Infrastructure & Development / Southeast Asia

“Dam if you do, Dam if you don’t” – Hydropower in the Mekong

by Loh Pei Ying
Length 21 min

Hydropower is the most significant development on the Mekong since the Vietnam War. A clean and renewable source of energy, hydropower is a convenient solution to the region’s growing need for industrialisation. Unfortunately, it has also become a major threat to the river’s longevity and sustainability. Why is this so, and how did it happen? Using a series of maps, we seek to understand the Mekong’s past, and the implications of these developments for its future.

About the Mekong

“Dam if you do, Dam if you don’t” - Hydropower in the Mekong

The Mekong is the twelfth largest river in the world, and is one of the most important rivers in Asia. It flows through six countries: China, Burma, Cambodia, Thailand, Laos, and Vietnam. From source to sea, the river begins in the Tibetan plateau and ends at Vietnam’s southern delta, emptying into the South China Sea. The river stretches over 4,900 kilometres comprising of an upper and lower basin. Together with its tributaries and distributaries, the Mekong drains a total land area of 795,000 square kilometres into the sea.

The name Mekong originates from the phrase, ‘Mae Nam Khong’ – a Thai and Laotian term that roughly translates to ‘Mother of Rivers’. Although the river is commonly referred to as ‘Mekong’, it goes by a different name in every region that it passes through. It is called Dza Chu (River of Rocks) in Tibet, Lancang Jiang (Turbulent Rivers) in China, Tonle Thom (Great Water) in Cambodia, and Song Cuu Long (Nine Dragons) in Vietnam. The names given to the river reflect its character – grand, turbulent and unpredictable.

Mekong: River of Life

Cities along the Mekong mainstream

Arguably the most important water resource of the region, the Mekong birthed many civilisations on mainland Southeast Asia. The earliest evidence of the river’s importance to civilisation is the ancient seaport of Óc Eo, which is situated in the Mekong delta of modern Vietnam. Archaeological evidence dates the city to the 1st century AD and strongly suggests that Óc Eo had an extensive trade network. The seaport was part of a larger kingdom, identified today as Funan. Other kingdoms, such as Chenla and Angkor, followed in its wake, relying on the Mekong for seasonal irrigation and an abundant supply of fish. Many major historic cities, such as Siem Reap, Phnom Penh, Vientiane and Luang Prabang, were built on the banks of the Mekong. Today, the Mekong basin is home to over 240 million people and 100 ethnicities.

The Mekong is rich in natural resources and biological diversity, housing a variety of ecosystems. It is a lifeline for all countries in the lower basin, especially Cambodia and Laos. River fauna is one of the most valued resources of the Mekong. The river and its tributaries account for about 90 percent of fish production in the basin. The value of the basin’s annual fish catch is estimated to be around US$800 million. Fishing is one of the most important livelihood activities for people in the region, and fish is the primary source of animal protein.

“Dam if you do, Dam if you don’t” - Hydropower in the Mekong
Fishing activity along the Mekong

The Mekong also supports a wide variety of agriculture – the primary economic activity in the basin. Rice is the most important crop. Rice cultivation can be found in various places along the Mekong, such as Yunnan, Laos, Thailand and Cambodia. However, the most important rice production area in the basin is in the Mekong delta. Also known as “Vietnam’s rice bowl”, the delta is a major contributor to Vietnam’s status one of the world’s leading exporter of rice. It is essential to the food security and economy of the country.

Hydropower in the Mekong

The Mekong’s rugged terrain and temperamental rapids unfortunately make it unsuitable as a major transport route. Since the Europeans’ first encounter with the river, many have sought to exploit it for profit as a transportation channel. The most significant attempt was the French Mekong Expedition (1866–68) led by Doudart de Lagrée and Francis Garnier that aimed to chart the river in search of a navigable route into China. The expedition was fruitless and ended in tragedy. Other explorations of the river came to the same conclusion: the Mekong is unsuitable as a transportation route.

It was not until after the Second World War that a new major economic use of the Mekong came into picture. In 1957, the United Nations (UN) specialised agency, Economic Commission for Asia and the Far East (ECAFE), released a report, Development of Water Resources in the Lower Mekong, recommending the construction of multipurpose dams on the river for irrigation and flood control. More importantly, it highlighted hydropower as one of the major ways in which the Mekong’s resources could be exploited, especially in areas where there are great rapids, such as Khone Falls in Laos. Electricity generated from the river had the potential to power development and bring in income for the region.

Shortly after, another two reports were made about the Mekong, similarly emphasising the river’s hydropower potential. The first was by the retired Lieutenant-General of the US Army Corps of Engineers, Raymond Wheeler. Supported by the UN, his report reaffirmed the Mekong’s potential for hydropower, and ambitiously outlined detailed plans for mainstream and tributary dams in the basin. The other report was a Ford Foundation sponsored study by Gilbert White, titled Economics and Social Aspects of Lower Mekong Development. White’s 1962 study focused on the environmental and social impacts of hydropower plans drawn up by the two prior reports.

These three landmark reports reflected clearly the prevailing view of the time. Hydropower was seen as progressive and modern. It was not that the negative costs were ignored. The reports acknowledged that huge areas would be flooded, and large populations would be resettled. However, the overall gains of hydropower development were seen to far outweigh its repercussions.

Dragged into the Cold War, Indochina was plagued with continuous wars and incessant conflict over the next few decades, ending only in 1992. America lost the ideological battle in the region. During this time, it was nearly impossible to execute any significant infrastructural development on the Mekong. Yet, while Indochina was mired in strife, China made significant progress on their end of the river in Yunnan. Construction of the first dam, the Manwan dam, began in 1984 and was completed by 1993. Since then, the Mekong countries have built over 60 hydro dams along the Mekong and its tributaries, with hundreds more planned and underway.

Regional Cooperation and International Politics

“Dam if you do, Dam if you don’t” - Hydropower in the Mekong

Regional cooperation has a short history in the Mekong. While there were bilateral agreements and treaties signed in the 19th century, it was not until the 1950s that major steps were taken. After the First Indochina War, the region was granted temporary peace by the Geneva Agreements. Together with the United Nations Development Programme (UNDP), Thailand, Laos, Cambodia and South Vietnam signed an agreement in 1957 to establish the Coordination of Investigations of the Lower Mekong Basin. Known as the Mekong Committee, it was the first institution to comprehensively detail the economic uses of the river beyond Yunnan.

The three major reports mentioned earlier played a significant role in the Mekong Committee’s development. The 1957 ECAFE report provided the impetus and foundation for the institution’s formation. Subsequently, Wheeler’s report was adopted by the Mekong Committee as a five-year action plan. Together, these reports set the committee’s agenda, which focused on poverty alleviation through hydropower, irrigation and flood control.

The Mekong Committee was very much a product of the Cold War. Americans played a key role in the production of all three reports, and had strong influence over the institution. During the 1960s, United States was the largest financier of the Mekong Committee, and the lower Mekong countries were heavily reliant on American economic aid. Eager to win the ideological war, the US backed the idea of hydropower as they believed it would alleviate the widespread poverty that allowed communism to thrive. China, a communist country and a non-member of the UN, was excluded from the Mekong Committee.

Due to war, the Mekong Committee was incredibly limited in its work, and was largely ineffective in the 70s. Between 1978 and 1994, the commission re-established itself as an Interim Mekong Committee (IMC) with the participation of only Thailand, Laos and Vietnam. Unable to execute any infrastructural development, it relegated itself to data collection and domestic projects.

A new lease of life was given to regional cooperation in April 1995. The four lower basin countries signed the Agreement of Cooperation for the Sustainable Development of the Mekong River Basin, also known as the Mekong River Commission (MRC). The MRC is an intergovernmental organisation that still operates today, and provides a platform for regional cooperation among member states. It stipulates a legal framework and procedures for coordination between countries to manage and protect the shared resources of the Mekong. This time, China and Myanmar were invited to be members of the commission, but both declined.

China’s Expansion

China’s non-membership of the MRC is the institution’s greatest challenge. China is only a dialogue partner of the MRC, and does not adhere to its legal mandate. China’s portion of the river forms nearly half the length of the Mekong. It accounts for as much as 40 percent to 70 percent of the river’s annual flow during the dry season. Evidently, developments on the river’s upstream have significant impact on the lower basin. Determined not to let the concerns of other countries impede its progress, China has generally taken a unilateral approach to developments on the Mekong. Currently, it has built eight major dams on the Lancang’s mainstream without consulting its neighbours, and has plans for another 12 more, creating a “cascade of dams” on the river’s upstream.

Despite portrayals by the international media, China has in recent years shown greater cooperation on the Mekong. It understands that it is not in their interest to destroy the Mekong’s ecology. China has created the Lancang Mekong Cooperation (LMC), which held its inaugural meeting on 23 March 2016. All six Mekong countries are members of the new Beijing-led regional entity – a first in the history of the Mekong. More significantly, it marks the first time that China is involved in discussions over the river with other stakeholders. It is regional cooperation on China’s terms.

This is part of China’s One Belt One Road (OBOR) vision. Announced in 2013 by President Xi Jinping, the initiative is meant to revive China’s historic silk road and maritime routes. It will connect over 65 countries across 3 continents through the development of infrastructure such as railways, ports, and roads. It aims to encourage economic cooperation and the movement of people, trade, capital and ideas. Undoubtedly, this development is also meant to boost China’s economy and expand its power and influence.

Battery of Southeast Asia

China is not the only one hungry for hydropower. Laos is one of Southeast Asia’s poorest countries. It is landlocked, has a small domestic economy, and lacks skilled manpower. It also does not have any natural energy sources, such as coal. However, Laos has steep mountains and abundant rivers, most of which flow into the Mekong. It occupies a central and favourable position in the lower basin, sharing borders with all other Mekong countries. It is not difficult to see how hydropower and its benefits appear extremely attractive to a country like Laos.

Determined to be the ‘Battery of Southeast Asia’, Laos has embarked on an ambitious hydro-industrialisation programme that will see the construction of over one hundred dams on the Mekong and its tributaries. The energy generated from these hydro dams will be exported to neighbouring countries, mainly Thailand. The country is convinced that hydropower export is the quickest way to improve economic growth and alleviate poverty. Currently, two-thirds of Laos’ hydropower is exported.

Backing this ambition is China, who is investing heavily in Laos’s hydropower development. Chinese foreign direct investment (FDI) in Laos has been increasing rapidly since the mid-2000s due to China’s ‘Going Out’ policy. At present, it is one of the top three countries investing in Laos, and 32 percent of the total Chinese FDI in Laos is for hydropower. Many of these are joint-ventures between Chinese and Laotian companies under a Build-Operate-Transfer (BOT) scheme, in which ownership of these ventures will be transferred to the Government of Laos over 25–30 years. Among the bigger projects are the 921 MW Pak Beng dam and the 1320 MW Pak Lay dam. Chinese companies, such as Datang Overseas Invest Co., Ltd, and the China National Electronic Import and Export Corp, are the major stakeholders of these ventures.

Impact?

The financial rewards of hydropower are undeniable. Currently under construction in northern Laos is one of the river’s largest projects – the Xayaburi Dam.  It is owned by Thailand’s CH. Karnchang Public Company and supported by Laos’ Xayaburi Power Company. Construction of the US$3.8 billion dam began in 2012 and it will be completed by 2020. Around 95% of the electricity generated will be sold to Thailand. The 1285 MV dam is estimated to bring in direct revenue of US$3,913 million for the Government of Laos over the 29-year concession period, and is forecasted to generate 12,000 local jobs.

The Xayaburi dam is merely the first of 11 dams planned for the mainstream. These dams were first conceived in the 1950s and shelved because of war. They were revived in the mid-2000s by Chinese, Thai, Vietnamese and Malaysian companies. Nine of these dams will be in Laos, and the remaining two in Cambodia. The energy generated will largely be sold to Thailand and Vietnam. Should all the mainstream dams be completed, Laos is projected to receive an estimated US$2.6 billion in export revenue annually. For a country that has a current GDP of only US$12.3 billion, the financial rewards of hydropower appears real and immediate.

Yet, the stakes of massive hydropower dams are just as high. The Xayaburi dam will flood the land around it, affecting ten villages and resettling 2,100 people. It will cause irreversible damage to the river’s ecosystem and affect the livelihoods of a projected 202,000 farmers and fishers. Around 41 fish species are at risk of extinction due to a drastic change in their habitats and ecosystems. The 820 metres long dam will also block a key migration route that at least 23 fish species rely on to swim upstream and spawn. One such fish is the critically endangered Mekong Giant Catfish. More importantly, the dam will have a lasting transboundary impact on the river’s ecology, and its long-term consequences are still largely unknown. The rice fields in the lower basin, especially in the Mekong delta, rely on the natural flow of the river for irrigation and nutrients transported from the north. No doubt that a dam the size of the Xayaburi will have serious effects on rice cultivation.

These are the consequences of only one hydrodam, albeit one of the largest. The projected total impact of the 11 mainstream dams is far more disturbing. Experts argue that the dams will transform the river into large, stagnant reservoirs. Over 100 fish species are at risk of extinction, and an estimated 106,000 people will be displaced from their homes. The food security of over two million people would be threatened as food sources wither. A study of the dams’ impact on the Mekong by Mae Fa Luang University, Chiang Rai, predicts a loss of US$66.2 billion from fisheries and agriculture.

The Government of Laos, represented by the Ministry of Energy and Mines, have attempted to address some of the concerns raised about the Xayaburi dam. In 2012, they temporarily halted construction due to protest from neighbouring countries and environmental groups. The ministry has also claimed to set aside US$43 million to resettle 2,200 people during the construction of the dam, and will resettle more people after. They will install ‘fish-friendly turbines’ and fish ladders to ensure that migration routes for fishes remain open. However, these efforts have been heavily criticised. Many argue that the resettlement plans are improperly done, and fish ladders are ineffective in encouraging fish migration.

Fears over the effects of these mainstream dams are not unfounded. The eight dams on the Lancang have already displaced more than 100,000 people, most of whom are ethnic minorities. In several instances, resettlement has been poorly executed, and the displaced were not adequately compensated. The dams have inundated farmlands, taking away the people’s traditional livelihood, and consequently their culture and identity.

More significantly, the transboundary effects of Lancang dams may already be showing in countries downstream. Sediment essential to fertilisation and coastal formation can no longer flow naturally downstream because it is being trapped in the dams’ reservoirs. This has deprived rice fields and fisheries of nutrients, and caused coastal erosion. Additionally, the dams have weakened waterflow, making the Mekong delta more vulnerable to saltwater intrusion. In 2016, Vietnam reported that due to the dams upstream and climate change, an estimated 400,000 hectares were affected by saltwater, 166,000 of which have become infertile. That same year, lower Mekong countries were plagued by a severe drought that threatened the food security of hundreds of thousands. In response, China released water from its Jinghong dam to alleviate the drought, a seemingly kind and cooperative gesture. However, many argue the drought was exacerbated by China’s dams. The action was a painful reminder of China’s privileged position, and how others are beholden to it.

Lowland rice extent in the Mekong basin. Data from International Rice Research Institute

The dams have also apparently adversely affected Cambodia’s great lake – the Tonle Sap. The lake yields around 300,000 tonnes of fish annually and accounts for most of the country’s freshwater catch. It relies on the river’s natural rhythm, expanding in the wet season and shrinking during the dry season. In recent years, many fishermen and villagers have complained of declining fish catches from the lake, attributing it to the dams upstream.

Development at what cost, and at whose expense?

To the poorer Mekong countries, the argument for environmental preservation holds little sway. According to the Asian Development Bank, 23.2 percent of the population in Laos lives below the national poverty line as of 2012. The World Bank also noted in 2014 that 21.9 percent of the country does not have access to electricity. A stable supply of energy has great potential to transform the economic landscape of the country. It paves the way for further industrialisation, job opportunities, and transfer of knowledge. As of 2015, electricity is Laos’ top export, accounting for 14 percent of total exports at a value of $528 million.

Most recognise that industrial development comes with trade-offs, often in environmental losses. There are those who believe that if these projects are implemented properly, they can benefit thousands of households in the region. For example, the World Bank reported in 2015 that the controversial Nam Theun 2 dam, which faced widespread criticism and protest when it was first proposed, shows positive and encouraging results. Built on a tributary of the Mekong, the dam has consistently exceeded energy production targets since it began operations in 2010. Household surveys of the 6,300 resettled showed that they are now better off with lower mortality rates, better education, and higher consumption.

Many have refuted claims that hydropower development will alleviate poverty. Demand for energy in the region may not be as great as it seems. Thailand, the major buyer of energy from Laos, is known to consistently overestimate their consumption. This may lead to overcapacity in Laos. Research also shows that hydropower generation in China far outstrips demand. In addition, whether the financial gains from the dams will filter down to the poor is questionable. Corruption is often cited as a major driving force behind dam construction as government officials seek personal profit. This suggests that hydro development will only further impoverish those displaced and affected.

No one can be certain of the overall losses and gains of hydro dams on the Mekong. Without complete information, it is difficult to say for sure that hydropower development will indeed ‘kill’ the river. Climate change and overfishing also add to the worsening condition of the river. Thus far, the loudest critics of the hydro dams are international organisations, environmental activists and NGOs, whereas local sentiment has been mixed.

Although lower Mekong countries such as Vietnam and Cambodia have raised objections to plans by China and Laos, they too have hydropower ambitions. Cambodia is building two mainstream dams, the Strung Streng dam, and the Sambor dam. Estimated to have an installed capacity of 2600MW, the Sambor dam will be much bigger than the strongly opposed Xayaburi dam. Vietnam is heavily involved in both projects, either as buyers or investors. This evidently undermines Cambodia’s and Vietnam’s case against the upstream dams, especially with regards to the Xayaburi. Thus, China and Laos are not the only countries industrialising at the expense of their neighbours.

Regional cooperation remains crucial to the longevity of the Mekong. The MRC is increasingly ineffective as a platform in facilitating and building consensus. Member countries do not have veto power. Instead, the MRC has in place a three-step process: Procedures for Notification, Prior Consultation, and Agreement. However, they have struggled to get member countries to genuinely adhere to these processes. Laos had independently decided that the Xayaburi would not affect the lower countries, bypassed procedures, and went straight to groundbreaking. In 2010, the MRC recommended a ten-year moratorium on dam construction so that proper study of the dams’ environmental impact could be done. This request went largely ignored.

It is hard to fault the Mekong countries for prioritising national concerns over regional ones, especially when poverty is still a major problem. Regional cooperation needs to benefit the countries individually for them to come to the table. To this, perhaps the future of the Mekong lies with the newly established Lancang Mekong Cooperation. China has offered billions of yuans in preferential loans to the other five countries. Through the LMC, the Mekong countries have agreed to “enhance cooperation among LMC countries in sustainable water resources management and utilisation”. Whether this new initiative will bode well for the Mekong remains to be seen. However, one thing is for certain: whether or not people like it, the dams will be built. It is only a matter of how and when.