Concessions and Leases in the Lao PDR

Executive Summary
Investment in land is a cross-cutting issue considered integral to socioeconomic change, natural resource management and
economic development in the Lao PDR. Expanding demand for raw materials by rapidly growing neighbouring economies
(particularly Thailand, Vietnam and China) and the establishment of policies and regulatory frameworks favourable to land- and
resource-intensive investment have driven a rapid increase in the area of land granted for development. The number of land
deals has skyrocketed in recent years, increasing fifty fold from 2000 to 2009. Still, constructive debate as to the costs, benefits
and sustainable alternatives to this shift has remained hampered by a lack of reliable and comprehensive data.
The State Land Leases and Concessions Inventory represents a globally unique and extremely valuable database from various
perspectives. It contains the spatially explicit data collected under the former NREIC-GIZ project, and is the first systematic
inventory that allows for visualising and analysing the extent and dimensions of land-intensive investment across the entire
country. Until now, all available insights into the expansion of land investments in the Lao PDR were based on either aggregated
official statistics or site-specific case studies. As a result, no detailed information on land concessions was available on a national
level. The data in the inventory was collected locally and in a spatially explicit manner where possible, allowing its combination
with other national level data to provide stronger insight into regional patterns as well as the contexts in which land concessions
and leases occur.
Since October 2011, the Swiss Agency for Development and Cooperation (SDC) has provided funding to the Natural Resource
and Environment Information Centre (NREIC) to pursue data collection in this area of interest. This funding made it possible for
the Centre for Development and Environment (CDE) of the University of Bern and the NREIC to capitalise on the existing wealth
of data by collaborating on this publication. This publication presents the analysis of the inventory, providing a series of “snapshots”
into the data, along with additional interpretations of key characteristics and trends.
Overall Results and Analysis
This book presents for the first time an overall picture of land concessions and leases in the Lao PDR on a national level. It
thereby grants information and insights into key issues, the spatial distribution of land deals and the wider context of land
intensive investment.
The analysis excludes logging concessions, contract farming and hydropower projects, and analyses mining exploration
concessions only briefly and in isolation from other land investment types. The analysis therefore focuses on 2,642 land
deals which total 1.1 million hectares – roughly five per cent of the Lao PDR’s national territory. Due to these exclusions and
other limitations described in chapter 1, this 1.1 m ha can be considered a conservative number. To put this in perspective,
rice constitutes the main crop grown in the country, yet the area under rice cultivation totals only 0.97 m ha (MAF, 2012).
The extent of investment is also astounding given that areas granted are biased towards being located on forest land and
in more accessible areas. Rice constitutes the main crop grown in the country, yet the area under rice cultivation totals only
0.97 m ha (MAF, 2012).
The majority of projects (62%) are under 5 ha in size, and leases tend to be far smaller than concessions. While 213 concessions
are over 500 ha in size, the majority of leases are under 5 ha. Hence a few large concessions make up a significant share of the
entire area granted: the largest 135 projects (5% of all projects) constitute 89% of the total area under investment. Most land
under investment, especially for projects over 1,000 ha in size, is utilized for primary sector activities including forestry (consisting
mainly of monoculture tree plantations but excluding logging concessions), agriculture and mining projects. The secondary
and tertiary sectors constitute only 3% and 7% of the total area under investment respectively. Mining is the most significant
subsector in terms of total projects and area under investment (21% and 50% respectively); mining projects are also the largest
on average, at 1,155 ha. Agriculture and forestry both claim 14% of all projects, though forestry projects are on average almost
twice the size of agriculture projects (885 ha and 453 ha on average respectively).
Domestic investors hold a sizeable number of projects (1,705 or 65% of all projects), though domestic projects are on average
almost ten times smaller than those under foreign investment. China, Thailand and Vietnam are the largest foreign investors,
both in terms of the number of projects and area covered by these projects (617 deals or 23% of all deals, and 579,821 ha or 53%
of all land under investment). Chinese investors hold the greatest number of investment projects of any foreign investing country
(299), but these tend to be slightly smaller in size than Vietnamese investment projects, thus the total area under Chinese
investment is lower than that under Vietnamese investment (199,015 ha and 307,169 ha respectively). Joint ventures are similar
to foreign projects in average size (1,048 ha); as a result, despite the small number of joint venture projects (140 deals), they still
Acknowledgements - Executive Summary 9