Tokyo NT2 Workshop

(Tokyo, September 3, 2004) Nearly 100 people from government, the private sector, civil society, academia, and development agencies gathered in Tokyo today to discuss the proposed Nam Theun 2 hydroelectric project and its potential to promote development in Lao PDR. Poverty is deeply entrenched in Lao; more than 70% of people in the nation live on less than US$2 a day, and the country's social indicators - including maternal and infant mortality, literacy, and access to health care - are among the lowest in East Asia.

The Tokyo workshop is the second in an international series of workshops focusing on the proposed Nam Theun 2 project. The workshops are intended to foster discussions about a number of key issues, to promote an exchange views, and to give interested parties a chance to comment on the series of safeguard documents on the proposed project.

The first workshop took place in Bangkok on August 31. The Tokyo session was moderated by Mr. Yasunobu Matoba, who served as senior advisor at the World Water Forum in Kyoto and is now executive director of the Agricultural Development Consultants Association in Japan. 

Representatives of the government of Lao PDR began the workshop by describing the challenges facing the country and the government's options for promoting economic 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 of Lao PDR's Ministry of Industry and Handicrafts, echoed these sentiments. Despite the progress in the last decade boosting growth and reducing poverty by 10%, he said, Lao PDR is still a poor country which views the hydroelectric project as an opportunity to improve people's lives and environment. The project would provide revenues that could be used to boost poverty reduction efforts, to increase the delivery of social services (such as health and education), and to promote conservation activities, said Dr. Manolom.

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.                
Providing technical background to the discussions was the set of safeguard documents, including the Environmental Assessment and Management Plan (EAMP); the Social Development Plan (SDP); the Watershed/Protected Area management plan (SEMFOP); the Summary Environmental and Social Impact Assessment (SESIA), which is a summary of the 3 safeguard documents and has been translated into Thai, Lao, Japanese, and French languages - all can be found on http://www.namtheun2.com.  A summary report of the workshop would be circulated to workshop participants and to the broader public through the website http://www.worldbank.org/lao. 

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.  Further information on each of the workshops, including registration, topics for discussion, background papers, and presentations, will be announced on http://www.worldbank.org/lao as they are finalized.   More information can also be accessed at the Lao National Committee for Energy http://www.poweringprogress.org; and at NTPC: http://www.namtheun2.com.