Mekong and the dams: For Whom the Bell Tolls

Would they dam this beautiful river? (source: the Economist)

Would they dam this beautiful river? (picture credit: the Economist)

In a remote mountainous area in Laos, an ongoing dam project would be a new source of discord among Southeast Asian countries over sustainable development. The US 3.5 billion worth Xayaburi Dam is believed to bring prosperity for Laos and electricity for Thailand, yet get on the nerves of their neighbours, specifically Cambodia and Vietnam, who are worried that it would devastatingly affect to the life of millions of people in the lower Mekong Basin.

Mother of Waters at stake

If rivers were to be ranked according to their importance to human life, the Mekong would be on the top list. Running through six different countries, the river is the direct source of life for more than 60 million people in the region.

Most of the fish catch in Cambodia, which then provide 85% of the population’s protein needs, are from the Mekong and its tributaries. The Cuu Long Delta, from which the Mekong flows into the Pacific, accounts for half of Vietnam’s rice production to be consumed by the population of more than 90 million people. It is also worth noting that Vietnam is the world second largest rice exporter, therefore playing a critical role in ensuring global food security.

Joern Kristensen, former CEO of the Mekong River Commission (MRC), an inter-governmental agency, said that the river is the “Mother of the Waters”, the “heart and soul” for the people living in region, and means much more to them than just a natural resource.

Yet the Mother of the Waters is at stake. According to a recent report from MRC, more than 70 hydro dams will be operational by 2030 along the 4000-kilometre river and its tributaries, which are feared to cause unimaginable socio-environmental impacts for the whole region.

The controversial Xayaburi Dam project, if being built, will force 2,100 to be resettled and negatively affect to the lives of more than 202,000 people living near the dam, according to International Rivers, an American NGO. The number of people will be indirectly affected by the project is countless. International Rivers also concerns that Xayaburi Dam would “permanently damage the habitat and ecosystem of the Mekong River.”

Hydro dams are not unusual in the Mekong Basin region, but what sets the Xayaburi project on heated debates is its position. It is the first dam to be built on the mainstream of the Mekong River in the lower basin (China has already built four gigantic dams upstream), which means if in any case the project goes wrong, the whole region will have to pay the price. Moreover, this huge project is the first of eight proposed similar ones in Laos’ territory, which then is the principle to deal with other projects.


Battery of Asia and Laos’ dilemma

It is economically understandable for Laotian government to be in favour of the Xayaburi project. They do not have to fund anything for the 3.5 US billion dam, which will be loaned by a Thai bank. Another Thai entrepreneur will take care of the construction, while high-profile Finnish-Swiss partners provide consultancy services. They only need to nod the head and sign contracts.

Yet what Laos is promised to receive is extremely attractive: 95 percent of the produced electricity in Xayaburi will be sold to Thailand, and a large of number of population will be offered jobs. For a land-locked, small, mountainous country with a GDP per capita of only more than 1,000 USD, that is too good an offer to be missed.

In addition, Xayaburi project will provide a bright future for Laos’ growth, as the government reveals their ambitious plan to be “the battery of Asia,” the power hunger continent with world most energy consumed nations such as China and India.

“Hydropower accounts for 33% of Laos natural capital, and if Laos wants to leave the least developed country status by 2020, this is our only choice.” declared Viraphonh Viravong, Vice Minister of Laotian Energy and Mines.


Food should come before sustainability
As Laos and Thailand are also members of the Mekong River Commission, they are supposed to be under the supervision of the 1995 Mekong Agreement, which requires countries to seek agreement on all proposed Mekong mainstream hydropower projects. For that matter, Vietnam, Cambodia, and not least international community, have tried several ways to persuade Laos and Thailand to stop the Xayaburi project, at least within next 10 years, the suitable timeframe to conduct an in-depth research on potential threats of the project.

However, the lack of a stricter scheme as well as punishment has made those efforts fail. Any proposal to deal with hydropower development in the future, as a result, should include more binding agreements among parties.

In addition, it should be also noted that not all hydropower dams produce negative environmental impacts, only one with careless socio-environmental studies does. Anyway, hydropower is considered as a renewable source of energy, with less carbon emission contributing to global warming than fossil-fuel power generation. Therefore, the MRC should help member countries conduct suitable studies for their hydroelectricity projects, while keeping an eye on proposed plans. Better supervision mechanism would help prevent such disputing cases like Xayaburi Dam in the future.

Binding multilateral agreements, however, can only touch the tip of the iceberg. When the host country must struggle with economic difficulties and poverty, it is much harder to convince them the good of sustainable development, even with the warning of sticks.

As for the case of Laos, they in fact have a good argument for exploiting their most valuable natural resource. Coincidently or not, there is enough empirical evidence for policy makers in Southeast Asian countries to link hydropower development and poverty reduction since 1950s, as shown in several researches.

Therefore, if international community and their neighbouring countries want them not to go forward with hydropower, then a good alternative must be given.

One idealistic way of dealing with the dilemma is the Net Avoided Emissions (NAE) Scheme, which was first initiated by the Ecuadorian government. The mechanism is simple: international community will pay for Laotian government an appropriate amount of money for not exploiting the Mekong River. That money, in return, would help Laos to develop their economy and support their own social plans to help their people. The problem is, of course, where to get that money.

A more practical way is to pour the country with investment and financial supports. Better poverty reduction programs, intensifying foreign direct investment (FDI) or official development aids (ODA) would reinforce Laos’ economic development, which then lure them away from ambitious but unstable hydropower development plan. The neighbouring Vietnam is currently the largest foreign investor in Laos, with 429 projects worth of more than $4.9 billion, which gives them an ideal position to speak of economic cooperation compensating for hydro dams.

However, those economic plans should be sustainable and of benefit to the Laotian people as well. It is both hypocritical and unworkable to talk about sustainable development when some Vietnamese investors promote deforestation and land-grab in the country, as the Global Witness claimed recently. It is impossible to deal with evil by more evil.



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