Lao PDR: Water Planning and Economic Development (#408)

The development of hydropower in the Mekong River basin can bring great economic opportunities for Laos. However, since this basin is shared with neighbouring countries, cooperation is crucial. Action was taken and the Agreement on the Cooperation for the Sustainable Development of the Mekong River Basin was signed to coordinate the use of these resources for economic development. For Laos, this has been crucial to their success in regards to the MDGs. 


Lao PDR is one of the most dynamic and rapidly transforming poor economies in the world. The significant increase in the number of people with access to safe water has risen from 30% to 60% and improved sanitation facilities from 11% to 45% between 1990 and 2003. Subsistence agriculture still accounts for nearly half of the gross domestic product, provides 80% of the employment as 69% of the population still live in rural areas. 

Although Laos has only developed about 4% of its potential for hydropower, it is already demonstrating the crucial value of expanding the power generation capacity and the distribution networks in order to foster economic development both in rural and urban areas.

All neighbor countries that are also faced to dynamic economic development share Mekong River basin and will require coordinated approach in order to avoid water conflicts and to guarantee the sustainability of social improvements.

Action taken

By subscribing to the Agreement on the Cooperation for the Sustainable Development of the Mekong River Basin in 1995, the governments of Cambodia, Laos, Thailand and Vietnam agreed to jointly manage the basin’s water resources and to coordinate decisions concerning the use of these resources for economic development.

The whole strategy is outlined on a road map which guides its implementation until the end of 2015. The strategy is owned and implemented by each member country.

In Lao PDR, river basin priorities were translated into national basin development plans and the economic development strategies as well. In order to ensure the implementation of national plan, River Basin Committees (RBC) are being established; the very first RBC was the Nam Ngum RBC.

Lessons learned

Adopting a set of international commitments regarding the environmental status of the Mekong River Basin in Laos has been a central element of the coordination of water planning with national development policies.

Water policy has been the cornerstone in the success of Laos regarding the Millennium Development Goals and in the ongoing transition from a rural to an urban economy.

Photo credit: Yosomono