SINCE 1989, LAOS HAS BEEN accelerating its transformation from a centrally-planned economy towards a market economy and could, within a short period, achieve considerable success in the reorganization of its legal and regulatory framework. This applies especially to agriculture and forestry which are the backbone of Laos' economy. An attempt is being made to secure private and communal property rights to arable land, pastures, forests and water resources. These rights are considered by the state and international donors as crucial for food security and the preservation of resources at all administrative and regional levels.
However, when fundamental legislation concerning property, contracts, family or inheritance is established, complex problems and goal conflicts arise, such as when the rights of access to and use of land, forests and water are actually worked out by the various actors. Claims for restitution raised by fugitive citizens delay investments that would increase the productivity in irrigated agriculture or conflicts between the state and international donors regarding customary rights (shifting cultivation, grazing and collecting rights in forests) explain the limited scope of national legislation and of the adoption of legal and regulatory principles of the economy of industrialized societies.
A consistent system of resource tenure and environment-oriented legislation, in which regulatory systems of subsistence-oriented small farmers or the central role of women in land allocation and food security are taken into consideration is often discussed, but its enaction as law is constantly delayed. As far as the registration of land is concerned, parallel systems develop in the urban and rural areas which can involve uncertainties and investment blockades. Foreign investors use the existing deficiencies and inconsistencies of the legislation to negotiate contracts regarding water power and logging projects without having to offer any compensation of the affected rural population.
After years of social and economic activities in the "control-and-command" system, there is a general lack of experience - and of willingness - to transfer responsibility to local groups, villages and districts. There is also a lack of familiarity with decentralized, participative planning, such as in land use planning, conflict solving or in the planning of contract solutions to allocate scarce natural resources.
A legal and regulatory policy is necessary, but not sufficient, for legal security, long-term investments in land, active product and factor markets nor food security in Laos. With the obligation to simultaneously speed up the conditions of land tenure and agricultural land use patterns (intensification through technological innovations, change in farming systems, extension, etc.) the administrative and implementing capacities of the state as well as of donors reach their limits.