Laos is suffering an acute debt crisis with no apparent way out. This is a shocking reversal of the optimism of the pre-COVID-19 era, when economic growth averaged over 7% annually. While the benefits excluded much of the rural poor, this was still among the best growth records in the developing world. What went so wrong, so quickly?
Laos’ development trajectory has been derailed since the 2020 pandemic began. The country’s currency has lost half its value against the U.S. dollar. Public and publicly guaranteed debt now exceeds 100% of gross domestic product. Over half of government revenues go to debt repayments. Public spending on health has halved, with knock-on effects for child malnutrition. School enrolments have dropped…
