Communist Laos is a landlocked country, with a population of 5.9 million, and an annual GDP of less than seven billion US dollars. Over a quarter of the population lives below the poverty line.

However, Laos is planning its way out of poverty with its ambitions of becoming the "battery of Southeast Asia" by generating power for its richer, more industrialized neighbors such as Thailand and Vietnam.

The 3.8 billion dollar Xayaburi dam is part of its grand plans and preparatory work is already underway. But environmentalists have warned that damming the main stream of the river will trap vital nutrients and lead to increased growth of algae and prevent dozens of species of migratory fish from swimming upstream to their spawning grounds.

They say that fishermen in general and farmers in Vietnam's "rice bowl" will suffer if the dam is built. Moreover, this dam would be the first of seven in total that have been planned by Laos

Two more are planned in Cambodia and a further two where Laos and Thailand share the Mekong River. China has already built four hydroelectric dams on the upper Mekong, in Yunnan province.

Postponed again

In April, representatives from the Mekong River Commission postponed making a decision on the Xayaburi dam until its annual ministerial meeting this month but the Thai contractor, CH Karnchang, continued preparatory work. Thailand has already agreed to buy 95 percent of the electricity to be produced by the dam.

On Thursday, ministers from Thailand, Cambodia, Laos and Vietnam were expected to make a final decision on the fate of the dam at their meeting in Siem Reap in Cambodia. However, in the end they postponed the decision once again and said they would approach Japan and other international development partners.

"With so much at stake, it would be inconceivable to proceed with the dam, so the governments must work together so that they can make more informed decisions," said Ame Trandem from the International Rivers environmental group on Thursday, calling for all preparatory work to be halted.

Author: Arun Chowdhury (AFP, dpa, Reuters)
Editor: Anne Thomas