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.
Laotian Prime Minister Bouasone Bouphavanh told global business leaders and regional politicians on Sunday that his country aims for “no less than” 8 percent annual economic growth to 2015.
Laos’s economy has already been expanding at an annual average of 7 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.
However, a group of NGOs 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 labor force is often foreign and there are high and potentially negative impacts on the environment and socio-economic development,” it said.
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 7 million and is highly dependent on foreign donors.
The INGO Network, which includes more than 60 foreign NGOs working in the country, made its comments to help the government prepare its seventh National Socio-Economic Development Plan, from next year to 2015.
The document 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 labor conditions, development assistance and other areas.
There should be adequate monitoring of the environmental impact of foreign-invested projects and the government should consider the feasibility of investments in small-scale decentralized power facilities as an alternative to large-scale dams, they said.
Laos this year finished its largest infrastructure project, the Nam Theun 2 hydropower facility, a US$1.45 billion 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 on the Nam Theun River, a tributary of the Mekong River.
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