Downstream Downturn: How Hydropower in Laos May Choke Vietnam

In the mountains of Tibet, Asia’s sixth-longest river shares its headwaters with two of China’s most important. But the Mekong River, often overshadowed by the Yellow and Yangtze, is just as critical to the countries through which it flows. Passing through six Southeast Asian nations, the river acts as an enormous economic resource for the region. Yet hydropower has made the Mekong’s future murky. As dam-building continues and the negative externalities flow down to the Mekong’s final destination in Vietnam, water becomes a conduit of soft power, weaponized to grow domestic economies at the expense of foreign ones. In particular, Laos’ ambitious hydroelectric projects threaten to devastate the economy and ecosystem of its southern neighbors while inflaming regional tensions.

The extent to which the Mekong defines the economic, cultural, and ecological health of these downstream countries—Cambodia, Laos, Thailand, and Vietnam—is indisputable. These countries produce more than 100 million tons of rice per year combined, representing nearly 15 percent of the global output. The Mekong serves as the water source for half of Vietnam’s rice production, and, on average, fish supply about 60 percent of the animal protein consumed in Vietnam. In total, those in the Lower Delta will eat 60 kilograms of freshwater fish per year, 18 times more than their counterparts in Europe or the US. The Mekong also plays host to a wide variety of species, second only to the Amazon in biodiversity. Some land animals dependent  have such distinctive features that taxonomists have placed them in a class of their own.

In recent years, the river’s delicate financial and environmental ecosystem has been threatened by the construction of hydropower dams. Fish need a certain flow of water to migrate up and downstream each year, and rice paddies require an exact amount of flooding. The proposed dams could unbalance both. Damming the Mekong favors upstream populations, leaving countries downstream with no choice but to adjust to whatever effects trickle down. Despite the river’s ecological fragility, this political leverage is too enticing for Laos to ignore.

Ever since hydroelectric power began to crop up on the Mekong, those along the river have had to adapt quickly. In 1995, China built the first dam on the mainstream Mekong. The project marked nothing new for the country, which had constructed nearly half the world’s dams in the previous 20 years. But for the inhabitants of the river, the Manwan Dam was just the beginning. By 2015, China had six dams operating on the Mekong and one more under construction.

Yet other countries had not followed in China’s footsteps until recently. Now, Laos—upstream of Vietnam and Cambodia—has developed rich energy ambitions fueled by a desire for development. The country sees an opportunity to become the “battery of Southeast Asia” by exporting hydropower. To this end, the government  has recently proposed six dams which, when fully operational, could turn a profit of over $4.5 billion. In a country of 6.5 million people with a GDP per capita of less than $2,500, these dams could represent a watershed moment. Sweetening the vision, the World Bank and the US Agency for International Development have, until recently, supported dam building and “sustainable hydropower,” arguing that the benefits outweigh any ecological costs.

Laos has accordingly found a powerful ally in China. Or, more precisely, China has elected to assist its southern neighbor. Since Xi Jinping took office in 2013, China has cultivated relationships with Southeast Asian countries in a bid for regional influence and ideological hegemony. Xi’s “One Belt, One Road” initiative, which aims to connect the region through a series of ambitious transportation projects, has already benefitted Laos. Beijing has lent the Laotian government $7.2 billion­—almost 50 percent of Laos’s GDP—to construct a railroad linking the two countries and gifted military equipment as an added incentive. The outgrowth of this vision is the Asian Infrastructure Investment Bank, whose $100 billion in capital has funded such projects across the region. Direct foreign investment in Laos has more than doubled since 2006—largely because of China. Now, China has entered a joint venture with Thailand to build another dam in Laos on the Mekong mainstream.

Despite the goodwill that China has recently won from many of its neighbors thanks to new projects, ties with Vietnam have deteriorated. The relationship owes some of its troubles to history: China waged war with Vietnam in the 1970s, and, over 40 years later, Beijing is encroaching on areas in the South China Sea that Vietnam claims as its own. Given the dual interest of reducing Vietnam’s power in the region and deepening ties with Laos, Chinese  officials disregard any concerns about the ecological damage the dams may cause to the Vietnamese portion of the river. Despite China’s concern for climate change, after tallying both sides of the ledger, the country finds itself supporting construction, not conservation.

Already, the damage these dams will have on Vietnam is beginning to appear. In the short term, flooding has been severe and unpredictable; last summer, the dams exacerbated El Nino conditions to create one of the worst droughts Southeast Asia has seen in a century. In the long run, the implications will multiply. As the country farthest down the watershed, Vietnam will be subject to these compounded harms. The country will suffer considerably under the proposed dams, losing as much as 27 percent of its GDP in the next 20 years as the Mekong Delta shrinks.

Vietnam has little power to protest its fate. Around the time when China built its first dam, concerned downstream countries formed the Mekong River Commission (MRC), an organization that would ostensibly govern the construction and proposal process for projects on the river. However, the organization has little power to halt projects. Lower countries cannot veto proposed dams that would be within the borders of higher ones, and the commission has no enforcement mechanisms, making it powerless to stop the havoc upstream dams can wreak on countries farther down the river. Moreover, membership excludes China, leaving it free to act outside of any boundaries the MRC sets.

Damming the Mekong favors upstream populations, leaving countries downstream with no choice but to adjust whatever trickles down.

One of Laos’ newest dams in Xayaburi, for which construction has already begun, encapsulates the slippery power dynamics of riverbed construction. In 2011, Laos approached the MRC to propose the 1,285 MW capacity dam that would lie in the mainstream. Vietnam objected, citing environmental concerns, and demanded a 10-year period for scientists to pinpoint environmental impacts. But the dam will soon be fully constructed, and in 2019, commercial operation will begin. Without increased influence in the dam approval process—which no country besides Vietnam has incentive to provide—the MRC will continue to ineffectually protest inevitable projects. This impotence helps to explain why, in the last two decades, the number of dams on the Mekong, both proposed and completed, has ballooned. Without international cooperation, the 11 mainstream dams merely need to find financing to proceed. China’s eagerness to provide capital means this hurdle is easy to clear.

The strength of this opposition helps to explain why Vietnamese officials have failed to stop the dams, despite expressing concerns about them. Simply put, Hanoi faces a coalition that stands to benefit from its harm and receives support from the region’s main economic and political powerhouse. Unless conditions in Vietnam deteriorate substantially, China will continue to pour money into hydropower on the river. Currently, even with the risk inherent to dam-building and the instability of village dislocations, China has every reason to support the projects. The environmental effects will not flow upstream, and a weaker Vietnam benefits Beijing.

In other words, Laos can toe the line without tangible opposition from Vietnam. The Minister of Energy has stated that his country does not need consensus in the region to push the dam projects forward. Unless these conditions change, Laos will continue to inflict ecological damage on the countries downstream, while simultaneously growing in regional stature. The Mekong, once the source of life for downstream countries, now threatens to cause their ruin.

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