World Bank Launches Workshops Around Laos Dam Project

September 7, 2004

September 7, 2004—The World Bank, in partnership with the Asian Development Bank, kicked off a series of international workshops last week – beginning in Bangkok, then Tokyo, before moving to Paris on September 7 and Washington, D.C. on September 10 – around the proposed Nam Theun 2 Hydroelectric Power Project, a US$1.3 billion project in Lao PDR. 

Lao PDR, one of the poorest countries in the world with an average income of US$320 a year, sees this project as the country’s best hope to earn income and reduce poverty. The consortium of private sector developers (Nam Theun Power Company) and other analysts agree. The Bank, which has not yet made a decision on whether it will provide a partial risk guarantee for the project, is interested in NT2’s potential – if properly designed, prepared, and implemented – to benefit the Lao people by increasing revenues for poverty reduction and environmental conservation.

Others are not so sure, and claim that the project’s assorted issues –environmental and social impacts, resettlement, fisheries, downstream impacts, revenue management, conservation area protection plan, financing, compensation, and livelihoods – make the project too big, too complicated, and/or too risky to warrant the Bank's "green light."

As part of the efforts to engage more directly with international stakeholders, the Bank has taken the step to organize, on behalf of the Government of Lao, this series of international workshops to discuss differing views of the project, based on volumes of research and analysis that are available as background.

Said Ian Porter, Country Director for Lao PDR, at the Tokyo workshops, "These workshops are just the latest step in what has been – for the World Bank at least – an unprecedented process of research, consultation, and disclosure of information on a single project. The intensity of this effort reflects our strong desire to ensure that the proposed project would deliver real, durable benefits for the people of Laos. That is the only basis on which we would support it."

At the Bangkok and Tokyo workshops, Dr. Somboune Manolom, Permanent Secretary, Ministry of Industry and Handicrafts presented a picture of the reality of Laos, and built the case for why Nam Theun 2 was needed. He noted that 70% of the Lao people live on less than US$2 a day; 40% of villages practice slash-and-burn agriculture; 70% of the labor force has no education or did not finish primary school; 40% of children are malnourished and 1 in 10 will die before the age of 5; half the population doesn't have access to clean water. 1 in 4 adults will die by age 40 and average life expectancy is 59 years."

"These are sobering statistics," said Dr. Manolom. "While many of these indicators are improving, much remains to be done, which is why rural development and poverty reduction programs are so important to my government. Nam Theun 2 has the potential to deliver a significant and predictable stream of revenue that would have a very clear positive impact on national development." He noted that it was within the Government’s interests to see its people better off, better fed, with better opportunities – and given limited options for growth, NT2 made sense as a development option.

The Vice Minister for Finance, Somdy Douangdy, said in Tokyo, "We don’t have much choice, we don’t have many alternatives to promote the kind of growth we need to reduce poverty. We rely too much on ODA (Official Development Assistance) – this is unsustainable. We, as a country, want to stand on our own feet, generate our own revenues, have our own source of income which we could use for our development priorities."

Ian Porter noted that “today’s discussion is not only about the proposed dam, but about Lao’s development options more broadly – it’s not just about the social and environmental impacts of the proposed project, but also about Lao’s overall macroeconomic and structural reform agenda designed to promote growth and improve the lives of millions of poor Lao people.”
Key issues of concern to Thai and Lao stakeholders were raised throughout the day.  Thai participants discussed their experience with the social and environmental impacts of Thai dams, including downstream impacts on fisheries and livelihoods, resettlement and social disruption, and mitigation programs.  Both sides expressed willingness to organize visits by villagers to compare experiences and learn from each other.

Concluding the workshop, Dr. Juree Vichit-Vadakhan of the National Institute for Development Administration noted that development is a series of trade-offs, not a panacea, and that every society has to make difficult choices;  “This was a healthy forum, in which a wide range of stakeholders aired their concerns.”

Urooj Malik, Director, Infrastructure Division, Mekong Department for the ADB,  commented, “Together, the comments and views of local and international stakeholders will help ensure the project brings the greatest benefits to the people of Lao PDR.”

Jean-Pierre Serusclat, Chairman of Nam Theun Power Company (NTPC) said, “This process is an exercise in good governance for the Government of Lao PDR and its private partners.”

Bounsalong Southidara, Deputy Director of the Watershed Management and Protection Authority (WMPA) addressed one of the key environmental concerns – partial flooding of the Plateau to create a dam reservoir – by outlining the Government’s vision for the management of the project-affected areas and of the project watershed, in which they seek to balance conservation with development needs through an intensive, participatory planning process, emphasizing systematic negotiation and customary rights.

Providing technical background to the discussions was the set of safeguard documents, available on-line at the NTPC website. Within two weeks of the closing date for comments (September 3) a summary report of the workshop will be circulated to workshop participants and to the broader public through the World Bank's Lao PDR website.  Following Tokyo, the technical workshops will continue in Paris (September 7); Washington DC (September 10); and Vientiane (September 24). The international workshops will conclude with the Government hosting in Vientiane.

To ensure that the process is transparent, meaningful, and balanced, an independent moderator will lead the discussions at each of the venues and  prepare a summary of the feedback and recommendations arising from the workshops, which the organizers will share with the participants.