Laos in 2024: Settling into Debt Distress

Abstract

In 2024 Laos entered its fourth year under the effects of the COVID and post-COVID economic downturn. However, the roots of Laos’ economic crisis extend back into the 2010s, with heavy borrowing under China’s Belt and Road Initiative. As rotating ASEAN chair, Laos hosted a successfully uncontroversial series of diplomatic meetings. Domestically, the Lao leadership struggled to respond to falling living standards and the urgency of close diplomatic relations with its primary creditor, China. The subsistence economy, the informal economy, the remittance economy, the moonlighting economy, and Laos’ shadow economy provided crucial livelihood buffers to the economic crisis. The National Assembly began work on a constitutional amendment, with the 2026 Party Congress on the horizon. Show more