The Power of the Mekong & the Fight for Resources in Southeast Asia

October 8, 2014

Host: The Stimson Center


Dr. Richard Cronin, Director of Southeast Asia Program, Stimson Center

Dr. Yongmin Bian, Visiting Researcher, Georgetown University Law Center

Ms. Courtney Weatherby, Research Associate, Stimson Center

For much of the past decade, China has seen the largest and most consistent economic growth in East Asia. Now, on the tail end of its rapid rise, China’s growth is slowing and its neighbors – most notably the bloc of countries to its south: Thailand, Laos, Vietnam, and Cambodia – are beginning to experience their own economic growth. However, as regional economies grow, so too does regional competition over access to energy and natural resources.

As one of the largest and most biologically diverse rivers in the world, the Mekong River is a valuable natural asset to all the countries that it flows through – particularly China, Thailand, Laos, Vietnam, and Cambodia. In short, it generates energy, food, and jobs. Since 1995, these countries, excluding China, have taken part in an intergovernmental body, the Mekong River Commission (MRC), in order to promote cooperation on sustaining and equitably developing the Mekong. However, in 2012, the authority of this commission was battered when Laos unilaterally decided to increase its energy exports by building a 107 foot dam in Xayaburi Province, with plans to export 95% of the energy generated largely to Thailand. This unilateral move by Laos created concern among its downstream neighbors, Vietnam and Cambodia, and has highlighted the need for a new equitable and legal form of governing the mutually valued river.

As illustrated by Dr. Cronin, 72.8% of Vietnam’s agricultural production is dependent on the Mekong River, while the Vietnamese people are also highly dependent on the fish that migrate up and down the river. According to a recent Stimson study, the unilateral decision by Laos to dam its part of the river will not only hurt Vietnam’s fishing market, costing it approximately $20 billion over ten years, it will also permanently change the region’s ecosystem.

Laos, which subsequently received backing from Thailand to utilize the Mekong in order to export energy, is not the only regional power that has plans to utilize the Mekong for the pursuit of unilateral interests. At the top of the river, China has already constructed several large-scale dams and has plans to operate six more mega sized dams in Yunnan Province. China has also refused to join the MRC at least in part because it does not support intergovernmental oversight of the river. In addition, China has refused to give any guarantees that it will preserve water and fishing quality for its downstream neighbors – assurance, Dr. Bian pointed out, China has previously given to Russia, Kazakhstan, and other, stronger, regional countries.

With the MRC seemingly lacking the authority to keep its members in line, and China refusing to offer any guarantees to its neighbors, citizens have begun taking it upon themselves to challenge ongoing projects on the Mekong and establish some sort of precedence for its use. So far, several legal challenges have had some success in curbing unilateral pursuits. In Europe, the energy company Pöyry was charged by the Organization for Economic Cooperation and Development (OECD) with failing to honor its Corporate Social Responsibilities when it backed the understudied Xayaburi dam project. After that ruling, Andritz, another European energy firm, similarly had its reputation damaged when it too was charged with similar offenses. Similarly, in Thailand, citizens have charged the Electric Generating Authority of Thailand (EGAT) of violating its constitutional duty by endangering the people’s food security and livelihood in the pursuit of cheaper energy from the Mekong.

Although no landmark punishments have been doled out, it is clear that the people of the region are beginning to realize the dangers that rapid modernization can bring with it. Although these countries obviously have a right to modernize their economies and infrastructure, it is important that they do so equitably and sustainably. In the pursuit of near-term success, it is crucial that these countries don’t jeopardize their and the region’s long-term future.

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09. October 2014 by Will Houstoun
Categories: East Asia, Economics, Energy, Environment | Comments Off on The Power of the Mekong & the Fight for Resources in Southeast Asia