China's Belt and Road Initiative and Laos

By Dr. Nehginpao Kipgen and Megha Gupta

Dr. Nehginpao Kipgen

Megha Gupta

Despite COVID 19 ravaging almost the entire world, China has continued to push forth its Belt and Road Initiative (BRI), taking advantage of the vacuum created by the months-long pandemic. Among Southeast Asian countries, Laos, a tiny and an underpopulated state, has been one of Beijing's major aid recipients.

In the course of granting loans and aid to Laos, Beijing has three basic demands in return: the backing of Chinese policy on issues such as Taiwan and Tibet; Chinese companies to be able to exploit Laos resources; and lines of communication to run through Laos to Thailand.

Laos has not only accepted these demands but has also let China be its largest investor. Beijing has pumped in billions of dollars into sectors such as hydroelectric power, agriculture, mining and construction, all in all, for its larger “new silk road” strategy.

The construction of the China-Laos railway for the BRI, began in December 2016, involving six Chinese contractors with a plan of finishing the project in December 2021.

The railway line, which runs 414 kilometers, stretches from the northernmost district of Laos, Boten, bordering China, to the capital Vientiane. The line will further connect with Thailand to Malaysia and Singapore as part of the Pan-Asia railway which will eventually run north-south from Kunming in Yunnan Province to Singapore.

In light of the pandemic, China has strategically optimized the construction of this connectivity project. However, the means adopted has not been the most ethical. The personnel available for the construction has been almost halved ― due to the pandemic ― and is having to perform multiple roles in the scorching May heat.

Furthermore, local staff who are obligated to stay at home due to the countrywide lockdown imposed in Laos are reportedly not getting paid for three to four months for a nearly completed project.

Another significant BRI project the Laos government has ventured into is the construction of the seventh largest dam on the Mekong River. The currently operational Xayaburi and Don Sahong dams will now be joined by the 684-megawatt Sanakham Dam, with a project completion date of 2028.

The proposal for the completion of the Sanakham project was submitted on Sept. 9, 2019, by the Laos government to the Mekong River Commission (MRC). As per the proposal, the dam will be built 155 kilometers north of Vientiane in the district of Sanakham.

However, the proposal faced a significant backlash as the construction will further gag the already encumbered Mekong River, a significant artery in Southeast Asia. The existing dams have by now negatively affected fisheries, farms, livelihoods and riverbanks downstream. Nonetheless, Beijing has continued to push forth the project.

As a result, several environmentalists have urged the government of Laos not to proceed with the construction of another “destructive” dam on the Mekong River.

“Sanakham Dam should not be built at all. There are several cheaper, less destructive and faster ways to meet the Mekong region's energy needs,” said Pianporn Deetes, Thailand and Burma campaigns director at the anti-damming group International Rivers.

Despite facing these human rights and environmental issues, the government of Laos has committed itself to submit to China's growing influence in the region and around the world.

What should Laos do?

Perhaps, Laos could consider diversifying its investments with other countries ― such as Thailand, India, the United States and Japan ― and not just depend on one single country. Consistent engagement with China could potentially allow Beijing to have an easy hold over it and make it a tool to push through its own strategic interests.

Better done now than later, as some analysts have said as Laos is one of the top countries at risk of the Chinese “debt trap,” making it susceptible to fiscal dependence, and having an inability at diversifying its foreign relations.

While engaging in projects with other countries, Laos should keep in mind not upsetting its neighboring countries such as Thailand as well as consulting its local population and environmental groups on these crucial decisions.

Laos went ahead with the Xayaburi Dam project with China, despite local protests from Thai villagers. In a bid to become the “battery of Southeast Asia,” Laos cannot and should not get away without local consultation.

Lastly, the revival of the Mekong River Commission has now been overshadowed by the Chinese Lacang-Mekong Cooperation Framework. MRC is a novel initiative, launched in 1995, as cooperation between Cambodia, Laos, Thailand and Vietnam aimed at managing the river and its resources.

In 2010, they urged a 10-year moratorium on large hydroelectric power dams, keeping in mind the best interests of the region. However, it has been unable to enforce its own recommendation. Taking advantage of the situation, China launched the Lacang-Mekong Cooperation Framework to foster BRI.

As China's geopolitical weight grows, susceptible countries such as Laos, Sri Lanka and Djibouti should take a closer look at Chinese strategic projects in their respective countries.

Dr. Nehginpao Kipgen is a political scientist, associate professor, assistant dean and executive director at the Center for Southeast Asian Studies (CSEAS), Jindal School of International Affairs, O.P. Jindal Global University. Megha Gupta is a research assistant at CSEAS and concurrently director of South Asia Programme at the International Scholar.