Laos New High Speed Railway Brings Economic Boost Hopes

A new railway is set to open in Laos on Friday, bringing hope for an economic boost to the infrastructure-poor nation amid a devastating pandemic and weak economic growth.

The 414-kilometer route was built by China under its trillion-dollar Belt and Road Initiative, which funds infrastructure projects aimed at increasing Beijing’s influence globally.

The railway will connect Laos’ capital, Vientiane, with the Chinese city of Kunming. The high-speed rail is also expected to pass through Thailand and Malaysia to Singapore in the future.

The 7.2-million-people nation only had four railway tracks’ kilometers. But the new red, blue and white bullet trains will accelerate along the new rail line through 75 tunnels and 167 bridges, with stops at ten passenger stations.

While Laos was not hit hard by the Covid-19 pandemic, its economy shrank to 0.4% last year, the lowest level in thirty years, the World Bank said.

Also, its tourism industry experienced an 80% drop in international travelers’ number in 2020, after 4.7 million tourists visited the country the previous year.

According to a report by the World Bank, the railway could boost tourism, freight and agriculture, but the government must undertake substantial reforms such as improving border clearance processes.

“The new railway is a major investment that has the potential to stimulate the Lao economy and allow the country to take advantage of its geographical position at the heart of mainland Southeast Asia,” Sombath Southivong, a senior World Bank infrastructure specialist, told the media.

Meanwhile, experts question the project’s benefits, as thousands of farmers have been evicted from their lands since the railway construction started five years ago.

Some observers have also expressed concern about the long-term viability of the route project.

Local Media reported that at least two-thirds of Laotians live in rural villages and earn about $116 a month as minimum wage by toiling on land. But the train fare from Vientiane to the border town of Boten has been stipulated at $13.30.

In addition, the railway’s development line forced 4,400 farmers and villagers to surrender their land. According to the Lao Human Rights Movement, many have not received adequate compensation or payments.