#Feature by 籽想旅行 | Cheung Kee, a watch repair stall that has been standing on Castle Peak Road since 1954, is owned by an 80-year-old horologist who has witnessed the Double Ten riots in 1956. He carried on fixing a watch when someone set a trash can alight next to him.
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Continue ReadingLaos debt crisis case study / by investment man
In the past, we may hear about the debts crisis of many countries.
But one country that many people may not have thought about is Laos.
Did you know Laos is currently facing a high-rise debt problem?
So that I can't pay creditors in time.
How does this impact on Laos?
Investment man will tell you about it.
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Laos People's Democracy Republic
There are 236,800 square kilometers.
Think about half of Thailand's area.
2019 Laos worth GDP is 603,000 million baht. It's the world's number 112
At the moment, Laos population is around 7.1 million people and the average income per capita. The population is 85,000 baht per year, which is lower than many Asian countries.
But if I look back, I will see that.
During 2010-2019, Laos had an estimated GDP growth rate of 7 %
Increase the average income per capita of Laos people in the last 10 years.
However, Laos's economic growth.
Followed by the debt burden of public sector from loans to projects.
And when the COVID-19 outbreak occurred.
It makes the public sector lower income than before
Both proceeds from exports, taxation and tourism sector
Make the government more income to spend on essentials with more loans.
When this happens, the proportion of public debt to GDP in Laos has risen to the highest in 13 years.
Year 2010 Laos's public debt burden is equal to 115,000 million Baht. Considering 49 % of GDP.
Year 2020 Laos's public debt burden is equal to 393,000 million Baht. Considering 65 % of GDP.
With debt burden increasing, while Laos's international reserves is reduced to just 26,000 million baht, making Laos's financial status worrisome.
Also, international reserves decrease.
Investors lack of faith in Laos also follow.
To this place, many people may wonder what the previous Laos government loaned to do.
What has caused public debt in recent years to rise dramatically?
Before answering this question
Let's understand the geographical characteristics of Laos first.
Even if Laos is a country without a way out to sea.
But most areas are mountainous and plateau districts.
Which constitutes many important rivers.
By terrain, this looks like 3 in 4 of the total Laos area.
When it's like this, it makes Laos.
Potential to produce electricity with water energy.
Laos government has therefore placed the country's status as ′′ Battery of Asia
And lots of loan to push the building of water power dams.
In addition, Laos also values and supports China's One Belt One Road project.
This will make Laos easier to connect with other countries in the region.
Specifically, Laos-China railway line project worth more than 187,000 million Baht.
I would have guessed it by now
The person who gives loan to Laos most is ′′ China ′′
Only debt that Laos government borrowed from China
Worth up to 271,000 million baht.
This amount of money is over 45 % of Laos GDP.
When the COVID-19 outbreak occurred.
Poor that Laos may not be able to pay back the debt on schedule.
The Laos government therefore has to negotiate with the Chinese government as a major creditor.
To restructure the loan debt
One of the deals between Laos and Chinese government.
Well, Laos Government has to sell shares of Electricity Wholesale Business of Laos (EDL) which is Laos's Electricity Enterprise.
Give to China Southern Power Grid that is the major electrical enterprise of Chinese government.
From this story, I will see.
Excessive debt is high risk.
If one day can't pay back the debt on schedule
We may have to exchange with the loss of our important debtor to the creditor.
Like in this case of Laos..
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References
-https://thediplomat.com/2020/09/laos-stumbles-under-rising-chinese-debt-burden/
-https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
-https://www.theglobaleconomy.com/Laos/reserves_monthly/
-https://countryeconomy.com/national-debt/laos
-https://www.ft.com/content/dc3f5981-4fd9-4e3a-9824-5b9ddf70735e?sharetype=blocked
-https://www.voanews.com/east-asia-pacific/analysts-rising-debt-burden-could-make-laos-more-reliant-china
-https://data.worldbank.org/country/LA
-http://www.xinhuanet.com/english/2020-08/07/c_139273117.htm
-https://tradingeconomics.com/laos/government-debt-to-gdp
-https://thailandtribune.com/financially-strapped-laos-partners-with-chinese-company-to-manage-power-grid/
-https://en.wikipedia.org/wiki/%C3%89lectricit%C3%A9_du_LaosTranslated
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軒仔聊車經 | 為何我的10沒快排 | 這集一次大解惑完未來不再回答相關問題
https://youtu.be/BxV_mWnkR3A
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Song: MBB - Happy (Vlog No Copyright Music)
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大夜騎士FB粉專歡迎追蹤
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極致工藝航太鋁合金手機架 | 不想跟車友用大眾手機架選這款就對了!
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軒仔聊車經 | 為何我的10沒快排 | 這集一次大解惑完未來不再回答相關問題
https://youtu.be/BxV_mWnkR3A
重機購車大小事 | 跟和潤車貸專員約7-11對保 | 闇夜惡獸降臨倒數中
https://youtu.be/mTY3G6jwP6U
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