Concerns over growth strategy in impoverished Laos
AFP, Mon, Jun 07, 2010
HO CHI MINH CITY, VIETNAM - Laos, one of Asia's poorest nations, dreams of escaping from underdevelopment over the next decade but concerns have been raised about a growth strategy based on hydropower and other megaprojects.
The communist country's Prime Minister Bouasone Bouphavanh told global business leaders and regional politicians Sunday that his country aims for 'no less than' eight percent annual economic growth to 2015.
Laos's economy has already been expanding at an annual average of seven percent in recent years, and the government aims 'to lift the country from underdevelopment by 2020,' Bouasone told the World Economic Forum on East Asia.
But a group of non-governmental organisations in the rural-based society have urged the government to consider slowing the pace and scale of large foreign investment projects which, the group said, form the basis of the country's growth strategy.
'Massive investments have been made in extractive industries: mining, hydropower and industrial plantations,' the INGO Network said in a submission to the government.
'The main characteristics of such investments are: they are land- intensive, there is little value added in Laos, the labour force is often foreign, and there are high and potentially negative impacts on the environment and socio-economic development.'
NGOs also asked the government to consider 'a more cautious development' of commercial agriculture which small, self-sufficient farmers in remote areas will have trouble adjusting to.
Laos has a population of about seven million and is highly dependent on foreign donors.
The INGO Network, which includes more than 60 foreign NGOs working in Laos, made its comments to help the government prepare its seventh National Socio-Economic Development Plan, from 2011-2015.
AFP obtained a copy of the INGO document, which recommended that the government take greater measures to assure social development, and to close disparities in income and access to health and education services.
The NGOs urged the government to apply stronger mechanisms to ensure foreign investors comply with their commitments on labour conditions, development assistance and other areas.
They added there should be adequate monitoring of the environmental impact of foreign-invested projects, and said the government should consider the feasibility of investments in small-scale decentralised power facilities as an alternative to large-scale dams.
Laos this year finished its largest infrastructure project, the Nam Theun 2 hydropower facility, a 1.45-billion-dollar Lao-French-Thai development with a generating capacity of 1,070 megawatts.
More than 6,000 villagers were relocated to make way for the reservoir.
Thailand will buy about 95 percent of production from the plant in central Laos on the Nam Theun river, a tributary of the Mekong.
The power company said Laos will earn royalties, dividends and taxes estimated at more than two billion dollars over 25 years, money the government has pledged to spend on poverty reduction.
State media in Vietnam reported in January that a Vietnamese company is developing a one-billion-dollar golf and tourist resort, which would also be one of the largest-ever foreign investment projects in the country.
Long Thanh Golf Trading and Investment Co said it had begun construction of the project in the Lao capital Vientiane. The development will include an 18-hole golf course, five-star hotel and villas as well as a school and hospital facilities, the report said.
The prime minister, Bouasone, told the World Economic Forum that Laos wants to embrace sustainable development as the country, locked between Thailand and Vietnam, seeks to transforms itself into a hub for the Mekong sub-region.
