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Saturday, 23 December 2017 21:37

LAOS Increasingly dependent on foreign aid

23 December 2017 - Lack of funds has made the country increasingly dependent on foreign aid. Laos strives to become a middle-income country by 2030. Healthcare is a priority. The hope for an economic boost thanks to the Chinese high-speed railway.

The Laos government aims to expand universal health care to strengthen its popular consensus, but needs Beijing's help to distribute medical supplies and services. Prime Minister Thongloun Sisoulith is working to rebalance the country's diplomacy, following concerns that the small landlocked nation is too dependent on Beijing's aid to improve the conditions of its largely impoverished population.

The interventions include loans granted to build a $ 6 billion high-speed railroad, which aims to connect southern China with Southeast Asia in the context of the Chinese Belt and Road Initiative (Bri). Once completed, Vientiane hopes to revolutionize its economy. At the same time, the Thongloun government recognizes the negative side of some Beijing investments. This was manifested in the ban imposed on the creation of new bananas plantations owned by China, due to their harmful impact on the environment. However, the executive can hardly do without Chinese financial assistance for its underdeveloped medical sector, in light of the ambitious health reform desired by the ruling Communist Party. It has identified the health field as a priority, especially as Laos strives to become a middle-income country by 2030.

The national life expectancy at birth was only 63.5 years in 2015, one of the lowest rates in Southeast Asia and eight years below the global average. Last month, the National Assembly set its health objectives for 2018: reducing the number of underweight children, infant and maternal mortality rates and the number of deaths of children under five. Poor infrastructure in a 70% mountainous country makes it difficult to access healthcare facilities. Laos is as big as France, but has a population of only 6.7 million. Corruption is another concern, exacerbated by the low wages perceived by public sector workers, including doctors and nurses. Public employees can often spend a months without receiving any salary. This means that medical personnel often expect small bribes, another deterrent for the poor to access health services.

The lack of funds has made the country increasingly dependent on foreign aid, largely from China. The Laotian gross domestic product (GDP) is less than 1,690 euros, one of the lowest rates in Asia, despite a 7% growth in recent years. The government is confident that the new high-speed rail, a joint venture of which Laos owns about 30%, will transform the nation into a modern logistics center for job creation and Chinese trade. So far the development of the railway line has required the transfer of 4,400 families this year alone and 22% of the expected 414km of the mega-project is built. Part of the government's hope of becoming the "battery of Asia" with its hydropower exports, even the numerous dams built along the Laotian stretch of the Mekong River have caused forced displacement and triggered strong dissent against the state. (Asianews)


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