Striking a Balance – Developing Sustainable Industry in Rural Laos

The opportunity for international investment and natural resource extraction is on the rise in Laos. When determining agreements for development the GOL (Government of Laos) weigths the impact of investment to existing communities and sets goals to maintain sustainable village lifestyles. This is balanced with the objective of encouraging more population density and connecting villages with roads. The Hongsa Power Co. demonstrates an effort to strike a balance between infrastructure development and cultural values in rural Laos. The mission statement of Hongsa power is “to be recognized as a leading power plant in Laos that is environmentally friendly and accepted by the local community.”

The large coal deposit in Hongsa was uncovered in 1992, and the GOL granted Lao and Thai entities with financial support from Singapore the authority to extract the resource in 2009. The GOL outlined the following objectives as part of the agreement: construct a road connecting Hongsa and Luang Prabang to Thailand, use international environmental standards, gain community acceptance of project and resettle the villages impacted by the project. The resettlement agreement included housing, income, farm and livestock land, temples, and skills training. In contrast to the Xayaboury Hydroelectric Plant resettlement agreement where the government contracted resettlement, the Hongsa Power Co. was granted full responsibility for managing and funding the resettlement.

One initiative is to establish a market for the sale of handicrafts made by the resettled villagers. With the new road connecting the villages to markets in Thailand and Luang Prabang these communities will have the opportunity to sell their wares at a greater profit. The basket above will be exported from Thailand to Japan. These markets will also support rice, dried chilies, and chili paste exports.

Another initiative is family budgeting, since part of the resettlement agreement is an income. In order to receive the income, families must open a bank account and participate in financial management training. Schools were also built to provide access to education.

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