Introduction

In this contribution to Development, we take our starting point in the current ‘rush for land’, more specifically the rapid growth of large-scale land acquisitions by a great variety of (new) actors.Footnote 1 While migrants from Africa, Asia and Latin America seek asylum in the USA, Europe and the Gulf states, there is a strong rush for land in the opposite direction. This land rush involves tourism development, including the purchase of wealthy Europeans and Americans buying houses in countries such as Mexico, Vietnam or Mozambique. Companies, but also governments are purchasing land on which to grow biofuel (to meet carbon compensation targets) or to cultivate food crops and/or to realize special economic zones or large-scale infrastructure works, including mining and urban extensions. Large areas of land are acquired by ‘enlightened’ entrepreneurs and NGOs investing in nature reserves, establishing their own ‘protected areas’, which easily become ‘places to hide’.

Access to land is of crucial importance for combating poverty and promoting local development. Land offers people a place to live and is important for their identity; land provides access to natural resources and, as such, provides food, income and employment; it can also provide access to credit in the form of collateral. Secure access to land is seen as a necessary condition for achieving the Millennium Development Goals (MDGs).

As a consequence of rapid increase of Foreign Direct Investments (FDI), in combination with the liberalization of land markets over the last decade, at present there are radical changes in landownership and land use. According to the World Investment Report (United Nations, 2007: xv), 2006 saw the largest sum ever invested in the developing countries, namely US$ 379 billion (a rise of 21 percent relative to 2005). In 2007, the figure rose to US$ 500 billion, 13 billion of which was invested in the very poorest countries (United Nations, 2007; United Nations, 2008: 1). Although the investments were made in various sectors, most went into the exploitation of minerals (including oil and gas), the production of biofuels and food, and the development of infrastructure and services, including tourism (United Nations, 2007; United Nations, 2008: 1).

Governments in Africa, Asia and Latin America are often pampering foreign investors because the attraction of foreign capital is a necessary condition for economic growth. Today, foreign investors can fairly easily become the owners of real estate (houses, land and forests), especially in countries with liberalized land markets. Besides tax concessions, guarantees are given for the repatriation of the capital and very attractive compensation is offered in the event of expropriation. The growing demand for land is met partly by the sale of state land and the granting of concessions by governments, and partly by sales by private individuals, including rural dwellers. Many of them have turned their backs on agriculture in recent years and want to profit from the rising prices. In many cases, however, land transfers take place in a context of informal property rights; situations often lack transparency and sometimes end up in conflict situations.

In spite of a growing number of studies on rising global interest in land (World Bank, 2010; publications by the International Land Coalition, GRAIN etc.), knowledge about the implications of large-scale land acquisition (and land grabbing) for development is scattered and incomplete: what are the trends, and what are the implications for local development?

At present there are several processes that, together, are giving rise to radical changes in landownership and land use (Zoomers, 2010). I shall deal with each in turn.

The drivers of the growing land pressure

Off shore farming: FDI in food production

Much of the current land grab is a result of the increasing demand for cheap food crops. ‘Food-insecure’ governments that rely on imports to feed their populations (e.g. the Gulf States) are seeking to outsource their domestic food production by buying and/or leasing vast areas of farmland abroad for their own off shore food production. The biggest players are China and the Gulf States, while countries such as Saudi Arabia, Japan, Malaysia, India, South Korea, Libya and Egypt are hunting for fertile farmland in places like Uganda, Madagascar, Mali, Somalia, Sudan and Mozambique, as well as in the Philippines, Indonesia, Laos, Thailand, Vietnam, Cambodia, Pakistan, Burma, Brazil, Argentina, Kazakhstan, Ukraine, etc. (GRAIN, 2008; Cotula et al., 2009; World Bank, 2010).

The governments of ‘host’ countries generally welcome foreign investment; large-scale land acquisition for food security by richer countries in poorer countries is increasingly contested, because it is not considered ethical to export food from countries in which there is hunger. There has been extensive media coverage of, for example, the 1.3 million ha deal between the South Korean company Daewoo Logistics and the government of Madagascar. The deal was reported to involve the acquisition of land in the West and East of the country in order to grow maize and palm oil mainly for export to South Korea; however, the deal ran into trouble and was then scuppered by the new government of Madagascar (Cotula et al., 2009: 37). According to the plans, the land would have been prepared for cultivation by South African labourers (Financial Times, 2008).

State-owned firms from Qatar, Dubai and other Gulf States are reported to be involved in the formation of a joint holding company to produce food in Sudan and other countries for export to Arab markets. A consortium of Saudi agricultural firms recently announced plans to invest US$ 400 million in food production in Sudan and Ethiopia, following investment in 10,000 ha of barley, wheat and livestock in Egypt. Other investors are looking for land in Angola, Mali and Malawi. Finally, Abu Dhabi plans to acquire 400,000 ha in Africa and Asia, with the aim of limiting food imports from other countries (GRAIN, 2008; Cotula et al., 2009).

FDI in non-food agricultural commodities and biofuels

A second driver behind the current land grab is the global demand for biofuels and non-food agricultural commodities, combined with expectations of rising rates of return in agriculture and of rising land values (Cotula et al., 2009: 5, 100).Footnote 2

Examples of biofuel crops that have rapidly expanded in recent years are jatropha (especially in the drier regions), soya (which already covers over 16 million ha in Argentina, and is also important in Paraguay), sugar cane (large areas in Brazil and in Tanzania) and the oil palm (particularly in Malaysia and Indonesia,Footnote 3 but also in Colombia). In West Kalimantan, the area devoted to oil palms has grown since the 1990s from 500,000 ha to over 3.2 million ha, and this has led to a sharp increase in the number of land conflicts in Indonesia. Foreign companies also want to invest in land for reafforestation projects within the context of the Clean Development Mechanism.

Little is known about the exact extent of land acquisition for biofuel production. However, according to Cotula et al. (2009) – who made an inventory of agricultural investment in Ethiopia, Ghana, Madagascar, Mali and Sudan – there is a rapid increase in land-based foreign investments (for both food and biofuels), although domestic investors are also playing a major role in land acquisitions.Footnote 4 GRAIN estimates that US$ 100 billion have already been mobilized to pay for these deals, which involved more than 50 countries that were targeted by about 1,000 investment groups and twelve governments (GRAIN, 2008). Lease contracts are often for 30–99 years, and most of these allocations have put pressure on higher-value lands (i.e. those with irrigation potential or that are closer to market). When approached with land deal proposals, many African governments readily accept them, because they need FDI and want to promote rural development – even though smallholders are usually not involved in the deals and local communities lose their access to land.

Adaptation purchases to meet climate change

Also related to climate change, but of a different order, are the attempts by some countries to gain possession of new territories ahead of the rise in sea level. A very recent example of this are the Maldives, whose the government announced through The Guardian (2008) that it was ‘laying money aside for the purchase of new land as the islands disappear into the sea’. According to the article, President Nasheed has his eye on land in India or Sri Lanka, because these countries are the closest to the Maldives in terms of culture. Some 380,000 people live on the 1,192 islands of the Maldives. Because of the rise in sea level, the Maldives are doomed to disappear into the Indian Ocean, since most of the islands are only 1.5 metres above sea level.

That this problem – and the search for land – will not remain limited to low-lying islands is shown by the fact that in Asia 40 percent of the population lives less than 60 km from the coast. It is estimated that some 332 million people living in low-lying coastal zones will be threatened by flooding or tropical storms. The number of environmental refugees is estimated at 10 million (Black, 2001), made homeless not only by flooding but also by scarcity of resources and desertification. This will lead to large-scale, though probably gradual population displacements and new demands for land (Black, 2001; Castles, 2002).

Protected areas – nature reserves and ecotourism – places to hide

The land purchases by private individuals and international organizations in ‘empty’ regions is another process contributing to the rising demand. In addition to the nature reserves and territorios indígenas instituted by governments, both individuals and businesses have become increasingly actively engaged in the purchase of large areas of land for nature conservation or ecotourism, or a combination of the two.Footnote 5

A region that merits explicit mention in this connection is Patagonia. In his book Patagonia vendida (‘Patagonia sold’), Gonzalo Sánchez (2006) describes how this region was almost wholly bought up in a short time by Americans and Europeans. For example, an Argentinean who until 1990 owned a ‘heavenly’ piece of land in the Nahuel Huapi nature reserve, relates how he could not resist the temptation to sell when an American suddenly turned up and offered him US$ 15 million for it. Although ‘foreigners’ (not only Italians and Spaniards, but also Germans and other European groups) have historically played an important role in the colonization of Argentina and large landownership is ‘very usual’ there, since the 1990s there has been a development of a different kind. It is now mainly North American and European millionaires, who have succeeded taking possession of gigantic areas. The ease with which land could be purchased was partly the result of the fact that the then president, Menem, spared no effort to attract foreign investors. He referred to the empty Patagonia simply as ‘land that was left over’ (la tierra que sobra). Only 5 percent of the 37 million Argentineans lived in this region. There are few limitations on the purchase of land in Argentina. Thanks to the absence of rules, everything was legal; everything could be bought for money, even national parks. The provincial governments often had free play. Between 1996 and 1998 the Secretaría de Seguridad Interior (SSI) granted permission for the sale of 8 million ha and now nearly the whole of Patagonia is privately owned, including natural resources such as oil, gas and water. The Benetton family is the owner of a million ha (currently in use as a sheep farm); Douglas Tompkins (the owner of North Face, Esprit and other concerns) was the owner of 900,000 ha and decided to make them into a nature reserve and so make a positive contribution to nature conservation. Other celebrities – such as Ted Turner (founder of CNN) and the owner of Lay (low-fat crisps) – bought large areas of land to convert into golf courses and hunting grounds. Because of the extent of the foreign investments, Patagonia can almost be regarded as a free state. According to Sánchez (2006), it is chance that the inhabitants still call themselves Argentineans.

Although the purchases are legal and some investors strive for noble goals, increasing resistance has arisen in Argentina since the publication of the book. However, the large-scale sale of land is not limited to Argentina: in neighbouring Uruguay, more than 5 million ha have been sold to foreigners during the past five years.

Special economic zones, large-scale infrastructure works, mining and urban extensions

A completely different factor is the increasing shortage of space as a direct consequence of rapid economic growth. With the onset of globalization and increased international investments, particularly Asian governments are freeing land for the creation of special economic zones (SEZs) and their necessary infrastructure such as airfields and ring-roads.

In India, 303 SEZs covering a total area of 1,400 km2 have already been created. An example of a city where much land was recently expropriated to make room for ICT parks and an airport is Hyderabad, India. In 1998, it was decided to create a high-tech city in order to provide space for the rapidly growing ICT sector. Three years later, ‘Cyberabad’ – a zone covering 52 km2 – arose. The number of ICT parks around Hyderabad grew from five in 2000 to nearly 70 in 2007; these have recently been supplemented by SEZs. This rapid development has led to the displacement of agriculture and a rapid rise in ground prices (Ramachandraiah, 2008).

In other Asian countries, too, investment in SEZs is taking place at a rapid tempo. In Cambodia, 59 ‘economic land concessions’ were recently designated (totalling nearly 1 million ha of land). In many instances the local population is forced to move, and does not always receive compensation. A study into the expropriations around Hyderabad prior to construction of the airport, revealed that only a small proportion of the local population were able to benefit from the newly created employment, as the majority were too poorly skilled (Schoneveld, 2008).

At an increasing number of places, the striving for economic growth and the attraction of foreign investments is accompanied by the forced displacement of the local population, under what is known as ‘development-induced displacement’. The World Bank estimates that in 2000, some 10 million people were displaced in China, India, Thailand and Cambodia for the sake of economic growth (Cernea and McDowell, 2000). An impressive example was the population displacement that took place in China to allow the building of the Three Gorges Dam (Sullivan, 2005)Footnote 6 it resulted in the forced migration of 2 million people. Increasing areas of land are also allocated in the form of mining concessions (e.g. Mali, Honduras), having huge economic, but also environmental and social impacts.

As governments increasingly have to turn to commercial land markets, ‘development’ will become increasingly expensive. To the extent that compensation schemes are in place, they are often inadequate to allow the displaced population to buy land in other places. While land is therefore being sought, on the one hand, for the creation of SEZs, a search must be made at the same time for areas for resettlement. The greatest pressure at present is in the peri-urban zone where land acquisition is taking place to allow for ‘ordinary’ urban expansion. Land prices are particularly under pressure in the vicinity of cities, also because better-off city dwellers want to find a weekend residence ‘in the country’ at a short distance from the city. International migrants who use their remittances for the purchase of land prefer to do so in the neighbourhood of a city; there is often nothing in which to invest in their villages of origin.

Large-scale tourist complexes

An important (but not so often mentioned) force behind the land rush is formed by the rapidly growing investments in large-scale tourist complexes, partly thanks to the attractive investment arrangements in this field. International hotel chains – such as Marriott, Four Seasons, Hilton and Hyatt – are actively looking for new, attractive and strategic locations for the building of large-scale, all-inclusive resorts. Particularly places on the UNESCO World Heritage list or those featured in the Lonely Planet guides are seen by foreign investors as commercially attractive. For example, 80 percent of all the beaches in Costa Rica are now in the hands of foreign investors (Honey, 1999); scenic and/or historically valued sites are increasingly privately owned. Here, too, it is difficult to obtain a picture of the spatial extent of the process, but the local impact is often strong. In many instances an ‘enclave economy’ arises, with major consequences not only for employment and migration, but also for the use of natural resources.

Investments in tourism are now stimulated by many developing countries, because it is believed that they offer possibilities for rapid economic growth. The Cape Verde islands are an example of a successful grower in this connection. The economy has been increasingly liberalized since the mid-1990s and, partly thanks to large investments in the tourist industry, the country has succeeded in rising on the Human Development Index from a poor to a middle-income country. In discussions about good governance, the Cape Verde islands are seen as a shining example of what would be possible in other countries: thanks to political stability and a stimulating entrepreneurial climate, the per capita income has risen to US$ 1,500 a month.Footnote 7 At the local level, however, the situation is somewhat different. The island of Boa Vista, for example, is increasingly populated by Italians – who are busy investing in hotels – and migrants from the African mainland, who are looking for work in hotels. The original population has largely emigrated or receives remittances from abroad. More Cape Verdeans live abroad than in their own country: there are 476,000 Cape Verdeans spread over the ten islands, while 500,000 live in Europe or the USA. The number of international tourists visiting the islands each year is rising steeply.Footnote 8

Cambodia is another country that is busy investing in tourism. In order to interest foreign investors, Koh Kong Island is more or less for sale (Bangkok Post, 2008). Besides the reservation of 10,000 ha of land for the building of hotels, casinos, etc., there are far-advanced plans to link the island to the mainland. The terms for foreign investors are highly favourable and a rush for land has arisen in anticipation of the realization of the plans. Through land grabbing, the price for a plot on the beach has risen in just one year from US$ 5 to US$ 150 per m2.

Retirement and residential migration

Another process contributing to the present land rush is the rapid increase in retirement migration, which is also referred to as residential migration. It is mostly people aged over 55 who, in response to the increased cost of living, are seeking a comfortable existence in a cheap and sunny environment that has a friendly and caring population. Large groups from the USA settle every year in Central and South America.Footnote 9 People who want to settle in countries such as Mexico, Costa Rica or Panama can do so as pensionados (retirees), rentistas (foreigners with guaranteed incomes) or investores (investors).Footnote 10 In Costa Rica, pensionados must prove that they receive pensions of at least US$ 600 a month, change at least US$ 500 a month into the local currency (colones) and stay in Costa Rica for at least four months each year. For rentistas somewhat larger amounts are involved (US$ 1,000 for at least five years) and a length of stay of at least six months. Neither category is required to pay any tax. There are many favourable arrangements to allow investors to set up their own businesses. You can call yourself an investor only if you invest a minimum of US$ 200,000. Investors in the export trade, tourism or reafforestation can benefit from all kinds of financial incentives (Wold, 1998). You need rather more money to settle in some countries than in others, but the settlement requirements for foreigners are generally favourable.

Many settle in condominium-like neighbourhoods with their own facilities, their own administration and their own rules, for example, rules that forbid or permit the keeping of pets, parking on site or sounding car horns. The local authority often has little say in the running of these gated communities (Dixon et al., 2006).

Although it is not easy to discover the extent of retirement communities (there are no reliable statistics on this ‘invasion of the elderly’, partly because the population is often only temporarily present), it is an increasingly important phenomenon. Such communities have now arisen in many places, not only in MexicoFootnote 11 and Central America (as a reception area for the USA and Canada), but also in the Maghreb countries and in South Africa. There is also a remarkable growth in Vietnam, the Philippines, Thailand and Malaysia (Dixon et al., 2006).

Land purchases by migrants in their countries of origin

Finally, the land rush is also caused by the purchases made by international migrants who live temporarily in Europe, the USA or other destination regions.

The past decade has seen a large growth in ‘long-distance migration’, often South-South, but also to Europe, the USA and the Gulf States. As a result, many developing countries have now acquired a large population that has fanned out over many countries (Sheffer, 2003: 104–105). The Asian ‘diaspora’ is estimated to comprise at least 60 million people (examples are China with 35 million people, India with 20 million and the Philippines with 7 million). The Latin American diaspora amounts to over 25 million people (Colombia, Brazil, Peru and Venezuela). African examples of diasporic states include Nigeria, Senegal and South Africa; there are also smaller diasporas such as Somalia, Ghana, Ethiopia, Eritrea, Gambia and the Cape Verde islands (Adepoju et al., 2008).

A considerable flow of remittances (the sending of money home by migrants) has now arisen and national governments are increasingly engaged in devising policies to further encourage migrants to transfer money to their families in their countries of origin or to invest it there.

Research has shown that a considerable part of the remittances is used to acquire houses and land (Cotula, 2004). According to de Haas (2003), who did research in Todgha Oasis in the south of Morocco, international migrants invest more in land than non-migrant households. Apart from the purchase of land, migrants also use their money to formalize property rights, to rent or lease land, or to enter into sharecropping relationships. In some instances, migrating family members are sometimes among the ‘better endowed’ heirs, because, thanks to their migration, they have made a larger contribution to the household income than their non-migrant family members (de Haas, 2003).

The purchase of land and houses has advantages for migrants: it is a safety net – a nest egg – and it helps to maintain ties. That the purchase of land ‘overseas’ by migrants is good business is shown by the fact that a trade fair is organized annually in Spain especially for Ecuadorean migrants. Ecuadorean estate agents then come to Spain to assist migrants to realize their plans (van Moppes and Schapendonk, 2007).

Final reflections

To what extent does the present land rush, which is partly accompanied by the foreign takeover of land, offer advantages for the development possibilities of local groups and what are the limitations?

There are, of course, various ways in which the land rush can make a positive contribution to local development. It can line the national treasury and provide extra financial resources. The local population can profit from new employment (such as jobs in the tourist sector and the setting up of ICT businesses), from new markets (American tourists; particularly the retired are big spenders) and from improvements in amenities and infrastructure. The growing demand for all kinds of goods and services can give an impulse to food production and local services. The use of land for nature reserves can put a brake on deforestation, while the growth of bio-fuels and other crops can ensure that agriculture again provides a reasonable income. The farmers who wish to sell their land can profit from the rising land prices and use the money to make fresh investments. And, lastly: contacts with foreign individuals and businesses can have a positive effect if they lead to new ideas and more innovative plans.

In practice, however, the land rush is often accompanied by negative effects. The poorer groups are usually the first to lose ground, certainly if they still do not possess formal property rights despite large-scale land titling programmes (people with only customary rights enjoy little protection from the law). At the same time, it is mainly the poorer groups who first decide to sell their land, because of their need for capital (distress sales), and new means of livelihood are not always readily available. The buying of land elsewhere is often too expensive, and the overwhelming majority of the poor do not possess the skills needed to become eligible for newly created employment (such as is provided in ICT parks). As a result, newly created jobs are often taken up by better qualified or cheaper migrants from elsewhere (e.g. the examples of Hyderabad and/or the Cape Verde islands). Where the land purchases are intended for tourist development, this sometimes results in the creation of gated communities, which might involve disruptions of social cohesion and/or cultural identity. A large inflow of tourists often means an onslaught on natural resources (such as water).

The contributions that follow illustrate some of the processes described above in different locations to gain a better understanding of their characteristics and effects. This special issue aims to bring together the different voices that are currently playing a role, while also bringing to the floor the various dilemmas: local governments are on the one hand forced to stimulate FDI (as a necessary strategy for pro-poor growth), but ‘local institutions’ are often insufficiently strong to take care that the benefits are shared by local populations. Analyzing the current rush for land and processes of land ‘foreignization’, we will focus on the consequences for local development and poverty alleviation in Asia, Latin America and Africa. Due to real estate boom and processes of land grabbing, local groups are often forced to move to more isolated and marginal locations. Local institutions are often not strong enough to optimize the benefits or to counterbalance the impact of external actors. Local groups are often bypassed or displaced. More attention should, therefore, be paid to this global land rush in the international development agenda.