Commentary: As Laos sees growing investment from South Korea, local communities are left behind
7 December 2018
...When the Xe Pian-Xe Nam Noy dam in Laos collapsed, two South Korean companies involved in the construction of the dam project suddenly faced tough questions....
...[T]he issues behind it are in fact characteristic of foreign direct investment (FDI) in Laos.
As South Korea seeks to deepen economic ties with Laos, weak regulations and the social and environmental risks involved threaten both local communities in Laos and Korean investors.
...Projects by SK E&C and Korea Western Power in Laos are part of a much larger plan coming out of Seoul – Korea’s new Southern Policy....
...By investing in the energy sector without helping to improve regulations and address social and environmental impacts, South Korean businesses are exposed to a huge amount of risk.
...It is in international investors best interests to work with the Lao government and local Lao communities to prevent these disasters. No one is better positioned to do so at the moment than South Korean firms.
South Korea also has domestic mechanisms to support equitable economic change in Laos. Much of Korea’s investment in Laos is funnelled through its Official Development Assistance program....
...If South Korea can reform ODA regulations to improve sustainability and work with local Lao communities to set the economic agenda, they might set a model for other countries’ FDI in Laos.
...Rather than continuing to increase their investments...South Korean government and corporations might use their influence to build stronger rules around FDI that will reduce risks for local communities and investors....