Beyond Debt-Trap Narratives: How the Lao State Manoeuvres the Hybrid Governance of a Chinese Hydropower Project

Abstract

Over the past years, Chinese debt-financed investments under the Belt and Road Initiative (BRI) in Laos have increased considerably. This development has drawn the attention of many analysts, and consequently, narratives such as the Lao state losing its sovereignty or becoming the recent victim of China's "debt-trap diplomacy" have held sway over international press coverage. Drawing on the case of the Nam Nua 1 (NNua1) Project - the BRI flagship hydropower investment in Laos - this article aims to move beyond the dominant narratives of China's debt-trap diplomacy and sovereignty relinquishment by scrutinizing the Lao state's strength in manoeuvring the NNua1 Project's hybrid governance arrangements. The NNua1 project developer's great concentration on the economics of dam construction and operation, its hands-off approach to local political issues, and heavy dependence on the host state in dealing with relocation concerns have boosted the Lao state's strength in controlling the active engagement of the project's stakeholders in hydropower decision-making and planning. The article argues that the Lao state's strength in governing the NNua1 Project hinges on its capacity to mobilize hydropower resources from the external environment by negotiating relations with powerful foreign entities of hydropower development while maintaining internal control over its remote populations through decentralization techniques. This article contributes to the critical discussion of the influence of multi-stakeholder governance engagement on the Lao state's statehood.