Building Dreams in the Lao PDR

Project Result / Case Study | 4 February 2020

The people and economy of a string of Mekong River islets known as the Four Thousand Islands in the south of the Lao People’s Democratic Republic (Lao PDR) hope to benefit from a larger, if still slim, share of the 350 million international tourists who arrived in Asia and the Pacific countries in 2018.

As Sengaloun Khamphan, a chef, and her husband Thepmai Thongsaly, a former teacher, have shown, the lush surroundings, lovely waterfalls, French colonial-era attractions, and rare Irrawaddy freshwater dolphins ensure that those who come don’t regret it.

Sengaloun’s and Thepmai’s restaurant and guesthouse experience exemplifies the immense potential for social and economic development ADB aims to help tap through ADF support for sustainable, inclusive tourism industries across the DMCs.

With the right infrastructure, policies, regulatory protections, and marketing, tourism can be a dynamic job and business grower and catalyst for all sectors of a population, often in areas where work and greater incomes are needed most.

Thepmai and Sengaloun, both 43, moved to beautiful Don Khone Island in 2002. “We started small, with only the restaurant,” says Thepmai, “followed later by a single bungalow. Now we have 30 cottages.”

Improvements along the way to access to the island and upgrades of road, ferry landing, and other facilities have helped, as have environmental improvements and training for community-based tourism.

These measures, part of ADB’s ADF-assisted Greater Mekong Subregion (GMS) Tourism Infrastructure for Inclusive Growth Project, has spurred a sharp rise in homestay and other tourism-based businesses in the southern part of Champasak Province where their island is located. Department of Information, Culture and Tourism data show the number of guesthouses up by a third from 2012 to more than 200 by 2018, and fivefold growth in the number of restaurants.

It has also meant more jobs. In peak season, Sengaloun and Thepmai employ 25 people.

It remains a family business, says Sengaloun, with an efficient division of hard work. “My husband does the booking, marketing, and accounting,” she says; “I handle the investments and manage the business on a dayto- day basis, including preparing the food and taking care of the guests. While we share, we make our own decisions on a lot of matters. But on the big things we always talk it out and find the answer together.”

The second phase of the project is financed by a $47 million ADF 12 grant and will make it easier and safer for tourists to get around the Four Thousand Islands area through further upgrades to roads and river ports.

This stage will provide an all-weather surface for the 11-kilometer road running through Don Khone Island and other improvements, such as footpaths, a cycle track, and public lighting.

“Customers complain a lot about the dirt road now,” Thepmai says. “When the road is fixed and we have the other improvements, we expect our average annual occupancy rate to rise from 50% to 70%.”

More business and more revenue will mean more hiring, as well as moving ahead with plans to expand the business to other sites. They will also be able to support their son’s dream of going to Australia to take a degree course that could prove handy for the family later on— business administration.

“When the road is fixed and we have other improvements, we expect our annual average occupancy rate to rise from 50% to 70%.”

Thepmai Thongsaly, guesthouse co-owner

Legend has it that the village of Ban Chan Neua in the Lao PDR began its long pottery tradition 400 years ago after King Fa Ngum asked for pots to be created in celebration of a great victory that had helped to unite the country.

These days, the Panhyavongs’ customers are tourist businesses, such as hotels and restaurants, and the tourists themselves.

The pottery trade may go back many generations in the Panhyavong family, but the pick-up in business is a relatively recent development and mostly due to infrastructure improvements under ADF-financed first Greater Mekong Subregion Tourism Infrastructure for Inclusive Growth Project.

The project’s upgrade of the Mekong River Xieng Men Ferry landing provided better vehicular and passenger access to Luang Prabang Town where the bulk of the local tourists and most of the Panhyavongs’ business customers are found. Village potters Thongvanh and Ting Panhyavong estimate that the improvements have increased their sales by up to 80%. Working together, the couple now earns the equivalent of $343–$457 a month.

Things should improve further under the project’s second phase, which will seal the rough 3.5-kilometer road between Ban Chan Neua and the ferry landing that has taken a heavy toll in damage on Thongvanh’s and Ting’s meticulously crafted pieces during years of trips for deliveries and to find customers in town.

More tourists are also likely to make their way to Ban Chan Neua itself, another boost for a village where life has never been easy. A display and demonstration center built under the project for the village potters is expected to be a particular attraction. If business picks up enough, Thongvanh says, his family may buy some land.

Thongvanh’s and Ting’s daughter is also more than ready for some easier travel to and from school. “The road is never smooth, and it turns to mud in the rainy season,” says 14-year-old Vanhkham. “I can’t take a motorcycle or ride my bike. I have to walk, and it’s slow and dirty.”

Meanwhile, she is learning the pottery trade and says that she hopes to continue the family’s traditional business after she finishes her studies.

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This article was originally published in Together We Deliver, a publication highlighting successful ADB projects across Asia and the Pacific that demonstrated development impacts, best practice, and innovation.