Abstract
Laos is a country undergoing rapid development. With a high percentage of the rural population still dependent
on agriculture for their livelihoods, the sector is an important part of Laos’ development strategy. With increasing
inflows of foreign direct investment (FDI), it is important to assess whether or not the investment is meeting the
stated development goals for the country and the sector and how different business models contribute to these
goals. This paper investigates FDI into the agriculture sector in an attempt to understand the pros and cons of various
business models, focusing on the model of land acquisition used by foreign investors and the extent to which various
business models are contributing to economic development. In addition to a comprehensive review of secondary
sources, we conducted interviews with stakeholders from the private sector and international non-governmental
organizations (NGOs). Our research has shown that Laos is meeting its stated macroeconomic growth targets for
agriculture, although these can mask negative impacts on local populations. This highlights the important distinction
between economic growth and economic development. The link between FDI and broader economic and agricultural
development goals remains unclear. To improve this, business models should be encouraged that more clearly align
with both development and growth objectives. However, business models alone will not be a panacea for development
of the agriculture sector in Laos. Although our research is focused on FDI, the role of official development assistance
(ODA) should not be overlooked. Greater collaboration and communication between FDI and ODA projects could
result in better development outcomes. Laos is making steps to improve in all of these areas but will need to ensure
that initiatives at a central level are carried through and enforced at a provincial and district level. A lack of clear land
rights, frequently changing investment laws and poor transparency are potential barriers to some investors. Similarly,
a lack of reliable socioeconomic data makes it difficult to assess the likely impacts of large-scale projects. Having
proven it can attract FDI, Laos now needs to ensure that FDI into agriculture is contributing to economic development
as well as economic growth.