Working towards greater community control over land, forests and natural resources

‘Review compensation policy’, research institute suggests

Vientiane Times, 12 November 2018


A top economic research institute has suggested the government reconsider its compensation policy, as many people who were compensated for the loss of their land to special and specific economic zones (SEZs) have been unhappy with the amount they received.
The National Economic Research Institute (NERI) said the authorities in charge should study ways to provide compensation in various forms, so as to give displaced villagers more options.
The options suggested include evaluating and converting people’s assets into shares, allocating appropriate land in their new location in exchange for the property they lost, and cash payments, among other methods. This would ensure people’s legal rights were upheld.
NERI made the suggestions in its survey and analysis report on the establishment and operation of SEZs, which was presented to the cabinet at its monthly meeting in October.
Presenting the report, a representative of the institute told the cabinet that the compensation unit price defined by state authorities and paid to people whose property had been appropriated was far lower than the market price.
“This made people dissatisfied so they did not cooperate,” the representative told the government.
In some cases, the villagers concerned agreed with the compensation rate but the government had insufficient funds to disburse the money, according to the report, which highlighted challenges and opportunities.
“These issues could have impacted the development process and confidence in the government’s policies,” it warned.
The unreasonably low compensation rate has been the root cause of land disputes in recent years, with the investment boom meaning that large parcels of land have been awarded to investors through concession agreements.
The government has enacted regulations stipulating that compensation for people affected by development projects must provide displaced people with similar or better living conditions. However, enforcement of the regulations has been weak, meaning that people who lost property were left at a disadvantage.
Observers say that the government, which is suffering from budget constraints, is aware that it is struggling to fully compensate people in line with the regulations it enacted.
They say that compensation at the market price would add a heavy financial burden which the government is likely to be unable to afford, but an inadequate budget for compensation could slow the investment process if the government had to pay the actual market price, so the regulations had been compromised.
The institute’s suggestions come as the government is seeking to maximise the benefits of SEZs and develop more in the years to come.
As of June this year, 12 SEZs offering tax breaks had been established and are operating across the country. These have attracted 503 local and foreign companies with registered capital of more than US$8.4 billion.
The institute said there is the possibility of setting up more SEZs along the 409-km Laos-China railway whose construction is slated for completion in 2021.
In this regard, it recommended the government consider developing industrial zones, a free trade zone, a logistics park, a smart city, an eco city, or a high tech park.
The government has told the relevant ministries to do away with the barriers that currently impede businesses operating in SEZs, to smooth their way and attract new investors.

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