Prime Minister Thongloun Sisoulith says he wants to end the Lao government’s policy of bartering land for development, in a reversal of a long-term practice that has seen large swaths of the country go to foreign-backed investors.
“The business sector should not convince the governmental sector to create debts for the nation,” Thongloun told the Lao version of the chamber of commerce earlier this month.
“In recent years, many big development projects, including infrastructure development, cost so much that the government cannot pay off debts for investors on time, so the government must use state land in return for payment,” he said during the Dec. 9 conference.
China, Russia and Vietnam are among the countries that have been part of the land-for-development schemes, sources tell RFA’s Lao Service.
The government is currently issuing permanent land titles to 1,000 hectares of land in the southern Lao province of Champassak province to Russian investors as a way to pay for debts Vientiane racked up in the past, a government official told RFA’s Lao Service.
“With the permanent land titles, the investors have the same land-use rights as Lao people do, and they can use the titles as collateral at banks in case they would like to apply for loans,” the government source said.
The decision to exchange the land with the Russian investors came despite a government moratorium on land concessions announced in 2011.
“In principle the concession must be approved by the government, but in the case of those 1,000 hectares of land, this is happening while the government’s ban on land concession is in effect,” the source explained.
Russian investors aren’t the only ones who have been part of the land-for-development scheme, as China and Vietnam have also grabbed a piece of their neighboring country.
‘How can people trust him?’
“In 2009, the Lao government let China to build a national stadium at around US$80 million to accommodate the Southeast Asian Games, but they paid the debt by giving the Chinese investors a 300-hectare-land concession in That Luang marsh,” a government official told RFA.
The Vietnamese Hoang Anh Gia Lai Group also received a land concession for their part in building a $19 million athlete’s village for the games, said the source, who spoke on condition of anonymity.
“The government gave the company a 90-year logging and land concession in Phouvong district, Attapue province in southern Laos,” the source said.
Land deals by the government are controversial in Laos as all land there officially belongs to the state, leaving citizens with few options in terms of legal redress when land deals are brokered between the government and companies.
The land grabs usually come at the expense of the poor as the government and private investors seek to tap the resource-rich areas that are usually occupied by the country’s subsistence farmers.
The Ministry of Natural Resources and Environment estimates that Lao government officials have given more than one million hectares of Laos’ total land area of 23.7 million hectares (58.6 million acres) as concessions to foreign investors, excluding land for mining and hydropower projects.
Past governments saw the land-for-debt deals as a way to generate cash. Ending the practice could shore up Thongloun’s standing in the country, explained a Lao legal expert, who requested anonymity.
“Even though it is not fully effective, the current government led by Prime Minister Thongloun Sisoulith is taking action on this issue because at least people will then have hope that the land conflict can be addressed,” the attorney explained.