Southeast Asia: Best Individual BRI Project or Initiative in the Region 2017
Kunming-Vientiane high-speed rail link (lead bank: Export-Import Bank of China)
Laos is small, landlocked and one of the poorest countries in southeast Asia. But a colossal infrastructure project, which will connect China to Singapore through Vientiane, the country’s sleepy capital, could have a dramatic impact.
While some countries in southeast Asia, such as Thailand, Cambodia, Malaysia and Indonesia, are upgrading existing railway networks or developing underground lines with Chinese support, Laos is getting its first-ever, 427-kilometre-long railway, funded by China at an estimated cost of $7 billion.
To put that in perspective, GDP in Laos last year was only $15.9 billion.
On completion, the benefits for Laos should be huge, providing an alternative to the dangerous dirt roads. A new railway will connect remote cities, potentially bringing people closer to better jobs, healthcare and education, and will give Laos access to sea ports. It should also provide a welcome boost for the country’s growing tourist industry.
With deep pockets and seemingly unconditional backing from the Chinese state, it is no surprise that the railway’s main funder is the Export-Import Bank of China, which plans to finance at least 70% of the cost. Work on the project officially started in December 2016 and will take around five years to complete.
But this is just the beginning of a much broader project: The railway route between Kunming in China’s Yunnan province and Vientiane will form the most direct of three to Singapore from China. Collectively, the railway network has been dubbed the Pan-Asian Railway. Now that work is under way in Laos, other rail projects are due to kick off soon.