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Japan, Thailand, Vietnam Vie with China for Influence in Impoverished,
Landlocked Laos

Ralph Jennings

   TAIPEI - Laos is getting a new round of aid and investment offers this
   year as foreign governments hope to dilute China's increasing influence
   over the poor, landlocked country, observers in the region say.

   Japan, Thailand and Vietnam have moved this year to offer new help or
   reaffirm the benefits of previous aid to Laos. Their assistance would
   arrive as a 400-kilometer, $5.9 billion China-invested railway is set
   for completion this year -- the pinnacle of Chinese largesse for Laos.

   Japanese Prime Minister Yoshihide Suga spoke this month with Lao
   counterpart Phankham Viphavanh to affirm plans for advancing a
   strategic partnership, Japanese media outlets say. Japan has offered
   about $1.8 million to open COVID-19 vaccine storage facilities and
   pledged support for upgrading international airports, the reports say.

   In Thailand, Prime Minister Prayuth Chan-Ocha has spoken by phone to
   the new Lao leader, who took office in March, the official Lao News
   Agency reported this month. On those calls, Phankham thanked Thailand
   for providing scholarships in education, agriculture and health.
   Thailand has aided Laos further in fighting COVID-19, the news agency
   reported.

   Vietnamese officials have launched a 2021-2030 cooperation strategy and
   a five-year cooperation agreement, the Communist Party of Vietnam's
   news website, Nhan Dan, said. Leaders from both sides are due to decide
   later what the two deals will cover. Vietnam gave COVID-19 aid and
   1,000 scholarships to Laos last year as well.

   Chinese official flows of money into Laos have reached $11 billion per
   year, according to the Aiddata.org website operated by U.S. university
   William & Mary. Financing and investment would push the figure higher.

   Other top donors are Japan and Thailand, with Vietnam emerging as a new
   one. Japan gave $63.8 billion in 2016, including grants, loans and
   technical aid, according to Japan's Foreign Affairs Ministry.

   Official development aid from all countries sometimes reaches 15% of
   Lao GDP. The economy has grown at an annual average of 5.8% during the
   past five years because of the "support of development partners and
   friendly countries," the national news agency said. The support matters
   because about a quarter of the 7 million Laotians live in poverty.
   Mekong River

   Much of Asia hopes to lessen China's influence so the superpower does
   not wield too much clout over the Mekong River, which flows from China
   through Myanmar, Laos, Thailand, Cambodia, and Vietnam, or over the
   region's overland transport links, analysts say. Chinese dams control
   flows in the upper Mekong. The U.S. government raised its aid offer to
   Laos and its neighbors last year.

   "Laos is kind of effectively being carved up in different directions
   but increasingly dominated by China," said Thitinan Pongsudhirak, a
   political science professor at Chulalongkorn University in Bangkok.
   "What we're seeing is [that] the major powers' rivalry is dominating
   the region. Laos is just one pawn in this mix."

   Japan wants more "connectivity" in continental Southeast Asia, said
   Jeffrey Kingston, a history instructor at the Japan campus of Temple
   University. Chinese control of water flows into the Mekong further
   worries Japanese officials, he said.

   "I just think that Japan is signaling that, [in] places that it looks
   like have been conceded to China's influence, it is going to contest,"
   he said. "It is going to take an assertive posture toward these
   countries."

   Japan relies on Thailand for automotive production, while Japanese
   manufacturers are increasingly active in Vietnam -- the result of
   investments made there since the 1980s. Land shipments can lower the
   cost of sending goods to more remote seaports.

   Japan, alongside the United States. is pushing back against China,
   Thitinan said. Washington's [1]Mekong-U.S. Partnership, an aid plan
   launched in September, is seen as a counterweight to China in
   continental Southeast Asia, including Laos.
   FILE - A local villager steers a boat where the future site of the
   Luang Prabang dam will be on the Mekong River, outskirt of Luang
   Prabang province, Laos, Feb. 5, 2020.

   Japan spars separately with China over sovereignty in waters near its
   outlying islands, and leftover World War II issues.

   Thailand typically finances Lao dams for hydropower and maintains close
   cultural ties with the bordering country, Thitinan said. Vietnam
   resents Beijing over its expansion in the disputed South China Sea and
   previous land border disputes, including a war in the 1970s.

   "There's that little battle for influence between Vietnam and China and
   Vietnam has been slowly losing influence to China," said Jack Nguyen, a
   partner at the business advisory firm Mazars in Ho Chi Minh City.

   China does not disclose aid and investment totals for Laos, but
   analysts say it depends more on China than on any other country. Now
   Laos, with a gross domestic product of less than $19 billion and an
   economy ravaged by COVID-19, is [2]struggling to pay for the railway
   line.

   Laos owed $250 million on railway last year, the International Monetary
   Fund has said.

References

   1. https://www.voanews.com/east-asia-pacific/new-us-aid-southeast-asia-takes-aim-chinese-influence
   2. https://www.voanews.com/east-asia-pacific/laos-braces-promise-peril-chinas-high-speed-railway