Day: March 5, 2022

Two years into the COVID-19 pandemic, Laos’ economic future looks precarious, bogged down by massive public debt and an economic strategy overly reliant on power generation.

The World Bank reported in August 2021 that Laos’ public debt has climbed to U.S. $13.3 billion, or 72 percent of its gross domestic product. Most of the debt was incurred by the energy sector, with the state-owned Electricité du Laos (EDL), accounting for 36 percent.

Laos has built dozens of hydropower dams on the Mekong and its tributaries and is building about 50 more under a plan to become the “Battery of Southeast Asia” and export the electricity they generate to other countries in the region, mainly Thailand.

Additionally, Laos and China in December completed a $6 billion high-speed railway project linking the Lao capital Vientiane with China’s Yunnan province. Though Laos only has a 30 percent stake in the project, it still needed to borrow heavily from China to fund what it pledged to the project.

The World Bank said Laos owes a total of $1.3 billion in debt service each year through 2025 and estimated that servicing the annual bill would reach 52.5 percent of public sector revenue in 2021, considered high for low-income countries. It noted that Laos’s obligations far exceed its reserves, recommending a shift in focus to “managing debt in a more sustainable and transparent manner.”

Two international credit rating agencies in 2020, Moody’s and Fitch Ratings, downgraded Laos’ sovereign rating, meaning they believe the country has a high likelihood of defaulting.

Fitch said in an August 2021 report that almost half of Laos’ external debt over the next few years must be paid to China. The two sides have worked together on the debt issue previously, with Laos asking for a debt suspension agreement, and the People’s Bank of China swapping yuan with the Bank of the Lao PDR in 2020 to help boost reserves of foreign currency, Fitch noted.

At an October meeting of the Lao National Assembly, the minister of finance warned that interest payments will sharply increase over the next five years on public debt that stood at $13 billion in 2020.

“The government will have to pay $414 million a year in interest alone, so we must tighten our belts,” Finance Minister Bounchom Oubonpaseuth said.

Negotiating with China will be key to getting Laos out of its debt problems, and there are four possible options, a foreign journalist and analyst who has covered Laos extensively, told RFA’s Lao Service on condition of anonymity.

“You can suspend … and give a longer time to pay the debt. They can cancel the debt. … They can ask Laos to settle for a foreign currency swap between the Bank of Laos and the People’s Bank of China. Or, China can loan money to Laos to pay the debt.”

EDL heavily indebted

Chanthaboun Soukaloun, managing director of Electricité du Laos, told the annual general meeting on February 11 that EDL has been losing money for years and has accumulated $5 billion in debt. The loss is affecting EDL’s ability to repay its loans, the Lao government news agency, KPL reported.

“The government has been aware of the debt. Everybody and every department of the government must help repay our debt, but we at the EDL don’t have money,” an EDL official, who requested for anonymity for safety reasons, told RFA Feb. 17.

“The government knows that EDL owes a lot of money to EGAT (Electricity Generating Authority of Thailand), and that the EDL doesn’t have money to pay them back,” he said.

The debt rose sharply over the past decade as EDL borrowed significant sums from foreign countries, especially Thailand and China, to build dams, install power lines and invest in other power related businesses.

But some of the dams have not been productive due to a lack of water, while other dams with sufficient resources produce power that nobody is buying.

The EDL has an obligation to purchase the electricity generated by the dams at high prices but must sell it at lower prices to companies in Thailand and China.

Additionally, EDL owns only 10 of Laos’ 88 currently operational dams, while the rest belong to foreign investors, who sell the power they generate to EDL at high prices.

Despite the excess electricity, power prices remain too high for many domestic customers to pay, which is why the company is losing money, the official said.

The power business favors foreign investors, an official from the Ministry of Energy and Mines told RFA.

“Of course, they pay all taxes and royalties to the government, but the government has huge expenses, such as paying out compensation” to people displaced by hydropower projects, the energy official said.

Compensation for households, or even entire villages displaced by dams and infrastructure projects has been a source of friction for years. Many rural villagers have told RFA that the offered compensation is far below the value of the property they are giving up, and they trade fertile farm land for remote parcels of land with poor soil.

For those that accept, the government sometimes struggles to pay out compensation in a timely manner, with relocated families waiting years for payment in some cases.

In this March 2020 file photo, employees of the Électricité du Laos (EDL) work on a power line in Vientiane, Laos. Credit: Citizen Journalist

Another problem for EDL is that it anticipated higher electricity prices when it signed agreements to buy electricity from the dam investors, with the eye of selling it for higher to its buyers.

EDL is obligated to buy the electricity from most of the dam projects for $0.06 per kilowatt hour but currently can only sell it for $0.04 to companies in China’s Yunnan province or $0.05 to companies in Thailand.

Many Lao citizens blame EDL’s problems on corruption, which has plagued the inner workings of Laos’ national and local governments for decades.

Berlin-based Transparency International’s 2020 Corruption Perceptions Index ranked Laos 134 of 180 countries it evaluated in fighting corruption.

Prime Minister Phankham Viphavanh pledged to stamp out corruption, bribery, fraud and other malfeasance by state officials in a speech to the Lao National Assembly in August, and in December, Laos stepped up the campaign against corruption by expelling corrupt officials from the Lao People’s Revolutionary Party, the country’s sole political party.

Corruption is so pervasive in Laos that many of its citizens suspect it is the reason EDL is losing so much money.

“EDL must inspect and closely monitor its employees at all levels, making sure that they don’t abuse power and seek personal financial gain,” a Lao businessman told RFA. “Widespread corruption leads to financial leaks and massive debts.”

EDL must be reorganized, a resident of the southern province of Champassak, told RFA.

“EDL’s employees and management team are running the company for their own benefit, not for the company or the state. First and foremost, actions for personal benefit must be stopped,” the Champassak resident said.

A resident of the capital Vientiane slammed EDL’s lack of transparency.

“There are no financial reports published. There must be a lot of corruption going on. That’s why the company is in such a big debt,” he said.

An EDL affiliate in a letter last year asked several Thai companies for a longer grace period in repaying debt, due to the COVID-19 pandemic and rapid inflation.

Prime Minister Phankham Viphavanh told the Lao National Meeting in November that the government was in the process of reforming several large state enterprises, including EDL, because of massive debt problems.

Translated by Samean Yun. Written in English by Eugene Whong.

Junta claims that the situation in Myanmar is “under control” couldn’t be farther from the truth, residents and analysts said Friday, calling the comments part of a bid to “save face” in front of the global community as the nation crumbles.

Speaking to Chinese and Japanese reporters during a Feb. 23 online interview, junta Information Minister Maung Maung Ohn said that the regime had “taken full control of the country’s stability and security” as it had been able to “suppress — within the bounds of law — all crimes and inhumane acts” within a short period of time.

The former general said that more than 3,000 ward or village administrators in various regions and states had resigned due to “threats” by prodemocracy People’s Defense Force (PDF) paramilitaries — who the military calls terrorists — but that the junta was able to appoint more than 2,600 people to fill the vacancies and ensure security.

Maung Maung Ohn’s comments came barely a week before authorities in Mandalay region’s Amarapura township killed a bystander who had been taking photos during a military raid on an area home. The killing in broad daylight prompted condemnation from observers who called it just one example of how security forces have used brutal tactics to quell opposition throughout the nation, in stark contrast to claims by the junta that the situation in the country is stable and peaceful.

In the 13 months since the military’s Feb. 1, 2021, coup, security forces have cracked down on its opponents through by arresting, beating and sometimes killing peaceful protesters. The military regime has also attacked opposition strongholds with helicopter gunships, fighter jets and troops that have burned hundreds of villages they accuse of supporting anti-junta militias.

As of Friday, more than 1,600 people had been killed since the coup and some 12,300 arrested, according to the Assistance Association for Political Prisoners, a human rights organization based in Thailand.

A woman who gave her name as Jewel and who works with the Pazundaung and Botataung Township Youth Strike Committee in the commercial capital Yangon told RFA’s Myanmar Service that the junta is claiming full control of the nation to “save face.”

“That’s nonsense. They don’t have any control over Yangon or anywhere else. Even their own forces are in a state of disarray,” she said. “A state of complete control means that the whole country is calm and quiet. But now, people everywhere are rebelling any moment they get a chance. The junta is using the word ‘control’ just to save face.”

She pointed to reports of the military resorting to the use firearms to force people to pay power bills they boycotted in opposition to the junta as an example of its inability to govern.

A resident of Myanmar’s second-largest city Mandalay, who spoke on condition of anonymity citing security reasons, told RFA that even if the junta did have full control of the country, its rule would still lack legitimacy.

“Anti-junta protests are still going on here and there, and arrests are still being made,” he said. “At night, we can hear random bomb blasts. Everywhere on the roads, they are checking people passing by. And they use bulldozers to demolish houses, without any court order. I see them bullying people at gunpoint. I haven’t seen one iota of legal rule at all.”

Other residents told RFA that the city streets are empty after 5 p.m. due to the lack of security at night.

‘Insecurity’ forces

A resident of Yangon noted that despite the junta’s claims of control, police and soldiers do not dare to go out without weapons because they know the country is not peaceful.

“Why have police stations turned into bunkers covered with sandbags? … Why are they still patrolling with their big guns at the ready? … Can they say they have control, and it is safe, when they themselves don’t feel safe to move around?” she said.

“It’s not that the people are calm and quiet. They are all rebelling in any way they can. … They haven’t hesitated to participate in any kind of protest. There is a revolutionary spirit in the hearts of the people.”

Even though some parts of Yangon may be crowded and seem calm and normal, people are, in reality, “ready to explode,” she said.

Aung Thu Nyein, director of the Center for Strategic and Policy Studies, told RFA that although the military is mostly in control of Myanmar’s cities, it is still struggling to stabilize the country.

“All we can say is that there is still a lot of opposition on the ground,” he said. “In some areas, villages have been set on fire, and we’ve seen many reports of human rights abuses. So, that means the regime is still working hard on ‘security.’”

Political analyst Than Soe Naing said that even with control over Myanmar’s urban areas, authorities “dare not walk on the streets.”

“They only live within their military bases or encampments in the city and are forced to defend themselves at all times,” he said.

“They dare not leave unless they are in full force in the countryside on a mission to attack villages or the opposition. The whole countryside seems to be under the rule of PDFs. In other words, we think the armed resistance has made true gains.”

Than Soe Naing noted that around 90 percent of Myanmar’s rural areas are now under the administration of PDFs and other armed opposition groups in Chin, Kayah and Kayin states, as well as in Sagaing region.

Reported by RFA’s Myanmar Service. Translated by Khin Maung Nyane. Written in English by Joshua Lipes.

Authorities in Cambodia ordered a non-governmental network of more than 550 rural schools to shut down, apparently because of its relationship with a newspaper that has criticized the country’s government, RFA has learned.

The independent, nonprofit schools were established by Japan Relief for Cambodia and World Assistance for Cambodia (JRfC-WAfC). They provided English classes and computer training to rural students from low-income families, the network said on its website.

Local news outlet CamboJA reported that a Feb. 2 letter from Cambodia’s Education Minister Hang Chuon Naron, shared by teachers this week on Facebook, ordered the organization to cease operations.

The minister told RFA’s Khmer Service Thursday that the Education Ministry asked JRfC-WAfC to stop operating the schools because it is affiliated with the Cambodia Daily, an English language newspaper that often criticized the government of Hun Sen and was shuttered in Cambodia in 2017 on allegations that it hadn’t paid millions of U.S. dollars in back taxes.

The Cambodia Daily continues to operate online and broadcasts in the Khmer language from a location in the U.S.

Even though JRfC-WAfC may no longer operate out of Cambodia, the schools that built by the NGO are still allowed to remain open since they were donated to the government after construction, the minister said.

The programs provided by the NGO will no longer be available, however, a fact that Ouk Chhayavy, president of the Cambodian Independent Teachers Association, lamented.

“We are sad about the closure because the NGO helped many poor students,” she said. 

Translated by Samean Yun. Written in English by Eugene Whong.

Thousands of Vietnamese people living in Ukraine were caught off guard by the Russian military’s invasion last week after their ambassador downplayed the likelihood of conflict between the countries.

According to Vietnam’s Ministry of Foreign Affairs, around 7,000 Vietnamese lived in Ukraine before war broke out on Feb. 24, just one month after Hanoi and Kyiv celebrated 30 years of diplomatic relations.

Prior to the invasion, Ambassador Nguyen Hong Thach assured Vietnamese citizens that the embassy was closely monitoring the situation and that war between the two former Soviet Republics would not occur, a Vietnamese citizen living in Kharkiv, close to the Russian border, told RFA’s Vietnamese Service on condition of anonymity.

As a result, most of the Vietnamese were not prepared to evacuate and remained in Ukraine when the Russian forces struck, he said.

“Bombs were exploding very close to our place shaking us from head to toe,” said the source, whose family has been living in Ukraine for decades. “The Vietnamese government’s efforts to protect its citizens here are really slow and ineffective.”

The source said the community learned of Vietnam’s plan to use the country’s major airlines to evacuate citizens from Ukraine from state-media, not the embassy.  

“It’s a plan we saw in newspapers only. In reality, we haven’t received anything from the embassy,” he said. “In fact, there are no commitments on providing transportation for us… The embassy hasn’t made any decisions or commitments to evacuate us from Ukraine.”

Even if rescue flights were to be organized, the source said he is doubtful that his family would be able to secure seats, likening the situation to Hanoi’s attempt last year to evacuate Vietnamese during severe COVID outbreaks.

“The most important thing would be whether we can win a place on a flight or not. In the recent COVID scare, most of Vietnamese in Kharkiv could not return to Vietnam without paying a fortune,” the source said.

“A ticket on a commercial flight often costs US $1,000, but we would have had to pay up to $6,000 for a ticket on a rescue flight. At present, we have no hope at all of being evacuated on flights,” he said.

The family instead may flee west to Poland over land, a plan the source said he is also hesitant about.

“I want to see first how it goes for the Vietnamese who have already left for Poland, how things are there, and whether they are becoming victims of robbing and looting along the way. I have to watch first as robberies often occur in situations like this,” he said. 

“If it is not safe, we’ll have no choice but to shelter here. My friends evacuated in four separate cars. We are still in contact with two of the cars but lost contact with the other two, so we are extremely worried,” the Kharkiv man said.

Others who have signed up for repatriation do not know where they should go to be picked up, Nguyen Khiem, another Vietnamese in Ukraine, told RFA.

“We have signed up, but how about a pick-up point? And how dangerous is it to get there? Really, in this situation we really can’t know how dangerous it will be until we’re there,” Khiem said.

“We’re also thinking that if we should go to Poland, it is 1,200 km [745 miles] from us. All we can do over here is to listen to those of our brothers and sisters who have made the journey already and are familiar with what could happen,” Khiem said.

“I myself never thought Russia would attack Ukraine. We were unprepared. The guidance from the Vietnamese government is just there for us to be aware, so we will actually have to fend for ourselves,” Khiem said.

RFA attempted to contact the Vietnamese Embassy in Ukraine many times but was unsuccessful.

Westward escape

Since the Feb. 24 invasion, more than 1 million people have fled Ukraine for neighboring countries, and many of Ukraine’s Vietnamese population were among them.

Vietnamese communities in countries like Poland, Romania and the Czech Republic have offered food, financial assistance, transportation and housing to Vietnamese fleeing Ukraine.

Facebook has become a key platform for connecting the communities, sources said.

“Members of the Vietnamese community here in Poland are trying to do whatever we can to help,” Phan Chau Thanh, a Vietnamese businessman there, told RFA. “Whoever has a house will offer accommodation. Whoever has a car and time will offer pick-ups.”

“In general, a lot of people in the community have chipped in. Specifically, out of around 25,000 Vietnamese people in Poland, around 7,000 to 8,000 have already participated in this campaign,” he said. 

Thanh himself is managing assistance activities at one of the border gates between the two countries.

In Romania, it isn’t just the Vietnamese community that is helping its own, a Vietnamese Bucharest resident identified only as Hai told RFA.

“All of Romania is also willing to provide assistance to Vietnamese or other people coming from Ukraine. You can contact any member of the Vietnamese community in Romania and get our maximum support,” she said. 

“If you need to stay somewhere for a couple of days, we can help find a place or offer free accommodation if necessary. Right now, many have come, and spare accommodation is no longer available, but the community is renting budget rooms at hotels or local residences for Vietnamese people from Ukraine to take refuge,” she said. 

The Czech Republic does not border Ukraine, but Vietnamese there are collecting donations and relief goods and reaching out to refugees on social media to help.

Julie Phan said she has offered a place in her home to any Vietnamese who needs a place to stay.  

“I did not have to think about it much. I know that wars create a lot of suffering. I burst into tears when I saw the footage of kids in bomb shelters. Here I am living in peace, and these kids … many people have lost their lives and families were separated,” she said. “I felt so sorry for them.”  

“We were deeply struck by the images of Ukrainians and Vietnamese standing in a 30-kilometer queue near the border with Poland and in a freezing weather to get a seal or permission to enter Poland. Therefore, we thought we must call for assistance for them,” Phan said.

Vietnam’s Ministry of Foreign Affairs reported that as of midday Thursday, almost all the Vietnamese citizens in Kyiv and Odessa had fled and hundreds of others in Kharkiv had been evacuated from war zones. 

The ministry also said that about 400 people had arrived in Moldova and were on their way to Romania. Another 140 people had arrived in Poland, 70 in Romania, 33 in Slovakia and 30 in Hungary. 

On Thursday, 141 of the 193 members of the United Nations voted in favor of a motion demanding the immediate end to Russia’s invasion of Ukraine.

Four countries, North Korea, Belarus, Eritrea, and Syria voted against the resolution alongside Russia, while 12 others, including Vietnam and Laos, abstained from the vote.

Nataliya Zhynkina, Ukraine’s Chargé d’Affairs in Vietnam, voiced her displeasure in a Facebook post written in Vietnamese.

“Among all the ASEAN countries, only Vietnam and Laos abstained. Vietnam, my second homeland, I am very disappointed.” 

Translated by Chau Vu. Written in English by Eugene Whong.