---

SINGAPORE, June 8 (AFP): A 14-billion-dollar plan to develop the Mekong region over the rest of the decade will fall well short of its targets, with environment and social concerns an important reason for the failure, rights activists say.

The Asian Development Bank’s Mekong Department director general, Rajat Nag, travelled to Singapore last week in a bid to convince foreign investors that the region was economically and politically sound enough to invest in. With the 4,000-kilometre (2,400-mile) Mekong River traversing China, Myanmar, Thailand, Laos, Cambodia and Vietnam, Nag offered the prospect of a fast growing economy, a region rich with environmental resources and a young population that could offer “competitive wages”.

Yet Nag conceded in an interview with AFP before meeting the American Chamber of Commerce here that the ADB’s plan to attract about 14 billion dollars to economically integrate the region by 2010 was off to a slow start.

Nag said the ADB would try to kickstart its development projects, which cover 11 areas such as telecommunications, energy, transport, tourism and other forms of infrastructure, with loans of up to 300 million dollars. But he said the private sector had so far committed less than one billion dollars.

“The most important challenge we face is actually getting the funding available,” Nag said. Nag maintained private investment would follow as long as the ADB, a Manila-based multilateral lending institution, provided the incentives by helping to lay the economic foundations for the projects.

However rights campaigners assert private sector reluctance to invest into the Mekong region is more to do with the environmental and social impacts that infrastructure projects have caused in the past and could do in the future.

“I can remember 10 years ago they (the ADB) were also trying to drum up capital and there was very little private sector interest,” Grainne Ryder, a policy director with foreign aid monitor Probe International, told AFP by phone from Cambodia. “So the ADB is repackaging old wine in a new bottle … there’s not an expectation that all of this plan will materialise.”

Ryder said the ADB was largely to blame by encouraging investment in massive infrastructure projects without taking into account the impact on local communities, or consulting them, as well as the environment.

“The ADB will not organise investments that have first been vetted by the public, who the ADB claims to be working for,” Ryder said. “When they back a project, their obligation is to ensure profits are maximised and to ensure private investors get a return (potentially at the expense of local communities and the environment),” she said.

The Theun Hinboun hydro-electric dam in Laos that was completed in 1998 illustrates the conflicting approaches taken by the ADB and its opponents. The 210-megawatt dam, built with ADB loans and private sector funding in the region’s first such financial arrangement, has brought in foreign revenue for the Laos government through electricity sales to Thailand.

However, it has also been fiercely criticised for the resulting fall in local fish stocks, soil erosion, deforestation, flooding, destruction of farmland, as well as the forced displacement of thousands of villagers.

In his speech to the American Chamber of Commerce, Nag hailed the Theun Hinboun dam as a “success” for regional public-private investment, without referrring to the environmental and social impacts. When questioned on this by AFP, he conceded there were environmental and social problems, particluarly with the fall of fish stocks that locals depended on to survive, but he said the ADB had learnt lessons from its mistakes.

“We do not want to see physical infrastructure being developed willy nilly without due consideration for the environmental and social impacts,” Nag said. The ADB says it has organised compensation for those affected by the Theun Hinboun project, but social activists in the region say it has been inadequate.

Rights activists also say the ADB’s policies often hurt the struggling democracy movements in the Mekong countries. “Whether its fisheries, forests, land, there are all sorts of grass roots efforts going on to have people lay their claims before they get bulldozed by large infrastructure projects,” Ryder said, adding the campaigns were sometimes supported by local governments.

“But when international financiers come along and offer one billion dollars for a dam, who are the governments going to listen to … the lender offering one billion dollars or the people living in the communities?”

Nag denied the ADB was subverting the democratic process in these countries.

For a related article, please see:
“Se San villagers call for government cooperation to resolve Vietnam dam impacts”