Tag Archives: Laos

Hydropower in Laos: An Alternative Approach

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It’s time to take another look at the future of energy in Southeast Asia.

A report published in September by the Stimson Center, a D.C.-based think tank, challenges prevailing notions about the future of hydropower in the Mekong subregion, an area including Vietnam, Cambodia, Laos, Thailand, Myanmar, and southwestern China.

The report focuses on Laos, which in years past has proclaimed itself the future “Battery of Southeast Asia,” by aggressively developing hydropower dams on the Mekong. Laos has already built 29 large dams along the river’s mainstream and tributaries, with plans for over 100 in total. The land-locked country remains the poorest in Southeast Asia, and has planned to raise cash by exporting electricity to consumers in neighboring countries.

But project developers of these dams – who are typically Thai and Chinese companies – have faced criticism from civil society groups and international observers for the myriad social and environmental consequences brought on by dam construction. The Mekong is home to an estimated 1,000 species of fish, many of which migrate along the river and replenish the region’s fisheries. By changing the hydrology of the river, these dams threaten the biodiversity of the Mekong and the livelihoods of fishermen and farmers throughout the region. In times of drought – as has been experienced this year – the dams can cause regional insecurity by contributing to water scarcity problems downriver.

While dam construction has continued apace despite these dangers, the Stimson report argues that new markets and technologies are creating an opportunity to change course.

Challenges for Lao Hydro

The report highlights new developments that could steer Laos away from further damming on the Mekong. First, following a period of economic and political liberalization, Myanmar is emerging as a competitor for energy infrastructure finance. Myanmar boasts nearly 100 gigawatts of potential hydropower capacity, far exceeding what is possible in Laos. Such a glut of potential projects in the region is likely to siphon away financing that might otherwise go towards hydropower development in Laos.

At the same time, China’s economic slowdown could signal the end for cheap and easy hydropower finance in the region. In previous years, Chinese state planners encouraged outbound investment in strategic sectors such as hydropower projects in Southeast Asia. However, the report notes that government concerns about non-performing loans on the books of Chinese banks seem to have reduced the funding available for some projects in Laos. Rising local awareness about the social and environmental costs of these dams also adds a layer of risk that financiers may find discouraging.

Perhaps most critically, it appears as if planned generation in Southeast Asia is outpacing the region’s appetite for energy. China, once envisioned as a potential market for Laos power, is already experiencing serious overcapacity in its domestic power market. Thailand, while still a major investor in Laos hydro projects, has consistently overestimated its own consumption levels – and has lots of room to cut demand through energy efficiency measures. Both Cambodia and Vietnam have planned to reduce their reliance on imported energy, with the latter investing heavily in coal-fired power plants.

A New Vision for Laos

Taken together, these signals make a compelling case for a new energy strategy in Laos and in the region as a whole.

First, the report suggests that Lao planners should invest in a backbone transmission network to connect its patchwork regional grids. This is a good idea for a variety of reasons. A nationwide transmission system would help open up markets for Lao electricity both domestically and internationally by creating a more flexible grid. It would help planners integrate renewable energy resources like solar and wind. It would also be a great step towards electrifying the remaining 20% of the country still without power.

Secondly, planners should consider ways to diversify the country’s energy mix with wind and solar. With too much reliance on hydro, the region risks facing shortages during drought conditions, which will become increasingly likely due to the effects of climate change.

It also makes good economic sense. Utility-scale solar is now nearly cost-competitive with hydro in Laos. Solar avoids the social and environmental challenges associated with hydro that have led to disruptive public protests and cost overruns, making it a safer bet.

In fact, solar already plays an important role in electrifying Laos’ rural communities. Companies like Sunlabob have pioneered low-cost solar home systems to provide basic electricity services like lighting and device charging to remote communities. A new energy outlook from Lao energy planners would also be a great opportunity to optimize plans to fully electrify the country, whether by grid connection, solar home systems, or village-level microgrids.

Lastly, greater international cooperation in energy planning is needed. The construction of a national power grid will require technical assistance from international experts. The Asian Development Bank is leading this effort, and plans to invest $400 million in a national transmission network by 2020. The US has already begun providing power planning and optimization assistance through the Department of Energy and its national laboratories.

The US is also supporting renewables in Laos. In advance of President Obama’s visit to Laos in September 2016, the US Trade and Development Agency committed to funding a feasibility study for a 20 megawatt solar farm in the country.

China, as a regional power with an abiding interest in Laos’ energy sector, can also benefit from this shift. The world’s largest solar module manufacturers are Chinese, and government support for emerging solar markets is one way to bolster domestic manufacturers while also rebranding China as a responsible stakeholder in the region.

Laos’ energy future is still uncertain. Energy planners remain convinced that prioritizing dam construction is Laos’ ticket to prosperity, despite the risks. But as the challenges for Lao hydro become ever more apparent, a new way forward could be in the making.

Read the Stimson Center’s full report here.

This article was first published here on the Pacific Observer website.

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Filed under Current Events, dams, FEATURES, Mekong River, SLIDER, Uncategorized

The US-Lao relationship: Don’t you forget about me

US President Barack Obama speaking to a crowd of Lao youth in Vientiane. Photo: USAID Flickr page

US President Barack Obama speaking to a crowd of Lao youth in Vientiane. Photo: USAID Flickr page

When considering US foreign policy in Laos, we cannot help but wonder whether President-elect Donald Trump has ever thought about small Southeast Asian country. It would be a mistake for the incoming administration to ignore the significance of the new opportunities for US-Lao engagement that President Obama’s September visit helped to catalyze. While in Laos, Obama acknowledged the US “moral responsibility” to help Laos recover from the ruinous legacies of the war with the US. Recognizing this complicated shared past, the President announced several new initiatives aimed at paving the way for enhanced US engagement with Laos, including a new Comprehensive Partnership between the two countries, increased funding for UXO removal , a new USAID office in Vientiane. His visit also ushered in the opening of new General Electric and Microsoft offices in Vientiane. Sustaining the momentum for positive US engagement in Laos will require continued support for government-led programs, increased private sector engagement, a greater NGO presence, and more people-to-people exchanges.

In the last two decades, Laos has pursued a strategy of attracting foreign investment to boost economic growth and development. Currently, China contributes about 40% of all FDI, making it Laos’s largest investor, followed by Thailand and Vietnam. Most of this investment is in natural resources such as hydropower, agriculture, forestry, and mining. Investment in natural resources extraction and development has come at a high environmental cost. Officials within the Lao government often lack the resources or the political will necessary to determine the full environmental and social impacts of a new development projects before a concession agreement is signed. Many foreign developers in Laos fail to abide by environmental and social safeguards. Plus, a lack of space for civil society to criticize or protest development projects means that potentially destructive projects such as dams, mines, or plantations, often go ahead without proper consideration of the social and environmental costs. All of these factors have contributed to a situation in which critical land and aquatic ecosystems in Laos are degraded at an alarming rate.  Often, the rural citizens who depend on these ecosystems for their livelihoods are left worse off as a result of new development projects. Meanwhile, despite the wealth gained from the development of natural resources, poverty and inequality in Laos remain widespread.

The U.S. currently invests very little in Laos. Between 1989 and 2014, the U.S. accounted for only 1.1% of FDI in Laos, and although the US is the single largest investor in ASEAN as a whole, it is the 14th largest investor in Laos. Historically, doing business in Laos has been quite difficult for foreigners. In 2010, Laos was ranked the 171st out of 183 countries in “ease of doing business” by the World Bank Group. In Transparency International’s Corruption Perception Index the same year, Laos was ranked 154th out of 180 countries.[1] However, the barriers to US trade and investment in Laos have been lowering. In 2013, Laos joined the World Trade Organization, and in February 2016, the U.S. and Laos signed a Trade and Investment Framework Agreement. The Agreement set up a Joint Trade and Investment Committee that meets at least once a year to enable trade and investment between the countries by identifying and addressing barriers.

The U.S. can play a key role in helping Laos to develop the capacity for more sustainable and inclusive economic growth. Rather than competing with China and other regional powers for the rights to develop natural resources in Laos, which the US is not likely to do, the US can invest in developing human resources and improving capacity to better manage and regulate the use of its natural resources. This is the idea behind the Smart Infrastructure for the Mekong program, an inter-agency US government-led program that provides technical assistance to line agencies in Mekong countries to support sustainable infrastructure development.

One promising area for investment in Laos is in renewable energies such as solar and wind. During Obama’s visit, he announced that the U.S. would provide funding for a feasibility study for a 20 MW solar power plant in Laos, which if completed, could power up to 30,000 households. With its significant solar power potential and relative lack of energy production and distribution infrastructure, Laos has the opportunity to leapfrog dirtier energy production technologies, taking advantage of the rapidly dropping prices for renewable technologies.

Another sector with significant potential for growth in Laos is in tourism.  Laos has spectacularly beautiful natural landscapes as well as unique sights that tell the story of a rich and layered history. After opening its borders to international tourists in 1989, inbound tourism has been steadily increasing. However, as Robert Travers argues, tourism infrastructure in Laos is being developed in an uncoordinated fashion, [2] and as a result, Laos has become a short-term stop on the backpacker trail through Southeast Asia. Through a strategic and coordinated approach to tourism development that highlights its unique culture, Laos could attract more long-term visitors and generate considerable revenues from tourism. Just as the US is promoting tourism to Vietnam, it can do the same with Laos.

Effective U.S. engagement in Laos, whether at the government or grassroots level, will only be possible through continued people-to-people relationship building between Americans and Lao people in order to develop mutual understanding and greater trust between the two countries. The US government should continue to pursue a Peace Corps program with Lao PDR and should offer increased funding for educational exchanges for Lao and American students.

Through strategic engagement with Laos, the U.S. can continue to build upon the momentum for improved relations cultivated over the last few years. Now is the time for enhanced US engagement that is guided by a commitment to helping Laos take a more sustainable and equitable approach to development.

Gabriella Neusner is currently an intern at the Stimson Center’s Southeast Asia Program.

[1] US Department of State. (March 2011) “2011 Investment Climate Statement – Laos.” http://www.state.gov/e/eb/rls/othr/ics/2011/157307.htm

[2] Travers, R. (2008). Economic Corridors and Ecotourism: Whiter Tourism in Laos. Asian tourism: Growth and change, 105-116.

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Filed under FEATURES, Foreign policy, Laos, SLIDER, US Rebalance, USA

Looking ahead to Obama’s September visit to Laos

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As the Obama Administration looks to add the finishing touches to its five year Rebalance to Asia, it is likely to continue to capitalizing on building ties to the 10-member Association of Southeast Asian Nations (ASEAN).  The Obama Administration has worked tirelessly, particularly over the last four years, towards improving bilateral and multilateral ties with ASEAN.  It has sent more high-level visits to ASEAN member states than its predecessors, had a visible presence in improving security relations with most ASEAN countries, and held the first U.S.-hosted ASEAN summit in Sunnylands last February.  And as a final feather in Obama’s cap, he’ll be the first president to visit to Laos this coming September

The visit to the small Southeast Asian country may seem minor in the current geopolitical climate; however, it is far more important in the long run.  Laos is tiny with only 6 million people earning on average just over $1000 per year, but the premise of the U.S. Rebalance has always been to re-engage with Asian countries wholesale in an effort to bolster the region.  Through Laos, the Obama Administration can solidify its objectives and spur a more holistic relationship with ASEAN.  In other words, the President’s upcoming visit to Laos represents the essence of the U.S. Rebalance to Asia as a whole.

On the surface, improving relations with Laos seems daunting.  Laos is beset by many problems in addition to economic development challenges, ranging from a lack of infrastructure to being a central thoroughfare for the region’s illicit trade network.  Historically, the U.S.-Lao bilateral relationship has been rather rocky.  Traditionally, policymakers have worked to curb relations with Laos’s Communist government that was deigned partially responsible for the U.S.’s defeat in Vietnam.  US Congress protested Laos’s entry to the WTO and criticized the Lao government’s lack of good policies to protect the Hmong minority, whose diaspora forms key constituencies in congressional districts in states like California and Minnesota.

Yet, it is because of these hurdles in the U.S. bilateral relationship that make Laos an ideal candidate for furthering the regional pivot.  The U.S. Rebalance is concerned with building bridges and opening channels to promote greater collusion between the U.S. and the whole region.  This entails reaching out to all of Asia and finding chains that can potentially help the U.S. and intra-Asian growth.  Properly mending relationships to promote a greater relationship promotes a sustainable future.  Furthering U.S. engagement with Laos will ensure the legacy of the Rebalance beyond the current administration.  To do so, the President should confront two significant regional issues: food security and UXO.

First, in conjunction with the President’s September visit, the Administration should establish new policies to improve Laos’ food security.  Laos experiences some of the highest nutritional deficiencies, child mortality, and maternal mortality in Southeast Asia. To assist with Laos’s food security problem, the Administration could build on successful frameworks for cooperation already in place.  Thus, USAID provides programs to supplement good nutrition and improve regional capacity building through the Lower Mekong Initiative (LMI).  A joint effort from the Department of Defense, the Oregon Health Science University, and the Lao University of Health Sciences created the Lao American Nutrition Institute (LANI).  LANI hopes to revitalize agricultural growth knowledge and practices in Laos.  In spurring this effort, the Obama Administration can establish sustainable development policies and build capacity within the Lao government on programs that benefit the whole of Laos’ population.

Second, it is paramount for the Obama Administration to resolve the long debilitating unexploded ordnances (UXOs) in Laos.  The small munitions left over from the U.S.’ Secret Bombing Campaign over Laos (1964-1973) still saturate much of the countryside and pose a threat to the country’s agriculture and young, vulnerable population.  UXOs have been a front row issue in the prior visits by high profile Cabinet members.  Ben Rhodes, Obama’s Deputy National Security Advisor for Strategic Communications, highlighted the UXO issue during his visit in November 2015.  As a Vietnam veteran, Secretary John Kerry expressed his sincerest wishes towards properly handling the issue and bringing closure to the UXO issue during his visit to Laos in January 2016.  Obama would benefit from boosting UXO removal efforts as prescribed by lawmakers.  Sen. Patrick Leahy (D-Vermont), has promoted responsible and effective strategies in removing UXOs as well as a deep concern that the U.S. owns up to the Secret Bombing Campaign over Laos by seeing that the country becomes completely UXO free.  Regardless of the approach, Obama should set a definite tone over UXOs in the upcoming visit.  Taking responsibility to end the UXO threat for good improves the U.S.’ standing in the region and will move the agenda of the Rebalance forward.

In his final months, President Obama will be setting the finishing touches on what has been a major foreign policy effort.  Above all, Obama would like to set the tone of being invested in improving the whole of Asia, exemplified through a serious responsibility to improving Laos’ development and correcting past US foreign policy decisions that proved detrimental to the region.  Laos will be Obama’s chance to set the record straight and cement a sturdy framework for constructive engagement with the region.  With this framework, future presidents will be encouraged to do the same: embrace Asia as a whole and continue an approach toward capacity building that ensures a brighter future.

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Filed under ASEAN, Cold War, Food, Laos, Regional Relations, SLIDER, US Rebalance, USA

Laos’s leadership transition raises questions over regional alliances

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Bounnhang will be the leader of Laos’ ruling Lao People’s Revolutionary Party.

Laos’ Communist Party elected vice-president Bounnhang Vorachit to be its next leader last week, after a vote by the newly formed 10th Party Central Committee.

State media announced on Friday that the congress of the Lao People’s Revolutionary Party, which is held every five years, had selected a new central committee and politburo to lead the country. The 78-year-old Bounnhang is replacing Choummaly Sayasone, 79, as secretary-general and president, who is stepping down after almost a decade in power.

Some observers believe that the change in leadership signifies a tilt away from China and closer to longtime ally Vietnam, as Laos takes on the chairmanship of the Association of Southeast Asian Nations (ASEAN) regional bloc.

The secretive nature of Lao People’s Revolutionary Party, which has ruled the country since 1975, makes its internal politics difficult to understand, but the changes in the politburo offer some indications of a slight shift in the ruling elite.

The choice of Bounnhang, a senior figure of the regime who was a prominent member of the Pathet Lao armed independence movement and has previously acted as prime minister, is an unsurprising one for the single-party state.

However, few expected the departure from the party of Prime Minister Thongsing Thammavong, 71, who had been in the politburo since 1991. Speculation in Laos is rife that his exit from power is linked to the recent arrests for corruption of Central Bank Governor Somphao Sayasith and former Finance Minister Phouphet Khamphounvong.

The 70-year-old Deputy Prime Minister Somsavat Lengsavad was also reported as not having sought re-election to the central committee, where he had been been a politburo member since 2006. Though less highly ranked in the cabinet, he was notable for being the principal pro-Beijing voice within the government.

A fluent Mandarin speaker, Somsavat has shepherded many joint ventures with China and is currently overseeing the controversial Laos-China high-speed rail project, whose ground-breaking ceremony took place in early December 2015.

The 427 km railway would connect the Lao capital to the Chinese border and is expected to cost  US$6.04 billion. A Radio Free Asia (RFA) report from January 4 mentions some government officials as criticizing Somsavat for having accepted a deal unfavorable to Laos, noting that it was not the first “high-cost investment where he gave too much away as collateral for project loans with little or no payoffs for ordinary Lao citizens.

The railroad has been mired in controversy ever since it was announced in 2010. The project was alleged to have created tensions between Laos and Vietnam, whose “own relations with China were then at a standstill,” explains Ian Baird, a Laos expert and a professor at the University of Wisconsin-Madison.

Bouasone Bouphavanh, the then-prime minister, is believed to have been removed from power and replaced by Thongsing in 2010, due to perceptions that he was favoring Beijing over Hanoi. Soon after, plans were started for a Laos-Vietnam railway, but never formalized.

In recent years, Beijing has vied aggressively for influence in Laos through aid, loans and infrastructure investment.

“China is using its economic interests to get political power” says Baird. “Politically, though, Laos remains much closer to Vietnam. Most of the country’s leaders studied or trained in Vietnam, including Bounnhang. They were already in governmental positions in the 1980s when there were strong enmities between Laos and China, who were then almost at war, with no trade or real relations.”

“What the Lao are doing now is trying to balance between the Vietnamese and Chinese. They want political support from Vietnam and financial support from China…The United States is also getting closer to Laos, but has relatively low investments in the country.”

“Ultimately”, Baird concludes, “I believe that Vietnam has more power than China in Laos.

Such diplomatic balancing was already visible this week. The Associated Press reported on Monday that Thongsing had assured US. Secretary of State John Kerry that “Laos would help counter China’s assertiveness in the South China Sea.

Xinhua, meanwhile, detailed a meeting on Tuesday between Bounnhang and Song Tao, a special envoy mandated by Xi Jinping, where the former announced “he was ready to join hands with China to further develop the relations between the two parties and two countries.” Unmentioned publicly by either government was the death of two Chinese nationals in a suspected bomb attack on Sunday in central Laos, though it remains unknown whether they were individually targeted.

As this year’s ASEAN chairman and co-convenor of the upcoming Sunnylands Summit, it is likely that Laos will be trying to strengthen its own position in the regional balance, particularly in light of mounting tensions in the South China Sea.

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Filed under ASEAN, China, Laos, Regional Relations, SLIDER, USA, Vietnam

Yunnan border zone slated to cost 200 billion yuan

New infrastructure projects, like the Kunming-Singapore Railway, will be passing through southern Yunnan on their way to Southeast Asia.

New infrastructure projects, like the Kunming-Singapore Railway, will be passing through southern Yunnan on their way to Southeast Asia.

Investment and development money continues to pour into southern Yunnan’s Xishuangbanna. Weeks after the largest resort in the province opened near the city of Jinghong, prefectural officials unveiled plans for a new economic zone with an eye-popping price tag.

The Mengla Economic Zone, according to plans approved this summer by the Yunnan Development and Reform Commission, will span 4,500 square kilometers, centered around Mengla County (勐腊县). Initial estimates place the cost of the multi-purpose undertaking at 200 billion yuan (US$31.4 billion). The zone spans 240 as-yet unclear projects reportedly focusing on the sectors of agriculture, education, logistics, processing, tourism and transportation.

The latter of the these is perhaps most important to national planners. Connecting cities in Yunnan to Southeast Asia by rail has long been a goal of the Bridgehead Strategy, which looks to integrate the province’s economy more closely to those of its international neighbors. Mengla County borders Laos and is one key component in plans to build a web of railway lines by 2020 which will further connect Southeast Asia with Kunming.

Progress, however, has been slow on multiple fronts. The Kunming-Singapore Railway — the main trunk line of the planned network — was once expected to open in 2015. However, due to ongoing financial disagreements between China, Laos and Thailand, completion projections have been pushed back at least five years.

In that time, a branch railway along the recently opened Kunming-Hekou line will be extended 500 kilometers south to the border town of Mohan (磨憨) in Mengla County. When finished, the railway will pass from Yuxi through Pu’er, Jinghong and Mohan before linking up with a 44.5 billion yuan (US$7 billion) Chinese-built high-speed line running to Laos’ capital, Vientiane.

The newly announced Mengla Economic Zone appears to be a very expensive kick-starter of sorts. Its launch is not only aimed at furthering Chin’s Bridgehead Strategy, but also seems designed to convince Laos — which is wagering half its annual GDP on the railway project — that Chinese intentions are serious and longstanding.

Regardless of the effects on Laos, the economic zone is another enormous financial shot in the arm for largely rural Xishuangbanna. Less than one month ago, real estate conglomerate Wanda opened a 15 billion yuan (US$2.36 billion) resort and development area of its own in the prefecture. The goal for such a sizable investment, in the words of company chairman Wang Jianlin (王健林), is to “…revolutionize Yunnan’s tourism industry“. One way or another, it looks as if sleepy Xishuangbanna is in for drastic changes in the coming years.

The preceding article was written by Patrick Scally and originally posted on GoKunming. It is republished here, in its entirety, with full permission from the author. 

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Filed under China, Economic development, GMS, Laos, Myanmar/Burma, SLIDER, Trade, Yunnan Province

Silence of the Dammed

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In the ongoing controversy over the costs and benefits of hydropower in the Mekong River basin, there is much debate among governments, private business and civil society especially in Thailand and internationally. But one voice seems to be always silent in this debate: that of the local communities of Laos in whose country at least two mainstream Mekong dams are being built or planned and who will face the brunt of the projects’ impacts.

We never get to hear or see an informed opinion from local communities in Laos about the dams under planning and construction although many of these communities would face being displaced or resettled and lose their fisheries and other river-based livelihoods.

Laos is often perceived as a peaceful, Buddhist country with verdant mountains, rivers and a rural (and laid-back) way of life. While this may be true on the surface, it is a daily fact of life for Laotians that the ruling Lao People’s Revolutionary Party (LPRP) maintains control over the country’s press and civil society.

This also gives the impression that Laos has for the most part a passive citizenry that is least interested in politics. During three years of my field research in Laos, however, I found many Laotians I met always enjoyed talking about politics with me. They have access to Thailand’s radio and television channels, and understanding Thai language is not a problem. Its just that the politics that they could freely talk about was about Thailand not Laos.

It is not surprising then that the debate about hydropower in Laos is met with silence among Lao people, especially communities, and the people who do voice their opinions are usually those in government or the hydropower business.

Missing voices in Don Sahong

I interviewed people about 10 km from the site of the Don Sahong Hydropower Project (DSHP) located on the Mekong River’s mainstream in the Siphandone area of southern Laos, less than two kilometers upstream of the Laos-Cambodia border.1

The Don Sahong Dam threatens the rich subsistence and commercial fisheries in Laos and could pose impacts also in Cambodia, Thailand, and Vietnam. It also threatens the last remaining population of the Irrawaddy dolphins in Laos whose habitat is the Siphandone area. Moreover, the planned water diversion from the Khone Phapheng waterfalls could undermine the area’s tourism.

The dam builders and government officials have organized many public information activities about the dam and social or environmental assessment studies to evaluate the potential impacts of the DSHP.

I asked my interviewees – the local people in the area – whether they were involved in these studies. Most said they have never engaged in these studies, and did not know about the DSHP’s expected impacts.

“Laos has only one communist party”. Local people always repeat this sentence several times, before somebody clarifies watchfully: “Nobody is allowed to express their opinions against the party. Whether we like the Don Sahong dam or not, it will be constructed..

When I asked them if they know about the potential impacts of the dam, a fisher replied: “I cannot foresee what will happen if the Don Sahong dam is completed. The officials said nothing is going to harm our life. However, I am worried about the reduction in fishing.”

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Dam developers have announced no-fishing zones around the Don Sahong dam site although local fishers have used these areas for their livelihoods for more than a hundred years. (Photo by JeeRung.)

To my surprise, many did not even understand the concept of a dam. One sixty-five year old woman said: “I do not know what is a dam. Will a dam be built here? I asked my children to explain the meaning of a dam.” Another fisher asked: “What is the Don Sahong dam? I never heard any news if it will be located here?”

“Public information activities”

The public information activities being held by the DSHP developer are not like a “public hearing” process where citizens can freely debate the merits and demerits of the project, ask for information, provide alternatives, raise concerns, etc. In fact, the DSHP’s public activities does not include the free, prior and informed consent from potentially affected people before going ahead with the project. Moreover, the available documents such as EIA, mitigation and other plans are not made available in the local language.

I conducted in-depth interviews with local people who had an opportunity to participate in the DSHP’s public information activities. Most interviewees said the information they received were about the dam’s positive impacts provided by the dam developers, but there was no information about the negative impacts. The summary of these efforts at misinformation by the dam proponents are provided in the table below.

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Restrictions on media and other freedoms, weak civil society

There are few local civil society or nongovernmental organizations (CSOs/NGOs) dealing with issues of hydropower projects and monitoring them in Laos. Moreover, any emergent grassroots-level NGO working on public policy monitoring are viewed with government suspicion as politically subversive troublemakers. Although a few international CSOs especially based outside Laos have voiced critical views about the Mekong hydropower projects in Laos, their views are ignored by official state policy.

The citizenry of Laos (apart from state officials and some influential groups) has only minimal access to information about pending legislation, changes in regulations, or government policy. There are no established mechanisms for government consultation with civil society groups.

Lao people are also subject to severe restrictions on freedom of expression. The government controls all print and electronic media through the state news agency, Khaosan Pathet Lao. All media content is vetted by the Ministry of Information and Culture. A press law announced in 2001 that would allow limited private media ownership has not yet been adopted. If enacted, it would still impose strict controls, including the power to close publications deemed to be “anti-government”.

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Once Don Sahong is completed, the Don Sadam secondary school will be taken for the site of the hydropower transmission station. (Photo by JeeRung.)

Freedom of speech is restricted by provisions in the penal code that forbid “slandering the state, distorting party or state policies, inciting disorder, or propagating information or opinions that weaken the state.”

Article 59 of the penal code sets a prison sentence of 1 to 5 years for anti-government propaganda. Journalists who do not file “constructive reports” or who attempt to “obstruct” the work of the LPRP may be subject to jail terms of 5 to 15 years. Previous violators are believed to have incurred prison sentences of between 1 and 5 years2. The authorities usually harass the English-language press when it does not toe the official line.

The act of expressing views opposite to the official view of the state administration or public policies in public spaces is considered taboo. Lao authorities have consistently suppressed political antagonists, cracked down on those expressing critical opinions with arbitrary imprisonments and sometimes enforced disappearance3. The most high-profile case has been the “disappearance” of Magsaysay award winner Sombath Somphone. He was last seen in Vientiane in December 2012. Through these measures, Laotian authoritaries have instilled a fear among the populace of free expression of views.

Given this situation described above, it is not surprising that we do not hear about or see the genuine participation or expression of critical views by local communities in Laos regarding the Mekong hydropower projects.

Show 3 footnotes

This article written by JeeRung was originally posted here on the Mekong Commons site.  It is reposted with permission of the author and Mekong Commons.

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Filed under Laos, SLIDER, Sustainability and Resource Management, Uncategorized

Laos Vegas: Rolling the dice on rural development

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In Lao PDR, there are three large casinos presently in operation: the Savan Vegas Hotel and Casino, the Kings Roman Casino and the Dansavanh Nam Ngum Resort. They are facing controversies over forced evictions, dispossession of farmlands belonging to the local rural communities, and are ridden with mafia-style armed fights among rival casino and investor factions. In January 2005, China’s anti-gambling campaign forced many casinos and small gambling houses to move to countries on China’s southwestern border including Myanmar, Laos, and Vietnam. Meanwhile, Lao officials and others, including middlemen and land developers, are reaping the cash benefits from this so-called rural development.

“The damned Chinese are taking over Laos,” the words spat out of a farmer whose nickname is Khoua living in the northern province of Luang Nam Tha. He was mouthing what most Lao people believe. Rural people dispossessed of land, urban dwellers witnessing the slow demise of their once elegant cities, all blame the mainland Chinese. Their presence is increasingly obvious, whether it be in the high speed motorcades blasting though Luang Prabang or in the proliferation of Chinese enterprises and their gargantuan construction projects, many of which lie echoingly empty and idle after completion. The influx of Chinese workers is affecting the local people’s chances of employment or skills training. But in the midst of frustration about the Chinese presence, what often goes unremarked or largely forgotten is that the Chinese are there as a direct result of the investment policies of the Government of Lao PDR, with many benefits from power to wealth being reaped by a long line of Lao officialdom.

When the author visited the area in November 2012, there were massive boards advertising the latest megaproject. Some provinces like Oudomxai north of the capital are more Chinese than Lao. That being said migrations and state borders have shape-shifted over the centuries blurring ethnicities and cultural loyalties. But what is obvious is the anger and resentment aimed at China while at the same time failing to recognise the agency and responsibility of the Lao government in ceding land and concessionary deals in return for investment and bribes.

This development complexity is best exemplified in the huge (and often bizarrely designed) casinos and gambling establishments that are expanding under the same perseverating rhetoric of development and poverty alleviation by which large dams and roads are being built. While these casinos have been written about in the mainstream media, very little analysis has been done about what they mean for rural people and their livelihoods.

Ferries bringing patrons across from Thailand and China for gambling (Photo by Melinda Boh.)

Ferries bringing patrons across from Thailand and China for gambling (Photo by Melinda Boh.)

From Chiang Saen in Thailand’s north, the white colonnaded building across the river, topped with a huge gilt crown is a bizarre sight. From Huay Xai in Laos, a potholed road through farmlands leads to the casino complex. The car suddenly jolt-lands on to thick cement, marking the casino’s boundary in Dork Ngoui Kham. Half an hour later we spot the golden cupola, its clock set on Beijing time, marking Bokeo Province’s Special Economic Zone (SEZ) office.

The nearby King Roman casino reveals plaster toga-clad statues alongside Chinese patriarchs and the symbols of the newest local religion: gambling. Parked nearby were two stretch limousines. Inside the building, men in suits gambled at the tables. “Kunming officials doing a site inspection,” was the official story from an attendant.

The only Lao person we saw was a farmer on a dust-covered motorbike with his equally dust-covered wife, narrowly avoiding being pushed into the Mekong River by the boat passengers.

The concession area includes archaeological treasures, importantly the ruins of a 16th century city reputedly built by King Setthatirat. Other remnants, possibly from the Mon empires of the first millennium CE, are considered to be of World Heritage value. Instead they may end up under the runway of an international airport planned to bring patrons in, but fiercely resisted by the local farmers. History will be replaced by what appears to be a gambling based narco-empire, where anything goes. For Laos, it means that some of the most fertile arable land and considerable archaeological treasures would soon be buried under asphalt to feed the gambling industry.

Stretch limousines pick up selected high rollers from the airport (Photo by Melinda Boh.)

Stretch limousines pick up selected high rollers from the airport (Photo by Melinda Boh.)

Civilising

Defending the casino and entertainment complex, a senior Chinese manager told researcher Pal Nyriri: “Before it was opium and drug businesses. There were no roads, no electricity … Laos is developing and it [the casino] is good for them.”

Zhang Wei, the casino’s principal developer, told Thai sociologist Pinkaew Laungaramsri of Chiang Mai University: “The biggest obstacle is that villagers … do not understand us. We have rented all the land and forest … but they … cut … or burn them. We can’t go around, arresting or beat up (sic) and fine the villagers who burn our gardens … it will cause ethnic issues.”

A local NGO worker, requesting anonymity, recalled taking a Chinese delegation to the site in 2009. “The three Government officials, a journalist, an environmentalist and a few academics were shocked at what they saw. ‘This gives China a bad image,’ they said. When we stopped; a crowd of up to 70 to 100 village people assembled shouting that they would not give up their land. The area is one of the most fertile and productive in Laos.”

They pointed to a white Humvee. “That’s the local official. Zhang gave him and the (Lao) police the same cars.”

China may see itself as a civilising influence, drawing on its long and remarkable history, using its wealth and dynamism to bring rapid economic growth. But with its entrepreneurs building casinos like those at the Lao border, China risks reinforcing its growing reputation for exploiting its neighbours.

Because although it’s the Lao government’s party apparatchiks and provincial officials whose signatures and rubber stamps bless these casino developments, it’s China that gets the bad press, a point clearly understood by the visiting Chinese delegation. The development of ‘legal/ illegal’ states through the formation of SEZ’s has enabled the Lao government to consolidate power, and amass wealth, patronage and control, while portraying itself as a helpless lackey of China.

Laos is fast gaining a reputation as a lawless state. It has shown unwillingness to arrestwildlife trafficker Vixay Keosavang while it faces continuing criticism for its intransigence in not being serious about investigating the high-profile disappearance of Magsaysay award winner Sombath Somphone. Moreover, Laos continues to face allegations of human rights violations, money laundering and profligate illegal logging that are causing both international concern to its many foreign donors and local frustration.

The so called “red carpet”, the road being paved pink for the patrons (Photo by Melinda Boh.)

The so called “red carpet”, the road being paved pink for the patrons (Photo by Melinda Boh.)

SEZs and other confusions

The casinos in the SEZ epitomise the complexity of the modernist zeal with which the Government of Lao and China pursue investment. Observers like Danielle Tan have noted the SEZs bring a post-socialist neo-liberal model to the Lao-China border zones. For nations that expound socialism and wisdom of central control, this is a strange choice. Neo-liberalism increases state income through taxes, exploits labour and expropriates land from traditional owners and farmers. The renowned sociologist Pierre Bourdieu considers neoliberalism “a program for destroying collective structures”, and even nations themselves.

With their confused legal frameworks and ambiguous status, SEZs invites all sorts of temptations. The implicit freedom tempts the seamier side of legitimate trade and investment particularly in the fabled Golden Triangle. Added to this mix, the Chinese fascination with gambling and luck makes Bokeo’s proximity all too tempting.

Along with disappointed losers, Tan found evidence of drug sales and money laundering, while Li Quan a London based tiger conservationist, told the Global Times that Lao casinos were trading posts for endangered species. Others are worried about child trafficking, rape and tax farming 1.

Tan alleges that the former military junta and drug lord Lin Mingxian is a major investor in the King Roman Casino, a charge denied by Zhang Wei. Ying and Zhang, of China’s Institute of Contemporary International Relations (CIR) and part of the 2009 delegation, agreed, writing, “While the nominal boss of the Casino in Bokeo is a Fujian native with a Hong Kong passport, it is … likely… the real investor is a drug cartel from Myanmar.”

The other side of China’s double jeopardy is legitimacy. The Bokeo casino is a photocopy of those in Mong La (Myanmar) and Boten (Laos) both managed by Zhang Wei, and both closed by China after evidence of mafia-style gunfights and crimes. However the King Roman is within Lao sovereign territory, while the others were on international no man’s land.

The Vice Prime Minister of the Government of Lao PDR, Somsavat Lengsavad, reacted to China’s concern about ongoing casino development with assurances that no further concessions would be granted as “casinos were a bad model for Laos.” But barely six months later in March 2014, the Vientiane Times announced plans for another casino in the South.

In total forty-nine SEZs are planned. How many will have casinos is anyone’s guess, and pose a serious concern to China.

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Size matters

The CIR’s critical appraisal of Laos’ transparency backs Nyiri’s research revealing that the Government of Lao granted the Hong Kong registered King Roman group a concession for the Bokeo land in 2007, after a down payment of US$850,000.

Lao government media KPL reported 827 hectares were ceded for 40 years; the maximum allowed under Lao law, but at variance to the company’s own estimation of 10,300 hectares for 99 years. In 2010, Zhao reported the new casinos would be bigger in scale than those in Boten, bragging that US$500 million would be spent developing the site, more than ten times the Laos national health budget.

A resident of Huay Xai who declined to be identified, admitted the casino is run down: “The paint’s peeling and shops boarded up. Less people visit now. One rich guy hired some [Lao] cops to protect him, but they shot him and took his money. Despite joint patrols, we still have shootings, as the Chinese mafia are using the place as a staging post. Gamblers are afraid. As for the organic farms and markets they promised, well who would buy the stuff? The farmers who lost their land are now broke and they used to produce what the casino promised but never delivered.”

“The casino’s still trying for the airport, but there is well-organised resistance. The locals called in Thai TV. The Lao police arrested two cameramen and held them for two weeks. The Thai government responded by closing the border until they were released. Now it’s a stand-off. The PR risk is too high.”

China has its own problems with crime. What it does to curb the influence of its neighbour will be interesting to see.

Post script: In late 2013, the Lao media announced that the farmers had been given their promised settlement. The casino had agreed to pay a compensation amount that was found satisfactory to the government. Many on the Lao agribusiness list-serv cheered.

Following up on this story, I was told by the above long term resident of the area (new laws in Laos restricting critical media make me reluctant to name anyone for fear of recrimination) that the company had in fact offered compensation way over the odds as the farmers had been both successful in gaining publicity and in holding out, fearing the same poverty that had mired their neighbours.

But the informant said the Lao government refused to give their imprimateur to the negotiated rate fearing that the amount offered would set an unhealthy precedent for other areas of Laos, so the farmers were given a significantly reduced amount. Hence the term “found satisfactory to the government” does not mean what one might have assumed.

This article was written by Melinda Boh for the Mekong Commons website and published here on 1/31/15.  It is reposted in its entirety with permission from Mekong Commons and the author.  ExSE is excited to begin a new cooperative partnership with the Mekong Commons team in sharing analysis and reporting.

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Laos extradites drug suspects to Yunnan

Editors note: This article was originally written by Cissy Yu and published on Go Kunming. It is reprinted on Exse in its entirety. 

Yunnan has long been the country’s main entry point for illegal drugs. Despite increased interdiction efforts, international law enforcement cooperation and recent large-scale busts, it appears the province’s ‘Drug War‘ is becoming more costly and having only a small effect on the overall flow of narcotics across the border.

Last week, Lao police transferred five suspected members of a drug ring to Kunming in a display of cooperation between the two countries. Authorities originally detained the suspects in a joint police raid conducted on March 19, 2013, when a naval patrol seized more than 500 million yuan (US$82.3 million) worth of methamphetamines on the Mekong River.

China has been conducting patrols such as this with the help of Thailand, Laos and Myanmar since the “Mekong River Massacre” of October 2011. The attack, which killed 13 Chinese sailors, spurred Beijing to begin interdiction patrols along the river. Institution of the policy, although sanctioned by neighboring Southeast Asian countries, was the first time in three decades that Chinese forces have operated outside the nation’s borders without a United Nations mandate.

Although the drug lord responsible for the killings, Naw Kham, was sentenced and publicly executed in Kunming last year, illegal drug trafficking continues to run rampant in the border regions between Yunnan, Laos, Myanmar and Thailand. Known as the Golden Triangle, the area supplies an estimated 60 to 70 percent of all drugs consumed in China. A United Nations surveyconducted last year reported that opium cultivation in the Triangle rose by 22 percent in 2013, largely driven by mounting demand from the mainland.

Yunnan’s 4,060-kilometer border with Golden Triangle nations presents a grim challenge for anti-drug personnel. According to Yunnan Net, 70 percent of methamphetamines confiscated in China last year were seized in Yunnan. Currently, there are 1.7 million registered drug addicts in the province, although the government acknowledges the actual numbers are much higher.

While heroin remains the most commonly smuggled drug on the border, methamphetamines — also known as ‘ice’ — are a fast-growing second. In Ruili, a border town infamous in the past for its heroin trade, methamphetamines now dominate the market. One dose of the crystals — known as bingdu (冰毒) in Chinese — reportedly costs as little as five yuan.

Yunnan’s narcotics officials, meanwhile, claim they have redoubled efforts to combat the drug trade. Provincial courts sentenced more than 5,020 suspects for drug crimes in 2013. Yet some officials have complained that the record numbers on trial have led to more lenient judgments. “A suspect who would get the death penalty elsewhere [in China] only gets several years of jail in Yunnan,” said a National People’s Congress deputy. “The judicial system should be punishing these people with an iron hand.”

Image: China Radio International

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China needs to change its energy strategy in the Mekong region

This op-ed was first published at ChinaDialogue and thethirdpole.net on 7/16.

 Mekong bridge

At the end of this year cars and container trucks loaded with goods from China and Thailand will finally be able to drive across a multi-lane bridge spanning the Mekong River (known as the Lancang in China). The bridge will connect Chiang Rai province in Thailand to Bokeo province in Laos, effectively linking China’s highways stretching south from Beijing and Shanghai to those coming north from Singapore, Kuala Lumpur and Bangkok.

Funded by equal investment from the Chinese and Thai government, the completion of the bridge, which took ten years of planning and two years to build, is not without controversy. For many years Thailand held back investment due to an uneven distribution of benefits between China, Laos and Thailand. Also on the Thai side, the NGO Rak Chiang Khong claim the bridge negatively impacts the local Golden Triangle economy and will ruin Mekong fisheries.

The Golden Triangle Bridge serves to highlight the challenges facing China, as the country’s new leadership attempts to balance its slowing and volatile economy and deliver domestic stability by maintaining peaceful economic relations with its neighbours.

China’s regional strategy

“In 2012 China’s growth in trade and outward investment with the five other Mekong countries of Myanmar, Laos, Thailand, Cambodia, and Vietnam surpassed its trade and investment growth in ASEANcountries,” said Xu Ningning, chairman of the Greater Mekong Subregion (GMS) Business Council. “Greater growth rates will continue with increases in regional cooperation and win-win investment opportunities.”

For the past three years China’s GMS provinces of Yunnan and Guangxi have posted growth rates of 12-15%, the highest of China’s localities, and arguably China’s economic rise has also helped deliver high growth rates among Mekong countries.

The end of the Cold War in the 1990s created a favourable environment for China to develop its economic cooperation strategies toward the Mekong region. The blurring and opening of once inviolable borders encouraged traders on both sides of the China-Southeast Asia frontier to appeal to local and national governments for better conditions for trade and migration. The Chinese government responded with twenty years of state-led trade liberalisation and investment policies to promote regional cooperation in state and private sectors.

China’s economic cooperation strategies towards its four Mekong neighbours has dovetailed nicely into a strategy that fits China’s current development needs. Liu Jinxin, a policy analyst and logistics expert says, “Unlike the US which leads the world in finance and IT, both high-value service-oriented industries, China is the world’s factory, producing goods to drive the growth of its growing middle class and serving export markets around the world. To survive, the Chinese ‘factory’ needs inputs like energy and raw materials.” Continue reading

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Burmese Teak: Turning a New Leaf

It’s prized the world over for its durability and beauty and has long been a status symbol; to own something made from teak really means something. But what is teak and why does it matter today?

Teak, or Tectona Grandis, is a large, deciduous, hardwood species found throughout Southeast Asia in environments under 900m in elevation that receive over 500mm of annual rainfall. Teak is known is primarily known for its durability; it is naturally water-resistant and contains resins that repel and termites and slows rot. Because of these qualities, teak wood is valued for its ability to resist the natural elements and is often used in outdoor furniture and yacht and sailboat building.

Teak is native only to India, Indonesia, Lao PDR, Malaysia, Myanmar and Thailand. Of the estimated 29 million hectares of naturally occurring teak forests, almost half are found in Myanmar. It is important to note that only Myanmar does not enforce a logging or export ban on teak, so all legally-harvested natural teak on today’s market is Burmese. The cost of this Burmese teak can be quite high – the market price for some wood can reach than $4,000/m3. This represents the most expensive teak, as natural teak is valued higher than its planted counterpart. There are several reasons for this disparity. First, plantation teak has smaller dimensions than natural teak and rarely reaches the size of a natural tree. Secondly, there is a perception among many buyers that plantation teak is less dense than natural timber and thus is of a lower quality. In addition, natural teak is a rare resource. As mentioned, Myanmar is currently the only country exporting natural teak and its forests are decreasing every year, making prized Burmese wood rarer and more expensive.

teak 1 Continue reading

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Filed under China, Economic development, Environment and sustainability, Indonesia, Laos, Malaysia, Myanmar/Burma, Sustainability and Resource Management, Thailand