CHINA SEIZES MEKONG RIVER

5/10/2018 Mekong River nations face the hidden costs of China's dams - Nikkei Asian Review
https://asia.nikkei.com/Features/Cover-story/Mekong-River-nations-face-the-hidden-costs-of-China-s-dams?n_cid=NARAN11&utm_source=NAR%20Newsletter&
COVER STORY
Mekong River nations face the hidden costs of
China's dams
Dozens of projects threaten agriculture and fishing in Southeast Asia
YUKAKO ONO, Nikkei staff writer
May 09, 2018 13:16 JST
STUNG TRENG, Cambodia -- Sam In, a 48-year-old rice farmer from
Cambodia's northeastern province of Stung Treng, never knew that people paid
for water until he was forced to move out of his home on the banks of a Mekong
River tributary two years ago.
Along with hundreds of other households, Sam In and his 10-member family
were relocated to make way for a dam development that left his entire village, Sre
Sronok, underwater. Now they live in a newly created village where government-
funded houses with identical blue rooftops are neatly lined up on a spacious,
dusty plot of land. Instead of a river, a national road runs alongside the village.

"Our cost of living has risen drastically," said Sam In, who is also the deputy
village head. "We have to buy the water we use for rice farming, drinking,
cooking and bathing. It all used to come from the river, for free."
The government provided the family with 2 hectares of land to use for rice
farming. But with no proper irrigation system or decent farming equipment to
plow the land, which were promised by the government when they agreed to
relocate, productivity is less than half that of the fields in their old village.
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Those fields, about 20km away, were submerged in September 2017 when the
floodgates of the Lower Sesan 2 Dam were closed to create a 33,000-hectare
water reservoir. The $816 million dam, located just 25km from the Mekong
River, is expected to generate 400 megawatts of electricity when it comes into
full operation later this year, becoming the largest dam in Cambodia.
The people of the Sre Sronok village, including Sam In, were opposed to the plan
when it was presented about 10 years ago. The government explained that the
electricity generated from the dams would benefit the entire country. "They said
that countries like Laos are generating electricity using the Mekong River water
resources and our country needed to build our own dams in order to stop buying
from them and lower electricity cost," Sam In said. "But I think it will benefit the
city people more, not us, unless the government gives us special discounts which
they have refused to do."
Sam In and his family are among the villagers displaced by the Lower Sesan 2 Dam. (Photo by Ken
Kobayashi)

The dam may have other unwanted consequences. Beyond the problems Sam In
and his neighbors are experiencing, the dam construction is expected to result in
a sharply reduced supply of fish, a change in the water flow and a reduced
riverbed sediments that provide crucial nutrients to the rice crop in Vietnam and
other Mekong countries. A 2012 study by the U.S. National Academy of Sciences
concluded that the dam would threaten more than 50 fish species.
Experts and campaign groups have long argued that the economic benefits from
the dam's electricity generation are questionable given the area's low water flow
during the seven-month dry season. Despite such concerns, Cambodia pushed
through the plan with the backing of a major Chinese state-owned power
company, which stepped in in 2012.
China's Hydrolancang International Energy, a subsidiary of Huaneng Group, is
the largest investor in the project, with a 51% stake, while Cambodia's Royal
Group and a subsidiary of Electricity of Vietnam control 39% and 10%,
respectively. A new road sign pointing to the "great dam" set up near the strictly
guarded gates leading to the dam site is written in Cambodian Khmer and
Chinese.

China's controversial dam building -- both on its section of the river upstream
and, increasingly, in Southeast Asia -- is dramatically changing the livelihoods of
many of the 60 million people living in the region who depend on the Mekong for
water, fish, transportation and irrigation.
Its control of the water upstream is a particular source of friction and concern to
the countries further south. Some experts compare the downstream Mekong
countries' water security risk -- which includes risks to their food supplies and
commercial activity -- to China's controversial island-building in the South China
Sea.
"What China has done by damming the Mekong and gaining undue leverage over
downstream countries is analogous and connected to its ongoing construction
and weaponization of artificial islands in the South China Sea," said Thitinan
Pongsudhirak, director of the Institute of Security and International Studies at
Thailand's Chulalongkorn University. "Beijing's approach is as simple as it is
controversial, for all to see: build first, talk later."
A fisherman in Laos attempts to clean debris from a traditional bamboo fish trap. Many Laotians depend on
the Mekong for their food and livelihoods. (Photo by Thomas Cristofoletti/Ruom)

The 4,800-km long Mekong River starts in the Tibetan Plateau in China and
runs through Yunnan Province into Southeast Asia --Myanmar, Laos, Thailand
and Cambodia -- then down into Vietnam, where it exits into the South China
Sea. It is the 12th-longest river on earth and boasts some of the most diverse fish
species in the world, second only to the Amazon.
The waters of the Mekong run freer than most of the world's major rivers, as
dam-building and other projects were forestalled by the wars in Vietnam and
Cambodia, says Courtney Weatherby, an analyst at the Stimson Center, a U.S.
think tank. Although Thailand and Vietnam have dammed parts of the river, the
need for regional coordination became clear when China started damming the
upper Mekong in the 1990s without consulting with the downstream countries.
The economies of all the Mekong countries rely on the river, but in distinct ways.
China and Laos largely see the Mekong as a source of electricity production.
Cambodia -- and many locals in Laos and Thailand -- depend on the bountiful
wild-catch fisheries in the Mekong for protein, food production and their
livelihoods. The 20 million people living in Vietnam's Mekong Delta depend on
the natural deposit of sediments and nutrients from the river's flow for their rice
crops and fishing.

With so many overlapping interests, the Mekong countries need better
information-sharing and "political management of inevitable tradeoffs between
each nation's interests," Weatherby said.
Such coordination is growing more complex now that China is funding dam-
building in the less developed lower basin countries such as Cambodia and Laos.
Of the 11 dams planned on the Mekong's lower mainstream, six are backed by
China, according to U.S.-based non-government organization International
Rivers. Another 30 dams are planned on the tributaries.
Yet as China pushes ahead, other investors -- including Western countries and
Japan -- are pulling back on Mekong dam development. The Japan-led Asian
Development Bank, for example, has halted financing for hydropower projects
on the Mekong mainstream because "the potentially negative impacts of
mainstream hydropower projects are substantial," said Andrew Jeffries, director
of the energy division of the institution's Southeast Asia department. Japan
pledged $6 billion in other infrastructure aid to Mekong nations in 2015 in a bid
to enhance its influence in the region, but that expires this year.
Chinese officials frame their activity as encouraging other countries to draw
benefits from the river.

"What benefit does Cambodia get from upstream dams? Nothing," Li Hong,
China's permanent representative to the United Nations Economic and Social
Commission for Asia and the Pacific, said at a Mekong River conference held in
Cambodia in April. "But Cambodia can benefit by developing its own dams. We
should all benefit from the river."
Geopolitical risk
Somchit Chittapong has been plying the Mekong River for more than 40 years in
northern Thailand's Chiang Rai Province, but on a March day this year he
noticed that the water was unusually low.
"Can you see the flock of ducks there?" he asked, pointing to a nearby sand bank.
"They never come here at this time of the year because that island is normally
under water."
Somchit gestured toward a boat beached on the riverbank that he said was
owned by his brother, who had been shipping rubber to China. The boat had
been stranded for more than five days.
Birds gather on a sandbar in the Mekong River that was exposed by unusually low water levels near Chiang
Rai. (Photo by Takaki Kashiwabara)
The Lower Sesan 2 Dam will be the largest dam in Cambodia when it begins full operation later this year.
(Photo by Thomas Cristofoletti/Ruom)

It was just one of many cargo boats operating from Chiang Rai, Thailand's main
northern export hub to China, stranded in early March due to unusually low
water levels caused by the sudden stoppage of flows by Chinese dams upstream.
Local businesses have called on China to share its schedules for releasing water
from the dams. China agreed to release daily information from the rainy season
months of June to October, but not for the rest of the year. The Chinese side
refers to the dam information as "internal matters."

"China is crazy," said Pakaimas Vierra, vice chairman of Chiang Rai's chamber of
commerce. "They give us no information in advance so we cannot plan business
at all. Inventories are piling up."
Pakaimas said there were dozens of boats loaded with goods for China docked
along the banks of the river between Myanmar and Laos in mid-March that
could go no further because of the shallow waters. One exporter estimated about
60 boats had been stranded.
Experts said that excess supply of electricity in Yunnan Province could have led
to the abrupt stoppage of water flow from the Lancang dams.
Trade with other countries, especially China, is the major source of revenue for
Chiang Rai, located near the storied Golden Triangle, where the Mekong forms
the borders between Thailand, Laos and Myanmar. The potential for China to
inflict economic damage with its control of the water flow is a major concern for
downstream countries, experts say.
"China's damming of the upper Mekong has long been considered a geopolitical
risk for the lower riparian states," Thitinan of Chulalongkorn University said.
Sediment brought by the Mekong makes for fertile farmland. (Photo by Ken Kobayashi)

But Beijing has also displayed deft water diplomacy skills. During a 2016
drought, it announced it would release water from its upstream dam for one
month to ease water conditions, an effort to reduce tensions with its southern
neighbors -- especially Vietnam.
The lower basin countries have found it difficult to push back against China,
which has become one of the largest trade partners and investors in the region.
Bilateral trade between China and the five riparian countries totaled $220 billion
in 2017, up 16% from the year earlier, while investment reached $42 billion.
The Mekong River Commission, an intergovernmental organization of the
Mekong riparian countries, does not include China; many experts believe it
opted out due to the group's funding from Western countries. The four member
countries -- Thailand, Laos, Cambodia and Vietnam -- have largely failed to have
fruitful discussions about the transboundary effects with its most powerful
neighbor.
Instead, the countries are banking on China as an investor-- a role Beijing is
happy to play. The lower Mekong area has become a focus of the Belt and Road
Initiative championed by Xi Jinping, China's president.
School children in the floating village of Chnok Trou in Cambodia (Photo by Ken Kobayashi)

In 2014, China initiated the Lancang-Mekong River Cooperation Framework, or
LMC, which is providing a host of aid programs to the five riparian countries. In
an LMC summit in January, Premier Li Keqiang promised that China will
provide 7 billion yuan ($1.08 billion) in loans, adding to the 10 billion yuan
already promised. It would also add a $5 billion credit line on top of the
previously committed $10 billion for infrastructure investment in the region.
Experts say China wants to demonstrate its leadership to the downstream
countries and improve its image through the LMC, the first multilateral initiative
led by China in the Mekong area.
Sak Seam, the head of Chnok Trou village, sits on a hammock made of illegal small-mesh fishing nets.
(Photo by Ken Kobayashi)

Yet the emphasis on hydropower runs counter to the findings of various studies
that say the negative impacts of dams outweigh the benefits of the resulting
boost to electricity supplies. A 2017 paper published by Thailand's Mae Fah
Luang University found that if all the 40-plus planned dam projects on the
Mekong's mainstream and tributaries are built by 2030, the net economic impact
on the four lower basin countries will be a negative $7.3 billion. The loss from
the drop in fishery catch is larger than the benefit from the 110,000 gigawatt-
hours of electricity generated, the report said.
However, "construction of dams in the lower Mekong has typically proceeded
without comprehensive assessments of impacts on the river and its local
communities," said Maureen Harris, Southeast Asia program director at
International Rivers.
Some who work on the river back this view. Le Hong Duc, 60, a fish farmer in
Vietnam's Dong Thap Province, called damming the river to produce electricity
"unsustainable development."
The floating village of Chnok Trou in Cambodia (Photo by Ken Kobayashi)

"If they build the dams, causing lack of water, we have to reduce fisheries farms
and move to other businesses," Duc said. "That is not worth exchanging the
environment and water of the rivers for the electricity."
The need for electricity is real, however. Cambodia is vowing to connect 70% of
its households to the power grid by 2030, up from roughly 50%. The country's
expensive utility charges, among the highest in the region, are discouraging
businesses from entering the market and setting up large-scale operations.
Laos, the poorest country in the region, has been the most aggressive in
developing dams on the Mekong. The landlocked country hopes to sell electricity
to its neighbors and become the "battery of Southeast Asia," though the benefits
to its own people are less clear.
Thailand, the largest electricity consumer in the region, has become a prominent
investor of hydropower projects in Laos and Cambodia. Vietnam is also
purchasing from the two countries.
Tonle Sap Lake provides more than half of Cambodia's total fish catch. (Photo by Ken Kobayashi)

The U.S. and Japan should counter China's damming push by promoting
alternatives to hydropower, said Nguyen Huu Thien, an independent ecologist in
Vietnam and expert on the Mekong Delta. "If the large powers such as U.S. and
Japan can see that the Mekong issue is a serious nontraditional security issue
that affects peace and stability of the region, they should take it seriously and
help promote renewable energy such as solar and wind power," Thien said.
Tough times for fishermen
Like other fishermen on Cambodia's Tonle Sap Lake, Oeru Navy has seen his
catch plummet in recent years. Tonle Sap is the largest fresh water lake in
Southeast Asia and provides more than half of the Cambodia's total fish catch.
About 60% of its water comes from the Mekong, and dam developments
upstream are interrupting fish migration. Oeru Navy says his catch has nearly
halved over the last decade.
The lower catch is prompting some fishermen to use illegal fishing methods,
such as using small-mesh nets that capture baby fishes. This only makes the
problem worse.
But for the 31-year-old Oeru Navy, the reasons behind his reduced livelihood
seem far away.
"I've heard about some government building dams on the river for electricity but
I don't think that is relevant to me," he said. "All we want is more fish so that we
can survive."
Additional reporting by Gwen Robinson in Bangkok

5/10/2018 Investment floods into Mekong Delta - Nikkei Asian Review
https://asia.nikkei.com/Features/Cover-story/Investment-floods-into-Mekong-Delta?n_cid=NARAN11&utm_source=NAR%20Newsletter&utm_campaign=RN%20F
Rice farmers in the Mekong Delta rely on the river for irrigation and nutrient-rich sediment, both of which are under threat.
© Getty Images
ECONOMY
Investment oods into Mekong Delta
Vietnam seeks to foster high-tech agriculture, renewable energy
YUKAKO ONO, Nikkei staff writer
May 09, 2018 13:16 JST
BANGKOK -- The Mekong Delta once sheltered Viet Cong guerrillas as they
battled U.S. forces during the Vietnam War. Today the area is the country's "rice
bowl," providing half of the national rice supply. It is also becoming an
increasingly attractive investment destination for domestic and foreign
companies.

Vietnam Dairy Products, Vietnam's largest listed company by market
capitalization, is looking to grow coconuts there. At its shareholders meeting in
April, Vinamilk, as the company is also known, announced it had acquired a 25%
stake in Asia Coconut Processing, a maker of coconut products based in the delta
province of Ben Tre.
"The Mekong Delta is abundant in natural resources, but beverage companies
have not yet invested enough to benefit from this," Mai Kieu Lien, Vinamilk's
chief executive, told shareholders. The acquisition -- along with plans to invest in
processing facilities and new organic coconut plantations -- forms part of the
company's strategy of diversifying away from dairy products. A new coconut
drink is expected to hit store shelves by the end of 2018, with shipment to the
U.S. market to start in 2019.
Vinamilk is also banking on the Mekong Delta for its core dairy business. It plans
to invest in local cattle breeders as part of plans to double the size of its herd to
240,000 head by 2022. The milk from these cows will be supplied to a dairy
factory that Vinamilk opened in the delta region in 2001.
DHG Pharmaceutical, the country's third-largest drug company, is likewise
beefing up investment in the region, where it aims to grow herbs. The state-
owned listed company aims to source 10% of the natural material it uses in its
drugs from the region by 2020. It also plans to partner with Vinamilk to produce
dietary supplements using raw material sourced from the delta.
In 2009, the Vietnamese government unveiled plans to create roughly 100
industrial parks and woo heavy industry factories to the Mekong Delta, but
opposition from residents and environmental activists forced a rethink. A new
30-year development plan introduced in March focuses more on the region's
agricultural advantages and aims to attract investment in high-tech agriculture
and renewable energies, such as wind and solar power.

Overseas companies seem to be taking note of these developments. Danish wind
power company Vestas Wind Systems is investing in renewable energy, while the
delta's agriculture sector is drawing attention from Japanese tractor companies
Yanmar and Kubota and South Korea's CJ group. Foreign investment over the
last decade has increased by more than 25 times, totaling $1.3 billion in 2017.
Yet even as businesses wake up to the opportunities in the Mekong Delta, there
are fears about its most basic virtue: the sediment that makes the region so
fertile. Damming on China's segment of the river has reduced the flow of
sediment to the lower Mekong by 50%; it will be halved again if 11 planned dams
are built, according to data from the Mekong River Commission.
"Without the nutrients from the sediments, Vietnam will soon lose its capacity to
export rice and this will have implication on food security of the region and the
world," said Nguyen Huu Thien, an independent ecologist in Vietnam and expert
on the Mekong Delta.
In 1988, then-Thai Prime Minister Chatichai Choonhavan talked of harnessing
economic development to turn the Indochina region "from a battlefield into a
marketplace."
The Mekong Delta is clearly turning into a thriving marketplace. The question is
whether it will become the site of another battle -- this time over natural
resources.

5/10/2018 China offers assurances on Mekong's use
http://www.nationmultimedia.com/detail/asean-plus/30334574 1/4
China offers assurances on Mekong's use
ASEAN+ December 23, 2017 01:00
By Supalak Ganjanakhundee
The Nation
Beijing
Water resources and environmental integrity are priorities for the Lancang-Mekong Cooperation (LMC),
established as a Chinese initiative in 2015 and also including other riverside nations.
The 4,900-kilometre Mekong – known as the Lancang River in China – runs through China, Myanmar, Laos,
Thailand, Cambodia and Vietnam. Only the downstream segment, from Laos to Vietnam, is regulated by
MRC under the 1995 Mekong Agreement.
China has pledged its cooperation on water-resource management and
protection of the environment of the Mekong River, but is unlikely to become a
full member of the Mekong River Commission (MRC), Chinese oﬃcials said this
week.
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Oﬃce of Lancang Mekong Environmental Cooperation Center in Beijing

Yu Xingjun
China and Myanmar have long been urged to become full members of the MRC and to ratify the 1995 accord
on regulating water use, but Beijing prefers to remain a mere dialogue partner, said Yu Xingjun, director
general of the International Cooperation Department at China’s Ministry of Water Resources.
He said China and Myanmar’s cooperation with the MRC has always been “very good” in terms of technical
matters, building capacity and sharing hydrological information.
“In the future, we will continue to strengthen that cooperation and we will take advantage of this extensive
experience and long-term information to conduct our cooperation,” he said.
The MRC recently expressed interest in strengthening ties with the LMC Water Resource Cooperation Centre,
Yu said.
He said the LMC water-resource mechanism complements the work of both the MRC and the Greater
Mekong Sub-region apparatus.
“We welcome all the support of other countries and organisations for the LMC and their contributions to
sustainable water-resource management.”
China has built seven hydro-power dams and plans a dozen more on the Mekong mainstream, giving it
effective control over the flow along the entire length. The upper Mekong within its territory contributes 45
per cent of the river’s flow in the dry season.
Yu argued that China’s dams and reservoirs are also useful for downstream countries in helping relieve
droughts and warning of floods.
In March last year, he said, downstream countries suffered the most extreme drought seen in a century. At
Vietnam’s request, the Jinhong reservoir in Yunnan province released water to help ease the situation.
“And this played a very important role in eliminating the drought, from which China also suffered,” Yu said.
China also has an agreement with the MRC to provide it with hydrological information during the rainy
season, he said. Through the Lancang-Mekong Joint Working Group established a year ago, it further
provides useful information during times of flood.
When Thailand and Myanmar suffered severe flood in recent years, the Chinese government dispatched
expert consultants. “In the near future, we will do evaluations of flood and drought disasters for the Mekong
countries so we can organise future work plans,” he said.
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Zhou Guomei
Zhou Guomei, acting director general of the Lancang Mekong Environmental Cooperation Centre, said China
was conscious of environmental concerns raised about its development projects, and her agency and the
LMC Water Resource Cooperation Centre are pooling efforts to address those concerns.
“Our objective is the same – to protect the environment for the beneﬁt of the people,” she said.
She said her centre would serve as the umbrella for diverse cooperation efforts on projects pertaining to
environmental governance, biodiversity conservation, capacity building and environment-sharing platforms.
Zhou said she too preferred building a network with existing regional and sub-regional mechanism to
address environmental objectives. “China participates very actively in sharing information to promote
activities more comprehensively and eﬃciently,” she said.
Tags Mekong environment Mekong River Commission water resource management
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