A set of indicators for sustainable development were identified to be employed in developing countries. The selected indicators provided a good understanding of social and engineering outputs of a water resources project. Results of the study revealed that there are significant positive impacts of dam construction but they were not same as the targeted objectives envisaged in the feasibility report of the project. It means that after construction of the dam and irrigation system, development didn?t match with the targeted goals of the project. This study argues the world-wide controversy against construction of dam in arid zone which is ill-founded and based on a few short term, mitigable negative impacts, ignoring many positive long term inputs alleviating chronic poverty in arid regions. The study meticulously looks into the pre dam bio-physical and socio-economic conditions in one of the arid region of Iran under the area commanded by Minab dam. This dam was constructed in Hormozgan province of Iran in 1983 and its irrigation system was completed in 1986 which was followed by progressive expansion of irrigated agriculture which almost doubled in year 2006. Literacy rate has increased from 41% (pre-project) to 74% in 2006. Similarly, significant improvements were observed in health care, sanitation, education, and other disciplines.