- The Nakai plateau in southern Laos is home to some of
the world's most endangered animal species. For generations, this remote
part of a landlocked country, ignored by much of the outside world, has
provided a refuge to tigers, Asian elephants, clouded leopards and gibbons.
It has also been home to many indigenous peoples who have survived by subsistence
farming, hunting and fishing on the Nam Theun river, a tributary of the
- But now the plateau is to be destroyed in a $1.3bn (£700m)
hydroelectric project, underwritten by the World Bank, that will build
a 50-metre high dam on the Nam Theun and flood an area the size of Singapore.
The project - likely to be one of the most controversial yet to involve
the World Bank - has been sought by the Laos government in order to boost
the economy by selling most of the electricity to neighbouring Thailand.
- But opponents believe the dam, known as NT2, will result
in irreparable environmental damage and social disruption. Furthermore,
they say, there is no guarantee that the repressive Laos government will
honour its promise to fully compensate the many thousands of indigenous
people whose homes will be destroyed and livelihoods threatened. There
is also evidence that some of the tribes have not been fully consulted.
What is certain is that the decision to build the dam after a period in
the which the World Bank moved away from backing such projects has again
focused attention on the feasibility for developing countries to build
their economies while safeguarding their national environments. The outcome
of the NT2 project in Laos could have global implications.
- "We fear that this dam, rather than reducing poverty
will only increase human misery and environmental degradation," said
Ute Collier of the World Wide Fund (WWF), the Swiss-based global environmental
- The origins of the project, which was approved by the
World Bank last Thursday on the same day that the former US Deputy Defence
Secretary, Paul Wolfowitz, was confirmed as the organisation's new president,
date back decades and coincide with the transformation of one of the world's
last officially communist nations to a more market-based economy in the
- Laos, a former French colony which gained independence
in 1949, is one of Asia's poorest countries with a per capita GDP of as
little as $320 (£170). Around 80 per cent of the working population
is employed in small-scale agriculture while large areas of the country
have not been cleared of landmines dropped by the US during the Vietnam
War. The Laos authorities hit on the idea of using one of the country's
few abundant resources - rainfall - and developing a hydroelectricity scheme
to produce energy for export.
- It is envisaged that more than 90 per cent of the 1,070
megawatts (MW) of electricity produced by NT2 will be exported to Thailand
in a deal that the government in Bangkok has already agreed. The scheme
will also produce around 75MW for ElectricitÈ du Laos, the domestic
- In compensation, the deal's backers believe that Laos
will earn up to $2bn over the next 25 years, a percentage of which has
officially been set aside for helping the poorest of the country's 5.6
- "We have spent the best part of a decade studying
the project and evaluating the risks," said James Wolfensohn, the
World Bank's outgoing president. "Our decision, after a lot of deliberation,
is that the risks can be managed - in fact, one major reason we are involved
is to help manage those risks." He added: "Laos has an average
income level of less than a dollar a day. Children still suffer malnutrition
and too many young people receive little or no formal education.
- "But to get out of this poverty trap, the country
has few options to generate income. Essentially it relies on mining, timber
and hydroelectricity. We believe that a sound approach to selling hydroelectricity
is the best way for it to increase the amount of money it can invest in
health, education and basic infrastructure."
- Peter Stephens, a bank official who has been working
on the project for the past decade, told The Independent that a series
of safeguards had been included. The approximately 6,200 people who are
being relocated have been given written guarantees that they will receive
new homes and compensation, a new environmental protection area has been
established and a separate finance line has been worked out with the authorities
to ensure transparency and allow officials to check that a percentage of
the money from the dam is used on education and health projects promised
- "This is the most public advertisement of the country's
investability - whether they are marketable," he said. "The net
outcome [of not meeting its undertakings] would be very much more serious
for them than the [short-term] benefits."
- Officials claim that the threat to the Asian elephant
population has been recognised and that a leading conservation group, the
Wildlife Conservation Society, has been recruited to assess the potential
damage and draw up plans to minimise the negative effects.
- But many others who have been studying the project for
a long time remain opposed to it. The World Bank received a petition signed
by 153 non-governmental organisations from 42 countries urging the bank
not to back the scheme. "The negative track record of other dam projects
in Laos and the government's failure to transparently manage revenues and
respect the rights of its people provide a strong indication that the costs
of NT2 will dramatically outweigh any potential benefits," it said.
- Shannon Lawrence, a spokesman for the US-based group
Environmental Defence, one of the signatories to the petition, said many
fallacies surrounded the dam, which will be built in a joint venture involving
two Thai companies and the French power corporation ElectricitÈ
de France. The group has questioned the degree of financial benefit the
scheme will provide, claiming that between 2009, when project revenues
come online, and 2020, net revenues for the government will total only
$20-$29m per year - around three per cent of total projected government
revenue. It is not enough, she said, to "kickstart the economy".
- In Thailand, environmental activists have for months
been staging rallies outside the regional World Bank office, claiming that
evidence from local projects suggest the scheme in Laos will create huge
problems. They said the World Bank-funded Pak Mun dam cost the Thai fishing
industry $15.8m in unanticipated damages.
- With regard to the endangered wildlife, Surapon Dongkhae,
secretary-general of WWF Thailand, said his country had seen its elephant
population depleted by two large dams in Kanchanaburi, a province west
of Bangkok and construction of the Thai-Burma gas pipeline. "In Laos,
it will be worse than what we experienced in Thailand with elephants,"
- The World Bank said that a full consultation process
had been carried out and that the views of indigenous peoples had been
sought. There is some evidence, however, that locals have been open to
- A report carried out for the bank by an independent consultant,
James Chamberlain, reveals that in the village of Sop Hia, officials won
over the 80-year-old female chief, Nang Hay, by holding a ceremony, that
involved eating chicken and drinking whiskey, to honour her dead husband.
The report notes that, while she had previously been angrily opposed to
the dam, after the ceremony she was prepared to listen to what officials
had to say about resettlement.
- But any doubts that Nang Hay or anyone else may have
will be of no importance now. With the backing of the 24-member panel of
the World Bank and yesterday's announcement from the Asian Development
Bank that it too will help finance the project, the plan to flood the Nakai
Plateau is all but under way.
- A government official, Viyaketh Nam, told reporters that
exporting energy to Thailand and perhaps even China, could be Laos's salvation.
"We can be like Kuwait," he said. "Kuwait pumps oil from
the ground. In Laos, we are selling power made of the water from the heavens.
We will be the battery of Asia."
- ©2005 Independent News & Media (UK) Ltd.