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From Savannakhet to Somerset: United by controversial EDF megaprojects

Two controversial energy infrastructure megaprojects located on opposite sides of the world, one in Western Europe and the other in Southeast Asia, are linked in more subtle ways than the most obvious bond i.e. they share the same main project developer. Hinkley Point C (HPC) nuclear power station, proposed to be built in the English county of Somerset and the Nam Theun 2 (NT2) Hydropower Project in operation since 2010 in central Laos are both megaprojects awarded to the French state-owned power utility, Électricité de France (EDF) as the main developer and shareholder in the respective project consortia.

Both projects are touted by their proponents as low-carbon energy alternatives to fossil fuel burning power plants that are designed to economically supply perceived unmet energy demands; both represent the biggest infrastructure projects the respective host nations have built at the time of construction; both projects have considerable externalities not being shouldered by the developers due to taxpayer subsidised risk guarantees; and both are mired in complex multi-stakeholder debates over their socio-economic and environmental sustainability credentials.

Beyond these similarities, both HPC and NT2 share a common pattern of politicisation at the highest levels of government, both at home and abroad, as vested interests clamour for each project to proceed at whatever the cost (both financially and politically). This situation inevitably leads to some serious political and economic distortions and inherent risks that emerge with time, that could have been avoided had less high profile, cheaper, smaller, more accountable, devolved and transparent energy projects been developed. Thus, it might be an interesting exercise to compare these two megaprojects and see if any wider lessons can be drawn from the common linkages discernible, despite the significant physical distance and domestic development context that separates them.

Nam Theun 2 – a dam too far for EDF and the Banks?

As the historically older case, this hydropower project had an extended period of gestation between initial development plans being proposed and eventual construction many decades later. A pre-feasibility study was first conducted in 1986, although basin planners with the multi-lateral river basin organization, the Mekong Committee, had already identified the dam site as holding potential for hydropower generation in the 1960s[1]. With the Indochina War being expedited across Laos (as “the other theatre”) and eventual 1975 regime change in Laos ushering in a one party communist state, geo-political conditions were not conducive for the project to be resurrected until the early 1990s, when the plans were dusted off once more by international actors.

The 39 m high Nam Theun 2 dam under construction in 2008. Much of the work was sub-contracted out to Thai construction companies and the cement was sourced from over 600 kms away in Saraburi, Thailand (Source: International Rivers)

The 39 m high Nam Theun 2 dam under construction in 2008. Much of the work was sub-contracted out to Thai construction companies and the cement was sourced from over 600 kms away in Saraburi, Thailand (Source: International Rivers)

It took ten years in the appraisal and preparatory stage from 1995 before final approval by the World Bank’s Executive Directors in lending countries was granted, thereby rubber-stamping the proposed social and environmental safeguards to mitigate and compensate for project impacts. This approval followed a year long period of “public consultations” and “participatory workshops”, conducted both internationally and domestically (though it was widely acknowledged that no meaningful participation was possible in the Lao context). In no reasonable sense could the developer claim to have gained broad public acceptance or employed a “fair, informed and transparent decision-making process”, according to World Commission on Dams principles, given the depth of opposition expressed by civil society globally.

I attended the Bangkok leg of the “technical consultations” held in August 2004, at which numerous civil society actors and dam-impacted villagers from Thailand, including a handful of impactees from the World Bank-funded Pak Mun dam, gave a series of heartfelt and well-reasoned arguments why it was an ill-conceived idea to build the NT2 dam project. The Pak Mun dam in Northeast Thailand became infamous for the multiple impacts it caused to fisheries and aquatic resources based livelihoods, sparking local protests and wider social conflict that still simmers today. But the Bank officials brushed off the objections with their own technocratic arguments as to why constructing the project was Laos’ only option to deliver it from abject poverty through electricity revenue generated and develop economically based on a rational utilisation and export of its natural resource asset base. At all the other consultations worldwide, voices of opposition outweighed those in support both in terms of numbers and credibility of the arguments presented. However, it was clear the decision to proceed had been taken long before the consultations were held and the World Bank was more interested in issuing a “blank cheque” to the developers, as maintained by David Hales of the Worldwatch Institute who chaired the public workshop on NT2 in Washington in September 2004.

The NT2 Hydropower Company (NTPC) that built, owns and operates NT2 is itself a consortium of three main shareholders, namely EDF International (40 %), the Electricity Generating Public Company of Thailand (EGCO) (35 %), and the government of Lao PDR’s Laos Holding State Enterprise (25 %). NTPC sell 90 % of the power generated from the 1,070 MW installed capacity plant to the Electricity Generating Authority of Thailand (EGAT), with the remainder consumed domestically in Laos.

Construction officially began in November 2005 and NT2 was commissioned in March 2010, having cost about $1.45 billion, with funding derived from multiple sources, including France’s Coface, Sweden’s EKN, Norway’s GIEK, the ADB, Multilateral Investment Guarantee Agency, the World Bank, the French Development Agency, the Export-Import Bank of Thailand, Nordic Investment Bank, nine international banks and seven Thai banks. The Lao government’s equity share in NTPC was financed chiefly by a loan from the European Investment Bank (EIB) and Asian Development Bank (ADB), with the multi-lateral banks providing political risk guarantees to the developers and private lenders, in effect, thus placing the main burden of risk on taxpayers in the contributing countries and into the future, with the Lao people.

Due to its size, prestige and symbolic nature, NT2 neatly embodied for all representatives of the temporarily thwarted dam building industry (domestically and internationally) a significant step towards the realisation of the popular narrative created that Laos could become the “Battery of Asia” or “Kuwait of Southeast Asia”, if the slumbering nation could only maximise the development of its hydropower potential. Technically, the dam project appears to have performed reasonably, but socially and environmentally the dam has been a predictable disaster, with the impacts falling particularly heavily on the downstream riparian people living along the Xe Bang Fai river in Khammouan and Savannaket provinces.

The downstream channel constructed below the power station takes 350 m3/s of turbinated water down to the Xe Bang Fai river, adding significantly to its normal background flows and seriously impacting the aquatic ecology and river-dependent livelihoods (Source: Aurecon Group)

The downstream channel constructed below the power station takes 350 m3/s of turbinated water down to the Xe Bang Fai river, adding significantly to its normal background flows and seriously impacting the aquatic ecology and river-dependent livelihoods (Source: Aurecon Group)

A significant, but invariably overlooked, historical feature of NT2 and the manner in which funding approval was granted by the multi-lateral banks, relates to the highly politicised nature of the campaign pushing for its development,  that included being able to harness the support of national leaders at critical moments. At one point in late 2004, it seemed like commitment was wavering from several crucial parties to backing the project, including some ambivalence on the French and American sides as to whether this was a worthy project to be involved in, given the patently high social and environmental impacts that would result and rising voices of opposition. Seemingly in a carefully calculated bid to sway any doubters of the project’s strategic importance, proponents started playing the “China card”, suggesting that if the Western institutions failed to back it, then China would fill the gap in a trice and takeover the project. This scare tactic seemed to do the trick, because French President Jacques Chirac was understood to have intervened and secured European loans and grants to secure EDF’s central involvement, a fact tacitly acknowledged by the French Ambassador to Laos at the project’s powerhouse construction inauguration ceremony in November 2005. The ceremony was also attended by the Lao Prime Minister, Bounnhang Vorachit and then Thai PM, Thaksin Shinawatra, representing the country likely to benefit most from the project in terms of immediate construction contracts, subsidised imported energy and externalisation of socio-ecological costs. Building large dams in Thailand has been controversial since the early 90s, thanks to an active civil society and relatively free media.

The Nam Theun 2 Hydropower Project (NT2) in central Laos and relative position of Savannakhet, where the bulk of the project’s power leaves Laos for the Thai market (Source: Baird and Quastel, 2015)

The Nam Theun 2 Hydropower Project (NT2) in central Laos and relative position of Savannakhet, where the bulk of the project’s power leaves Laos for the Thai market (Source: Baird and Quastel, 2015)

There were strong suspicions amongst civil society observers and energy analysts that the World Bank doctored its figures and used incorrect assumptions in order to make the economic argument for the dam stack up, prior to final appraisal in March 2005. Civil society critics had always argued that there was no credible economic case for the NT2 project going ahead, above and beyond its poor social and environmental score sheet, as the amount of electricity it was supposed to produce for export could easily be covered by demand side management in the Thai energy market. At least 153 NGOs recorded their opposition to the dam project going ahead during the evaluation phase.

In 2011, the World Bank published a report entitled “Doing a Dam Better: the Lao People’s Democratic Republic and the story of Nam Theun 2”, in which it is claimed the story of NT2’s development would provide “valuable insights and lessons that can be applied in future projects of similar size, scope, and complexity”. It was also held up as “strong evidence” of the Bank’s re-engagement in and commitment to supporting the large hydropower sector, after a decade-long hiatus prior to and after the seminal World Commission on Dams (WCD) report. Thus, the NT2 project fulfilled many functions for the dam lobby, not only in terms of Laos but worldwide, as a harbinger of renewed lending for “high risk, high reward” hydraulic development projects. And sure enough, it did open up a flood of cheap finance, subsidies and externalisation of risk for the ever-thirsty industry across Asia, Africa and Latin America.  The World Bank’s storyline of success with the project has continued since, despite the many reports issued that challenge this stale narrative with compelling evidence, including those from the project’s own Panel of Experts (PoE), but also numerous civil society studies conducted.

The project is expected to generate total revenue of $1.9 billion over the course of its 25 year concession period, of which some 25 % should, in theory, make it into Lao government coffers to help fund rural poverty alleviation programmes. However, because the project’s financial arrangements are so murky, particularly on the Lao government side, there is no guarantee in place that the funds generated will be spent where they were originally intended. Due to a culture of intense secrecy and unaccountability within the heart of Lao state governance, it is uncertain to what extent dividends, taxes and royalties from NT2 have been directed towards social security, education or health programmes. Without an independent audit, suspicions remain that revenues are just co-mingled with other public resources or even mis-appropriated, calling into question any claims by the Banks of a “model project” in water or energy governance. Tellingly, a spate of subsequent hydropower projects in Laos have ignored the long list of “safeguards” touted as the new standard by the NT2 proponents and fast-tracked dam construction without even basic public consultations. In Transparency International’s 2015 Corruption Perception Index, Laos was ranked 139th out of 168 nations worldwide.

Children bathe in the dam’s 450 km2 Nakai reservoir near a resettlement village. Despite assurances by the developers to remove all vegetation prior to flooding, much of it was left and is slowly rotting in the water (Source: FIVAS)

Children bathe in the dam’s 450 km2 Nakai reservoir near a resettlement village. Despite assurances by the developers to remove all vegetation prior to flooding, much of it was left and is slowly rotting in the water (Source: FIVAS)

Meanwhile, most of the goals of the social and environmental mitigation programme remain unmet, while many of the impacts identified by critics (and some additional ones) have been borne out in practice. Resettled families have not been made demonstrably better off and many are still reliant on dwindling material handouts from the NTPC and Lao government to survive, while downstream along the Xe Bang Fai recipient river in Khammouan and Savannakhet provinces, fish populations have crashed and riverside vegetable gardens lost amongst a catalogue of impacts, impoverishing the livelihoods of the tens of thousands of people that once relied on them. Rainy season flooding has been exacerbated by the power station additional flows, further eroding the sustainability of local livelihoods through destruction of rice crops. Meanwhile natural forests have been destroyed and wildlife decimated in the “protected area” in the headwaters of the NT2 reservoir, despite the assurances of the dam proponents that the project’s development would ensure their protection.  As Professor Thayer Scudder, an eminent global expert on the social impact of dams, Commissioner for the World Commission on Dams and one of the three person Panel of Experts for the NT2 project, commented in a New York Times article in August 2014, after nearly two decades spent closely monitoring the dam’s development process, “Nam Theun 2 confirmed my longstanding suspicion that the task of building a large dam is just too complex and too damaging to priceless natural resources”.

 

Hinkley Point C – more economic madness?

Nuclear power was first developed in the United Kingdom during the 1950s and 60s with the somewhat cornucopian promise of abundant clean, cheap and reliable energy for present and future generations to benefit from. The British public generally believed the claims made by the industry and politicians, so little overt opposition to nuclear energy (unlike nuclear weapons) appeared until the first large-scale nuclear accident occurred at Three-Mile Island in 1979 followed six years later by nuclear meltdown disaster at Chernobyl. These events and various setbacks within the industry prompted a much wider debate about the technology with a resulting fall in public support. At its peak in 1997, nuclear power generated 27 % of the nation’s electricity, but this has subsequently declined to about 18.5 % (in 2012) from 15 nuclear reactors, as the original fleet of power stations has been gradually retired for decommissioning and not been replaced. Based on rhetorical concerns about future energy security and pressures to reduce national emissions of carbon dioxide, the UK government announced in 2008 that it had given the go-ahead for a new generation of nuclear power stations to be constructed, with eight potential sites announced the following year, one of which was Hinkley Point.

This move proved controversial, with many NGOs, including Greenpeace, Friends of the Earth, the Campaign for Nuclear Disarmament and the World Wildlife Fund opposing the shift back to nuclear power solutions, on the basis of uncertain cost-benefit appraisal, the opacity of the planning process and environmental concerns. By marked contrast with NT2, nuclear plants like HPC do not require the resettlement of 6,500 households nor do they have the same direct negative impacts on the livelihoods of tens or hundreds of thousands of people, so the short term social and environmental impacts could be said to be more limited and manageable. However, the long term environmental and health impacts and risks posed are less favourable, due to the problems of nuclear material transport to and from site, safe disposal of radioactive waste and plant decommissioning issues passed on to future generations to resolve.

After a long period in the consultation and planning stages, a third reactor is scheduled to be built alongside two existing plants at the Somerset coastal site, namely Hinkley Point A (Magnox reactor) and B (Advanced Gas-cooled Reactor). The landscape-dominating plants occupy a low-lying, rural spot barely above sea-level next to the Bristol Channel, famed for having the second highest tidal range in the world after the Bay of Fundy, eastern Canada. This fact is material, when considering the United Kingdom’s energy futures in an era of awareness of the need to build alternative, safe and sustainable energy sources to mitigate predicted climate change. The UK government is legally committed to a gradual decarbonisation of the nation’s energy production mix up to 2050.

A view across Bridgwater Bay to the Hinkley A and B power station site. HPC will be developed alongside, at an estimated cost of £ 18 billion (David J.H. Blake)

A view across Bridgwater Bay to the Hinkley A and B power station site. HPC will be developed alongside, at an estimated cost of £ 18 billion (David J.H. Blake)

While the original A plant closed in 1999 and is being decommissioned, Hinkley B is still operating under EDF ownership and is not expected to cease operations until at least 2023. The entire site is vulnerable to future increases in sea levels, something that was not well understood when Hinkley A and B were built, but should be a high priority for HPC planners. In 1607, a major tsunami is recorded as engulfing much of this coastline and killing an estimated 2,000 people, but neither this historical event nor future predicted sea level rises of at least two metres by the end of this century and more severe weather events precipitated by climate change seems to have dampened the appetite of the proponents to push ahead with HPC, regardless of potential risks. When I visited the site in early April 2016 at high water on a spring tide, the sea was already lapping over the first line of concrete defences around the existing reactors (see picture). I can foresee extra marine erosion and flood protection measures, adding further to the costs of the project in the foreseeable future.

The coastal perimeter of the HPC site is threatened with coastal erosion, expected to worsen in future under conditions of rising sea levels, stormier weather and an underlying soft geology (David J.H. Blake)

The coastal perimeter of the HPC site is threatened with coastal erosion, expected to worsen in future under conditions of rising sea levels, stormier weather and an underlying soft geology (David J.H. Blake)

HPC was originally proposed by the government as an ideal solution to “keeping the lights on” in a climate change challenged world, able to supply 7 % of the UK’s present energy needs at a single location, through a 3,200 MW installed capacity and reliably high plant load factor[2]. The trouble is, the European Pressurized Reactor (EPR) design EDF have proposed to use is thus far unproven technology and at the four other sites where a similar nuclear reactor type is being constructed in France, Finland and China, the projects have been dogged by unforeseen technical problems leading to steep cost and time overruns.

During a spring tide in early April 2016, the sea breached the first line of sea defences near the plant. In 1607, this coastline was struck by a major tsunami that swept many miles inland and drowned thousands (David J.H. Blake)

During a spring tide in early April 2016, the sea breached the first line of sea defences near the plant. In 1607, this coastline was struck by a major tsunami that swept many miles inland and drowned thousands (David J.H. Blake)

As a political party, the incumbent Conservatives have traditionally offered strong support for nuclear power, although up until a few years ago the leadership insisted that it should not be subsidised by the taxpayer but subject to normal market forces and open competition. However, this stance shifted under the Conservative-Liberal Democrat coalition government (2010-15), when ministers decided that the UK should pursue a nuclear-fuelled future, with the provision of state subsidies to sector investors, riling both free-marketeers and renewable energy campaigners alike. This policy position remained unchanged even after the sobering wake-up call of the potential dangers surrounding nuclear power delivered by the March 2011 Fukushima disaster. Yet the British public have proven far less averse to nuclear power than the German population, perhaps partly because the former have been fed a regular line from the government that without further nuclear development the UK may be looking at future brown-outs. Such a fear-invoking narrative was recently admitted to be a myth by the government’s own Secretary of State for Energy and Climate Change, when Amber Rudd publicly stated that the nation’s lights would not go out if it was not developed, as had been claimed by her predecessors.

Such admissions are grist to the mill for the national and local civil society opposition to Hinkley, movements like Stop Hinkley which have doggedly campaigned against the project for many years, long before HPC was proposed. Although such citizen groups are ideologically opposed to nuclear power development in principle, their economic arguments against the project have been given added weight in recent years by a number of studies by financial and economic analysts, such as Liberium Capital which described the strike price as “economically insane” and “as far as we can see this makes Hinkley Point the most expensive power station in the world.”

Despite the generous government guarantees provided by a strike price (at £92.50 per MW/h) for the electricity produced of over twice the current wholesale price for electricity in the UK, the parlous state of EDF’s finances and massive debt mountain mean that HPC is a risky proposition for the utility. Its own workers’ union opposes the project and in February 2016, Thomas Piquemal, EDF’s chief financial officer resigned, warning that building HPC could ruin the company. As a result, the French government has said it plans to provide financial support to EDF, a move that will likely fall foul of EU legislation to ensure fair competition in the energy market and disallow unfair state aid to individual companies, something that the UK government is already being challenged on in the European courts by the Austrian government. With national pride and the reputation of French nuclear technology potentially at stake (EDF is also looking to invest in China and other countries), a decision from the French government on whether to bailout EDF has been delayed time and again, and a decision is not now anticipated until at least September 2016.

One remarkable point of difference between NT2 and HPC is that with the former, China was portrayed by some as a threat to EDF and Western venture capital’s regional interests, had it been allowed to gain a stake in the dam project. With the benefit of hindsight, China was poised to build dozens of other dams in Laos, with or without EDF’s involvement. But now China is actively courted as a nuclear investment partner, both for the injection of funds it can offer, but also, potentially for its technological expertise. Indeed, the China General Nuclear Power Corporation has taken a one third stake in HPC, with the deal inked just hours before the state visit of President Xi Jinping to London in October 2015. Much to the chagrin of human rights groups, the President was afforded the red carpet treatment for his visit, with PM Cameron and Chancellor Osborne hoping HPC would be the springboard for further Chinese investment in nuclear power stations in Essex and Suffolk.

With the latest twist in the Hinkley saga looking like a legal challenge will be launched against the UK and French governments, one Southwest region Green MP referred to HPC as an uneconomic “white elephant” which is being pushed regardless, because there is “now a political battle where the stakes for both the UK and France are just too high to admit failure”.

Both NT2 and NPC would qualify as prime examples of what Danish economist Bent Flyvbjerg refers to as “Machiavellian Megaprojects”, which are shown to follow a time-honoured formula:

(underestimated costs) + (overestimated revenues) + (undervalued environmental impacts) + (overvalued economic development effects) = (project approval)

As Flyvbjerg stresses in his analysis of such megaproject development by a relatively few societal elites, the monomaniacal pursuit can frequently lead to the deception of “parliaments, the public and the media about the costs and benefits of the projects”.

It seems there is more linking the development paradigm of Savannakhet and Somerset than citizens in both the U.K and Laos may fully appreciate. There is still a glimmer of hope, however, that commonsense may prevail in London and Paris, and the HPC case of folie de grandeur may be stopped in its tracks. In the case of NT2, Laos has now been locked into a project with multiple negative social and environmental consequences, many irreversible such as permanent loss of valuable terrestrial and aquatic biodiversity, that will ultimately cost its citizens and the wider Mekong basin populations dearly into the future.

[1] Interestingly, in the address given by Pierre Lellouche, Minister of State with responsibility for Foreign Trade at the Nam Theun 2 project’s inauguration ceremony on 9 December 2010, he claimed that the site was first identified back in 1927 by an engineer, presumably of the French Indochina colonial government.

[2] The plant load factor is the ratio between the actual energy generated by the plant to the maximum possible energy that can be generated with the plant working at its rated power over the duration of a year.

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An alternate past/future for Mekong River dams under the UN Watercourses Convention: Part 1

This article is the first in a three part series looking at dams in the Mekong. 

Damming the Mekong: Unprecedented threats to the river and its people

The lifeblood of the region, the Mekong River (known as the Lancang in China) and its many tributaries flow through six countries: China, Myanmar, Laos, Thailand, Cambodia and Vietnam. Its resources affect the lives of over 70 million people who rely on it daily for food and/or work, but these livelihoods are facing growing threats.1,2,3 Today, the mighty Mekong is at an unprecedented juncture in its ongoing survival, particularly from hydropower dam development.

Much of the focus of the Mekong is divided between the upper Mekong, which includes China and Myanmar, and the Lower Mekong, encompassing the remaining four states. Eleven dams are being planned or built on the Lower Mekong Basin’s mainstream with many more anticipated along its extensive tributaries.4,5 Most of these dams come with significant social and environmental impacts.

Source: WWF

Most dams trap fluvial sediment, creating erosion and reducing nutrients in the river, directly affecting agricultural production, so each additional dam means less rich soil downstream.11 Agricultural outputs from Vietnam’s Mekong Delta, particularly rice, have already been severely impacted via China’s Lancang dams scheme.12 The situation has become so critical that Vietnam recently went to the extent of asking China to discharge water from the Jinghong Dam on the Lancang in Yunnan Province to help alleviate conditions in the Delta and seems intent on requesting other upstream states to do similarly regarding river flows.13,14 Thailand’s need for water during the current drought has led it to set up temporary pumping stations to divert 47 million cubic metres of water from the Mekong, causing concern for other downstream countries.26 Additional Mekong dams, compounded by ongoing drought and rising sea levels due to climate change, will only exacerbate these issues.11,15

While some riverine communities may be displaced as their fishing or farming lifestyles become unsustainable, other communities, often indigenous peoples with a strong cultural connection to their ancestral land, are being relocated to make way for dam reservoirs.16,17

Thus, it is no wonder that disputes have emerged between various Mekong basin states as to the domestic, transboundary, environmental, and social impacts of certain dams. Part 1 of this three-part article examines the existing legal framework for regulating dam development in the Mekong and how its legal gaps and ambiguities have led to ongoing disputes, specifically regarding the Xayaburi Dam under construction in Laos.

1995 Mekong Agreement and MRC

Entering into force on 5 April 1995, the Agreement on the Cooperation for the Sustainable Development of the Mekong River (Mekong Agreement) for the Lower Mekong Basin states of Cambodia, Laos, Thailand, and Vietnam was the celebrated river basin treaty of its time and a major legal milestone.

Divided into six chapters, the Mekong Agreement’s provisions broadly set out the roles and responsibilities of riparian – being ‘of the river’ – states in governing the seasonal flows and major uses of the Lower Mekong Basin. It is accompanied by the Procedures for Notification, Prior Consultation and Agreement (PNPCA), which sets out key timeframes, standards, and processes for states regulating dam development. It contains separate procedures for projects on Mekong tributaries, plus intra-basin uses on the mainstream (proposing states are only required to notify fellow riparians of planned projects) versus inter-basin and other mainstream developments (proposing states must submit the project for prior consultation with MRC member states with the aim of reaching an agreement on any contested aspects). The PNPCA Guidelines elaborate further on implementing these processes. Both the PNPCA and Guidelines are not ‘international treaties’ in the strict legal sense as they are supplementary to, and thus sit outside of, the Mekong Agreement ratified by MRC member states.18,19

The Mekong river. Photo: Remy Kinna

The Mekong river. Photo: Remy Kinna

As Bearden (2010)18 aptly suggests, the Mekong Agreement and the MRC have successfully epitomised what a transboundary watercourse agreement and river basin commission should be in many respects, especially given the ever-changing geo-political and environmental contexts of the basin and its member states. However, twenty years later, the Mekong Agreement and PNPCA have collectively shown identifiable legal weaknesses.The Agreement also established the MRC as an inter-governmental institution with the aim to foster cooperation between basin states to effectively manage river usage. Having not yet decided to join, China and Myanmar hold official observer status as MRC ‘Dialogue Partners’.

Legal gaps and limitations for governing dams

The following critical legal gaps in the Mekong Agreement and the PNPCA have led to varying interpretations on its basic standards, timeframes, and processes for dam construction thus fostering subsequent disagreements among MRC states:

  • Lack of clear specifics for key processes under the Agreement and PNPCA’s standards, timeframes, and procedures thus leading to inconsistency in their practical application;
  • Exclusion of tributary dams from ‘prior consultation’ regulations under the PNPCA; and
  • PNPCA and Guidelines being widely perceived as not legally binding on states.2,18,19,20,21

Another significant limitation of the Mekong Agreement and the MRC is its circular mechanism for dispute resolution. As it stands, the Agreement requires states to peacefully resolve disputes or, when necessary, to refer the dispute to the MRC for further negotiation. However, the MRC refers unresolved matters back to states to use diplomatic means unless, as a last resort, they chose to invite third party involvement. Eventually, if no resolution is reached, states can essentially ‘agree to disagree’ as has occurred with the Xayaburi Dam and its PNPCA process (explored in Parts 2 and 3 of this article). Such stalemates often leave the disputing parties dissatisfied and can breed distrust for future processes.

Frustrated at the perceived inability to efficiently resolve disputes and clarify processes for dam developments, including the PNPCA, bilateral ‘Development Partners’ have considerably reduced their funding to the MRC for the 2016-2020 budget.22,23 Large-scale restructuring is scheduled and relocation of the Secretariat headquarters from Laos has even been suggested as a possibility.22,24 After years of calls for greater transparency and improved efficiency, the MRC is currently undergoing such significant changes that its ability to effectively govern the river’s resources long-term is at stake.24,25

Mekong in 2016: A basin under threat, agreement under scrutiny, institution undergoing change

As dam construction on the Mekong rapidly accelerates, states’ legal obligations under the Mekong Agreement and PNPCA, as well as the mandate of the MRC to help guide and resolve disputed procedural matters, need clarifying and strengthening to evolve and cope with these challenges.

Given the issues outlined above, Part 2 of this three-part article will next investigate the practical implementation of the Mekong Agreement and PNPCA via the Xayaburi Dam ‘prior consultation’ process, examining the specific contested procedural and legal elements. The potential benefits of the 1997 United Nations Convention on the Law of the Non-navigational Uses of International Watercourses (UNWC) – the most authoritative global treaty concerning management of international rivers – being applied to the Lower Mekong Basin are subsequently explored.

References:

  1. Vidal, J. (2015, November 26). Mekong: a river rising. The Guardian. Available from:http://www.theguardian.com/environment/ng-interactive/2015/nov/26/the-mekong-river-stories-from-the-heart-of-the-climate-crisis-interactive
  2. Hirsch, P. (1999). Nature beyond the nation state symposium: beyond the nation state – natural resource conflict and “national interest” in Mekong hydropower development. Golden Gate Law Review, 29, 399
  3. Osborne, M. (2004). River at risk: The Mekong and the water politics of China and Southeast Asia. Lowy Institute for International Policy Paper 02. Longueville Media, New South Wales, Australia
  4. Goichot, M. (2016, January 14). UN convention could help solve Mekong pact’s weaknesses. Phnom Penh Post. Available from: http://www.phnompenhpost.com/analysis-and-op-ed/un-convention-could-help-solve-mekong-pacts-weaknesses
  5. International Rivers (2015, November 15). Guest Blog – Dams: Don’t Risk What You Can’t Afford To Lose. Available from: http://www.internationalrivers.org/blogs/263/guest-blog-dams-don-t-risk-what-you-can-t-afford-to-lose
  6. Than, K. (2011). New Mekong Dam a Go, and a Blow to Megafishes? National Geographic. Available from:http://news.nationalgeographic.com/news/2011/03/110324-mekong-river-endangered-megafish-xayaburi-dam/
  7. Gaworecki, M. (2016, January 12). Scientists sound alarm over hydropower’s impacts on tropical fish biodiversity.Mongabay. Available from: http://news.mongabay.com/2016/01/scientists-sound-alarm-over-hydropowers-impacts-on-tropical-fish-biodiversity/
  8. Turton, S. (2015, October 22). Mekong dams will wipe out fisheries, study says. The Phnom Penh Post. Available from: http://www.phnompenhpost.com/national/mekong-dams-will-wipe-out-fisheries-study-says
  9. WWF (2012, August 27). Mekong dams could rob millions of their primary protein source. Available from:http://cambodia.panda.org/news_cambodia/press_releases/?uNewsID=206032
  10. Henderson, S. (2013, December 3). Mekong Dams a Long-Term Risk to Food Security. Cambodia Daily. Available from: https://www.cambodiadaily.com/archives/mekong-dams-a-long-term%E2%80%88risk-to-food-security-48415/
  11. Khadka, N.S. (2015, October 20). Climate Change: Mekong Delta heads for troubled waters. BBC News. Available from: http://www.bbc.com/news/science-environment-34407061
  12. Gillet, K. (2011, August 21). Vietnam’s rice bowl threatened by rising seas. The Guardian. Available from:http://www.theguardian.com/environment/2011/aug/21/vietnam-rice-bowl-threatened-rising-seas
  13. Tiezzi, S. (2016, March 16). Facing Mekong Drought, China to Release Water From Yunnan Dam. The Diplomat. Available from: http://thediplomat.com/2016/03/facing-mekong-drought-china-to-release-water-from-yunnan-dam/
  14. Viet, D. (2016, March 16). Vietnam takes urgent action to rescue Mekong River Delta. VietNamNet Bridge. Available from: http://english.vietnamnet.vn/fms/environment/152461/vietnam-takes-urgent-action-to-rescue-mekong-river-delta.html
  15. Choonhavan, K. (2014, April 30). Vietnam screams for halt to Mekong dams as delta salts up. The Nation. Available from: http://www.nationmultimedia.com/opinion/Vietnam-screams-for-halt-to-Mekong-dams-as-delta-s-30232520.html
  16. IRIN. (2011, July 29). LAOS: Villagers brace for relocation as dam project moves forward. IRIN. Available from:http://www.irinnews.org/report/93355/laos-villagers-brace-for-relocation-as-dam-project-moves-forward
  17. Titthara, M. (2016, January 7). Trapped between two dams. Mekong Eye. Available from:http://www.mekongeye.com/2016/01/26/trapped-between-two-dams/
  18. Bearden, B.L. (2010). The legal regime of the Mekong River: a look back and some proposals for the way ahead.Water Policy. 12, 798
  19. Rieu-Clarke, A. (2015). Notification and consultation procedures under the Mekong Agreement: insights from the Xayaburi controversy. Asian Journal of International Law. 5(1), 143
  20. IUCN. (2016). A window of opportunity for the Mekong Basin: The UN Watercourses Convention as a basis for cooperation (A legal analysis of how the UN Watercourses Convention complements the Mekong Agreement): IUCN. 27pp. Available from: http://www.3sbasin.org/publication/download-documents.html?download=99:a-window-of-opportunity-for-the-mekong-basin-the-un-watercourses-convention-as-a-basis-for-cooperation
  21. Kinna, R. (2015, November 24). UN Watercourses Convention: Can it revitalise the Mekong Agreement 20 years on?. Mekong Commons. Available from: http://www.mekongcommons.org/un-watercourses-convention-can-it-revitalise-mekong-agreement-20-years-on/
  22. Cox, J. (2016, January 13). Forecast Stormy for Mekong, Commission Says. Khmer Times. Available from:http://www.khmertimeskh.com/news/19880/forecast-stormy-for-mekong–commission-says/
  23. Turton, S. (2015, June 25). Mekong body risks losing funds: donors. The Phnom Penh Post. Available from:www.phnompenhpost.com/national/mekong-body-risks-losing-funds-donors
  24. Hunt, L. (2016). Mekong River Commission Faces Radical Change. The Diplomat. (22 January, 2016). Available at: http://thediplomat.com/2016/01/mekong-river-commission-faces-radical-change/
  25. International Rivers (2008, March 27). MRC’s crisis of legitimacy and relevancy challenges new CEO: Regional Groups. Available from: https://www.internationalrivers.org/resources/mrc-s-crisis-of-legitimacy-and-relevancy-challenges-new-ceo-regional-groups-3177
  26. Lee, G. & Scurrah, N. (2009). Power and responsibility – The Mekong River Commission and Lower Mekong mainstream dams. A joint report of the Australian Mekong Resource Centre, Sydney University and Oxfam Australia. Available from: http://sydney.edu.au/mekong/documents/power_and_responsibility_fullreport_2009.pdf
  27. Cochrane, Liam. (2016, March 17) Mekong River diverted into Thailand’s waterways, worrying drought-stricken neighbours like Vietnam ABC News. Available from: http://www.abc.net.au/news/2016-03-18/mekong-river-thailand-diverts-worries-neighbours/7256678

This article was first published here on the website of the Global Water Forum. It is reprinted with permission of the author and Global Water Forum. 

Rémy Kinna is an Australian international water law, policy and governance specialist and Principal Consultant with Transboundary Water Law (TWL) Global Consulting (www.transboundarywaterlaw.com) currently based in Phnom Penh, Cambodia. He is an Honorary Research Associate with the Institute of Marine and Environmental Law at the University of Cape Town, South Africa, and an Expert – International Water Law and Policy with the London Centre of International Law Practice’s Centre for International Water Law and Security. Rémy can be contacted via email (remy@transboundarywaterlaw) or found on TwitterAll views and errors remain those of the author and do not represent those of the states, organisations and individuals mentioned in this piece.

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Regaining Thailand: An Inevitable Challenge for US Policymakers

This article focuses on the political situation in Thailand and the current state of U.S.-Thai relations. Due to the recent Thai military coup in 2014, the relationship between the United States and Thailand has deteriorated in various aspects to the extent that the ex-ASEAN frontrunner seems to have lost its position as a vibrant democracy and human right advocate and a relatively strong U.S. ally in the Asia-Pacific region. Although it will be an inevitable challenge for U.S. policymakers, to assist Thailand in regaining such position, it is believed that the United States must reverse its policy on the cutbacks in cooperation with Thailand and work with Thai authorities in an attempt to stabilize the political situation and consequently restore democracy to the country.

In elaboration of the above standpoint, this article is divided into three sections. The first section provides background to how the Thai military coup has come to power and of the present state of U.S.-Thai relations followed by a section which describes the significance of Thai political situation to the United States. The last section will be an illustration on a step-by-step procedure recommended to be taken by the United States in order to take Thailand back to its former self as a democratic nation and a U.S. ally.

Background Information

In May 2014, General Prayuth Chan-ocha seized power in what is now Thailand’s fifth military coup under its current monarch of King Bhumibol Adulyadej. Although coups have been frequent in Thailand’s turbulent modern history, the crucial timing and the severity of the junta’s subsequent actions suggest a subterranean ratcheting up of tensions. The backdrop of the coup was six months of street protests by “yellow shirts” which paralyzed the democratically elected government of Yingluck Shinawatra, the youngest sister of the former Prime Minister Thaksin Shinawatra.

Thaksin Shinawatra is undoubtedly considered a controversial figure in Thailand. During his administration, his populist policies worked in favor of his supporters mostly the lower-class who make up the majority of the Thai population. Despite various attempts by the elites to rid Thaksin of his influence, it was him and his allies that had always won elections on consecutive occasions over the past. Coming with the party’s gain in its popularity among the destitutes was the ascending despite from the the urban middle class, elites and especially the royalists who saw the party and its leader’s popularity and policies as cunning approaches to consolidating power. For the royalists, Thaksin’s legacy and influence was also seen as a threat to the monarchy, who has always maintained outright supremacy in modern times.

A loose group comprising royalists, ultra-nationalists and the urban middle class who disliked Thaksin is known as the People’s Alliance for Democracy (PAD) or the “yellow shirts”. It is well known for its constant rallies of political movements against Thaksin and his allies in politics including his own sister the last democratically elected prime minister Yingluck Shinawatra. They were behind the huge street protests that led up to both the 2006 military coup, which ousted Thaksin and sent him into exile overseas, as well as the recent one, which deposed his sister from the state’s premiership in similar ways. They are renowned for opposing stance against the “red shirts,” who sided with Thaksin and protested against unelected governments that toppled over him and his successors. For the “yellow shirts” and royalists, the coup was therefore seen as  a showcase of their own achievement after repeated prolonged efforts to eliminate prospects of Thaksin and his successors’ repeat victories in general elections and their returns to political power.

Upon taking power, Prayuth promised to Thai people in what described as return of “sustainable happiness” and laid a “roadmap” to returning the country the democratic ruling

whilst in reality all he and the junta has been committing seems to be of undemocratic nature and against its originally proclaimed plan. To name a few, Prayuth has suspended the democratic constitution, imposed martial law, and dialed back civil liberties such as freedom of speech and assembly. Over the past year, more than 1,000 politicians, academics, and journalists have been detained or sent to Thai military facilities for what is called “viewpoint adjustments”, while Yingluck has been put on trial for criminal negligence over alleged graft in a rice subsidy scheme. In April 2015, the junta released the first draft of its new constitution, the real aim of which was branded undemocratic in that it appeared to work against return of  electoral power once wielded by Thaksin Shinawatra to the Thai population. The draft was so unpopular and untrustworthy that it was rejected by the National Reform Council and surprisingly faced opposition from both the Phua Thai and Democrat Parties, the longstanding rivals in Thai politics. In January 2016, the second constitutional draft was launched to the public amidst fear of Meechai Ruchupuan, the official in charge of drawing it up, that it might not resolve long-running troubles and even produce weak civilian governments under the hidden influence of the military. Criticism of the new draft has demonstrated significant flaws in its content which once again bleak the potential of real democracy being returned to the nation. Notwithstanding masses of criticisms, Prime Minister Prayuth Chan-ocha remained adamant that the referendum for the draft constitution be held in mid-2017 even without solid guarantee.

As the United States’ oldest ally and a strategic hub to U.S.’ interests in the Asia-Pacific, Thailand’s regressive path cannot be ignored. Thailand is at present a military regime that lacks guarantee of when it will return to civilian rule. Further, it must be noted that elite interests are divergent from the United States’. While the United States, in collaboration with the Asia Pacific region, are expected to strive for bringing back the democratic state in Thailand, the royalists are dreading return of an electoral democracy that brought Thaksin and his successors into power over the past decade. Moreover, they become increasingly hostile with the United States’ signs of growing disapprovals and reactions shown in their curtailment of cooperation with Thai authorities. After Kristie Kenney, the US Ambassador to Thailand, criticized the coup, Thai royalists began a social media campaign calling for the ambassador to be recalled to Washington. Khunying Songsuda Yodmani, the daughter of former pro-US military dictator Thanom Kittikachorn, blasted the United States for ‘meddling’ in Thailand’s affairs and called on the U.S. State Department to “respect its allies and treat them as equals rather than its colonies.”

In the areas of defense and security, the Obama administration suspended more than $4.7 million worth of the unspent FMF and IMET assistance for Thailand. It cancelled high-level engagements, exercises, and a number of training programs with the military and police. Every year, the United States participate in the Cobra Gold, the largest Asia-Pacific military exercise held in Thailand. In the past, the exercise involved many thousands of U.S. and Thai troops and included high-end military operations. In 2015, however, the U.S. military scaled down the Cobra Gold, reducing U.S. troops to just 3,600 and cancelling a large-scale, live-fire exercise associated with amphibious landing. This is not surprising as under prohibitions in U.S. laws, American forces are limited in what exercises they are permitted to conduct with a nation that had overthrown a democratically elected government.

Nevertheless, Thailand, trying to prove its prevailing independence from Western sanctions is embarking on its journey to pursuing bilateral ties with China. To begin with, Thailand’s military junta favors China’s stance on the country’s internal situation. According to the conservative Thai newspaper Naew Na, sources in the Ministry of Defence noted that, “China regarded Thailand’s political problems as an internal issue, and that China would not interfere.” Due to the lack of ideological differences between Thailand and China’s current regimes, Thailand has been working more closely with China. On June 6, 2015, General Prayuth Chan-ocha announced that Thailand was now a “partner of China at every level.” Moreover, in January 2015, China’s Defense Minister Chang Wanquan embarked on a visit to Thailand aimed at boosting Sino-Thai defense relations. For Thailand, securing relations with China is the ruling junta’s way to show Washington that there are alternate partners who are willing to do business with, without fretting about the legitimacy of its rule.

Economically, Thailand’s ruling junta is boosting ties with China as a way to reverse its sluggish growth. In December, Thailand welcomed Chinese Premier Li Keqiang, the most prominent foreign leader to visit the country since the military seized power on May 22. It was a good opportunity for Thailand to show that Thailand’s political problems are not obstacles to trade, especially since the West has reduced trade ties with Thailand following the coup.

Why Does This Matter?

As the oldest ally to the United States in the Asia-Pacific, Thailand acts as a crucial determinant to the U.S. pivot to the Asia-Pacific region. While U.S. relations with most countries in Southeast Asia are warming, the United States’ ties with its oldest partner in the region are a critical outlier.

Although it is true that the military junta purposefully took control of Thailand, it must be understood that there is a looming royal succession coming up due to the ailing 87-year-old Thai King Bhumibol Adulyadej’s ill-health. For now, the Thai military has assumed political control to ensure it manages the royal succession, whenever that takes place. King Bhumibol guided his people through the tumult that was the second half of the 20th century until today. His death will shake Thailand like nothing has in its modern history, and the Thai military wants to be firmly in charge when that happens, and it is that simple.

In responding to Thailand’s political crisis, the United States must walk a tightrope, balancing consistency in U.S. foreign-policy tenets supporting democracy, human rights and freedom of speech with readiness to deal with deep-rooted consequences of Thailand’s political transition that may arise in the near future. It risks losing serious geopolitical ground if it fails to manage this difficult chapter in Thailand’s political evolution.

Whether or not the junta succeeds in this aim, Prayuth’s “democracy with Thai characteristics” may struggle to bridge his country’s deep political and social divides. American academic David Streckfuss has described his rule as a throwback to Thailand’s “golden age of military dictatorship” during the Cold War. Particularly, it overlooks the rising political expectations of the Thai people. “This is not the same Thailand as 1958, 1976, or 1991,” Streckfuss writes. “And neither are the Thai people the same. Democracy in Thailand may not be inevitable, but its chances are considerably higher than successfully putting the genie of political consciousness back in the bottle.” In other words, Prayuth may find the Thai people growing restless provided that not much has been done to bridge the divides. Meanwhile, the United States has an interest in seeing democracy return to Thailand as rapidly as possible. The U.S. must therefore act as a mediator ready to handle the consequences that may arise from Thailand’s political crisis.

What Should The United States Do?

For now, it is unlikely that Thailand will have real elections until the succession has taken place, which could be several years from now. Moreover, the draft constitution currently being circulated falls short of what would be considered as democratic. The presented charter contains provisions for a new senate where the junta would appoint all 250 members and leave six seats open for the heads of the armed forces. This appointed senate would also check the power of lawmakers during the five-year transitional phase, which allows the junta, and not civilians, to both determine both the senate body and the laws. Further, the new prime minister could be selected if over 250 members of parliament support the motion and if it subsequently approved by a joint session of the lower house and the appointed senate. This would allow the junta-controlled senate, and not the citizens to choose their leader, and would arguably allow junta leaders like Prayuth to prolong his premiership. In addition, the revamped constitution may allow a planned National Strategic Reform and Reconciliation Committee – nicknamed the “crisis panel” – to seize all executive and legislative power from the government and parliament in an emergency. An unelected “outsider” could become prime minister, endorsed by parliament, if a “crisis” arises, and critics fear that pro-junta outsiders will be boosted to become premier. Additionally, the Constitutional Court will continue to decide the fates of politicians who fall afoul of the charter’s laws or if a “crisis” remains unresolved. During the past decade, that Constitutional Court ruled against several elected politicians, effectively ending their careers. Essentially, this constitution will provide the junta a supreme right to prevent the sort of electoral democracy that brought Thaksin and his allies to power, contrary to popular 1997 constitution that the junta canceled after a 2006 coup.

The U.S. government must be strategic. Taking lesson from the hostilities that the Americans faced after the previous U.S. ambassador Kristie Kenney staked out hardline against the coup, Washington must urge the current ambassador to Thailand Glyn Davies to be cautious, moderate and take a more nuanced approach towards protecting U.S. interests. Meanwhile, Davies must be urged to continue negotiating with Thai authorities. His team should consult with the military and various stakeholders, in order to deepen understanding of U.S. concerns and listen to perspectives of the key players in the political drama that has engulfed the kingdom. Further, to restore democratic hopes, Davies’ team must also pressure the junta to amend the new draft through diplomatic pressures and negotiations. It must uphold the principle that the constitution follows international guidelines, respects the choice of citizens and not the military officials over their premier. At this point, there were numerous politicians and civilians who were detained over their criticisms of the new draft; the U.S. government must assert the fact that their opinions must be respected. Beyond that, it should pressure the Thai government to end the use of military tribunals to try civilians, and amend or revoke the penal code article 112 on lese-majeste and release those who are convicted under that article.

Thailand’s relations with China have long been strong and it seems that Beijing incrementally steps up its ties with the Thai military every time Washington pulls back. Washington must therefore find ways to demonstrate that it remains a friend of Thailand and not turn its back on the country when politics enters a rough patch. One idea would be to establish a private eminent persons’ group of senior former U.S. foreign-policy officials, experts and business leaders that could meet influential Thais on a regular basis to discuss the future of Thai-U.S. relations, for example, five years down the road.

In the areas of defense and security, Washington can reverse its cuts to military cooperation, but with limits. First, it can continue its full complement of joint military exercises. Second, the U.S. should prepare to hit the ground running with resumption of full military-to-military contact, to include the doubling of IMET assistance. Nonetheless, Washington should also condition that Thailand will only receive full military cooperation if it is progressing towards the democratic path and take into account the human rights of its citizens, through Ambassador Davies’ use of continued diplomatic pressure and negotiations. This way, the U.S. will be able to both improve its ties with Thailand and at the same time ensure that Thailand is walking the right way.

Bangkok hosts one of the largest U.S. embassies in the region, and this serves as the base for a raft of U.S. activities in Southeast Asia including regional headquarters for narcotics addiction, U.S. Agency for International Development, and the Federal Bureau of Investigation. If the military continues to delay elections and tighten control on civil society, it would not be safe for these institutions and operations to be solely based in Bangkok, as it would allow the junta to jeopardize U.S. interests, institutions and operations. However, rather than completely relocating these activities, which would strain U.S.-Thai relations even further, a good option will be to disperse these interests throughout Southeast Asia, which would not only protect U.S. interests, but would also allow it to better deal with Thailand. For example, the U.S. could enlarge its embassies throughout the region and establish second offices for these activities in countries such as Vietnam and Singapore, for a different set of reasons. U.S.-Vietnam relations in recent times have been improving and strategic; establishing offices in Vietnam will not only allow the U.S. to handle more closely mainland Southeast Asian issues, but will also increase its leverage over the ongoing disputes with China in the South China Sea, a sea crucial to maritime trade. As for Singapore, the island nation’s political stability, development and hub location in Southeast Asia allows it to serve as a haven for U.S. interests to be well-maintained and not be threatened.

Moreover, an important way to regain Thailand is by increasing engagement with nearby countries, which has already been happening. For example, the U.S. could work towards the development and democratization of Thailand’s neighboring countries Lao, Cambodia and Myanmar, in case it will have any spillover effects to Thailand in the future. Having recently gone through a dramatic political transition from a military dictatorship to a democratic regime, working with Myanmar will give hope. Another very important country the U.S. should work very closely with is Indonesia, a regional leader, stable democracy and home to the headquarters of ASEAN, the political and economic organization of ten Southeast Asian countries. First, more diplomatic activities in Indonesia will allow the United States increased presence over ASEAN regional institutions to influence the dynamics and affairs of Southeast Asia as a region. Second, with Indonesia on its side, the U.S. will be able to utilize Indonesia’s power in Southeast Asia to push Thailand and other countries in the region to embrace democratic transitions and human rights. It would not be a quick process, but working with neighboring countries will gradually press Thailand to democratize in the long-run.

After all it is worth noting that there exists remarkable prospect of Thai’s current political status being overlooked by the United States amidst the rising of some neighboring countries on the ASEAN political and diplomatic platform. There also arises a concern that this may steer away the United States’ attention from assisting Thailand in gaining back democracy and basic human rights. Among a few countries is Myanmar which has recently gone through a massive political upheaval from the dictatorship to democratic regime and coming with their newly-acquired democracy is evidence of China’s attempt to secure the top alliance position via its economic collaboration plan and policies with the country. Confining its attention to a small group of the Asia Pacific countries may do the United States more harms than goods. Hence it is crucial that the United States never loses sight of maintaining a good balance of power through its public relations and diplomatic exercises throughout the Asia Pacific region.

This op-ed, written by a concerned Thai citizen, is posted anonymously.

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“Welcome to Sayabouly – Land of Elephants & Dams”

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A propaganda poster in the center of Sayabouli township shows founding leader of the Lao People’s Revolutionary Party and former Prime Minister Kaysone Phomvihane

Sayabouly[1] province, situated in Laos’ northwest, has long been considered something of a historical and geographical anomaly. For a start, it is the only Lao province that lies entirely on the western bank of the Mekong river with only a forested mountain range separating it from Thailand, and secondly, as a once remote borderland, it has at various times been the subject of territorial disputes that occasionally have proved quite bitter.

Once part of the Lan Xang kingdom and used as a conduit for warring Siamese and Lao armies, by the late nineteenth century Sayabouly became a slice of desirable real estate for expansionist Siamese and French colonial governments, both of whom claimed dominion over its territory and rich forest resources. The Siamese were forced to cede it to France in 1904 by treaty, no doubt recognising its strategic importance for buffering the important city of Luang Prabang. During the Second World War in 1940, Thailand annexed it with the help of the Japanese army and renamed it Lan Chang, but the province returned to French control six years later with the restoration of French Indochina and Thailand was obliged to drop its claims as part of the conditions for its entry into the United Nations.

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Location of Sayabouli province in Lao PDR. Photo: Wikipedia

Since the fall of French Indochina and its inclusion in a new Lao nation, Sayabouly has been subject to periodic Thai irredentist claims for lost lands of a greater Thai empire and saw active insurgency by Thai-funded fighters during the twenty year civil war, although it largely escaped the US aerial bombing campaign that devastated so much of the rest of the country. More recently, the southern end of Sayabouly in Botene district experienced a short border war between the Thai and Lao military from December 1987 to February 1988, supposedly over disputed logging claims and the legacy of unclear French border demarcation. This rather bloody spat reportedly led to the deaths of around a thousand soldiers (primarily on the Thai side), but was deftly hushed up by the authorities on both sides, with the Thai government blocking reporters from accessing the battlefield area. I have heard credible reports from Lao soldiers present that Thailand employed chemical weapons against the Lao

Sayabouly also offered an important sanctuary for Communist Party of Thailand (CPT) fighters during the 1970s and 80s, a leading member of which used to be a neighbour when I lived in remote Phiang District for two years in the late 1990s. I was a field-based advisor with a UNDP-funded aquaculture extension project working with the provincial livestock and fisheries department in a role that gave me a unique opportunity to travel extensively throughout the province, at a time when road communications were still problematic and slow, while telecommunications facilities did not extend much further than the provincial capital.

The kindly old Thai CPT comrade I knew had trained in China and fought in the jungles throughout Northern Thailand, eventually retreating to communist Laos following a government amnesty for CPT members being declared in 1982. After laying down his weapons, he lived out his twilight years in Muang Phiang in conditions of relative poverty living the life of a smallholder farmer, steadfastly refusing to return to his birth place in Sisaket Province, Northeast Thailand. He used to tell me about the dense forests the CPT set up small camps in to conduct raids into Thailand, which one could trek through for days without encountering a road or human habitation, living largely off hunted game and forest produce. The Lao authorities permitted a small group of Thai CPT dissidents to seek refuge in Sayabouly for years after hostilities officially ceased, including the noted writer, Assanee Polajan.

Retooling Sayabouly

Despite recent government efforts to put the province on the map through tourist promotion, attempting to take advantage of its position as both a gateway to Luang Prabang and a province with a rich potential for eco-tourism in its own right, reflected in the organisation of an annual Elephant Festival in Sayabouly provincial capital (held on 19-21 February this year), originally conceived by ElefantAsia to ensure pachyderm protection, with the elephants acting as an iconic symbol of wider Lao cultural and environmental conservation concerns.

Having evolved since its first iteration in Hongsa district in 2006, tourists nowadays would see dozens of elephants led in to the township to play football, drag demonstration logs, parade in costume, take a bath in the Nam Houng river, give rides and generally entertain locals and foreigners alike. Since its inception, the conservation message has been gradually replaced by spectacle and commercialism, with ElefantAsia nudged out of the scene by competitors with far deeper pockets and greater influence in high places, with the two most prominent names by far being “Hongsa Power Company” and “Xayaburi Power Company”. Both maintain a healthy fleet of branded four wheel drive vehicles and display prominent roadside posters around town that compete with Lao People’s Revolutionary Party (LPRP) hammer and sickle adorned banners, from which smiling demagogues beam down on passers-by above ubiquitous state propaganda messages. Ironically perhaps, given the province’s history, both of these companies are Thai-owned. Amidst this strange mix of modern corporate advertising and North Korean style political propaganda, it is unlikely a visitor would learn much about the province’s rich historical past at the Festival, much less its environmentally controversial present.

Not disconnected from the deft switch to Thai corporate sponsorship of the Elephant Festival, Sayabouly province hosts two of the largest energy production projects in Southeast Asia. These have contributed to a fundamental alteration in its ecological character in a matter of a few years, perhaps more than any other province in the Lao People’s Democratic Republic, as it is officially known. What were remarkably healthy and biodiverse forests and river systems at the turn of the millennium, have rapidly degraded to become rather lacklustre shadows of their former state, diminishing their value and utility to the majority of the scattered rural population that heavily depended upon the services they provided. Furthermore, rare and endangered wildlife species have all but disappeared, falling victim to habitat loss, hunting and a scarcely restrained trade in bush meat.

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Group of youth work as a team with nets to catch small fish in the Nam Huong river near Sayabouli township.

For many households, agriculture was a secondary occupation to the foraging and harvesting of non-timber forest products and a wide variety of aquatic organisms that formed the basis of livelihoods up to around the millennium. While this livelihood switch may be considered the inevitable cost of “development” and “progress” wherever one cares to look in the “developing” nations of the world, the social and environmental changes I found in Sayabouly during a recent visit were nevertheless rather stark and speak to wider political and structural issues emerging in this autocratic state, sandwiched between three voracious regional powers.

Harnessing Sayabouly

My first return visit to Sayabouly in over a decade began in the northern district town of Hongsa, travelling there by slow boat down the Mekong River to the minor landing at Tha Suang, an hour’s journey downstream from the popular backpacker overnight stopping off village of Pak Beng, located roughly midway between Huay Xai and Luang Prabang. Pak Beng is on the cusp of being transformed by a near-completed bridge over the Mekong that will link Thailand and China, and just above the bridge, a 912 MW hydropower dam, with the site currently being prepared by Datang, a Chinese corporation. From Tha Suang, Hongsa is reached along a narrow, twisting dirt road, which snakes up through some of the last remnants of a once immense jungle. One emerges from that forest high above Hongsa to be greeted by the sight of an immense smoking industrial complex, dominated by a massive chimney and three cooling towers. On the day of my visit the tops of the chimney and towers were lost in the cloud, giving the view something of a surreal quality, juxtaposed as it is next to paddy fields and traditional villages.

HONGSA EdMK

Hongsa lignite power station. Local air and water quality has deteriorated around the site since operations began in 2015.

Hongsa has become the site of a giant opencast lignite mine and associated thermal power station which is designed to produce when fully operational an electricity output of 1,653 MW, of which all but 100 MW will be exported to Thailand. It is described by the Lao government as a “model project” that is “truly environmentally friendly and conducive to sustainable social development”[2]. The main investors in Hongsa Power Company (HPC) are Thai companies Banpu Power and Ratchaburi Electricity Generating Holding, each of which hold a 40 % stake, while the remaining 20 % is retained by the Lao government’s Lao Holding State Enterprise (LHSE). The consortium has been granted a 25 year concession to operate the mine and power station, which employs some 700 staff, of which about 400 are Lao nationals. The concession area covers about 60 km2 and required the forced resettlement of over 2,000 people to a once-forested 1,200 hectare site located some 18 kilometres to the east of Hongsa town. Oustees are trained to adopt new and alternative livelihoods involving both agricultural and non-farm activities by staff from HPC and state officials, but inevitably within a far more challenging and biologically impoverished landscape than their more productive homelands.

The local driver who took me to Hongsa told me that since the mine and power station were built, the local river (Nam Kene) had become seriously polluted affecting the water source for several villages and killing fish all the way down to its confluence with the Mekong over 30 kilometres away. He told me, “since the power station opened last year, people in Hongsa and Muang Ngeun have been complaining about chest complaints and other health issues, brought about by the dirty air from those chimneys.” He explained that a vast area of agricultural land, mostly rice paddies, and natural forest had been confiscated over the last few years, to make way for both the mine and power station, but also the resettlement site, leading to a rapid loss of previously prolific non-timber forest products and wildlife available locally.

The same informant also told me that villagers living along the Mekong’s banks in Hongsa district were aware of and concerned about the future impacts of the Xayaburi hydropower project on their fisheries and natural resources-based livelihoods. This was the other Thai-owned mega-project looming large over the province’s future. They had already experienced a precipitous decline in fish catches in recent years, but were not sure if this was mostly related to dams upstream in China that have already greatly altered flow regime of the river, or the ongoing construction of Xayaburi dam located 90 kilometres downstream of Luang Prabang city. The Xayaburi dam project officially began construction in 2012, although site preparations had been going on for a year or two previously, creating a noted logical disconnect between Lao state-controlled media announcements and reported observations of actual on the ground activities.

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The Xayaburi dam under construction in December 2014. Photo: Courtney Weatherby

The 1,285 MW project, estimated to cost $ 3.5 billion, is owned by “Xayaburi Power Company”, which is a 50% owned subsidiary of the Thai construction corporation giant CH. Karnchang PLC, a major listed company on the Thai stock exchange. Funds to build the dam project have been loaned by a group of six Thai financial institutions, including the state-run Export-Import Bank of Thailand. Its implementation has been described as a “game changer” in terms of paving the way for future hydropower development along the lower Mekong mainstream. Indeed, since it was approved by the Lao and Thai governments, Xayaburi has sparked off a rush of new hydro development domestically in Laos, including an equally controversial project in southern Laos at Don Sahong, situated on the most important river channel for upstream fish migration, just a few kilometres from the border with Cambodia. Similar to the Hongsa project, 95% of the power produced from Xayaburi is scheduled for export to Thailand, following planned completion in 2017, underlining a wider gradual incorporation of neighbouring state’s natural resources into the Thai market. This is not to underestimate similar designs and processes underway by both China and Vietnam who are in fierce competition with Thailand for the rights and means to extract them.

Sayabouly at risk

In terms of the environmental and social impacts of the Xayaburi project, much has been written elsewhere about its destructive potential to decimate capture fisheries upstream and downstream, through blocking migration pathways and altering flow and sediment patterns across international boundaries, although the Lao government has treated its development in essence as a domestic affair, with any transboundary impacts considered minor and “incidental.” The government and developers have consistently rejected any need to accept responsibility in the event of a decline in fisheries linked to the dam, arguing that their technological mitigation methods in the form of an unproven fish lift and pass will be sufficient.

In any case, as the director-general of Laos’ Department of Energy Policy and Planning, Daovong Phonekeo maintained, following the decision to pursue construction of Don Sahong dam last year, “for the development of the Mekong River, we don’t need consensus.” Meanwhile, a challenge against the legality of Thailand’s Ministry of Energy and four other state agencies’ support for the Xayaburi dam project was brought to the Supreme Administrative Court by a coalition of villagers at risk of impact and civil society groups, but was thrown out late last year by judges on the grounds that the agencies involved had performed their legal duty correctly. An appeal against the verdict was filed by the plaintiffs on January 25 this year, but any decision will come too late to halt the dam’s completion. The often maligned and toothless Mekong River Commission has remained to all intents and purposes mute throughout this process, causing disillusioned donors to head for the door with future funding.

Although the Xayaburi dam has been roundly criticised for its destructive potential by a wide range of civil society and international state and non-state organisations and media, including repeated concerns voiced by the United States government and other Western nations, the Lao government and allied hydropower industry interests portray any opposition as being confined to a small group of foreign environmentalists that are ideologically opposed to any development activities. Thus, opposition to Xayaburi and other major Mekong dams is perceived within Laos as the preserve of a minority of Western “troublemakers” that through ignorance and arrogance, want to keep the nation perpetually poor and underdeveloped, by halting its rightful sovereign demands to fully develop its water resources for hydropower production and other purposes. Anyone who remotely sympathises in public with this unreasonable foreign position is likely to be harshly treated by the ubiquitous state machine, which falls under the direction of the Politburo of the LPRP.

As the respected historian and political observer of Laos, Martin Stuart-Fox has observed, “No criticism, or even political debate, is permitted outside the confines of the highly secretive party, which recruits its membership from the ambitious and educated. Without the support of the party, promotion in government and the bureaucracy or success in business is impossible.”[3] In short, Laos languishes near the bottom of almost any international league table of civil liberties, accountability, rule of law, and anticorruption and transparency measures, with virtually no civil society to speak of, in particular around hydraulic development issues. As a young villager watching a dam site being prepared on the Nam Kading river in central Laos once confided to me, “To speak against a dam here, is like speaking against the king over there”, pointing towards Thailand. In other words, it is just not done, if one wants to survive.

And not everyone does survive under the LPRP regime, which has ruled with an iron fist since “liberation” in 1975. Lao people who dare to speak out or protest may be incarcerated for years in grim prisons or fall victim to more brutal measures. Some have been known to simply disappear and are never heard of again, for conducting what would be considered quite innocuous activities in most other countries. Even though he was careful not to directly criticise the government’s policy on dam development and was a relatively high-profile NGO leader who had won the Magsaysay Award in 2005 and travelled extensively abroad, Sombath Somphone became a victim of suspected state enforced disappearance in December 2012. While his case has been extensively covered in the international media, and the Lao government has been criticised by Australian and European parliamentarians for not releasing more information about Somphone’s case, there has been little progress made over the last three years and the human rights situation domestically has continued to worsen, leading to a palpable sense of fear amongst ordinary citizens. According to a reliable source in Vientiane, since Somphone’s disappearance an estimated 200 Lao citizens have similarly disappeared, with a reasonable assumption that state forces are responsible.

While such figures are impossible to verify, in the absence of a free media and independent organisations to investigate such allegations, it is widely recognised by organisations such as Human Rights Watch that Laos has regressed in terms of basic freedoms over the last decade. I found Lao people I met during my visit far less likely to talk frankly about the internal situation than I ever recall was the case in the late 1990s and could only attribute this to a context of worsening state censorship of expression and draconian internal repression, even while superficially it may appear to be reaching out to processes of regionalisation and globalisation. Even foreigner friends who work in Laos were reluctant to talk about dam-related issues, perhaps frightened that their Lao visas or work permits may be cancelled by vindictive authorities. There is no contradiction in this position, nevertheless, if one appreciates how power and decision-making are centralised within the hands of a relatively small group of people at the top of a patronage-based hierarchical system.

Whither Sayabouly?

To better comprehend the political situation in Sayabouly and more broadly in Laos with regard to dam development, the visible environmental degradation and tangibly repressive atmosphere that surrounds such infrastructural development, it is helpful to recall the work of Karl Wittfogel and his “hydraulic society” hypothesis. Wittfogel, in describing the nature of state-society relations in certain ancient states in arid and semi-arid areas which exerted strong authoritarian control (often under a despotic, theocratic ruler), hypothesised that state formation and expansion was carried out to a large extent through the centralised control over water resources, in particular irrigation development and management, though included other productive and protective (i.e. flood control) functions too, as well as non-hydraulic infrastructural construction. He noted how, “the rulers of hydraulic society were great builders”, in their efforts to dominate and sustain their power base. In modern states too, one can discern how state-centric hydraulic development can permit the greater control over society, with increased bureaucratisation and centralisation of power to a small, ruling elite, paralleling the processes in ancient states, albeit within a narrower time frame nowadays due to technological advancements. Laos is becoming a classic nouveau hydraulic society as its handful of ruling families concentrate the wealth and power that results from the sole authority to dole out rights (at considerable cost, one might add) to public and private operators wishing to develop the hydraulic potential of the nation’s rivers.

This leads to some spectacularly big and bad projects being built throughout the country, exemplified by the Xayaburi hydropower project, but also a slew of smaller dam projects on tributaries, such as the one I witnessed getting under way to the east of Sayabouly town on the Nam Houng River. A contract signing and groundbreaking ceremony was held on 2 August last year attended by the recently deposed Lao foreign minister, Somsawat Lengsavad, and work is being undertaken by a Lao construction company linked to the central elite, Simouang Group and a Korean sub-contractor, Dowoo Engineering and Construction, both of which appear to have no prior experience of dam construction. Even though the electricity production capacity is relatively small at 15 MW, the project’s ecological footprint is high, that will lead to the destruction of an “ADB Sustainable Tourism Development Project” funded medicinal plant preserve and spa centre at Huay Namsai, originally aimed at boosting the province’s eco-tourism credentials, supporting ethnic minorities and boosting local livelihoods.

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Sign announcing directions to the Chinese built Nam Houng 1 hydropower plant.

When I visited in late January, the magnificent old growth forest around the centre had just been felled and the trunks were awaiting removal, while visitors to the centre were blocked from entry by dam company guards. A provincial official that had helped to establish the centre told me that he was thoroughly disillusioned, after he had learned the herbal plant centre was to be flooded by the dam and local Hmong people would lose land and livelihoods as a result. He confided that the LPRP leaders were considering changing the provincial motto from “Sayabouly, Land of the Elephants” to “Sayabouly, Battery of ASEAN”. I looked for a hint of irony in his face, but there was none.

Sayabouly province may not be territorially integrated into the borders of Greater Thailand and it is still very much a part of the PDR, but its natural resources are increasingly not being enjoyed locally by the majority of its inhabitants. Instead, they are flowing across the border to the nearest of an insatiable triumvirate of neighbours, captured by powerful foreign business interests in close collusion with the provincial and national level LPRP apparatchik. It is apparent that such processes of primitive accumulation will only grind to a halt when the store cupboard is well and truly bare, which may not be too long into the future. Tellingly, it is predicted that lignite reserves at Hongsa will be exhausted just one year after the power concession agreement expires, presumably leaving the nation with one humungous bill in clean up costs at the mega “mine-mouth power project”. Whether there will be any wild elephants left in the province’s forests by 2040, or indeed any Lao forests left intact at all, seems most unlikely under the present paradigm.

 

[1] NB: I have adopted the spelling convention most commonly used by provincial authorities, though there are several other variations commonly encountered, including that used for the eponymous hydropower dam, which I have retained when referring to the project in this article i.e. “Xayaburi”.

[2] This quote is taken from the Ministry of Energy and Mining, sponsored amongst others by Hongsa Power Company, that paints a wholly rosy picture of this and other power projects underway or already built in Laos. Available at: http://www.laoenergy.la/pageMenu.php?id_menu=47

[3] Quote taken from Stuart-Fox, M. (2008). Laos. In Sanha Kelly, Christopher Walker and Jake Dizard (Ed.), Countries at the Crossroads 2007: A Survey of Democratic Governance (pp. 369-392) Lanham, MD, United States: Rowman & Littlefield Publishers .

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Thailand bets on China-led AIIB to finance massive infrastructure needs

Will China's AIIB-backed 'railway diplomacy' be enough to jumpstart Thailand's lagging economy?

Will China’s AIIB-backed ‘railway diplomacy’ be enough to jumpstart Thailand’s lagging economy?

On January 26, Thailand’s cabinet approved a budget of 52.82 billion baht (US$1.47 billion) to join the China-led Asian Infrastructure Investment Bank (AIIB).

Thailand will hold around a 1.43 percent share of the bank with payments beginning in five installments of 2.112 billion baht (US$58.90 million) due by the end of 2019.

“As the country [has] aggressive plans to improve its much needed infrastructures, the AIIB would offer great opportunities in terms of more loan availability” explains Nithi Kaveevivitchai, a research economist at the Bank of Ayudhya.

Thailand’s junta is attempting to revive the country’s flailing economy with an ambitious spending program of over US$100 billion that would include large-scale infrastructure upgrades for the country’s railways and roads, as well as air and seaports. Being one of the fifty-seven founding members of the AIIB, Thailand could potentially receive cheaper loan rates and more flexible lending conditions from the Beijing-based bank, compared against the US-led World Bank or the Japan-led Asian Development Bank.

The Thai government foresees it will benefit from intensified diplomatic rivalries between China and Japan. During a speech in April 2015, Thailand’s energy minister Narongchai Akrasanee, cannily asserted that “one thing we have learned is that if we welcome the Chinese, the Japanese will come running.”

Support for the AIIB in Thailand has not been unanimous, however. Kasit Piromya, a former foreign minister and current advisor to the Democratic Party of Thailand, criticized the creation of the AIIB as “part of China’s global strategy to dominate” and argued at the Asian Financial Forum that “China will be dictating terms and that will further weaken the Asean community.”

Since seizing power, Thailand’s military generals have instead sought to deepen political and economic ties to China, which is now the country’s largest trading partner. “It has been analyzed that any related projects that could benefit the supply chain network and trading routes between the ASEAN region and China would receive great attention from the AIIB,” assesses Nithi Kaveevivitchai.

The Sino-Thai railway link, which aims to transform Bangkok into the hub of China’s ambitious Pan-Asia Railway Network, appears to be a particularly likely candidate for an AIIB infrastructure loan. After months of bumpy negotiations – during which Beijing insisted on downgrading the railway from high-speed to medium-speed – the project saw a breakthrough in January 2016 when China agreed to Thailand’s demand that it slash its interest rate from 2.5% to 2%.

The Chinese government had long insisted on a 2.5% rate, arguing that Thailand was now an upper-middle income country, notes Mr. Nithi.

“Whether [the] AIIB will be used to fund this project is still too early to say… it could be seen as a good alternative for funding, especially if the development bank can offer a more competitive lending rate,” he adds.

The railway is currently facing further uncertainties due to its estimated budget of 500 billion baht (US$13.08 billion) and the Thai government is asking China to take more financial responsibility for the project.

Thai Deputy Prime Minister Somkid Jatusripitak told the Nation (Thailand) on February 5 that “Thailand was requesting that China be responsible for civil construction and related work for the 800km-plus railway track instead of just providing trains, rolling stock and related equipment, as the scheme is mutually beneficial so profits should not be the only factor for consideration.

In addition to issues of cost, critics in Thailand have asked whether the project is actually beneficial to the country, which has no mass goods in need of rail transit.

In parallel to the Sino-Thai railway link, Thai and Japanese authorities recently announced they have launched on a trial basis a train-delivery service using 12-foot long containers at Nong Pla Duk Junction in Ratchaburi province.The aim would be to eventually connect the junction to the Dawei deep-sea port in Myanmar, where Thailand has been developing a special economic zone (SEZ) with Naypyidaw since 2012. The long-delayed project was recently joined by Japan in 2015 and has the ambitious aim to become the gateway for the Mekong region to the Indian Ocean. China, however, has also expressed interest in creating a Dawei rail link, intimating a likely point of competition in the future. 

While it remains too early to be seen whether Minister Narongchai will be proven right, using the AIIB to expedite rail infrastructure loans could significantly help China  secure its fragile ascendancy over Japan in terms of ‘railway diplomacy’, as the two countries continue to compete for contracts across Southeast Asia.

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What’s Old is New Again: Predictions for Southeast Asia 2016

Will there be more skirmishes in the South China Sea in 2016? Photo: Getty Images

Will there be more skirmishes in the South China Sea in 2016? Photo: Getty Images

Much can change in a year’s time. In January 2015, Singapore’s Lee Kuan Yew was still alive, Aung San Suu Kyi’s future as leader of Myanmar was quite uncertain and East by Southeast was not making any predictions about international affairs in Southeast Asia. But again, much can change in a year’s time.

2016 will be a critical period for geopolitics in the region, as new strategic relationships are formed and existing ones strengthened. Many experts talk of a growing polarization of the region as countries position themselves between the US and China, a trend due in large part to rising tensions in the South China Sea. The conflict will take center stage in 2016. Look for the the Netherlands-based Permanent Court of Arbitration to publish its initial findings on the Philippines’ case against China in the first half of 2016. Despite not ruling on sovereignty issues, the outcome of this case will likely anger China and lead to a more aggressive stance towards the Philippines and other claimants. As the Philippines and Vietnam rely more heavily on the US for security guarantees in the South China Sea, more US flyovers and naval patrols in the contested waters are to be expected. Look for the US Navy to begin to use Vietnam’s Cam Ranh Bay for “maintenance” purposes and to park its ships on a somewhat permanent basis  in the Philippines’ Subic Bay after joint military exercises finish in April 2016.

Conversely, look for the emerging Sino-Thai regional axis to be solidified in 2016. This relationship, despite not bringing much to the languishing Thai economy, will tighten the ruling junta’s grip on power. Thailand’s long drift towards authoritarianism will add further strains on ties with the US, its long-term external security power. Of course, the permanent white elephant in the room in Thailand is the king’s health. With his majesty in poor health, lese majeste cases will continue to multiply as the junta’s concern grows.  His death and the subsequent succession struggle would likely send the country into chaos, even with the army in control. Such a collapse of the Thai political structure would have major repercussions for the region’s stability.

Laos is also in for a tough year ahead. Its chairing of ASEAN will do more to highlight its shortcomings than celebrate its successes. With the opening of Xayaburi Dam, Don Sahong Dam scheduled to break ground in 2016 and preliminary studies beginning on a third Mekong dam at Pak Beng, there will be renewed calls from the international community for Laos to reconsider its hydropower plans for the Mekong River. The landlocked country’s lack of finesse in dealing with the South China Sea conflict will also draw criticism, all punctuated by continuing questions about the kidnapping of Lao activist Sombath Somphone.

In Cambodia, the political impasse between the ruling Cambodia People’s Party and the Cambodia National Rescue Party will continue through the first half of 2016. Expect strongman Hun Sen to find an 11th hour solution paving the way for opposition leader Sam Rainsy to return from self-imposed exile to begin preparing for the 2017 parliamentary elections.

Barring another major fracture in Thai politics, Vietnam’s National Party Congress will mark the region’s most significant political transition in 2016. Nguyen Tan Dung is likely to be selected as Vietnamese Communist Party chairman, with Truong Tan Sang staying on as president or similar role to balance Dung’s reformist tendencies. Dung’s leadership will be key as Vietnam implements the Trans-Pacific Partnership, a painful process that will force Vietnam to learn to run and walk at the same time. Dung’s princeling son, Nguyen Thanh Nhgi, will also be elevated to the Central Committee and has a bright path ahead if his father can lead the country into a new era of high economic growth and balanced relations between the US, China and Russia.

Corruption scandals will continue to keep a stranglehold on Indonesian and Malaysian politics. In Indonesia, President Joko Widodo’s efforts to prop up a sagging economy will be hampered by an unstable cabinet and nagging questions relating to 2015’s Freeport corruption scandal. In Malaysia, Prime Minister Najib Razak will continue to face intense public scrutiny over the 1MDB scandal. It is possible that Najib will use a new national security law to muffle Malaysian civil society’s calls for his resignation.

After refreshingly open elections in 2015, 2016 will be a year of political posturing for Myanmar. As Aung San Suu Kyi and her victorious National League for Democracy take power in early 2016, the military will position itself to retain many of its past privileges. Look for Than Shwe and the other generals to create a formal post in the government for Aung San Suu Kyi, who is legally barred from the presidency, in a bid to define and contain her power as head of the NLD. Those expecting radical change from the NLD government will be disappointed – there will be little structural political reform, the NLD’s foreign policy will be largely similar to Thein Sein’s, and the ethnic reconciliation process will still muddle along. However, look for the new ruling party to permanently shut down the Myitsone hydropower project and consider suspending the Salween river’s cascade of dams in order to push along the ethnic peace process.

Like 2015, this year will see a further intensification of the Rohingya refugee crisis. However, with the world’s eyes adjusted to seeing the plight of refugees, there will be more attention paid to the issue and Aung San Suu Kyi will receive pressure from both Western and Muslim-majority countries to solve the problem of Rohingya persecution in Myanmar. Another ethnic group that came to the forefront last year, China’s Uighur population will also stay in the news in 2016. Increased crackdowns in their home Xinjiang province will force more refugees into Southeast Asia, and lead to a handful of Uighur-related terrorist attacks, both foiled and executed, in Thailand and Indonesia.

The regional economy will see decreased growth in 2016 as a result of slowing growth and structural issues in the Chinese economy. Chinese money will still flow south as the One Belt One Road strategy is rolled out and the Asian Infrastructure Investment Bank officially opens for business. Contrary to some expectations, the AIIB’s first loan recipient will not be Myanmar, but either Laos or Cambodia.

On the other side of the coin, the US-led Trans-Pacific Partnership will begin the ratification process in a number of regional countries this year. Our bets on order of approval are Singapore first, followed by Brunei, Malaysia and Vietnam. Indonesia will likely commit to the TPP by the end of the year while Thailand’s economic struggles under the military junta will push it closer to joining. Much of the US-ASEAN Sunnylands conference in February will be centered on TPP ratification, along with South China Sea issues and counter-terrorism cooperation, and will serve to solidify relations between the US and the bloc. ASEAN leaders will be looking for assurances of American commitment to the region during the next administration and they will likely receive them. Of course the future of the TPP and the US Rebalance to Asia lies in the fate of the US Presidential elections and our prediction is that America’s first woman president will keep the Rebalance at the forefront of her foreign policy – after all it was her idea.

Last but not least, the Asian Economic Community will be the same on January 1, 2017 as it was at the head of this year – a half-baked dream with little hope of success.

To all of the East by Southeast readers and their families, we wish a you happy new year and much joy and success in 2016!

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Solving Southeast Asia’s drug problem

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Image of the Golden Triangle where Thailand, Laos, and Myanmar meet.

The Obama administration has once again named Myanmar and Laos to its list of twenty-two countries determined to be major drug trafficking countries or major drug transit countries. The White House memo, issued on Monday, noted that Myanmar “failed demonstrably during the last twelve months to make sufficient or meaningful efforts to adhere to their obligations under international counternarcotics agreements.” The United States, however, did extend Myanmar a National Interest Waiver to promote democracy and avoid reduction of aid to Burma as a result of the designation.

The Golden Triangle, an area formed roughly by the upland frontier areas of Thailand, Laos, Myanmar, and China, was the world’s leading opium producer from the 1960s to the 1980s. But just less than ten years ago, it was moving toward opium free status as deepening economic ties with a rising China brought new investment and governments supported crop substitution programs in the region. Now, opium, methamphetamines, and other drugs from the Golden Triangle are once again flooding regional and global markets.

In just the past two months alone, 26mn methamphetamine tablets were seized in Yangon, Myanmar and 1.5 tons of marijuana packed into coffee shipments from Laos were seized in Cambodia. Earlier this year The New York Times ran a series of exposes on opium production and heroin addiction in Myanmar’s conflict-ridden Shan and Kachin states. The United Nations estimates that Myanmar’s poppy cultivation has tripled since 2006 and takes up almost 150,000 acres.

Despite recent spurts of economic growth in Myanmar and Laos, flagging economic conditions on the countries’ peripheries and civil war in Myanmar are pushing marginal peoples toward the production of opium. Lucrative cash crops like opium won’t make farmers rich, but hired labor on an illegal opium farm in Kachin state will earn $8 per hour compared with $2.50 working on a legal farm.

A new push factor for upland drug production in Laos and Myanmar is the arrival of small-scale agricultural investors from China’s neighboring Yunnan province. Their projects, often set up on lowland concessions granted by national or local governments, utilize less local labor and thus create a landless poor classes that literally ‘head for the hills’ to cultivate opium. Another new addition to the landscape is recently built highways and other infrastructure development projects that link urban centers but often ignore the periphery. Poor road conditions in upland areas cannot facilitate logistical support or encourage investment that could promote legal and productive agricultural activities in upland areas. And once the opium makes its way down narrow trails to the lowland areas, the highway serve as quick conduits for global distribution networks.

Being out of reach from state security and legal institutions – which typically underperform at any rate in Laos and Myanmar – permits opium farmers and trafficking middlemen to operate with impunity. Upland Southeast Asia is not the only place affected. Evidence shows drug use is on the rise in China and within Southeast Asia’s growing urban and rural middle classes. Moreover, crackdown efforts in lowland areas of these countries has only pushed production further into upland areas which are harder to reach.

Efforts to control and stem opiate production in Laos and Myanmar are often focused on identification and eradication. Government agencies locate productive areas and destroy illegal crops. This often forces rural peoples into poverty or drives villagers to new, more remote areas ripe for opium production. The UN and China have introduced crop substitution as a solution in Myanmar and Laos. But this “big state solution” often fails in its implementation because it neglects the needs of upland agriculture and flounders in its long term commitment to solving the problem.

In 2007, China’s crop substitution programs looked to be succeeding in reducing opium production. However, poor investment in infrastructure and low commitment to technical assistance created a situation where alternative cash crops could not compete on a global market and upland farmers were left high and dry.

Investments in coffee and rubber – often seen as more lucrative cash crops – take three to seven years to yield a harvest. This, coupled with falling global food prices and high transportation costs due to lack of infrastructure, discourages alternative investment. As a result, crop substitution investments in sugar, buckwheat, coffee, and rubber have consistently failed or are currently flagging in upland Southeast Asia.

To effectively curb the production of opium and other illegal drugs in upland areas of Myanmar and Laos, expenditure on agricultural extension programs and infrastructure such as paved roads and logistical facilities must increase to attract suitable investment into these areas. Advances in the peace process in Myanmar and resultant spurts of legitimate economic growth in the country’s ethnic autonomous states will do much to curb opium and methamphetamine production. Laos, however, is a different story. Even peace cannot stem opiate production, with its current set of weak institutions dictated by the fiat of a few powerful families with strong ties to China. Counter-narcotic efforts are vital to stop the flow of opium and methamphetamines in Southeast Asia. But they must be paired with viable economic solutions for the upland farmers involved in drug production.

This article was first published here on The Diplomat website on September 17. 

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Why Beijing isn’t using the Erawan Shrine bombing to its advantage

A statue of Brahma at the Erawan shrine in Bangkok. The Hindu shrine is popular with people of Chinese descent, including Thais.

An image of Brahma at the Erawan shrine in Bangkok. The Hindu shrine is popular with Chinese tourists, who were among the victims of the attack.

A connection between Uyghur militants from China’s northwest and the August 17th bombing of Bangkok’s Erawan Shrine has been confirmed. Thailand’s police chief made the link explicit during a news conference Tuesday. While the geopolitical consequences of the connection remain to be seen, Beijing could still stand to benefit from the Erawan bombing. However, fears over domestic implications may keep China from using the attack to their advantage.

Two men who have been taken into custody in connection with the case are Yusufu Mieraili and Adem Karadag. Mieraili was arrested in late August with a Chinese passport that listed his birthplace as Xinjiang province – the homeland for the oppressed Muslim-Turkic Uyghur minority. The second suspect was found in an apartment outside Bangkok along with bomb-making materials and dozens of fake Turkish passports.

Thai police issued an arrest warrant for another suspect from Xinjiang, Abudusataer Abudureheman, on Saturday. The 27 year-old Chinese national goes by the name ‘Ishan’ and is the suspected mastermind of the operation. The wanted poster for Ishan first reported that he was of Uyghur ethnicity, though a second version removed the reference and Thai authorities subsequently asked media to “drop the word”.

Observers, both international and Thai made early connections  between the Erawan bombing and the forced repatriation of 109 Chinese Uyghur refugees in July, though it is only now that Thai authorities have acknowledged the Uyghur links to the case. On Tuesday, Thai’s chief of police, Gen. Somyot Poompanmoung blamed the attack on human traffickers who aided Uyghurs refugees, angry that their network had been disrupted by Thai authorities. “Put simply, we destroyed their business.”

Combating domestic terrorism

While the connection between the controversial deportation and the bombing is seemingly bad news for China, there are a number of ways in which the PRC could benefit from this situation. First, the bombing legitimizes China’s domestic anti-terrorism efforts.

The Uyghur struggle for autonomy and Beijing’s efforts to contain it has been anything but peaceful. Systematic state-sponsored economic and physical violence in Xinjiang has been met with repeated attacks on police stations, government buildings, markets and train stations, both in Xinjiang and elsewhere. Beijing has long claimed that many of the terror attacks were coordinated by the East Turkestan Independence Movement (ETIM), a shadowy separatist organization allegedly linked to al-Qaeda. The very existence of ETIM, let alone its potency, has long been debated among experts and China has struggled to receive widespread recognition for its fight against domestic terrorism. This is largely due to doubts over ETIM and opposition to China’s repressive policies in Xinjiang.

The Erawan attack could change this. Now Beijing can point to the Erawan bombing as credible evidence that Uyghur terrorism is a threat that deserves attention outside of China. By internationalizing the issue, the Chinese government can rationalize its repeated crackdowns on Uyghurs to an international community which has been critical of its past policies. Now, Uyghur terrorism is an international issue that affects everyone – Bangkok was the world’s most visited city in 2014, after all.

Cross-border cooperation

Additionally, with an internationalization of Uyghur terrorism comes more opportunities for cross-border cooperation. Sino-Thai relations, already made closer by new trans-boundary infrastructure projects, will undoubtedly be strengthened by the Erawan attack. In February 2015, a counter-terrorism cooperation pact was signed between Indonesia and China following the repatriation of four Uyghurs accused of planning the Kunming train station attack. A similar agreement is a likely consequence of the Erawan attack.

International cooperation in combating (and sometimes creating) terror networks has been a lowest-common denominator of sorts for inter-state relations in the 21st century and China should take advantage of this. In the past, China has used links between Uyghur militants and terror cells in northwest Pakistan to strengthen relations with the South Asian state. In light of the Erawan blast, Beijing could coordinate its counter-terrorism efforts with Washington. Sino-US relations have noticeably worsened in recent years, and counter-terrorism, aside from global warming, may be the safest area for increased cooperation between the two regional rivals.

Coordination of border control efforts in Southeast Asia, particularly along China’s southern boundary is another area of possible cooperation. Uyghur migration through southwest China into Southeast Asia is a relatively new trend, and the number of migrants has swelled in recent years. Refugees have been known to use existing smuggling routes out of China and through Southeast Asia, exploiting porous borders and corrupt guards on the way. With the specter of international terrorism looming, China and its southern neighbors could increase cooperation along the margins. This would particularly benefit China’s ties with Myanmar and Vietnam, two countries with strained relations to Beijing.

Historically, Southeast Asian governments have acquiesced to China’s demands for detained Uyghur refugees to be repatriated and many observers presumed that the trend would continue along with China’s rise in regional influence. However, there is wide speculation that the attack at the Erawan Shrine, a site popular with ethnic Chinese, both Thai and tourist alike, was executed in retaliation for Thailand’s deportation of Uyghur refugees. The repatriation of 109 Uyghurs from Thailand in July led to condemnation from human rights groups and protests at China’s consulate in Istanbul, where nationalist Turks see Uyghurs as their pan-Turkic brethren. After Erawan and Turkey’s summer protests, Southeast Asian governments will likely reconsider any future deportations for fear of similar retribution.

Internal Worries

Internal worries over the consequences and implications of the Erawan blast may explain Beijing’s continued silence over the incident. While news of the attack did feature prominently in Chinese media in the days following the blast, there has been scarce coverage of the subsequent investigation, let alone the identity of the alleged attackers. Moreover, Beijing has actively denied Uyghur links to the Erawan attack, calling such speculation “hugely irresponsible” in the days following the explosion. Following the Tuesday statement from Gen. Somyot, there has been no mention of the Uyghur link to Erawan in the Chinese press.

China’s fears are not without merit. First, that the attackers hail from Xinjiang could be a point of embarrassment for the Chinese government. The crisis in northwest China has grown worse by the year – 2014 saw the expansion of Uyghur violence out of Xinjiang to the rest of China – and 2015 has now brought an international attack linked to the Uyghur separatist movement.

In the past, Beijing has refrained from mentioning the ethnicity of suspects in domestic attacks for fear of stoking ethnic tensions. Similar concerns are likely influencing China’s actions post-Erawan. Implicit in China focusing at all on the attack’s connection to Xinjiang is an acknowledgement of failure in solving the country’s ethnic problems and an admission of partial culpability. The government is already having enough trouble convincing its citizenry that it is capable of guiding the country through an economic slowdown – adding more doubts over ethnic and security issues is the last thing Beijing wants.

A Coordinated Response?

The lack of coverage of the investigation in China has been mirrored by Thai authorities’ previous reluctance to link the explosion to Uyghur separatism, and its continued avoidance labeling the attack as terrorism. This, like China’s strategy, is likely targeted at the Chinese public. The number of Chinese visitors to Thailand has exploded in recent years and the money they bring has been a welcome addition to the country’s economy as other sectors have faltered since a military junta took power in 2014. News of a bomb in downtown Bangkok was always going to affect tourism numbers, but connections to Uyghur terrorism will undoubtedly cause many prospective Chinese visitors to think twice before booking flights to the kingdom.

What’s more, Thailand’s handling of the case has raised questions of Chinese involvement in the case. The delayed official announcement of the Uyghur and the offiical waffling over the ethnicity of the suspects signaled to some that China had an affect on the investigation. Further, Thai officials asked media to avoid analysis that might affect “international relationships,” interpreted by many to mean China. A coordinated response by Bangkok and Beijing would make sense. In addition to being the source of millions of tourists each year,  China is Thailand’s largest trade partner and the closest ally of its military government.

Now that Bangkok has shown its hand, Beijing’s response will be critical to watch. Political savvy on the part of China’s foreign ministry could turn an international tragedy into an opportunity for more positive ties with Southeast Asia. However, the domestic implications of publicizing the link between Xinjiang and Erawan shrine will likely keep Beijing silent for now.

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Filed under China, Current Events, Human trafficking, Kunming Train Station Attack, Regional Relations, SLIDER, Thailand

Gold Diggers

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A major Geographical investigation looks at the devastating environmental and debilitating health effects a Thai gold mine is having on a village in Loei, and at how a group of determined villagers are fighting back

 

It’s a truly idyllic valley, thumbs of karst rising from rice fields, a glowing sunset tempered by cumulo nimbus. Women bend at the waist planting rice seedlings, their movements reflected in the water. The set for a painter or poet.

Instead it’s the stage for the violent suppression of popular protests in the northern Thai province of Loei. For eight years, the embattled villagers have been fighting the owners of an adjacent gold mine. This lovely valley and the determined villagers are at the intersection of human, physical and political geography writ small and very mean.

To the villagers, the environment itself has become the enemy. The water in which the women stand plunging seedlings into mud is contaminated with arsenic, manganese and chromium. Below the overburden dumps, the rice fields hold arsenic, cyanide, mercury and cadmium.

Under trees, an unusual number of people sit in wheelchairs. Changma, 65, suffering debilitating peripheral neuropathy in her legs and hands (‘stocking/glove syndrome’) sits in her basic kitchen, cleaning pots. She is barely able to walk. Her doctor diagnosed the cumulative effects of arsenic. Cham, 84, who lives 300 metres away, has worse symptoms. A bowl of water nearby soothes the pain and persistent tingling associated with damaged nerves. Her 86-year-old husband with degenerative spinal condition is unable to care for her. We see cases of skin rashes. All signs of chronic arsenic poisoning.

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Filed under Agriculture, Current Events, Economic development, SLIDER, Sustainability and Resource Management, Thailand

Thailand deports Uyghur refugees to China, despite protests

Refugees on the way to a Thai detention center, March 18, 2014. Image used courtesy of VOA News.

Refugees being transported to a Thai detention center, March 18, 2014. Image used courtesy of VOA News.

After more than a year of waiting, almost 300 ethnic Uyghurs are leaving Thailand. On July 1, a group of 173 Uyghur refugees, mostly women and children, left Thailand for Turkey. A week later, another 109 Uyghurs were deported back to their home country of China. The decision on the fate of these refugees, who have remained in Thai custody since their arrests in March 2014, has sparked criticism from human rights groups and protests from the Turkish public.

These 282 Uyghurs are part of a group of almost 300 people taken into custody by Thai authorities in March 2014. Many were found in a human trafficking camp in Songkhla province. Since then, they have waited in detention centers in Songkhla, Trat and Rayong while an intense diplomatic battle over their fates raged between the governments of China, Turkey and Thailand.

The Uyghurs are a Turkic-speaking, predominantly Muslim people from Xinjiang Uyghur Autonomous Region in China’s northwest. In the last decade, they have left China in increasingly larger numbers, escaping religious persecution and political and economic repression.

On July 1, Seyit Tumturk, vice president of the Munich-based World Uyghur Congress (WUC), confirmed through Radio Free Asia‘s Uyghur language service that the first group of 173 Uyghurs were able to “enter into Turkey safely” after arriving in Istanbul.

“They are mostly women and kids—around 120 kids and about 50 women. Hopefully, the men [still in detention] will be granted this kind of chance in the near future.”

Initial reports of bloodshed

The Uyghur men, however were not given such a chance. On July 8, 109 refugees were forcibly deported to China from Thailand. The group was made up of mostly men, however some women and children were also repatriated.

The World Uyghur Congress first reported that 25 men had been shot dead after resisting their deportation in Bangkok. Thai authorities, however, denied the story.

Thai government deputy spokesman Weerachon Sukhontapatipak told Radio Free Asia in an interview that “there was no such thing as claimed by WUC.” Another, anonymous source in the Thai government confirmed Weerachon’s statement, saying, “It is not true. There was no killing as claimed by the WUC.” He added that video evidence confirming the refugees’ safety could be provided.

In the initial report published on their website, the WUC reported that a first plane of mostly women and children departed without incident. “The second plane, however, was intended to transport around 65 men, but authorities faced some resistance from the men in doing so.”

In the process of subduing the resisters, 25 men were shot and killed, the WUC originally reported. Hours after its publication, however, the paragraph concerning the killings was removed from the report.

Protests and condemnation

The move by Thailand to repatriate the refugees drew intense criticism from Uyghur organizations and human rights groups. The office of the U.N. High Commissioner for Refugees said it was “shocked” by Thailand’s decision and considered the deportation “a flagrant violation of international law.”

Prime Minister Prayuth Chan-ocha, head of Thailand’s military government, seemed unconcerned with issues of international law, claiming that the matter did not concern Thailand.

“I’m asking if we don’t do it this way, then how would we do it?” he said. “Or do you want us to keep them for ages until they have children for three generations?”

Rights groups worry that the deported Uyghurs will face harsh penalties once on Chinese soil. Uyghurs that have been repatriated from Southeast Asian countries in the past have received long jail sentences and even capital punishment for illegally leaving China.

In Beijing, Hua Chunying, spokeswoman for the Ministry of Foreign Affairs confirmed that the Chinese government would pursue legal action against the repatriated Uyghurs.

“China’s relevant departments will bring those who are suspected of committing serious crimes to justice according to law,” she told reporters. “As for those who are not suspected of committing crimes or who commit lesser offences, we will find proper ways to deal with them.”

The episode has also led to protests in Turkey, where many see Uyghurs as their Turkic-speaking “cousins”. On Thursday, both the Thai consulate in Istanbul and the Thai embassy in Ankara were attacked during pro-Uyghur demonstrations. Police in Ankara used tear gas there to disperse protesters.

Earlier in the week, the Chinese consulate was attacked along with  Chinese restaurants in Istanbul. Protesters were angry after reports emerged that local governments in Xinjiang region were prohibiting Uyghur schoolchildren and civil servants from fasting for Ramadan. Similar Ramadan crackdowns have been reported annually for over a decade In response to the protests, the Chinese government issued a travel warning to Turkey for Chinese tourists on  July 8.

A split decision

Despite closer ties between Turkey and China in recent years, the issues surrounding the treatment of Uyghurs in Xinjiang and Turkey’s acceptance of Uyghur refugees have prevented the Sino-Turkish relations from moving forward. This week’s protests certainly marks a low point in the relationship and it will be interesting to see how things develop after this latest deportation episode. It is unlikely that China’s crackdowns nor Turkey’s acceptance of Uyghurs will end anytime soon.

Despite Thai Prime Minister Prayuth’s claims that Thailand was simply a third party actor, its role in the refugees’ deportation to Turkey and repatriation to China was key. How it navigated this tricky diplomatic issue says much about Thailand’s relations with China. Ties between the Southeast Asian state and China have improved in recent years and increased Chinese investment in Thailand’s infrastructure will only make the two countries closer. Therefore, it was never in doubt that Thailand would acquiesce to the PRC’s request to have the Uyghur migrants returned.

However, Thailand, with a proud history of resisting foreign pressures, still wishes to remain independent in the face of a rising China. Its decision to send 173 women and children, likely low-priority targets for China’s internal security forces, to Turkey instead of China is significant. It could be interpreted as a symbol that while China’s clout in the region is growing, it is not yet large enough to wholly influence diplomatic decisions.  Future cases of deportation involving Uyghurs in Southeast Asia will act as a barometer of China’s influence on the foreign affairs ministries in Bangkok, Kuala Lumpur and other regional capitals. This episode may have reached its conclusion, but it is unlikely to be the last as long as Uyghurs continue to look for a better life outside China’s borders.

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Filed under China, ethnic policy, Human trafficking, Regional Relations, SLIDER, Thailand