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Destructive investments in Laos and Cambodia

Destructive investments in Laos and Cambodia


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By Shalmali Guttal

The forests that the company is clearing are not degraded; They are forests where we get food, roots, medicinal plants and other elements to live. (A resident of Ansar Chambok Commune, Krakor District, Pursat Province, Cambodia, April 9, 2010.)


What kind of development is this? If the government cares about development, it should include the people, so that we can consider it our own and take advantage of what it brings. But in this type of development, people lose everything. (Conversation with residents of a village affected by the Pheapimex concession in Krakor district, Pursat province, Cambodia. March 2010.)

In Cambodia and the Lao People's Democratic Republic, the rapid and intensive exploitation of land and natural resources by state and private investors is increasing land insecurity, landlessness, environmental destruction, forced migration and migration. poverty.

More than 70% of the population of both countries live in rural areas and practice subsistence agriculture and artisanal fishing. Laos is a country rich in natural resources and biodiversity, and boasts of its superb landscapes of rivers, mountains, forests, plateaus and floodplains. Some 10,000 species of animals, plants, insects and fish live in it, many of which are disappearing due to the disappearance of their habitat. Laos is also one of the most important areas in the world for rice, of which it has a surprising variety of traditional seeds, as well as important indigenous knowledge about its cultivation and resilience. Cambodia contains approximately 10.7 million hectares of tropical forests of various types, which chainsaws and bulldozers are rapidly destroying. Its landscapes are outlined by numerous streams, lakes, swamps and rivers where a great variety of fish and mollusks reproduce. In that country is the famous Tonle Sap, the largest freshwater lake in Southeast Asia, which almost triples its surface during the monsoon season.

However, in both countries development is becoming synonymous with private investment. As in many Asian countries, the dominant development model prioritizes integration with regional and global markets, as well as rapid economic growth, regardless of ecological and social consequences. Private investment is sought in virtually every sector of the economy, from energy, oil, minerals, agriculture and food processing, to education, healthcare, tourism, manufacturing, pharmaceuticals, transportation and urban infrastructure. Both countries rely heavily on foreign aid, which often comes bundled with investment opportunities for companies from donor countries. National development plans are favored by economic arrangements promoted by multilateral institutions and groups such as the Asian Development Bank (ADB), the World Bank Group, and the Association of Southeast Asian Nations (ASEAN).

Most large-scale investment projects focus on the exploitation of land, water, minerals and agricultural potential. The government of Laos presents the country as an attractive destination for investment, citing among its advantages the abundance of natural resources, the vast expanses of fertile land, a flourishing tourism industry, a reliable supply of energy, the low risk of natural disasters. , political stability, and privileged access to the European Union and several other markets. The Royal Government of Cambodia (GRC) offers generous incentives to foreign investors, with long-term land leases at free prices, tax exemption, few restrictions on imports from abroad, and the ability to repatriate profits.


In both Cambodia and Laos, agro-industrial plantations have become a scourge. Millions of hectares of agricultural, forest and communal lands have been transferred to state and private companies for the cultivation of rubber trees, pines, acacias, eucalyptus, hardwood trees, corn, cassava and sugar cane. The latest inventory carried out by LICADHO, a Cambodian human rights organization, shows that 3,936,481 hectares have been awarded to mining activities and economic land concessions (ELCs), of which 2,036,170 hectares were allocated to agro-industrial plantations of rubber, cassava and sugar cane. ELCs cover almost 53% of the country's arable land, and 346,000 hectares are located in conservation zones. In Laos, an inventory carried out in 2010 by the National Land Administration Authority showed that the area covered by concessions is 1,400,000 hectares, and includes more than 760 projects, including 375,000 hectares of agro-industrial plantations, mainly rubber and eucalyptus.

Investors come from India, Vietnam, China and Thailand, and also from more distant countries such as Singapore, South Korea and Australia. These investments have been promoted by many bilateral donors, such as the Asian Development Bank, the World Bank and private consulting firms, as a strategy to maximize the economic returns from "degraded" forests and "idle" or "underutilized" lands. , increase reforestation and alleviate poverty. Recently, new ways of extracting income from natural resources have started to be proposed within the framework of the “green economy”.

At the end of March, Cambodia, Laos, Burma, Thailand and China signed a pact to increase trade between them, with the sale of rubber to China as the main objective. Cambodia already has 204,800 hectares of rubber plantations, under concessions for a period of 70 years, and with a view to expanding them to 300,000 hectares by 2020, mainly for export to China. In Laos, the agreement is part of the national agricultural development plan, and the contract will include approximately 270,000 hectares of rubber plantations.

There is increasing evidence that these ELC offer little or no benefit to the national economy, and instead have significant consequences for the livelihoods and economies of local communities, compounded by human rights violations. and the destruction of diverse landscapes, forests and native ecosystems. Plantations require the intensive use of chemical fertilizers, pesticides and herbicides, which degrade soils and make them arid, and which poison aquifers and surface water sources. Many plantations are accompanied by processing plants located nearby, which consume enormous amounts of water and energy, while local communities do not have them.

ELCs have displaced local populations from their villages, fields, forests and traditional occupations. In many cases, communities are forced to change the location of their villages. When they are able to stay in their village, they are not allowed to use the surrounding forests and lands or the public lands for grazing, as they now belong to the investors. It has become common for investors to encroach on forests and communal or public lands claiming they are part of their concessions. Communities in the Pheapimex plantation area in Cambodia's Pursat and Kamponc Chnang provinces report the loss of communal forests, wild food sources, rare wildlife reserves, sacred spiritual sites, streams and springs, grazing lands, paddy fields and even houses and villages. According to a woman from a village affected by CLA:

The forests that the company is clearing are not degraded; They are forests where we get food, roots, medicinal plants and other elements to live. (A resident of Ansar Chambok Commune, Krakor District, Pursat Province, Cambodia, April 9, 2010.)

Investment companies often violate written agreements, but they rarely face censorship or punitive measures from the state. They promise jobs, schools, health centers, roads, and other infrastructure, but they rarely deliver what they promised. Experience belies the promises of employment and a better standard of living. According to villagers fighting the Pheapimex company in Kampong Chnang, Cambodia, those who work on the plantations do so in very poor conditions: their food sources have been destroyed, they have no money to buy food, and they only receive a few bowls of watery rice from long hours of exhausting work. Months go by without charging anything. They return home sick, tired, weak and without any money.

For people who are dispossessed and displaced by investment-based development, survival involves a daily struggle. The speeches of authorities, donors and financiers on the promotion of “high quality, environmentally and socially responsible investments” do not sound convincing, in the absence of regulatory frameworks that protect the rights to land, resources, food and livelihoods of the rural population, and that they sanction investors who violate those rights. The strong economic growth that Cambodia and Laos are aiming for thanks to agro-industrial investment projects will cost the rural population dearly, which is what really makes a contribution to society by producing food, caring for fragile ecosystems and regenerating biodiversity and environmental wealth. To address development with real responsibility, governments should recognize the importance of what rural communities invest in maintaining food security, sources of income and the economy, and support them in doing so.

Shalmali guttal, Focus on the Global South. April 2012. Monthly newsletter of the World Forest Movement - WRM http://www.wrm.org.uy


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