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Frontier capitalism and the expansion of rubber plantations in southern Laos

Published online by Cambridge University Press:  22 August 2012

Pinkaew Laungaramsri
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Abstract

This article examines the recent expansion of large-scale rubber plantations in border areas of Laos and argues that this phenomenon as well as the attendant land concession controversy must be understood from the perspective of resource frontiers. While transnational Vietnamese investment in rubber plantations represents one form of land capitalisation, their establishment in southern Laos has been part of the turbulent political economic transition in Laos. Collaboration between frontier states which often bypasses central governance, chaotic boundaries between what is recognised as ‘used or productive’ and ‘unused or underproductive resources’, and regulatory disorientation of resource control allow what I call ‘frontier capitalism’ to proliferate.

Type
Research Article
Information
Journal of Southeast Asian Studies , Volume 43 , Issue 3 , October 2012 , pp. 463 - 477
Copyright
Copyright © The National University of Singapore 2012

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References

1 A Mon-Khmer language-speaking group, the Brao people live in the Ratanakiri and Stung Treng provinces of northeastern Cambodia, and Attapeu and Champassak provinces in southern Laos. This ethnic minority comprises a number of different subgroups, the most prominent being the Kreung, Brao Tanap, Umba, Kavet, Lun, Hamong, Ka-nying and Jree. About half of the approximately 60,000 Brao live in Laos while the rest reside in Cambodia. The Brao were swidden agriculturalists, combining their upland livelihood with fishing, hunting, and the collection of non-timber forest products until the past few decades, when some have taken up the cultivation of lowland wet rice and other cash crops. Baird, Ian, ‘The case of the Brao: Revisiting physical borders, ethnic identities and spatial and social organisation in the hinterlands of southern Laos and northeastern Cambodia’, in Recherches Nouvelles sur le Laos, Etudes thématiques, No. 18, ed. Goudineau, Yves and Lorrillard, Michel (Paris and Vientiane: École française d'Extrême-Orient, 2008), pp. 595–672Google Scholar.

2 Cor H. Hassen, ‘Lao land concessions, development for the people?’, paper presented at the International Conference on Poverty Reduction and Forests: Tenure, Market and Policy Reforms, Regional Community Forestry Training Center for Asia and the Pacific Bangkok, 3–7 Sept. 2007.

3 Vientiane Times, 19 June 2009.

4 Ministry of Industry and Commerce, www.moic.gov.la.

5 Tsing, Anna, Friction: An ethnography of global connection (Princeton, NJ: Princeton University Press, 2005), p. 28Google Scholar. As Tsing explains, made possible by ‘Cold War militarization of the Third World and the growing power of corporate transnationalism, these resource frontiers grew up where entrepreneurs and armies were able to disengage nature from local ecologies and livelihoods, “freeing up” natural resources that bureaucrats and generals could offer as corporate raw materials’ (p. 28).

6 Ibid., p. 30.

7 Large-scale land concessions have been hotly debated within the government since 2005. While the Committee for Planning and Investment strongly supported the policy to lease land to foreign investors as an economic development strategy, other government sectors, especially the Prime Minister's Office, were concerned about the impact of this policy on local communities, the forests and land conflict. In 2007 the Lao government decided to suspend issuing concessions to revise the existing regulations and implementation (http://hrdme.wordpress.com/2009/06/17/govt-resumes-land-concessions).

8 Donan, Hastings and Wilson, Thomas M., Borders: Frontiers of identity, nation and state (Oxford: Berg, 1999), p. 15Google Scholar.

9 Bounlonh J. Soukamneuth, ‘The political economy of transition in Laos: From peripheral socialism to the margins of global capital’ (Ph.D. diss., Cornell University, 2006), pp. 79–81.

10 Ibid., p. 79.

11 The French experimented with growing rubber in Bachieng, Champassak in 1930. They did not undertake any serious expansion of the four half-hectare plots, however. Villagers in this area refer to rubber as caosu. Sounthone Ketphanh, Mounamai Khamphone and Phoui Siksidao, ‘Rubber planting status in Lao PDR’, National Agriculture and Forestry Research Institute (n.p.), p. 3.

12 Although coffee did take off, as the Commerciale du Laos company invested in the Haut-Mekong (Upper Mekong) and Bolovens from 1922. Stuart-Fox, Martin, ‘The French in Laos 1887–1945’, Modern Asian Studies, 29, 1 (1995): 111–39CrossRefGoogle Scholar.

13 From 2001 onwards, China became the biggest processor of natural rubber in the world and in 2003, China was consuming 1.8 million tonnes of rubber. However, China only produces around 35 per cent of its own domestic consumption, which has increased at a rate of 12 per cent per year on average since 2003. Kuaycharoen, Pornpana, Rubber and its products in China (Bangkok: Foundation for Ecological Recovery, 2006), p. 4Google Scholar.

14 The fee for land concessions in Laos was US$6 per hectare per year — the lowest in the Mekong region — until May 2009, when the Prime Minister's Decree on State Land Lease or Concession adjusted the rate to US$30–50 per hectare for a 10-year rubber concession.

15 See Sithong, Thongmanivong and Thungtong, Vongvisouk, ‘Impacts of cash crops on rural livelihoods: A case study from Muang Sing, Luang Namtha Province, Northern Lao LDR’, in Hanging in the balance: Equity in community-based natural resource management in Asia, ed. Monhanty, Sango, Fox, Jefferson, Nuse, Michael, Stephen, Peter and McLees, Leslie (Bangkok: Regional Community Forestry Training Center for Asia and the Pacific and East-West Center, 2006), p. 110Google Scholar. Several case studies were of the spectacular success of Hat Yao village in Luang Namtha in northern Laos, where a conjunction of favourable conditions led to a boom in the price of rubber. V. Manivong and R.A. Cramb, ‘Economics of smallholder rubber production in northern Laos’, paper presented at the 51st Annual Conference of Australian Agriculture and Resource Economics Society, Queenstown, New Zealand, 2006, pp. 13–14. The farmers in Hat Yao earned 4 million kip per household in the first year and 8 million kip in the third year. This led to the widespread expansion of rubber cultivation in other villages and consequently stimulated the state's interest in rubber as an economic crop for the country.

16 Remarks made by the Deputy Chair of the Committee for Planning and Investment at the workshop on Lessons Learned from the Land Policy for Tree Plantation, 15 Feb. 2007, the National Land Management Authority (NLMA), NLMA conference room, Vientiane.

17 Harvey, David, The new imperialism (Oxford and New York: Oxford University Press, 2005), p. 139Google Scholar.

18 In 2005 Dak Lak Rubber was granted a 50-year land concession on 10,200 hectares in Champassak, Saravane, Attapue and Sekong provinces and the Viet-Lao Joint Stock Rubber Co. was granted a 50-year concession on 10,000 hectares in Champassak. In 2007 Dao-tien was granted a concession of 10,000 hectares for 50 years in Champassak, Quang Minh Rubber Production Joint Stock Co. was granted 3,000 hectares of land in Attapue, and Quasa Geroco Joint Stock Rubber Co., 8,650 hectares, in Savannakhet. Viet-Lao Joint Stock Co. was the first to establish its rubber business in Laos and has the largest concession. The Vietnamese investors plan to expand their plantation areas up to 58,600 hectares. They will begin to pay the concession fee at the rate of US$9 per hectare per year in the eighth year of the concession. Centre for Research and Information on Land and Natural Resources, National Land Management Authority, Office of the Prime Minister, Lao PDR; Faculty of Social Sciences, Chiang Mai University; Foundation for Ecological Recovery, Bangkok, ‘Summary report on research evaluation of economic, social, and ecological implications of the south of Laos PDR’ (n.p., 2009), p. 8; henceforth ‘Summary report’.

19 Mandel, Ernest, Late capitalism (London: Humanities Press, 1975), pp. 84–5, 312–16Google Scholar.

20 Harvey, The new imperialism, p. 159. In expanding Marx's primitive accumulation concept, Harvey defines accumulation by dispossession as a politically driven process that occurs simultaneously with capital accumulation. This process operates in a variety of ways, including the commodification and privatisation of land and the forceful expulsion of peasant populations; conversion of various forms of property rights into exclusively private property rights; suppression of rights to the commons; commodification of labour power and the suppression of alternative (indigenous) forms of production and consumption; colonial, neo-colonial and imperial processes of appropriation of assets (including natural resources).

21 Personal communication with representative from the Birla Lao company, 14 July 2007.

22 ‘Summary report’, p. 8.

23 Between 2007–2010 a variety of seminars and conferences on land concessions were organised by the Lao government. While government agencies were concerned about how to calculate the proper rate of concession fees so as to reflect the real value of land, various social and environmental issues and problems were raised by non-governmental organisations and international agencies working in the areas affected by the land concession policy. Among state agencies, opinions regarding land concessions also diverged. The Committee for Planning and Investment is a strong proponent of the policy, but the Minister within the Prime Minister's Office who oversees the NLMA inclines towards an alternative approach to land capitalisation.

24 See Cleary, Mark, ‘Land codes and the state in French Cochinchina c.1900–1940’, Journal of Historical Geography, 29, 3 (2003): 356–75CrossRefGoogle Scholar.

25 ‘Govt suspends land concessions’, Vientiane Times, 9 May 2007.

26 Khamoan Bhouppa, remarks made at the Workshop on Lessons Learned from the Land Policy for Tree Plantation, NLMA, Vientiane, 15 Feb. 2007.

27 The actual land acquired by the companies was often far less than the amount granted in the contract. Despite the government's moratorium, many provincial officials continued to seek land to fulfil the leases.

28 Ekaphone Phouthonesy, ‘Govt resumes land concessions’, 17 June 2009, http://hrdme.wordpress.com/2009/06/17/govt-resumes-land-concessions (last accessed 20 Mar. 2010).

29 Remark made at an informal meeting between the collaborative research team and local government officials, NLMA provincial office at Champassak Province, 20 July 2007.

30 Ibid.

31 Ibid.

32 Ibid.

33 Turner, Frederick. J., ‘The significance of the frontier in American history’, in Rereading Frederick Jackson Turner, ed. Faragher, John Mack (New York: Henry Holt, 1994), pp. 31–60Google Scholar.

34 Donnan, Hastings and Wilson, Thomas M., ‘Introduction: Borders, nations and states’, in Borders: Frontiers of identity, nation and state (Oxford and New York: Berg, 1999), pp. 1–17Google Scholar.

35 Fold, Neils and Hirsch, Philip, ‘Re-thinking frontiers in Southeast Asia’, Geographical Journal, 175, 2 (2009): 95–7CrossRefGoogle Scholar.

36 Barney, Keith, ‘Laos and the making of a “relational” resource frontier’, Geographical Journal, 175, 2 (2009): 146–59CrossRefGoogle Scholar.

37 See, for example, a speech by Somsawat Lengsavad, Deputy Prime Minister and Foreign Minister at the Lao National Assembly, 6 Oct. 2010, ‘We have abundant land, forests and water resources which are suitable for development projects in line with our market-based economy’; ‘NA urges govt to make land policy fairer’, Vientiane Times, 7 Oct. 2010.

38 The exchange rate was 1 US$ = 7,500 kip.

39 Tsing, Friction.

40 Although historically in Laos there was never a strong connection between the centre and the other regions, provincial economic autonomy has increasingly been perceived by the Vientiane government as a hindrance to reform, obstructing the standardisation of law and financial regulation, revenue collection, transparency in procurement and the restructuring of state-owned enterprises. The Lao government has been attempting to promote political, administrative and economic centralisation.

41 Note that there are more Thai companies than Vietnamese investing in Champassak; other foreign investments/concessions involve companies from Korea and Japan.

42 ‘Summary report’.