Southeast Asian Studies, Vol. ῏ῑ, No. ῏, March ῎ῌ῍ῌAgency, Opportunity and Risk: Commercialization and
Human-nature Relationships in Laos
Introduction
KDCD Yasuyuki*, Nathan B69:CD8=**, TDB>I6 Shinsuke***
Linkham DDJ6C<H6K6CI=** and NDC6@6 Kenichi****

From Land-locked to Land-linked
Laos, previously known as an isolated and land-locked country, has undergone rapidchanges bringing it into the dynamic regional economy of Southeast Asia. Locatedstrategically at the center of the region, and home to many of the region’s remaining
natural resources, the country is better understood now as “land-linked” [Kono et al. ῎ῌῌῒ].
Regional integration is proceeding at a rapid pace, driven by national policies, regional
cooperation and the private sector. Each of Laos’ ῍ῐ provinces has an international
border. With the opening of the Lao national economy starting with the ῍ΐῒῐ Chinthanakaan mai policy, local Lao economies have begun to orient themselves towards markets
in neighboring countries and beyond. Thailand, China and Vietnam are now not simply
sources of commodities for the Lao population, but have become partners in trade andinvestment.
The larger context for these local market-based linkages is the driver to create acommon economic arena on the mainland of Southeast Asia, including the provinces ofSouthwestern China. The Greater Mekong Subregion, a regional mechanism funded by
the Asian Development Bank with significant financial backing from the Japanese
government, is working to integrate communications and energy networks to promote
the movement of capital, goods and people across the region [ADB ῎ῌῌ῏]. With improved
road links, Chinese, Thai and Vietnamese companies are increasingly attracted to Laos asa destination for investment.

This in turn has stimulated the growth of a modest

domestic private sector providing basic services.
ῌ Center for Southeast Asian Studies, Kyoto University
e-mail: konocseas.kyoto-u.ac.jp
ῌῌNational Agriculture and Forestry Research Institute, Lao PDRῌῌῌ Graduate School of Agricultural and Life Sciences, The University of Tokyoῌῌῌῌ College of Arts, Rikkyo University365῔῕῎῏῎ῒῑ ῐῒῐ ῐ ΐ

By most macro-economic standards, Laos’ development in the past years has been
impressive.

Annual growth rates of between ῒῌΐ῍ and increases in foreign direct

investment to ῐ῕῏ billion dollars in the first nine months of ῎ῌῌ῔, suggest that policies
opening the country to regional trade under the framework of the ASEAN Free Trade
Area have produced results [EarthTimes, ῎ῒ October ῎ῌῌ῔]. Much of this development,
however, is based on extraction of the country’s natural assets. Laos, itself a hotspot of
biodiversity, has seen a continuous reduction in forest cover, from ῐ῔῕῎῍ in ῍῔ΐ῎ to ῐ῍῕῍῍in ῎ῌῌ῎ ῌ the product of multiple pressures stemming from logging and agriculture [DoF῎ῌῌ῏]. Ambitious hydropower development plans aim to turn Laos into the battery ofSoutheast Asia, drawing upon the abundant water resources that rise in and flow
through the country [GoL ῎ῌῌῑ].
At the micro-level, there are indicators that the gap between the rich and the poor iswidening at a worrying rate. The benefits of economic development have been concentrated in the Mekong valley region, while the upland regions lag behind. The Participatory Poverty Assessment ῎ῌῌῑ [Chamberlain ῎ῌῌῒ] showed that the major source ofpoverty in the country is insecure access to land. Behind the inadequate land situationis the government’s effort to stabilize shifting cultivation and create permanent village
settlements in areas where access to services is better. In terms of human development,
every second child still suffers from chronic malnutrition, a situation that has notchanged in ten years [World Food Programme ῎ῌῌΐ]. Running across these worrying
indicators is the gross imbalance in poverty, with the ethnic minority groups thatcompose approximately half of the national population at a distinct disadvantage.
Vulnerability of local livelihoods to shocks has emerged as one of the key threats tohuman development in the new economy across the region [Cornford and Matthews῎ῌῌῒ].

Opportunity and Risk: Rural Livelihoods in Transition
The situation of development in Laos is a complex mosaic of government and market,
seemingly contradictory macro- and micro-dynamics, and widening variation acrosssectors of society. That said, both upland and lowland areas are clearly on the way
towards a market-driven, regionally oriented economy. Natural resources are to be themainstay of local economies, just as in the national economy. Trade in natural resources
has long been an important part of local economies, and has been a central element of
Laos’ relationships with its neighbors [Stuart-Fox ῍῔῔ΐ]. What is different today is therate of change, and ways of adaptation to these changes that challenge rural people’s
resilience.
The papers in this volume show how local people are adapting their livelihood to therapidly deepening market economy through case studies in various parts of Lao PDR.
366

KDCD Y. et al. : Introduction

Fig. ῌ

Locations of the Study Sites(Fig. ῌ ). Two main sets of dynamics are explored in the following analysis. First, somecommunities are devising new ways to engage with the market, commercializing resources they have traditionally managed as part of their livelihoods. Here, local people
engage with rapidly expanding domestic markets to supply natural products that arecollected or cultivated within the village landscape.

These products are linked ec-

ologically and economically with other livelihood activities; for example, a wide range ofwild foods are collected from rice fields and village forests. As Nishimura et al. describe,
responding to signals from markets in nearby urban marketplaces and more distantregional markets, rural people devise strategies for securing income based on the resources available on hand.
In a large part, these strategies are based on consideration of how to maintainsimultaneously a flow of economic benefits and productive natural systems. In places
located farther from markets, for example in the northern mountainous regions, local
people search for ways to respond to the changes in demand for forest products.
Non-timber forest products (NTFPs), long-time components of local and regional trading
networks, undergo another phase of commercialization. One of the key changes in the
upland economy has been the re-emergence of private traders who provide access tomore distant markets, such as China. The trade in NTFPs was nationalized through367ῒΐῌ῍ῌῐ῏ ῏ῐ῎ ῏ ῑstate-run trading firms until the end of the ῍ῒῑῌs, when restrictions on private involvement in trading were released. After this, marketing chains ῌ often linking ethnic groups
and crossing boundaries ῌ for forest products such as Boehmeria malabarica, called peuak
meuak in Lao, were revived and new products available locally become commercially
viable. Traders form nodes in these networks, building upon social relations in uplandareas, as described in Yokoyama’s article. Neef et al.’s analysis shows how local dependency on these products has grown with increased international trading outlets.
These case studies illustrate how economic sustainability at household-level is
intricately linked to ecological sustainability at the farm level, even as markets takeproducers and products into larger scales of economic activity. Simultaneously, rural
lifestyle, or more concretely speaking, people’s time allocation, is deeply linked to theecological seasons and daily rhythms of the rural landscape, as Nishimura et al. describe(Fig. ῎ ). Small-scale, incremental changes are born out of the daily decision-making

Fig. ῌ

Non-rice Products of Paddy Landscape and Their Seasonality at a Village in theVientiane Plain
Note: A wide range of non-rice products including fishes, insects, weeds and tree products arecaught/collected at mosaic landscape of paddy fields, forests and water body for homeconsumption and commercial purposes.
Availability clearly depends on seasonalhydrological patterns.
368

KDCD Y. et al. : Introduction

strategies of local people.
Second, other communities are experiencing rapid transformation of livelihoods andlifestyles. Takai et al. show how a conflict between agriculture and livestock has arisen
in response to market opportunities. Farmers, anxious to take advantage of demand for
cash crops, have expanded agricultural production areas. This means that fallow fields,
where livestock had previously been kept under customary management institutions,come under multiple demands. The result has been a tightening of land use restrictions
not only from government agencies but also from inside the community. In the end,
previously diverse production systems have been transformed into more simplified ones.
Buffalo, traditionally a popular strategy for livelihood security, have been sold off, evenas consumer demand may be growing in urban areas.
With these changes, some of the basic assumptions of life have been challenged, suchas the allocation of time and labor to agriculture-based livelihood activities. Nishimura
et al. show how the peri-urban people take advantage of opportunities to engage in wage
labor in Vientiane municipality. Where the rhythm of daily life was centered previously
on agriculture and collection of natural products, people are now faced with a range ofoptions for off-farm income generation. Foreign investment in Vientiane municipality
creates a pull-force, which comes just as prices for traditional agriculture and othernatural products experienced drops. The advent of wage labor brings about a drasticchange of the rhythm of daily life, from ecological to artificially predetermined rhythm,
reflecting the changing idea on the productivity of their time.

This diversifies thelifestyle even within a family, particularly between on-farm workers and wage labors.
Thus, the agency of local people is expanding with the opening of new opportunities
ushered in by the market. However, opportunity is accompanied by risk in the process oftransition. The risk stems from uncertainty in both the market and policy, in addition toenvironmental degradation.
The government hopes to concentrate more dispersed communities near roads where
it is hoped they will have better access to markets and social services. While access may
be improved through basic infrastructure, communities are often not equipped for thechanges that can result from being resettled along roads and with other communities
from unfamiliar ethnic groups, often in areas where productive land is in severe shortage[URDP ῍ῌῌ῎]. Another key concern is health, as is shown by Midorikawa et al.’s findings
about the interrelationship between water, livelihoods and health.

In the relocatedcommunity studied, high levels of malaria and parasites were observed, despite thepotential access to improve health care services. The research shows that information
gaps are still substantial, raising the risk of infection among relocated people.
Many ethnic minority groups rely on NTFPs for cash income. These commercialized
forest products are, however, largely bought and sold as raw products. The hopes for
success, in terms of raising local incomes, are pinned on the creation of sustainableproduction, processing and marketing mechanisms.

Potentially high-value products,369ῒΐῌ῍ῌῐ῏ ῎῏῎ ῎ ῑsuch as paper mulberry, are constrained by the difficulty in developing ways to add value
and thereby increase the benefit to harvesters, as shown in the article by Neef et al. Hereas well, the unsure land tenure situation adds a layer of uncertainty and risk to thesecommunities.

Agency and Balance: Negotiating the Human-environment RelationshipThe changes described in these papers represent a significant shift in the role of local
people in determining their livelihood and economic activities.

This new form of“agency” means that rural people have more options at hand, when it comes to improving
their well-being. After two decades of state-directed development, markets are providing
the signals upon which people act. With the market come other actors, domestic andforeign. By any standard of governance, one must welcome the increased role for local
decision making.
Yet, the flip-side of this new range of opportunity is uncertainty and risk, and there
are signals that the market as it currently operates is far from producing efficient
outcomes. Farmers lack negotiation skills to engage with agribusiness, price informationis slow to reach producers and the government still struggles to provide the necessary
support mechanisms.

Contracts are very difficult to enforce, and have very little

meaning in terms of ensuring that a farmer’s product will be purchased.

Informal

networking among farmers and local traders is yet immature. Furthermore, competition
between traders may mean higher farm-gate prices, but at the same time communities
may find themselves in competition with other communities. Market demands dictatequality, quantity and timing of supply, which mean that the conditions for production
are fixed outside of the producers’ livelihood.
Farmers who are empowered by the changes going on around them are faced with arange of dilemmas. The short-term prospect of increased cash income is a main concern
for rural people who are faced with an ever-longer list of expenditures, from agricultural
inputs to school uniforms and modern medicines. Farmers have learned that market
prices for cash crops are unstable. The drop in maize prices in ῍ῌῌῐῌῌῑ was a particularly
strong shock for many areas, for example. There is a strong incentive to capitalize on
opportunities when they present themselves, which can lead to over-exploitation of
resources. Farmers are also learning that over-supply drives prices down. On the other
hand, many of the products being sold have been a component of traditional livelihood
strategies for generations. Knowledge of management, harvesting and use of natural
products may exist in communities. If the need for short-term cash overrides the benefitof a longer-term management regime, not only will the resource be depleted, but indigenous ecological knowledge is also eroded.
This dilemma is also reflected at the national level. Short-term benefits from a370

KDCD Y. et al. : Introduction

resource-extraction economy become more tentative when considered in a longer-term
perspective of sustainability. In the market economy, the main strategy for providing
support is to identify one product that draws on the local ecological and economic
situation, and focus on this as the main route to development. As seen in the paper by
Takai et al., the homogenization of production systems may bring some immediate
economic benefits, but the overall sustainability of the system is likely to be reduced andthe vulnerability of the producers enhanced.
Clearly Laos is undergoing remarkable changes with integration into the regional
economy. The interface between local and regional markets is complex and dynamic.
Farmers find themselves with more power to make their own decisions, but the dilemmas
they face are increasingly difficult and their bargaining position remains weak. Economic
reforms promoting market-oriented production have stimulated new strategies to production which reflect a greater range of options than have been available in the past.
More locally appropriate and sustained government support is needed to help bridge
gaps in information and experience, reduce risk by encouraging diversification andproviding an institutional and regulatory framework that mediates the interactions
between diverse stakeholders.

Micro-analysis and Policy Feedback Loops
As these papers demonstrate, micro-level analysis is indispensable in maintaining the
feedback loops to inform policy. In “policy,” the volume editors refer to the full spectrumof actors making decisions that impact local livelihoods and landscapes. This includes
government policy makers, who are in need of information regarding the outcomes ofdevelopment interventions. Furthermore, the donor community, which usually works inclose concert with government agencies to implement programmes and projects, isimportant not only because of the direct impacts of its activities on the local level, butalso because it maintains dialogue with government and other actors. Finally, international organizations, which work at both policy and implementation levels, are well
positioned to make use of research findings.
Biodiversity is one of Laos’ greatest resources.

More broadly speaking natural

resources will continue to be the backbone of development in Laos. There is now noquestion about whether Laos will be integrated into the regional economy, assuming afully developed central position as a land-linked country. How this process of integration
proceeds depends on a mixture of both policy-level development interventions andlocal-level, individualized decisions about how to engage with market opportunities.
This collection of papers shows that at the local level, there remain steep challenges tomaintaining a balance between the aspiration of improving one’s economic wellbeing inthe short-run and the imperative of sustaining the productive natural systems upon371

ῒΐῌ῍ῌῐ῏ ῐΐ῎ ῐ ῑwhich livelihoods depend. Furthermore, while farmers are making more decisions about
their economic activities, they are at considerable risk when they venture down the pathof commercial cropping.
Research, such as presented in the papers included in this volume, should be of use
to decision-makers at all levels. Additionally, this analysis should contribute to theconstant re-creation of a research agenda that addresses the key challenges faced by
Laos. Domestic Lao researchers and foreign researchers alike have a key role to play inproviding policy-relevant analysis to a broad range of actors. Empirical data based in thedaily dilemmas of decision making faced by local people should form the foundations ofpolicy debate on pathways towards economically viable, ecologically sustainable andsocially acceptable development outcomes.

Acknowledgements
On the way from field survey, data analyses and workshops to the completion of this volume, wehave owed a number of persons, institutions and projects. We began a collaborative research
program in Laos in ῍῕῕῕. This is exactly the year when the National Agriculture and Forestry
Research Institute (NAFRI), our counterpart, was established as the umbrella institute of the various
research centers under the Ministry of Agriculture and Forestry, Lao PDR. As a partner of ourresearch activities, the first Director General, Dr. Ty Phommasak, the second Director General, Dr.
Bounthong Bouahom, and their staff helped us to carry out field surveys, co-organized a series ofworkshops, and translated some publications into Lao [Bouahom et al. ῎ῌῌΐ]. A part of our work has
also been coordinated by the Department of Geography, the National University of Laos, and the
National Institute of Public Health. Most of the articles of this volume are the outcome of a research
project of the Research Institute for Humanity and Nature (RIHN) titled “A Trans-Disciplinary Studyon the Regional Eco-History in Tropical Monsoon Asia: ῍῕ῐῑῌ῎ῌῌῑ.” The discussions among thisresearch group, particularly with its leader, Prof. Akimichi Tomoya, have been indispensable for the
success of our research work. In addition, a various research projects including the Grant-in-Aids for
Scientific Research of the Japanese Society of for the Promotion of Science, including “Transnational
Comparison of Ecological Resource Management by Constructing Integrated Database on Livelihood and Environment in Mainland Southeast Asia” (No. ῍ῑ῏῍ῌ῍ῒῒ) and “Land Use Dynamics ofMainland Southeast Asia: Combining Field Works with RS” (No. ῍῔῏῍ῌ῍ῒῌ), supported our fieldstudies and data analyses. We would like to express our sincere thanks for their academic andfinancial supports.

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