BANGKOK: Laos is set to open a US$6 billion Chinese-built railway today, with debt concerns balanced against hopes it could boost the reclusive nationâs struggling economy, AFP reported.
The 414km route took five years to construct under Chinaâs trillion-dollar Belt and Road Initiative.
Analysts have acknowledged the potential economic boost, but have queried how infrastructure-poor Laos will pay its US$1.06 billion debt â and whether it is ready to exploit the state-of-the-art transport system.
But Chinese foreign ministry spokesman Wang Wenbin said Wednesday the âflagship projectâ would give a âboost to Laosâ strategy to convert itself from a landlocked country to a land-linked hubâ.
President Thongloun Sisoulith is expected to hold virtual talks with Chinese President Xi Jinping today, with both expected to deliver speeches at the official opening ceremony.
The route will connect the Chinese city of Kunming to the Laotian capital Vientiane, with grand plans for high-speed rail to ultimately snake down through Thailand and Malaysia to Singapore.
The communist-run country of 7.2 million people previously had only 4km of railway tracks.
But now sleek red, blue and white bullet trains will speed along the new line at up to 160kph, passing through 75 tunnels and across 167 bridges, stopping at 10 passenger stations.
Passenger services are expected to begin tomorrow, state media reported, although only for those fully vaccinated.
Laos took a battering in the pandemic with economic growth declining to 0.4% in 2020, the lowest level in three decades, according to the World Bank.
Hopes for a 2021 rebound were dashed when the country locked down as it registered more than 76,000 infections in the past eight months.
The railway could boost Laosâ economy, but the government needed to undertake substantial reforms â including improving its border management systems, a World Bank report noted.
But the project could be an economic âgame-changerâ, according to Bangkok Bank chief economist Burin Adulwattana.
âI donât look at it as China trying to bankrupt Laos â¦ itâs not a Trojan Horse strategy. I think itâs going to be a win-win situation,â he said.
But there is little transparency around how Laos will fund its debt, Australian National University lecturer Greg Raymond said.
A World Bank report noted, âfunding of the existing public infrastructure programme looks increasingly unsustainableâ.
Raymond noted the railway is a huge test for the countryâs mostly agricultural subsistence-based economy, which doesnât have a big merchant class.
âThe issue for Laos is whether their economy â¦ their private sector is positioned to take advantage of this transport system,â Raymond told AFP. – New Malaysia Herald