Financial Times
November 4, 2002

The six countries that share the Mekong River have agreed to form a regional power distribution system, laying the foundation for an ambitious programme of hydro-power development in the ecologically sensitive region.

The agreement, signed by the governments of China, Thailand, Cambodia, Laos, Vietnam and Burma at a summit yesterday, commits the signatories to the eventual opening
of an international market for electricity.

As a first step, they have created a high-level committee to set up rules, protocols and a regulatory framework for regional power trade. Officials of the Asian Development Bank, which supports the project, say the deal provides the “conceptual” foundation for regional power transmission lines, which they argue will help attract private investment into  much-needed power-generating capacity.

“It’s very important, very far-reaching,” says Rajat Nag, director-general of the ADB’s Mekong Department. “If you are going to develop hydro-power, you have supply countries like Laos and demand countries like Thailand and Vietnam. It makes much more sense to take a regional, holistic approach.” But environmentalists worry that the creation of a regional power market will be the first step towards a fresh spurt of dam-building in the Mekong basin that they say will destroy the livelihoods of millions of poor, mostly uneducated people who live along the 4,880km river and its tributaries.

They say that earlier dams such as the Theun Hinboun project in Laos and on-going dam projects along the upper branches of the Mekong in China have forced thousands of people off their land, while the region’s authoritarian governments offer little help to the dispossessed. They argue that encouraging further dam building will just exacerbate the
problem.

“It’s going to be an ecological and social disaster,” says Aviva Imhof, an activist with the International Rivers Network. The ADB, which is working closely with the governments of what it calls “the greater Mekong sub-region”, has focused on power development as one
of key priorities for the region, one of the poorest parts of Asia.

Hydro-power has been identified as the main potential energy source. China has already embarked on a course of dam building on the upper Mekong that has alarmed some of its down-stream neighbours, with one big dam complete, a second nearly finished, a third under way and several more slated for the years ahead. Meanwhile, the Communist government in Laos in pinning its hopes for development on securing financing for a Dollars 1.1bn (Pounds 625m) hydro project that would export power to Thailand.