Although the LPRP remains in control of the political system, various challenges remain in its attempt to manage the economy and ensure social stability. According to the UN, in March over 110,000 people were in need of food assistance in central and southern Laos owing to rice shortages. UN agencies have reported that the shortages are a result of damage caused by Typhoon Ketsana in 2009, which was followed by drought and flash-flooding in 2010. An estimated 4,000 tonnes of rice are needed to alleviate shortages until the next main rice harvest in October. The UN says that only one-third of the rural population have enough to eat throughout the year.

The allocation of land to investment projects remains a major concern. According to the National Land Management Authority (NLMA), more than one-half of all land concessions result in detrimental effects. An NLMA spokesman, Palikone Thalongsengchanh, said in April that many investors buy concessions only to fell timber and then speculate on land values before selling the project on to other investors. For some projects, land concession fees are as low as US$1-3 per hectare per year, and the duration of concessions can be up to 90 years. The compensation paid to villagers who lose land to projects is often unreasonable, according to the president of the NLMA, Khamouan Boupha. Palikone has disclosed that there are currently over 2,000 land-concession projects nationwide. Resulting forestry loss is of particular concern: he described the management of Lao forests as "out of control" and said that the destruction of forests and watersheds could affect hydropower development and the tourism industry. Around 70% of Laos was forested in 1940, but that figure had declined to 41% in 2001 and has continued to fall since.

Nevertheless, the granting of concessions continues apace. Lao and Chinese companies are to spend US$180m developing a Mekong island, Don Chan, in Vientiane. The developer, CAMCE Investment, signed a 50-year concession in April that is extendable for another 40 years. The three-phase project will build a five-star hotel, shopping centre and rental properties. The importance of the venture to the government lies in the hotel and residences, which will first be used to accommodate the heads of states and governments attending the Asia-Europe Meeting in the capital in November 2012. A similar deal was struck by the government to develop the facilities for the 2004 Association of South-East Asian Nations (ASEAN) summit in Laos. A hotel built on Don Chan for that meeting at present struggles to attract guests, while the complex that housed visiting leaders during the summit has remained empty ever since. A representative of the Chinese investors in the new project, Luo Yan, promised Lao media that the first phase would be completed before the meeting. Following lobbying by the island's residents, five of the 36 ha of land on Don Chan are to be allocated to families affected by the development. Those who do not receive land will receive compensation of up to US$10,000 plus land around 20 km from the centre of the city.