Chinese Expansionism in Laos
Landlocked amidst regional powers, Laos suffers to be one of the poorest countries in Asia with most of its people still relying on subsistence farming. With a record-high GDP of 15.90 Billion USD as reported by Trading Economics in 2016, it remains to be one of the lowest in contrast to its neighbors like Thailand (406.8B GDP), Vietnam (202.6B GDP), and China (11.2T GDP). This makes Laos very dependent on foreign aid for its economic survival. Philippines on the other hand registered a 304.9B GDP on the same year.
Today, China is considered to be the largest source of foreign investment in Laos with bilateral trade arrangement amounting to 2.34B USD reached in 2016 (China Daily, 2017). Having around 765 projects across different sectors including mining, hydropower and agriculture, China is investing roughly 7B USD for the development potential of this Southeast Asian republic. However, it goes not without huge trade-offs affecting Laos’ environment, people and politics, given China’s debauched reputation in extractive industries.
These economic constraints plaguing Laos have roots in its on-going search for an appropriate blueprint that can improve the quality of their lives. From the collectivization of agriculture in the early 70s ending up in food shortages, to loose countenance for private ownership, to a centrally planned economy, Laos is now shifting towards a market economy that allows liberalization of its trade and investment policies and privatization of state enterprises (Croissant and Lorenz, 2017). But this “New Economic Mechanism” (NEM) faces the risk of failing, with opportunities for self-enrichment available to the Lao Peoples Revolutionary Party (LPRP) becoming the sole instrument controlling both government and economy favoring families, military cadres and co-opted businessmen in the country. This instability is taken advantaged of by China at the expense of Laos’ human and natural resources.
Laos is giving too much concessions to China in the hope of arresting further economic slump. In 2008, reports showed of the plan to build a sports stadium in That Luang marsh, the biggest wetland in Vientiane at around 20 square kilometers and home to 20 species of fish, rice paddies and circled by human settlements (Hays, 2008). This was financed by China in time for Vinetiane’s hosting of the 2009 Southeast Asian Games. Allegedly form this location will rise a new Chinatown where close to 5,000 Chinese families will be transported from mainland evicting the locals.
In fact, a sleepy town in northern Laos called Ton Pheung is now becoming an extension of China’s gambling and entertainment haven with Chinese authorities having control on almost everything in their local economic and tourism activities (Al Jazeera, 2017). Casinos, hotels and shopping centers believed to bring development to the locals actually suck out the resources available in Ton Pheung creating an imbalance with benefits flowing back to China rather than in Laos. The sad part is that this is permitted by the Laos government knowing that the economic gains outweigh the implications it may have on its territorial integrity and sovereignty.
Furthermore, huge projects like dam-building, large-scale monocropping thorough banana plantations, oil gas piping and many others leave a lot of Laosian either homeless or seriously ill. With the Chinese promise to help the local communities unfulfilled, the Lao people are left with no option but to make ends meet with the little that they have and keep on hoping for real development to dawn upon them – a dream so elusive unless Laos re-calibrate its relationship with its most voracious consumer – China.
Maintaining a singular international partner creates exclusivity and dependency limiting a state’s capacity to move around diplomatic avenues. It further establishes a clientelistic relationship where utilities are unevenly distributed favoring the patron and further disadvantaging the client. This is what Philippines should learn from Laos although the former’s economic indices give it more legroom to negotiate bilateral trade agreements and advance its national interests. In crafting foreign policies, Philippines needs to consider nationalist principles with a pinch of neoliberal trade inclinations. For areas that can be liberalized like telecommunications, electronics and tourism, economic ties must be kept open. However, some areas need to be secured for the interests of the Filipino people like natural resource management, energy and agriculture. Otherwise, we will end up like Laos where natural resources are plundered and human resources exploited.
In order to strengthen Philippine presence and influence in ASEAN, firming up relations with Laos may be a strategic diplomatic path in positioning itself towards China. From the vantage view of neo-realists, Philippines will be able to gain power and become more secure in its desire to protect itself from power-seeking hegemons in Asia, particularly in the advent of China’s growing superiority and might. The balance of power in Asia requires the smaller states to come together in order to project its ability for self-preservation amidst the economic and political power of a strong state like China. By cooperating with Laos, Philippines will further obtain economic, diplomatic and even military benefits in so far as its strategic leadership in the ASEAN is concerned. In fact, Philippines was able to secure the nod of all member states in ASEAN, including Laos for the formulation of a code of conduct vis-à-vis the South China Sea dispute – all on account of its pivot to China attitude.
With China’s fast rising superiority, it may change international politics in the near future tilting the balance towards the east. Maintaining relationship with it and its allies like Laos might place Philippines in a strategic advantage in the future. The only thing it needs to remember is not surrendering its sovereignty and staunchly protecting its national interests so that it will not end up like Laos.
(Photo: Xinhuanet)
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