The Lao government is seeking to manage the crisis through a range of measures. To stabilise the currency, the authorities have imposed foreign exchange controls and tightened monetary policy. Unable to raise fresh foreign capital to help meet impending debt service payments, the government has resorted to borrowing domestically, selling state assets, increasing tax revenues, and imposing harsh budget cuts. In the medium term, the hope is that Laos will grow its way out of debt, especially given the recent completion of the Laos–China Railway. However, the most important measure, by far, keeping Laos afloat is the continued ad hoc deferral of near-term debt service payments to China.
In the energy sector, EDL established a Reform…
