the situation to wield greater influence over Laos.

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