Laos’s China problem is ominously similar to crisis-ridden Sri Lanka’s

All is not well in Laos. The sovereign body is ailing, teetering on the brink of bankruptcy. The country’s problems are many, ranging from rampant inflation to external debt overload, much of which is owed to its neighbour and creditor-in-chief, China.

“The macroeconomic situation is very challenging,” says Pedro Martins, senior country economist for Laos at the World Bank. “Longstanding structural vulnerabilities have been exacerbated by the impacts of the pandemic, a deteriorating global macroeconomic environment, and the rapid depreciation of the Lao kip.