Tag Archives: Vietnam

Hydropower in Laos: An Alternative Approach

7898068106_592eb8e458_b

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.

Leave a Comment

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

On the Rocks: China’s expected response to tribunal decision threatens to undo soft power gains

South_China_Sea

The Permanent Court of Arbitration is set to rule tomorrow on a case brought by the Philippine government over China’s attempts to claim almost the entire South China Sea as sovereign territory. Beijing has boycotted the tribunal and betting the odds are that the verdict will not be in China’s favor.

Whatever happens tomorrow at the tribunal, Chinese state media is going to claim victory. But within the walls of Zhongnanhai, there ought to be some soul searching. This assumes of course that anyone who works in Zhongnanhai still has something approaching a soul.

Should the tribunal rules against the PRC — as it is expected to — and if the Chinese government chooses to use the tribunal’s ruling to, for example, wipe the ass of the nearest stray dog — as they will almost certainly want to do — the repercussions will ripple far past the rocks and reefs of the South China Sea.

Internationally, China has worked hard over the previous two decades to present itself as a good global citizen. As the US and their allies engaging in what many around the world see as reckless military adventurism, China positioned itself as a semi-sane alternative to the failed — and sometimes disastrous — policies of the West.

Choosing to ignore the tribunal’s ruling jeopardizes this concerted effort at image building. China can point all it wants to the way the US especially routinely ignores these sorts of hearings and decisions, but if the Chinese government is serious about being the voice of reason in a world gone mad they have to better than the US. Caesar’s wife must be above reproach. “You did it first” isn’t going to fly.

The second issue is domestic. Chinese media routinely demonizes the United States and the West for their actions around the world. Implicit in this coverage is the idea that most of the world — those countries who don’t burn summer palaces and invade Middle Eastern nations for sport — see China as the good guy in world affairs.

The Chinese government wants to present every issue as China (and by extension, the rest of the world) versus the West. It’s the US and their allies who are the odd ones out in the world. In some ways, that might be true. But it doesn’t mean that China’s neighbors see China as any less of the threat.

In the case of the South China Sea, Beijing is opposed by countries, like the Philippines, Malaysia, and Vietnam, who ought, by virtue of geography and a shared history as victims of colonialism, have common cause with China.

One reason the Chinese government has been so insistent on the US being the real impetus behind the decision to take the South China Sea case before the tribunal is that it helps soften an awkward truth: China isn’t as beloved around the world — and particularly in asia — as the Chinese state media wants people to believe.

Talking with folks in Beijing, there is the persistent belief that the Philippines and the other countries opposed to China’s territorial grab in the South China Sea are being hoodwinked into becoming the pawns of the usual suspects: The United States and Japan.

The Chinese government has made the South China Sea a core strategic interest. But one wonders if Chinese leaders have thought through the downfield implications of digging in on this issues. Maybe they have and have decided that they are fresh out of fucks to give about what Vietnam thinks of them.

The callous cynic in me might suggest that while China’s actions in the South China Sea represent a challenge to America’s leadership and strategic position in the Western Pacific, Beijing’s refusal to accept the tribunal’s decision could be seen as an opportunity to undermine some of the gains China has made in global public opinion over the past two decades.

Leave a Comment

Filed under China, FEATURES, SLIDER, South China Seas, USA

Laos’s leadership transition raises questions over regional alliances

7109856-3x2-340x227

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.

1 Comment

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

China’s national meat scandal hits Yunnan

 

This week news broke that dozens, if not hundreds, of police seizures had been carried out across the country in an ever-broadening meat scandal. The crackdown covers at least 14 Chinese provinces including Yunnan, where much of the spoiled food apparently entered the mainland.

Coinciding with reports released across the country, the Yunnan Public Security Bureau announced it had seized 750 tons of rotten or otherwise dangerous pork, chicken, beef and donkey meat in three separate cases. The investigations were originally opened last year but a spate of arrests began on April 13, 2015, and has led to the jailing of 25 people as well as the confiscation of tainted food valued at 80 million yuan (US$13 million).

The national scandal has involved horrific stories of meat frozen for up to forty years. Investigators believe Shenzhen was a major port of entry for three billion yuan (US$482 million) in spoiled goods (requires proxy). However sizable amounts are also thought to have entered China through Vietnamese border crossings in Yunnan and Guangxi. Once in China, meat was often thawed, repackaged, relabeled and then frozen once again before being distributed across the country.

Yunnan police detained suspects in the cities of Songming, Yiliang, Jinghong, Jinning, andChenggong. Some were taken into custody for trafficking, while others arrested for illegally transporting banned substances. Vietnamese companies operating under the Chinese names Tianhe (越南天河公司) and Huafeng (越南华峰公司) have been implicated in smuggling meat across the border, although no legal action against the companies themselves has been made public.

The case in Songming began when 200 middle school students were sent to emergency rooms with food poisoning. A subsequent criminal investigation into the school cafeteria eventually uncovered a cache of rotten meat, some of which tested positive for E coli. All of the students were eventually released from the hospital.

As with most Chinese provinces, Yunnan is no stranger to terrifying headlines concerning tainted or dangerous food. Before ancient meat products came to be a concern, gutter oil — referred to colloquially as digouyou (地沟油) — was a major worry, culminating in the 2013 police seizure of 32,000 tons of ‘store-ready cooking oil’ manufactured largely out of industrial and commercial waste.

The current province-wide investigation into illegal food and drug smuggling is code-named ‘Operation Sharp Sword’ (利剑行动). In addition to uncovering trafficking rings dealing in contaminated meat, detectives are also concerned with finding factories producing fake over-the-counter drugs. To report suspicious behavior, people are encouraged to call the Yunnan Public Security Bureau hotline at 63052548. Operation Sharp Sword will continue until April 2016.

This article, written by Patrick Scally was first published here on GoKunming.com.

Leave a Comment

Filed under China, Food, Governance, SLIDER, Yunnan Province

Bottlenecks to Development: Challenges in the Mekong Delta

Last week, ExSE took a hard look at the environmental challenges facing the Mekong Delta region and found that the prospects are not good. Due to unenviable geography and global warming, rising sea levels, higher average temperatures and irregular precipitation patterns will all converge in the next 50 years to change the face of the Mekong Delta (MKD). That’s to say nothing of salinity intrusion, flooding and tropical storms. However, the MKD’s problems are not only environmental in nature; the region’s economy also faces a host of challenges, many of them tied to the Delta’s environmental changes.

Issues in the Mekong Delta are of course significant for its residents, but they also carry great importance for those outside the region because of the MKD’s role in national and regional food security. The statistics on the Delta are incredible. In an area taking up just 36,000 square kilometers (12 % of Vietnam’s total area), the Delta’s 22 million inhabitants plant 2.6 rice crops per year totaling 25 million tons of rice. The MKD’s rice production accounts for over half of Vietnam’s total and the seven million tons rice that the Delta exports has helped Vietnam become the world’s second largest rice exporter after Thailand. In addition, the Delta accounts for 70% of Vietnam’s fruit production and three-quarters of its fish catch.

The Delta’s massive agricultural output is no accident. The region is perfectly situated to receive large amounts of water and sediment from the three main stems of the Mekong Delta and the many thousands of canals that intersect them and a tropical temperature allows for farming year-round. What’s more, concerted efforts in the past 30 years to improve the region’s water infrastructure have doubled arable land in the MKD. Combined with advances in genetically modified rice strains, yields in the Delta have increased by 30% and total production has doubled, all within the past 20 years.

Incomes have also increased. According to the General Statistics Office of Vietnam (GSO), the average income of Delta residents has gone from 50 cents USD/day in 1999 to $2/day in 2010 and the region reached it Millennium Development Goals in 2006. However, despite impressive improvements in agricultural output and per capita income, the Delta has lost ground to other regions of Vietnam and now lags behind in important measurements of human and economic development.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam.

In the late 1990’s, the Delta was actually 20% above the national average in per capita income. However more than 10 years later, the number stands at a little more than 80%. In the first decade of the new millennium, Vietnam underwent a period of intense economic growth through industrialization and people all over the country got richer as a result. The benefits of economic growth were not felt equally by everyone, however. Due to development bottlenecks, some regions, including the Mekong Delta, did not industrialize like others

One of these bottlenecks is a lack of infrastructure. The proportion of waterways, intra-provincial roads and inter-provincial roads per thousand people are all behind the national average. Of these three measures, the proportion of inter-provincial roads stands out. For one, there are only 0.34km of them per 1000 people in the Delta, standing at only half of the national average. This is especially important because of the nature of the Delta’s economy. The MKD, because its economy is so heavily concentrated in agriculture, lacks many necessary products and thus has a long history of importing and exporting nearly everything. While this may be good for enterprising middlemen, it is not good for the region’s economic development. With so few avenues for importing and exporting goods, the logisitical cost rises and because the MKD lacks so many raw materials, industrial development becomes disadvantageous. In fact, unless an investor is interested in agricultural processing, building a factory closer to Ho Chi Minh City is probably a better business plan in many cases.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

Measure of waterway, inter-provincial roads and intra-provincial roads in the Delta. Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

A second bottleneck, and another reason a potential investor might not consider the Delta, is a lack of skilled labor. Like the region’s road density, the MKD’s percentage of trained labor lags behind the national average; according to data collected by GSO (General Statistics Office of Vietnam) the Delta’s percentage of trained labor stood at just over half of the national average. In addition, the proportion of Delta residents with some sort of higher education stood at less than 1%, or in other words, just a fifth of the national average. With a workforce that is so poorly trained and educated, the Delta becomes an even less attractive region for investment, especially when compared to the populations near the Red River Delta (Hanoi and its environs) or Ho Chi Minh City.

What’s more, those Delta residents that have some technical training and/or higher education do not stay in the Delta for long. As the region’s economy falls farther behind the rest of Vietnam, more and more Delta residents are moving to urban centers to look for work. One of the main destinations for these people is Ho Chi Minh City, where over half of the city’s migrant workers come from the Mekong Delta. What trained labor the MKD might have ends up leaving the region for greener pastures, thus widening the gap between the Delta and places like Ho Chi Minh City.

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

Source: Dr. Ho Long Phi, processed from data of General Statistics Office of Vietnam

One reason that the MKD has such a low percentages of trained labor and educated inhabitants is that in the past there was no need for supplementary education of any form. In an environment where the annual rice yields are stable and prices are good enough, investing time and money for a new career is an unnecessary risk and one that Delta residents have not taken. Paddy rice cultivation requires little technical skill yet provides a modest, usually stable income. However, the income provided from rice is rarely enough to invest in the expansion of other industries and in the Delta’s case, the lack of infrastructure makes such an investment an even more expensive proposition.Unfortunately for the farmers of the Mekong Delta, rice cultivation is becoming a less and less stable enterprise. For one, the price of rice has dropped in the past decade. As more and more rice is produced worldwide, the seven tons of rice the Delta exports annually decreases in value and farmers lose out.

However, shifts in the world rice market are nothing compared to problems farmers face due to global warming. As detailed here, rising temperatures, sea level rise, an erratic precipitation and flood schedule and more frequent tropical storms all threaten to radically alter the Mekong Delta in the next century. The region already has enough impediments to development with its lack of infrastructure and trained labor; its environmental issues only add to the severity of the situation. The Delta, now more than ever, is in acute need of solutions. However, who’s coming up with these solutions, if there are any to begin with, is another question unto itself and one that needs to be answered before any future for the Mekong Delta can be imagined.

Leave a Comment

Filed under Agriculture, Economic development, Environment and sustainability, Mekong River, SLIDER, Sustainability and Resource Management, Vietnam

Map of the Greater Mekong Subregion (GMS)

gms_map_large

Leave a Comment

Filed under GMS, VISUALS