Rail services are almost non-existent in Laos , a dormant small country in Southeast Asia that, compared to neighboring states, has attracted less interest from investors or the international community. However, Laos is strategically located in Southeast Asia and it is the quickest gateway connecting China with the rest of the region, including key areas, such as the Malacca Straits.
Thus, Laos has recently become one of the priorities in the Belt and Road Initiative (BRI), a new development policy announced by the Chinese government in 2013 and propelled since 2017. The Chinese scheme aims at increasing connectivity and the economic and political ties of China with more than 60 countries in Asia, Africa and the Middle East through mainly infrastructure projects.
One of the key projects of the BRI is a railway connecting Kunming, in southern China, to Singapore, running through Laos, Thailand and Malaysia. In Laos, a high-speed train line will stretch around 410 kilometers from Boten, in the Lao-China border, to Vientiane, Lao capital and also a bordering city with Thailand .
The Boten-Vientiane line will be a complex engineering project where tunnels and bridges will comprise 62% of the track’s length. The construction was launched in December 2016 and the line is expected to open in December 2021.
But the construction will also affect thousands of villagers, most of them impoverished people, who live along the projected line. Thus, an estimated 4,411 families will be relocated, according to numbers given by the Lao government to Radio Free Asia (RFA) , while the construction of the railway will also affect farmland and forests. The Lao government has promised compensations for the affected families , but victims complained that the money was being delayed . The Ministry of Public Works and Transport has also admitted that the payments were expected to be made in 2019 .
The funding of the project has also been controversial since it would involve a substantial loan from the Chinese government . Thus, the Lao government would have to provide US$700 million in annual installments. Of this, US$480 million will be borrowed from China while the remaining funds will be provided by the country’s budget. The International Monetary Fund has warned that Laos’ external debt sustainability is at risk and that the loan will be one of the main reason widening this the current account deficit . Activists also worry that most of the construction work will be managed by Chinese companies with Chinese labor.
Locals also fear that the Laos-China railway will boost dramatically the number of visitors from China to Laos , a country with a population of just 7 million people, damaging the country’s environment and the local traditions.Today, China is Laos’ top investor , and Chinese companies are heavily investing in dams, mines, and agricultural plantations, among others.