Dangers lurk in land-lease reform

Hoping to woo more foreign investors for an economy desperately in need of a boost, the government is planning to extend the maximum period land can be leased from 50 to 99 years. The idea has the backing of real-estate businesses, but has attracted criticism from nationalists fearful that the government is “putting up the country for sale”.
Others are concerned that a law extending the maximum leasing period could result in foreigners buying up agricultural land, which could significantly affect the country’s farmers. Critics complain that the government is neglecting the interests of small-time landless farmers, noting cases where farmers and other residents have been evicted from land expropriated for the “special economic zones” in border provinces.
Government Spokesman Maj-General Sansern Kaewkamnerd maintains that the proposed amendment to the Act on the Lease of Immovable Property for Commercial and Industrial Purposes will benefit the whole country. The previous lease limit, he explained, deterred large investment, which requires a long period of returns in order to produce profit.
Sansern added that the amendment would boost Thailand’s ability to compete with regional neighbours such as Singapore and Malaysia, which permit leases of up to 99 years on land. He said the government would implement measures to prevent abuse by leaseholders and to ensure that leases are bestowed only for investment and business purposes. The lease could thus be revoked at any time should its holder violate the regulations.
These measures ought to be sufficient to allay most fears and suspicions, but what’s lacking is a guarantee from the government that they will be strictly implemented. It must also bar foreign investors from leasing agricultural land for the maximum term, which would have a serious and unfair toll on the lives of countless landless farmers and farmhands. The lease extension should be limited to commercial, industrial and residential areas, leaving farmland secure in Thai hands.
There must be careful regulations and measures, including clear zoning of areas where foreign investors can lease land for the maximum 99 years. This would help prevent more large swathes falling into the hands of overseas speculators. Wealthy foreigners already hold valuable, sizeable plots in this country through local nominees.
Similar attempts by previous governments to amend the land-lease law failed after strong opposition fuelled by nationalist sentiment. Our post-coup administration, chasing much-needed revenue, now finds itself in the same position.
The government’s task is to find a balance between wooing foreign investment to shore up the economy and protecting the public interest. It should come up with measures to allay concerns about a possible buying binge by foreigners. The amendment should be carefully thought out, with all pros and cons taken into account.
It is important to attract overseas investment by extending the land-lease period, but it is equally necessary to make sure our citizens are not affected, particularly those less fortunate in their finances.
If the government is confident this measure will really benefit the economy as a whole, it should go ahead, but it should do so carefully to minimise negative impacts.