Laos: A strategic tilt and link with B&R

In August 2016 when President Obama made his historic visit Laos, many predicted this to mark a significant tilt towards the West. Of course this popular perception was backed by the Obama administrations overall strategy to move towards Asia. And what followed was a narrative developing around the claim that Laos among other East Asian countries has declared the United States as its partner of choice. In an attempt to rebalance their influence towards Asia, hedge China’s growing clout, and strengthen economic cooperation in China’s backyard, attempts were made to fortify friendships in Asia. 

Fast forward to one year- this week President Xi Jinping wrapped his visit to Laos with immense success. The tide has turned disproportionately in favor of the Middle Kingdom. Beijing has in recent years effectively embarked on infrastructure projects that dwarf other investments. -But the path was paved by the security realm Defense Consultative Mechanism earlier in September 2017 taking their bilateral dynamic to towards more holistic ends. Even more interesting remains the fact that Xi made this journey immediately after concluding Trump’s state visit to Beijing. The key question is: why? Why was a small landlocked nation chosen at a high when all eyes were on Beijing’s next move?

Photo taken on April 1, 2017 shows the scenery of Vang Vieng, Laos.[Photo: Xinhua]

Laos has played a vital role in the biggest standoff between China and the US during the Vietnam War. As shear collateral damage of a strategic war, historians even from the West remained puzzled over Laos’ fate and why it became a target for American interventionism. Natural resources, population, social structure, economy, or protection of commercial interests – none of the interests typically taken into consideration justified this intervention. However, what remained to be seen was the seemingly docile nation’s strategic location. Laos was an access route from Yunnan and North Vietnam to the rest of East Asia. 

Today, this very strategic significance has morphed Laos into a primary beneficiary of the Belt and Road Initiative. And also as a suitable comeback to previous misdemeanor of the past. As a neighboring county to China, Vietnam, Cambodia, Thailand and Myanmar, by investing significantly in the rail and road linkages of this country, much more than mere gratitude can be achieved. 

The Laos-China Railway will cost $5.56 billion is so far China’s biggest investment project in Laos. This project has been termed the most important in the Eighth National Socio-Economic Development Plan 2016-2020 of Laos. Starting at the border with Yunnan to the capital Vientiane, the 400 km fast-speed rail link has already transformed opportunities to locals in what was known as a No-Man’s land. The electricity grid completed in July this year has converted barren land into a power hub, poised for commerce and activity. Once the Railway system is complete and operating, it will firstly allow swift and hassle-free access to China- and secondly provide Thailand and Cambodia land routes to China through Laos. 

But what fuels this partnership is also China and Laos’ security cooperation. Under President Xi, the spirit of a shared future has been promoting a mindset of mutual gain over a zero-sum game. Laos is crucial in offering access to Southeast Asia’s markets, and also provides a certainty in the scattered puzzle surrounding the Strait of Malacca. What further bolsters Beijing’s purpose is Laos’ own long-held suspicions about her neighbors. Today this mutual recognition- the need to create peace and synergy in the region- can serve as a key win for both countries. Vientiane which has historically served as a point of contact between China and ASEAN countries is welcoming a change in perspective and hope for the future.

Entering into Beijing's defense fold is also very important for Laos’need for recognition and domestic security. When the defeat in Vietnam became inevitable, Washington saw an easy victory in Laos as an easy boost to faltered esteem. Recently senior military officials from China and Laos carried out the first high level defense meeting, and this need was satiated to some degree. The Lao People’s Armed Forces (LPAF) is poorly funded and ineffectively resourced. Though no immediate threats from neighboring countries are looming, recent history of civil war has entitled Laos to seek military support and partnerships. 

With population estimates at almost 7 million and the youngest median age in all of Asia, Laos is a small fish in the big Pacific Ocean. With only 4% arable land, what Laotians depend on are trade and tourism as the key drivers of the economy. Both these ends require sophisticated projects that would not have been possible without China. In exchange for providing access to Laos and making it a more attractive commercial and tourism destination, China is poised to integrate better with ASEAN countries- and also closer access to a region where the stakes are high. And as such, Laos and China are both prepared to realize their vision for a shared future. 

(Zoon Ahmed Khan is a Research Fellow at the Belt and Road Research Institute, Tsinghua University)