[BANGKOK] As Laos gears up to assume the chairmanship of the Association of Southeast Asian Nations (Asean) on Jan 1 next year, the government is busy dealing with some serious economic challenges at home.

Laos, which joined Asean in 1997, is one of the most indebted countries in the region and the only Asean member state to have had its sovereign rating downgraded during the Covid-19 period. It also has the region’s most devalued currency, the highest inflation rate, and the lowest budget expenditure on essential services such as education and health.

Laos’ most serious issue at the moment is its mounting public debt, which has ballooned over the past decade as the country migrated from least developed country status to lower-middle income status, and therefore saw diminished overseas development aid at concessional rates.