November 19, 2007

LAOS : Hydropower
Laos targets hydropower not democracy
Landlocked Laos is shaping itself into a battery for its power-hungry neighbours, by damming up its rivers to tap hydropower, but the communist state has no plans to introduce democracy, its prime minister told Reuters.
With an average monthly income of less than $2 (98 pence) a day and 80 percent of its 6.5 million population surviving on subsistence farming, Laos is one of the world's poorest countries.
"Compared to the U.S., which is in the 21st century, Laos is still in the 16th or 17th century," Lao Prime Minister Bouasone Bouphavanh said in an interview ahead of the ASEAN Summit.
But the communist-led country, which dropped central planning for market reforms in 1986, is developing fast and saw its economy grow 8 percent in the fiscal year to September 2007.
"We are confident we can achieve another 8 percent growth for fiscal year 2007/2008, and we believe we can achieve higher growth beyond that," Bouphavanh, 53, said through a translator.

Bouphavanh -- who became PM in 2006 -- expects that foreign direct investment (FDI) this year will more than double to $500 million, from $200 million in the last fiscal year, with funds mainly coming from neighbouring China, Thailand, and Vietnam.
Much of Laos' FDI will go into turning the country into what it calls "a battery for the region", through a series of dams that will generate power for sale to its neighbours.
Major investors in Laos' hydropower and infrastructure industries include China's Sinohydro Corp and Datang International Power; Thailand's Banpu and Italian-Thai Development; and Vietnam's Song Da Group and Petrovietnam.
Companies from Western countries investing in Laos include Australia's Oxiana, French electricity group EDF, and London-listed Salamander Energy.
Laos currently has the capacity to produce 600 megawatts of hydropower, of which 200 megawatt are exported.
But Bouphavanh said the country has the potential to produce up to 28,000 megawatt of hydropower from the Mekong River and the 16 Mekong tributaries within Laos borders.
It has already committed to supply 7,000 megawatts to Thailand, 5,000 megawatts to Vietnam, and 1,500 megawatts to Cambodia by 2015, he added.
Laos' dams have come under tough criticism from environmental groups, who slam the projects for harming biodiversity and displacing the many ethnic communities that live in the area.
The Soviet-educated Bouphavanh -- a career cadre who took part in Laos' 1975 communist revolution -- refused to be drawn on a date for when Laos could become a democracy.
"I don't think it will be the right path for Laos to have a multi-party system," said Bouphavanh.
The ruling Lao People's Revolutionary Party is the country's only legal political group in the country.
"During the eighth party congress in 2006, we re-affirmed our ultimate goal to lead the nation towards socialism," he said.
On Tuesday, Bouphavanh and other leaders of the Association of South East Asian Nations will  sign a charter that spells out ASEAN's desire to strengthen democracy and protect human rights.

Courtesy Reuters

More on Laos