What Are China’s Investments Costing the People of Laos?

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In the past 5 years, the lush green rice fields and orchards that once danced endlessly across the Lao countrysides, have been replaced with more Chinese owned banana plantations.

While Laos isn’t among the world’s top banana producers, banana production in the small country has erupted. In 2002, Laos produced less than 90,000 tons of bananas, however by 2013 it was producing over 400,000 tons.

While the banana boom has brought economic benefits to impoverished regions, there is also strong concern regarding the use of chemicals – including the banned herbicide, paraquat.

According to recent studies, Chinese entrepreneurs are renting 1,600 square meters of land for about $300 to $600 per year from farmers, which is roughly what they would earn from this area if they cultivated the land. Villagers believe they are getting a great bargain because they earn the same income without having to do the work.

However, deals such as these ultimately comes with great sacrifices; for example, concession contracts seldom specify that the investor is required to clean and restore the land to its previous condition after the agreement has ended.

According to Cecilie Friis, a human geographer at Humboldt University, there are considerable economic incentives for locals to rent out their land, due to the large influx of cash that Laotian villagers could never earn in one shot from farming. However, the consequences are severe in terms of chemicals utilized by Chinese investors, destruction of land markers and of traditional irrigation channels.

With the majority of plantation workers being from marginalized ethnic minority groups, workers are also motivated by the money, earning between $120 and $150 a month, where the national income per capita is estimated at $137 a month by the World Bank.

Yet analysts believe that the banana rush in northern Laos is just one element of a larger phenomenon.

In 2014, China became the largest investor in Laos, a landlocked country of 6.5 million people, with more than 760 projects valued at about $6.7 billion, not to mention the highly anticipated Laos-China Railway project.

Deprived of economic opportunities in overpopulated southern China, Chinese entrepreneurs are venturing across the border in droves, to a country where people are scarce and land is plentiful.

Chinese migrants have been investing in a plethora of things in northern Laos – from hotels and bakeries to rubber plantations. However, it is the massive banana estates, which cover most of Bokeo province and parts of Oudomxay and Luang Namtha, that they tout as their greatest achievement.

Though Chinese economic influence over Laos is nothing new, the superpower’s economic penetration of the small country  has increased considerably in recent years. According to the World Bank,  Laos’ GDP took off with real growth of 8.5% in 2013 and 7.5% in 2014 – figures that surpassed China’s.

As a result, largely due to shipments of agricultural products grown by Chinese companies, Lao exports to China increased by 300% between 2005 and 2013,

However, what at first seemed like a good deal for the impoverished Laotian farmers is turning out to be anything but positive, with unexpected side effects rapidly outweighing the economic advantages.

Though plantation workers take precaution by wearing masks when spraying  trees with pesticides, it’s not enough to prevent severe headaches, nausea, liver disease and in some cases death. Nor does it prevent the chemicals from spreading to other family members living in the village, some who do not partake in the farming of these banana fields but have also fallen victim to the hazardous fumes.

Many cases result in young children vomiting blood, suffering from extreme fever, enduring intense cases of diarrhea and for more unfortunate families, losing the child. Doctors have confirmed with tests that their lungs have been irreparably damaged by toxic pesticides.

Such situations are fueling an anti-Chinese position that is beginning to pour over into  Laos’ northern regions.

Demonstrations are rare in Laos, however residents of Sibounheung village unified in August  to protest their displacement, after their land was included in a 99-year concession for a private Chinese company to extend its hotel-casino complex. After villagers proposed $5,600 per rai (1,600 square meters), the government purchased the rice fields for $2,800 per rai.

Other protests have taken place across social network platforms, including one that criticized a proposal that allowed China’s A-Cho Group to develop land around the Kuang Si waterfall, one of the most famous natural sites in the country. The project was shortly terminated.

At the end of September last year, the Ministry of Agriculture and Forests warned four Chinese companies for “excessive use of pesticides” and ordered inspections on the types and amounts of chemicals used at various banana plantations. Business licenses were threatened to be revoked if laws continued to be broken.

In mid-October, authorities in Bokeo, Luang Namtha and Oudomxay provinces banned the creation of new plantations, after Chinese-owned banana farms were discovered to have used and leaked hazardous chemicals into the soil and water.

However, despite the government’s efforts towards preventing further damage from being done to the people and the environment, the use of illegal substances in  banana farming is far too lucrative for it to disappear anytime soon. Farmers continue to rent their land out illegally to China’s investors to bring home a steady income.

Prime Minister Thongloun Sisoulith has voiced his concern over the widespread chemical usage on Chinese-run banana plantations stating, “the government could not overlook this.”  He added, “since last year, I have ordered a prohibition on renting out more agricultural land for banana plantations to investors because of the damage from chemical contamination.”

The PM acknowledges that the use of chemicals has made farmers sick and contaminated water sources, however he did not mention whether Laos would take action against the existing banana plantations.

Source: Southeast Asia Globe

One Response to What Are China’s Investments Costing the People of Laos?

  1. […] the new law may be in response to the poisonous pesticides repeatedly found in the country’s soil and water sources, that are widely employed by farm […]

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