Cambodia, Laos and Myanmar

The economic paths of ASEAN's lower-income members - Cambodia's garment exports, Laos's debt and Chinese railway, and Myanmar's collapse after the 2021 coup.

Alongside the region’s fast-growing economies are three lower-income members along the Mekong River: Cambodia, Laos and Myanmar.

Cambodia: garments and the dollar

Garment and footwear exports to the US and EU drive Cambodia’s economy, employing hundreds of thousands of workers, mostly women.
Cambodia’s economy is heavily dollarised: US dollars are widely used alongside the riel.
Tourism, including Angkor Wat, is important.
The EU partially withdrew Cambodia’s trade preferences in 2020 over human rights concerns.

Laos: dams and debt

Laos has built many hydropower dams, aiming to become the “battery of Southeast Asia” by exporting electricity to Thailand and others.
The Laos-China railway, opened in 2021, connects Kunming in China to Vientiane. It was financed largely by Chinese loans.
Laos has high public debt, much owed to China, and has suffered high inflation and a weakened currency.

Myanmar: reform and reversal

After reforms began in 2011, Myanmar opened up, attracting investment and growing fast.
The military coup in February 2021 reversed this. Protests, conflict, sanctions and the exit of foreign companies caused the economy to shrink sharply, and poverty rose.
Civil conflict has disrupted trade, farming and services, and a major earthquake in 2025 added to the crisis.

Shared challenges

Weak institutions and governance.
Dependence on China for investment and loans.
Limited skills and infrastructure.

Opportunities

Proximity to larger economies and supply chains.
Young populations.
Trade agreements through ASEAN and RCEP.

The garment worker

A young woman moves from a village to Phnom Penh to work in a garment factory making clothes for European brands. Her wages support her parents' farm. When orders drop, as during the pandemic, the whole family feels it.

Thinking all of Southeast Asia is booming

The region's lower-income members face serious challenges, from debt in Laos to conflict in Myanmar.

Key takeaways

Cambodia depends on garment exports and is heavily dollarised.
Laos built dams and a China-financed railway, but faces high debt.
Myanmar's economy shrank sharply after the 2021 coup.
Weak institutions and dependence on China are shared challenges.