Livelihood Diversification into the Rural Nonfarm Economy: A Case of the Resettled Households of the Nam Theun 2 Hydropower Project

Sammanfattning: Historically, agriculture has played a significant role in enhancing the economic base of rural areas in most developing countries. However, the rural nonfarm economy, previously neglected by policy makers, is currently receiving more attention as it is thought to be a potential alternative to agriculture in lifting the rural poor out of poverty. This case study is centred on the resettled communities of the Nam Theun 2 Hydropower project, located in Lao P.D.R., and examines the transition of their livelihood strategy, with a focus on the diversification into the rural nonfarm economy. The objectives of the study is to describe and analyse the development on the rural nonfarm economy in the resettlement area of the Nakai Plateau as well as to analyse whether resettled households have been ‘pulled’ or ‘pushed’ into diversifying into the rural nonfarm economy. The collection of data, grounded in qualitative semistructured interviews, was conducted through fieldwork in the resettlement area. The development of the rural nonfarm economy emerged rapidly with the commencement of the construction of the dam, yet expansion has stabilised and been slow in recent years. Findings show that resettled households are increasingly incorporating rural nonfarm activities into their livelihood strategy, yet the significance of nonfarm activities remains weak as households continue to depend on more profitable activities outside the rural nonfarm economy. Furthermore, the dynamics of pull and push factors at play remains highly complex, yet both factors are simultaneously present and influence the development of the rural nonfarm economy of the Nakai Plateau. Nevertheless, push factors appear to be more prevalent as the sluggish agriculture results in an economic base that is not able to drive the expansion of the rural nonfarm economy.