China-Laos high-speed railway set to roll through COVID cloud
Southeast Asian country's rising infections reduce pomp of Friday's launch
BANGKOK -- Rising COVID-19 cases in Laos are overshadowing the launch of a high-speed train to China billed as an engine of growth for the impoverished Southeast Asian country and a new route for Beijing to extend its reach deeper into the region.
Laos' infections are now averaging over 1,000 per day. This has prompted the government of the one-party communist state to limit the train's ridership on its inaugural run on Friday to officials. Prime Minister Phankham Viphavanah is expected to lead party apparatchiks and bureaucrats aboard the seven carriages of the sleek bullet train, gleaming with red, blue and white stripes, the colors of the Laotian national flag.
Vientiane, where the 414-km journey begins, has been locked down for weeks. Now the national epicenter of the pandemic, the capital reported 677 of the 1,504 new cases recorded nationwide last Thursday -- according to the latest available data from the National Taskforce for COVID-19 Prevention and Control.
By that date, total infections in the country of 7.3 million had climbed to over 67,000, though deaths appeared to have been held to over 140, according to World Health Organization data. Since cases crossed 20,000 in September, they have risen threefold.
By mid-November, it was clear that COVID-19 would dampen the pomp of the railway's opening. Officials canceled celebrations of a traditional festival, permitting only religious events and banning processions and stage performances.
"The general public will not be permitted to attend the [railway] launch party because of the COVID restrictions," a Vientiane resident said on condition of anonymity. With China also maintaining tight border restrictions, the resident added, "we will have to wait a little longer to get a seat on the new train."
The tarnished celebrations mark the latest of numerous twists for the $6 billion project in the land-locked country.
The track from Vientiane to Boten, a northern frontier town along the Laos-China border, will compress what is normally a two-day road trek through rugged mountain terrain into a brisk three hours or so. The Lane Xang, as the bullet train has been named after an ancient Laotian kingdom, will travel through 75 tunnels and across 167 bridges at a speed of up to 160 kph.
Back when construction began in December 2016, seasoned observers of Laotian politics detected differences of opinion among the usually reclusive leaders of the Laos People's Democratic Party. The division was rooted in Laos' ties with its two larger communist-ruled neighbors, and views on which way the nation ought to lean.
"There was some disagreement expressed by the pro-Vietnamese faction while the project was supported by the pro-China faction," a Laotian analyst said. The pro-China faction had been led by former Deputy Prime Minister Somsavat Lengsavad, a fluent Mandarin speaker of Chinese descent.
In the five years since, the project has become a stark reminder of Laos sinking under the weight of loans from China in its race to build big-ticket pieces of infrastructure. An estimated 60%, or $3.6 billion, of the high-speed railway's cost has been funded by a loan from the Export-Import Bank of China.
The Lao-China Railway Company, a joint venture between the countries, has been covering the remaining 40%. But China holds a 70% stake in the venture, and Laos' share is funded by $250 million from the national budget and $450 million via another loan from the Export-Import Bank.
Laos' $19.14 billion economy last year added another $13.3 billion in debt, according to the World Bank. Fitch Ratings in August warned that the country faced daunting debt payment obligations averaging $1.16 billion annually from 2022 to 2025, half owed to China.
The country's foreign reserves in May stood at $1.2 billion, down from $1.32 billion at the end of 2020.
China's tough COVID-19 border policies have only compounded Laos' need for foreign earnings to repay its debt. This week's inaugural train run is a reminder: Laotian officials had drummed up hopes that the bullet train -- and the arrival of Chinese tourists from Yunnan Province, the other end of the route -- would help lift the country's economic fortunes.
In the wake of the pandemic, the Laotian people "will stay patient without demanding early rewards from the Laos-China railway," said Toshiro Nishizawa, a professor at the University of Tokyo. "But post-pandemic developments over the next five years might potentially put the Laotian government on the spot."
The yardsticks for success, he added, would be tourist traffic from China "as well as the volume and time savings of freight transport, especially from Laos to China."
Yet Nishizawa, a former policy adviser to the Laotian government, contends that the opaque nature of the project may complicate assessments. "Warnings of trouble, either early or late, could come from the financial viability of the railway ... to generate sufficient income to meet operational and debt commitments," he said. But that "might not become clear because of the nature of the project as a 'business-to-business' deal without full disclosure of information."
Diplomatic implications are expected to come under scrutiny as well.
"The railway is a clear step forward for the region's economic and transport integration with China," a Bangkok-based Western diplomatic source told Nikkei Asia. "Many countries are looking carefully at how the railway will operate and whether the benefits will flow in both directions."