As an underdeveloped country, foreign investment plays an important role in economic development of Laos over recent decades. As the transition economy shifted to market economy, Laos has really created significant attraction to many international investors. This country,surrounded by hills (2/3 of the country are mountains and hills, located mainly to the North), is comparatively small with the total land area of 236.8 thousand km2 without sea borders. These geographic characteristics have posed barriers to agricultural development in both quality and quantity as well as major difficulties in commercial development, social infrastructure, transport and information connections of Laos. However, located inSoutheast Asia andin the middle of Indochine peninsula, Laos has enjoyed thedynamic and prosperous development thanks to abundant natural resources and sharing borders with 5 neighboring countries namely China, Cambodia, Vietnam, Thailand and Myanmar. Therefore, it is possible forLaos to grasp opportunities to cooperate with these neighbouring countries and act as a transit center for them to facilitate the development of trade, investment and transnational tourism.
Research aims and objectives
On the basis of clarifying theoretical issues regarding the impacts of foreign direct investment on community development, this research is aimed to analyze the specific impacts of foreign direct investment from China on Laos’ community development.
Specifically, the research will focus on the analysis of three main effects on the economy,society and environment of the community before outlining the negative and positive effects of foreign direct investment, proposing orientations and measures to improve the effectiveness of FDI to accelerate the development of the communities in Laos towards sustainability.
To achieve these aims, the thesis is to finish the below objectives:
- Interpret the rationale and the reality of the impacts of foreign investment on community development.
- Analyse the impacts of Chinese investmenton Laos’ community development in recent years, extensively clarify positive and negative effects of Chinese investment, urgent issues to be addressed to promote the positive effects and limit the negative impacts ofChinese investmenton community development in Laos.
- Propose orientations and measures to improve the effectiveness of Chinese investment in community development in Laos in the near future.
Research Methodology
The thesis utilizes severalresearch methods such ascollecting materials, analysing, conducting statistics, comparingas well as summarising, analyzing practices to find out characteristics of the issue to be studied At the same time, the thesisconducts surveys and interviews with a number of stakeholders to clarify the impacts of FDI on community development After assessing these impacts, the thesisapplies forecasting methods to predict future demand for FDI and itseffects on community development.
- Empirical survey among the community where the projects occur, Chinese investors, local and provincial authorities
- Desk study on reports and related documents.
The dissertation is based on the synthesis of the following research methods:
- Dialectical Materialism: Assessing the impacts of Chinese investment on community development in a developmental state and considering it in relation to other things and phenomena.
- Systematize and research into academic papers: forming the general theoretical basis related to the impact of China's investment on community development.
- Synthesis and statistical analysis: Based on the primary and secondary data collected, the study will conduct a situational analysis and assess the impact of China's investment on community development.
- The comparison method is applied in studying and evaluating the impact of Chinese investment on Laos community development compared to other countries.
- Conduct interviews with Chinese investors, local managers, experts and local people in Laos.
- Quantitative methods: The models of exploratory and regression analysis will be used to evaluate the impact of China's investment on community development in Laos in the coming time.
Limitations of the thesis
Due to limited time and resource, it is impossible toresearch in-depth into the impacts of all forms of foreign investment but only the impacts of FDI and ODA fromChina on community development Besides, the study only focuses on clarifying the impacts of Chinese investmnet on three fundamental elements of community development, which are economic, social and environmental development Therefore,shortcomings of the thesisin its inclusiveness and completeness of the impactsof foreign investments on community development are inevitable.
Contents of the thesis
In addition to the introduction, the thesis consists of three chapters:
- Chapter 1: Rationale for foreign investments and the impacts of foreign investment on community development
- Chapter 2: Impacts of China investment on community development in Laos- Chapter 3: Forecast future demand and the impacts of China investmenton community development in Laos in the near future
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PROPOSED OUTLINEChapter 1: Rationale for foreign investments and the impacts of foreign investment on community development
Foreign investment
1.1 Definition of foreign investment1.2 Types of foreign investment1.3 Linkages in foreign investment1.4 Impacts of foreign investment on the host country
Community development
2.1 Definition of community development2.2 Factors affecting community development2.3 Elements of a sustainable livelihood
Impacts of foreign investment on community development
3.1 Economic impacts3.2 Social impacts3.3 Environmental impacts3.4 Other impacts
International experience in promoting positive impacts and limiting negative impacts of foreign investment on community development
4.1 International experience4.2 Lessons learned for LaosSummary of Chapter 1
Impacts of China investment on community development in Laos I China direct investment in Laos over recent years
Impacts of China investment on community investment in Laos
2.1 Economic impacts2.2 Social impacts2.3 Environmental impacts2.4 Other impacts
Assessing impacts of China investment on community development in Laos
3.1 Positive impacts 3.2 Reasons for positive impacts 3.3 Negative impacts
Proposed recommendations and measures to promote the positive impacts and limit the negative impacts of China investment on community development in Laos
Chapter 3: Forecast future demand and the impacts of China investment on community development in Laos in the near future
Solutions to enhance the positive impacts and limit the negative impacts of China investment on community development in Laos
3.1 Economic solutions3.2 Social solutions3.3 Environmental solutions3.4 Other solutions