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Tokyo Workshop For Nam Theun 2 Concludes

September 3, 2004

TOKYO September 3, 2004 ¾ Nearly 100 people from government, private sector, civil society, academia, and development agencies gathered in Tokyo today to discuss the proposed Nam Theun 2 hydroelectric project in Lao PDR, against the broader context of promoting development in Lao PDR, a country where poverty is entrenched – 70% live on less than US$2 a day and social indicators – maternal and infant mortality, literacy – among the lowest in East Asia. 

The Tokyo workshop follows Bangkok, which was held on August 31, and is part of an international series of workshops intended to discuss a number of issues and exchange views on the proposed project and to specifically comment on the series of safeguard documents on the project.                                       

Moderating the session was Mr. Yasunobu Matoba, who served as Senior Advisor at the World Water Forum III in Kyoto and is now Executive Director of Agricultural Development Consultants Association, Japan. 

The Government of Lao PDR began by describing the reality of the country and their options for growth. H.E. Mr. Somdy Douangdy, Vice Minister of Finance, said, “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.”                           

Dr. Somboune Manolom, Permanent Secretary, Ministry of Industry and Handicrafts echoed these sentiments and noted in his presentation that Lao PDR, in spite of good progress made in the last decade boosting growth and reducing poverty by 10%,  is still a poor country that sees the potential project as an opportunity to improve people’s lives and environment by providing revenues that could be used for poverty reduction efforts, increasing the delivery of social services such as health and education, and promoting conservation activities. 

In his presentation, he commented that 80% of Lao live in rural areas; that 40% of villages practice slash-and-burn agriculture; 70% of the labor force has no education or did not finish primary school; life expectancy is 59 years; 1 in 10 children die by age of five and 1 in 4 adults die by age 40.                                                                                                                    

 "These are sobering statistics.  Much remains to be done.  Rural development and poverty reduction programs are key priorities 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.  We are committed to promoting development to give our people a better lives – and balancing that development with conservation.  We have very carefully studied the alternatives; we think that  Nam Theun 2 gives us the best option.” 

Mr. Ian Porter, Country Director for Lao PDR , said that these workshops are geared to hear differing views of the project, based on the volumes of research and analysis that are available as background. “These workshops are 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.”

Mr. Porter noted in his remarks that the international financial institutions (IFIs) – the World Bank and Asian Development Bank – which have not yet made a decision on whether to support the project, are considering Lao’s request to finance NT2 because they believe, if properly managed and implemented, NT2 could bring significant benefits to the Lao people by providing incremental revenues for poverty reduction and environmental protection; that the safeguard policies of the IFIs help to ensure that social and environmental risks are mitigated; and that IFI involvement brings standards of transparency and accountability to project preparation in the framework of the broader reform agenda in Lao PDR.                                                                                                                                                                 

Following on this, the representative from the Asian Development Bank, Mr. Woochong Um , commented, “The Government’s past few years of progress in terms of improving economic management, reducing spending on state-owned enterprises, reforming the energy sector, improving environmental protection and allowing greater debate and discussion suggests a commitment to ensuring that the proposed project could be carried out in a fiscally, environmentally, and socially sustainable way.”.

Today’s workshop covered a range of topics covering Lao’s development framework; environmental and social impacts; project economics and costing issues; revenue management; and local consultations.  Key issues of concern to the Japanese stakeholders were raised, including government capacity to manage  NT2 revenues in a sustainable way against an overall backdrop of responsible, transparent and accountable system of public financial management; capacity to implement dam projects and associated environmental and social/resettlement impacts; and capacity to manage conservation programs.  Past legacy issues involving dams and logging were also raised by some participants.

The Government addressed these issues and noted that while problems remain, the poverty in Lao PDR is real.  And in spite of the many challenges and risks, they believe, with the help of the developers (Nam Theun Power Company - NTPC) and other donors, that the impacts can be addressed; that the progress made thus far on implementing macro and financial reform can be deepened in the time ahead; and that the project can deliver the kind of revenues that would enable Lao PDR to exit the “LDC ranks” (Least Developed Country) by 2020. 

Questions were raised by Japanese stakeholders on the local consultations process and whether the project-affected people fully understood the project impacts, prompting the Government to repeat the invitation made in Bangkok to invite the Pak Moon dam villagers of Thailand – as well as Japanese participants – to the September 24 Vientiane workshops and meet directly with the Nakai villagers.

The workshops will continue in Paris on September 7 and Washington DC on September 10.  The Government will host a wrap-up in Vientiane on September 24.

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