Laos, in an attempt to deal with its rising debt, handed control of its electricity grid to China last year. The agreement seems to be yet another example of the Chinese government using debt trap diplomacy to extend its sphere of control.
The deal was between state-owned Electricite du Laos (EDL) and China Southern and ceded control of the grid for 25 years. The deal was to infuse US$2 billion into into the country to operate and expand the grid, according to Radio Free Asia.
Laos has been building hydroelectric dams along the Mekong River and its tributaries in an attempt to create a surplus of energy. If it could achieve this, it would likely be able to sell the energy at a handsome profit and potentially stem some of the countries monetary woes.
However, now that the CCP controls a majority stake in Laos’ energy grid, some fear that it will be exploited and the profits will be extracted by China.
This comes at a time when Laos is facing soring inflation. In, May inflation was nearly 13 percent, which is higher than it has been in a decade.
Laos has also fared terribly under the COVID pandemic. Laos, lost a significant amount of revenue from the drop in travel over the past few years. They have also seen some of the worst death numbers in the region.
Gas prices and availability have also been a serious issue with vehicles in line for hours to get fuel. Officials have blamed this shortage and the price hikes on the ongoing invasion of Ukraine by Putin.
However, some believe that the prices, which have risen nearly 100 percent year on year, are at least partially due to price manipulation by those wishing to make a quick buck off a crisis.
In the one party state, the Lao People’s Revolutionary Party (LPRP) has struggled to come up solutions to the growing series of crises.
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