Foreign Direct Investment (FDI) in Land in developing countries

51The official database is not supposed to be comprehensiveand the extent of land concessions issupposed to exceed the officially reported amountby far. But there is no reliable estimation on theadditional land concessions granted by otherentities.Regarding the economic, socio-cultural andenvironmental impact of FDI in land, the casestudy reveals the following positive points:• The recent upsurge in private sector FDI inCambodia (FDI is estimated to reachUS$ 8.9 billion in the first eight months of 2008(Royal Embassy of Cambodia in WashingtonD.C (2008) is considerably larger than thevolume of Official Development Aid beingprovided by the donor community (see table10). When a conflict arises between privatesector and donor projects, it is likelythat the larger project will be given precedence,and this may pose a threat to some donorprojects.• There is significant increase in local employmentopportunities with raising wages (up to US$ 100per month) which is more or less equal to theurban wage rate.• Improved local roads for moving companygoods and products means local villagers alsobenefit from better road conditions. But also theeffects of damaged roads were seen due to heavyloaded trucks, especially in the rainy season.• Export to foreign countries has tremendouslyincreased, especially to China (mainly wood andrubber) going along with an increase of exportrevenues. Also, it is expected that the localproduction of agro-fuel will benefit the countryby reducing imports of fossils fuels (but thisheavily depends on the development of jatrophayields which often are overestimated).• There is a hope that FDI will result in thecreation of job opportunities and thus contributeto the development of the country.On the other hand, unfavourable developments forthe rural people could be detected:• But many people are already negatively affectedby FDI by losing their agricultural land or accessto forests which is an important source ofrevenue especially for indigenous communities(NTFP).• Large-scale land investments granted toforeign companies have already led to dominantcontrol of fertile land by foreigners, more landconcentration, inequitable land distribution andcauses an increase in landless people. Manylocal villagers migrated to urban areas fornon-agriculture jobs.• Since there is no baseline data available atnational level on patterns of changes of naturalresources, especially of biodiversity, impacts canonly be estimated:• A large part of FDI investments in landconcern establishing tree plantations likeeucalyptus, palm trees and rubber. All theseexotic species are not part of the local biodiversityresulting in a disruption of the localecologic system. They are not part of thenatural local food chains.• These trees are generally cultivated in largescalemonocultures going along with intensiveuse of chemical fertiliser and pesticides andthus showing a high risk of water pollution.• Eucalyptus plantations are forming a seriousfire risk.• Palm oil production with its high biologicaloxygen demand (BOD) presents a seriousdanger to nearby rivers and lakes.• Monocultures of tree plantations with clearcut at short intervals and without a stableforest cover are likely to increase the risk ofsoil erosion, especially during the establishmentphase.• Ongoing illegal logging activities are detrimentalto natural environment resulting in aloss of biodiversity. Even national conservationareas are threatened by human activities.Village workshop