A Kinder, Gentler Dam; New construction in one of Asia's poorest countries raises the ethical bar for the world's megaprojects.

Byline: Jonathan Kent

Dam projects in poor countries tend to wreak havoc on the communities they displace. But the $1.4 billion Nam Theun 2 dam in central Laos is a different story. Piu, a smallholder in her 30s, moved in May to a village built for some of the 1,200 families displaced by the project, scheduled for completion in 2009. "It's very beautiful," she says. Nearby, workmen finish neighboring units--wooden homes on stilts with a traditional feel.

The justification for NT2, like that for many big infrastructure projects, is to lift the locals out of poverty. Indeed, the dam's electricity will be a boon: over the next quarter century, developers expect to bring in $2 billion, paying for the dam and much-needed economic development. But unlike dams elsewhere, NT2 may represent a new generation of massive World Bank projects. Prompted by a growing awareness of the impact that megadevelopments can have, the Bank now attaches strict conditions to its aid. "It used to be accepted that some would have to lose so that the majority could benefit. But now we're asking whether anyone has to lose," says Chaohua Zhang, who oversees NT2's social and environmental projects.

As for displaced families, the World Bank and the Laotian government promise to double their incomes ...