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Laos Faces Challenge of Using Water Resources to Ease Poverty While Protecting Environment

Unlike many parts of the world with water shortages, the small Southeast Asian nation of Laos has hundreds of rivers draining the highlands along its border with Vietnam. The challenge facing Laos is how to use its water to alleviate poverty without damaging the environment.

Correspondent Scott Bobb visited central Laos and reports on a dam project the government says will boost economic growth, but that some environmentalists fear will endanger a forest conservation zone in the region.

It is late afternoon in Thalang, a village of several hundred people in central Laos, 100 kilometers from the nearest paved road.

Chickens and pigs forage for food in the hardscrabble earth around wooden houses on stilts.

Thalang's inhabitants eke out a living by fishing and tending small gardens along the Nam Theun, a river that flows from the mountains near Vietnam to the Mekong River.

Thalang is doomed.

The government wants to build a dam on the Nam Theun that will flood Thalang and 16 other villages in the area. Six thousand people will lose their homes.

Mrs. Thorn, a mother of five, has lived in Thalang for most of her life, but she is ready to leave.

"I want to move," she says. "I will have a new house with electricity and land to cultivate. It's hard here. My family is very poor. We don't have enough rice."

The Nam Theun Power Company, which is building the dam, has built a model village of new homes and a neighborhood school 30 kilometers away on higher ground. Mrs. Thorn and her neighbors have seen the houses, which have electricity and running water. And they like them.

The company's resettlement manager, Impasit Thathongsakd, says the most important thing is consultations with the people and detailed planning.

"We tell them the project components and the benefits of the project, and the impact, of course, all good and bad," he said. "The most important thing is for them to understand in depth how the project affects them."

Excavators are already at work on the dam, which is to be completed in four years at a cost of $1.2 billion.

It will flood 450-square-kilometers of land on the Nakai Plateau. Water from its reservoir will generate 1,000 megawatts of electricity - enough to light more than 750,000 homes.

Laos will sell most of the power to neighboring Thailand to fuel its booming economy. The power will earn the Lao government $80 million, or one-fifth of its current budget.

The money could fund development projects, create jobs and improve social services in one of the region's poorest countries.

However, some environmental groups worry that the dam will open up a nearby forest preserve to poachers and illegal loggers, threatening tigers, elephants and other endangered species.

Gary Oughton, an agriculture expert with the environmental consulting company EcoLao, says dams can severely damage forests.

"You will inundate some of their [villagers] lands, and you will force them uphill into the forests, put more pressure on wildlife and natural resources, unless proactive measures are taken," he said.

He adds that dams also affect fish populations and soil quality downstream, as well as the lives of people whose lands are flooded.

The more outspoken critics of the dam say the reservoir will be too shallow and could dry up during droughts. They say that during rainy seasons, on the other hand, heavy water flow could flood fields and pastures downstream. They add that dam projects rarely benefit the rural poor and mostly provide funds to governments, which are vulnerable to corruption.

Aviva Imhof of the International Rivers Network says 150 organizations have sent a letter to the World Bank expressing their opposition to the project.

"The risks far outweigh the potential benefits of the project," said Aviva Imhof. "It's the poorest people that will end up worse off. So we can see no evidence that the revenues will be used to alleviate poverty in Laos."

The dam's supporters, including several large environmental groups, say excessive logging already has damaged the plateau and its soil is too poor for commercial farming. They say it would be better to sacrifice the plateau and use revenue from the dam to preserve the forest, which is the area's major water catchment.

Mr. Oughton says greater care is now being taken in building dams in Laos.

"Planning of roads, highways, irrigation systems and hydro-power dams involves a very large component of additional investment into ensuring that the communities receive investment for the development of irrigation systems, sustainable agriculture and a share in income from forestry," he said.

Several environmental groups have done environmental assessments. Most of them support the project as long as an independent group, such as the Mekong River Commission, can ensure that the power company and the Lao government fulfill their pledges to the villagers of the Nakai Plateau.

The Nam Theun Power Company has pledged $1 million a year for conservation efforts in the forest and $16 million during construction to offset the effects on the villagers.

The company's Mr. Impasit acknowledges that development projects are destructive, but, he says, sometimes they are necessary.

"You have to evaluate what is the loss and what are the benefits, long-term, short-term, and what is good for the Lao people," he said. "And through the lessons learned from all over the world, we try to avoid [having] a bad impact, especially to the people, to the nature."

The World Bank is to decide later this month, after years of study, whether to guarantee $1.2 billion in loans for the project. Independent observers say the bank is under pressure to approve the loans, because if it does not, the Lao government would likely go to other lenders, who have less stringent requirements for protecting the environment.

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