onsdag 18. august 2021

Laos Drowning in China Debt That Can’t be Repaid: Experts

Laos is drowning in debt with at least $400 million due in loans this year that can’t be repaid, with cash flows crippled in the country because of a shutdown of the economy due to COVID-19 and another $1 billion coming due each year from 2022-2025, experts say.

State officials and Lao researchers say they now see no way the one-party communist state can meet the debts it owes foreign lenders, mostly in China but also in Thailand and Vietnam, amid the global pandemic. “It will be hard to Laos to repay all the debts that have been outstanding for so many years now,” an official in the Lao state inspection agency said, speaking to RFA on condition of anonymity. “Laos can’t pay off its debts even if it makes payments over the next ten years. It’s just a huge sum of money,” he added.

Laos’ external debt repayment profile “remains challenging,” according to a Fitch Ratings report dated Aug. 9, “with around U.S. $422 million due over the remainder of 2021 and an average of U.S. $1.16 billion due per annum between 2022 and 2025.”

Lao debts are tied mainly to the development of infrastructure projects including hydropower dams and transportation systems, one Lao researcher said, also asking that his name not be used. “But the more development we do, the more money we borrow,” he said.