Monday, February 7, 2011
The Dragon Retreats?
Lao Chinatown Dropped
07-01-10
A Chinese-Lao joint venture has pulled out of a deal to develop a Suzhou-style “model city” on the outskirts of the Lao capital, Vientiane, according to senior Lao officials.
The "New City Development Project," which involved a 50-year lease for 1,000 hectares of land in and around the That Luang Marsh, required the group to pay roughly 7,000 households a total of U.S. $400 million in compensation for relocating their homes.
Sinlavong Khoutphaythoune, a former mayor of Vientiane and current minister of planning and investment, said the concession had been canceled because the Chinese developer didn't want to pay the compensation.
“Previously, the government had an agreement with the Chinese company to build a new city. But this has already been canceled,” Khoutphaythoune said.
“Due to the high cost of compensation to residents in the area surrounding the location, there are no longer any companies interested in developing it.”
The joint venture comprised three Chinese firms and one Lao firm and was managed by the Suzhou Industrial Park Overseas Investment Co.
Khoutphaythoune said the Chinese company will revert its planned development to the original 1,000 hectares it had targeted near a Chinese-built stadium Laos used to host the 2009 Southeast Asia Games (SEA Games) in December.
Sombath Yialiheu, Vientiane’s current mayor, signed an agreement with Chinese officials to that effect on behalf of the Lao government, just one of 18 deals sealed during Chinese vice president Xi Jinping’s visit to Laos in mid-June.
Protected area
Khamouane Boupha, the Lao minister in charge of land management, said the That Luang Marsh has now been designated a protected area by Lao Prime Minister Bouasone Bouphavanh and that only environmentally friendly development projects would be considered going forward.
“The management plan for the That Luang Marsh involves preservation because it needs to serve as drainage for the city waste water,” Boupha said.
“Some people want to build houses over there, but if people do that they will have to balance the interests first. We have to think about mutual interests. We need to preserve [the marsh] and we have to think about the interests of the Lao people.”
“Some people want to build houses over there, but if people do that they will have to balance the interests first. We have to think about mutual interests. We need to preserve [the marsh] and we have to think about the interests of the Lao people.”
Boupha said the government is considering ways to promote That Luang Marsh as a tourist destination and also as a reservoir that would help irrigate Vientiane in times of drought.
Plan with all parties
David Mann, program officer for the U.N. Food & Agriculture Organization (FAO) in Laos is overseeing planning for the marsh.
“Participatory in nature, it would bring the different stakeholders to the table. This would include developers who have a stake in the area, the population, the appropriate Lao ministries, and international cooperation agencies,” Mann said.
“[They would] come to the table and understand what are the strengths and weaknesses of the That Luang [Marsh], what are the proposed developments there, what are the potential impacts of these, and how can we come up with a coordinated plan for the development.”
Mann wouldn't rule out the development of a city site, similar to what the Chinese developer had proposed, but said it would include many more environmental precautions and ensure adequate compensation to relocated families.
But he cautioned that both the benefits and costs must be fully understood before the government hands out a long-term concession.
“The Lao people [must] understand—and this doesn’t just include the farmers on That Luang Marsh, but middle-class people and people in ministries—that something like U.S. $1.1 billion ... doesn’t mean that it is going to benefit the Lao people,” he said, alluding to the earlier proposed Chinese investment.
He said investment schemes such as the Chinese plan are unlikely to be fully funded even within the first five years of the project, affecting the quality of the development and the likelihood that displaced farmers would be provided with jobs in the new businesses brought with it.
Local residents are encouraged, Mann said, by the government’s decision to abandon the Chinese development plan, Mann said, and have been vocal in their suggestions for alternative projects.
The decision on new development plans will ultimately be made by the Lao government, he said, and the FAO hopes to have a complete concept paper ready for official signature by October in time for the 450th anniversary of Vientiane.
Chinese presence
Under initial terms of the 2007 agreement, China planned to hold several hundred hectares around the That Luang Buddhist monument on a 50-year lease with a 25-year option, with permission to develop the surrounding marshlands.
The project called for the development of a new city similar to Suzhou in eastern China’s Jiangsu province, renowned as a tourist draw for its bridges and lush panoramas, creating a sort of Chinatown in Vientiane directly next to the That Luang Temple, a symbol of Lao nationalism.
China’s presence in Laos has intensified rapidly since it organized a financial bailout of the impoverished country in the wake of the Asian financial crisis. Beijing provided U.S. $1.7 billion in export subsidies and interest-free loans, allowing Laos to stabilize the value of its currency during a crisis in 1998-99, according to official Chinese media.
Since 2000, Beijing has poured money into Lao infrastructure, including a “land bridge” through which Chinese goods can flow into Thailand.
China has expressed a strong desire to increase imports of natural resources from Laos, including timber, iron ore, copper, gold, and gemstones.
The new relationship was cemented with the visit by then President Jiang Zemin to Laos in November 2000, the first by a Chinese head of state, and Beijing agreed to cancel much of the Lao debt in 2003.
Original reporting by Viengsay Luangkhot for RFA’s Lao service. Lao service director: Viengsay Luangkhot. Translated from the Lao by Bounchanh Mouangkham. Written for the Web in English by Joshua Lipes. Edited by Sarah Jackson-Han.
Elephant For Hire (Long Term - Reasonable Rates)
Chinese in Laos
We've been hearing a lot lately about China's growing economic activities in Africa and its "charm offensive" in various parts of the world, linked to things such as the establishment of Confucius Institutes everywhere from the U.S. and the U.K. to South Africa, South America, and Serbia. But many of the most complicated international ties involving China are still, as in the past, ones that connect it to neighboring countries, such as those of Southeast Asia. Caroline Finlay, who has written pieces for China Beat before on issues such as Vietnam and the torch route, sheds light on different sorts of China-Southeast Asia ties here...
By Caroline Finlay
Chimes jingle on gold-painted stupas and teenagers strum guitars to the beat of passing tuk-
tuks in Luang Prabang, Laos’ UNESCO World Heritage sight nestled on the Mekong. Sadly, a more obtrusive rhythm has hit the scene: the squawk of walkie-talkie phones. Like a large percentage of Lao’s motorbikes, clothes and electronics, the walkie-talkie phones are a Chinese import, strapped to the belts of the increasingly numerous Chinese tourists visiting Luang Prabang, famous for its now fragile serenity.
China has begun to re-establish ties with sparsely populated Laos, which has historically aligned with Indochina War ally Vietnam. The Chinese have made a number of gestures to the Lao people - they have built a highway linking Yunnan to Thailand, are working on a sports complex for the 2009 SEA Games, and are involved in a hydroelectric project in Vientiane province. But it’s not without a measure of self-interest. The new highway links China with the Thai market, eliminating the need to ship down the twisting and increasingly shallow Mekong, while the Chinese have been awarded a large and controversial land concession in Lao’s capital Vientiane in return for enabling Laos to host Southeast Asia’s largest sporting event.
In Luang Prabang, a Chinese-funded airport upgrade is planned to begin in early 2009, and NGOs and tourists alike are concerned that the roar of jet engines will be the new background to their riverside sunsets. According to an Asian Development Bank (ADB) report, Luang Prabang’s airport “is not compliant with ICAO [International Civil Aviation Organization] safety and security standards for current operations,” and the Laotian government is “interested in upgrading the runway… to support the operation of B737 and A320 aircraft.” The project is expected to boost tourism by 125 percent in the first three years, provide Lao laborers with income, compensate and resettle those on land required by the project, and include a gender and HIV/AIDS awareness program. Construction will be funded by China EXIM Bank at $63.2m, while the Laotian government has pledged $20.4m for the other programs, including resettlement.
In Luang Prabang, a Chinese-funded airport upgrade is planned to begin in early 2009, and NGOs and tourists alike are concerned that the roar of jet engines will be the new background to their riverside sunsets. According to an Asian Development Bank (ADB) report, Luang Prabang’s airport “is not compliant with ICAO [International Civil Aviation Organization] safety and security standards for current operations,” and the Laotian government is “interested in upgrading the runway… to support the operation of B737 and A320 aircraft.” The project is expected to boost tourism by 125 percent in the first three years, provide Lao laborers with income, compensate and resettle those on land required by the project, and include a gender and HIV/AIDS awareness program. Construction will be funded by China EXIM Bank at $63.2m, while the Laotian government has pledged $20.4m for the other programs, including resettlement.
Concerns have arisen over the project, especially over the lack of international oversight in a country that has been sliding down Transparency International’s corruption perception scale. The ADB report states that “ADB’s Anticorruption Policy and Policy relating to the Combating of Money Laundering…is not applicable to the project since the ADB is not participating in financing the project investment.” In UNESCO’s 32nd session in Quebec this summer, it was reported that “several new development projects, including a new airport and a new town on the right bank of the Mekong, would have an adverse impact on the World Heritage property, both in terms of visual integrity and noise pollution,” and that development in Luang Prabang has led to a decline in Lao traditional heritage that could “justify ‘World Heritage in Danger’ listing.” Rumors abound in Luang Prabang that the labor for the airport construction will be shipped in from China, reducing the benefit to locals, and that the Chinese were awarded another land concession on the right bank of the Mekong in return for their soft loan and construction expertise. The land in question has actually been set aside for a South Korean development with a five-star resort and golf course.
Foreign NGOs have yet to publicly denounce the project, but a Voice of America report states that “concerns have been raised that while this new town will bring modernity to the people in the area, it may adversely affect the city of Luang Prabang itself.” The report also gives Laotian Deputy Prime-Minister Somsavad Lengsavath an opportunity to respond to these claims. “Lengsavath points out that, for the past twelve years, Laos has followed the international criteria for maintaining the city’s World Heritage status,” but that, “there are some aspects, such as the construction of new buildings, that Lao officials still need to further address.”
Issues like World Heritage status and even resettlement concern a small percentage of Laotians; what is more obvious is the rocketing number of Chinese economic migrants moving into their backyards. Nearly every large town has a “Dalat Chine” or Chinese market, where locals can buy cheaply made clothing, motorbikes and impressive rip-offs of Nokia and Apple mobile phones. The vendors usually live in an accompanying housing complex, speak very poor Laotian, and rarely interact with locals. In a report by Thomas Fuller for the New York Times, Luang Prabang resident Khamphao says that “life is better because prices are cheaper.”
While that may be true, the Chinese presence may be hurting local businesses, “There are some good properties for sale in Phonesavanh [the capital of Xieng Khouang province],” says Ditthavong, a Xieng Khouang native, “because the Chinese have put the Laotian shop owners out of business. The Chinese have access to such cheap goods. The Lao can make more money by renting them storefronts than they ever could running their own shops”
Issues like World Heritage status and even resettlement concern a small percentage of Laotians; what is more obvious is the rocketing number of Chinese economic migrants moving into their backyards. Nearly every large town has a “Dalat Chine” or Chinese market, where locals can buy cheaply made clothing, motorbikes and impressive rip-offs of Nokia and Apple mobile phones. The vendors usually live in an accompanying housing complex, speak very poor Laotian, and rarely interact with locals. In a report by Thomas Fuller for the New York Times, Luang Prabang resident Khamphao says that “life is better because prices are cheaper.”
While that may be true, the Chinese presence may be hurting local businesses, “There are some good properties for sale in Phonesavanh [the capital of Xieng Khouang province],” says Ditthavong, a Xieng Khouang native, “because the Chinese have put the Laotian shop owners out of business. The Chinese have access to such cheap goods. The Lao can make more money by renting them storefronts than they ever could running their own shops”
Thousands of Chinese workers have been brought in to construct Vientiane’s stadium and a new Chinese-owned shopping complex, and more are expected to move in to develop the new Chinatown, Vientiane’s second, on the capital’s outskirts as well as the airport in Luang Prabang. Vice Minister of Foreign Affairs Thongloun Sisouluth said in a 2008 BBC report that, “economic migration is unavoidable in this modern time,” while Vientiane resident Xaisomboun Soukhummalay has the same worries as Luang Prabang’s World Heritage committee – cultural dilution. “Our population is six-and-a-half million,” he says, “their one Yunnan province is seven times that!”
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