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The Big Story

Mekong River nations face the hidden costs of China's dams

Dozens of projects threaten agriculture and fishing in Southeast Asia

YUKAKO ONO, Nikkei staff writer | China

STUNG TRENG, Cambodia -- Sam In, a 48-year-old rice farmer from Cambodia's northeastern province of Stung Treng, never knew that people paid for water until he was forced to move out of his home on the banks of a Mekong River tributary two years ago.

Along with hundreds of other households, Sam In and his 10-member family were relocated to make way for a dam development that left his entire village, Sre Sronok, underwater. Now they live in a newly created village where government-funded houses with identical blue rooftops are neatly lined up on a spacious, dusty plot of land. Instead of a river, a national road runs alongside the village.

"Our cost of living has risen drastically," said Sam In, who is also the deputy village head. "We have to buy the water we use for rice farming, drinking, cooking and bathing. It all used to come from the river, for free."

The government provided the family with 2 hectares of land to use for rice farming. But with no proper irrigation system or decent farming equipment to plow the land, which were promised by the government when they agreed to relocate, productivity is less than half that of the fields in their old village.

Sam In and his family are among the villagers displaced by the Lower Sesan 2 Dam. (Photo by Ken Kobayashi)

Those fields, about 20km away, were submerged in September 2017 when the floodgates of the Lower Sesan 2 Dam were closed to create a 33,000-hectare water reservoir. The $816 million dam, located just 25km from the Mekong River, is expected to generate 400 megawatts of electricity when it comes into full operation later this year, becoming the largest dam in Cambodia.

The people of the Sre Sronok village, including Sam In, were opposed to the plan when it was presented about 10 years ago. The government explained that the electricity generated from the dams would benefit the entire country. "They said that countries like Laos are generating electricity using the Mekong River water resources and our country needed to build our own dams in order to stop buying from them and lower electricity cost," Sam In said. "But I think it will benefit the city people more, not us, unless the government gives us special discounts which they have refused to do."

The dam may have other unwanted consequences. Beyond the problems Sam In and his neighbors are experiencing, the dam construction is expected to result in a sharply reduced supply of fish, a change in the water flow and a reduced riverbed sediments that provide crucial nutrients to the rice crop in Vietnam and other Mekong countries. A 2012 study by the U.S. National Academy of Sciences concluded that the dam would threaten more than 50 fish species.

Experts and campaign groups have long argued that the economic benefits from the dam's electricity generation are questionable given the area's low water flow during the seven-month dry season. Despite such concerns, Cambodia pushed through the plan with the backing of a major Chinese state-owned power company, which stepped in in 2012.

China's Hydrolancang International Energy, a subsidiary of Huaneng Group, is the largest investor in the project, with a 51% stake, while Cambodia's Royal Group and a subsidiary of Electricity of Vietnam control 39% and 10%, respectively. A new road sign pointing to the "great dam" set up near the strictly guarded gates leading to the dam site is written in Cambodian Khmer and Chinese.

China's controversial dam building -- both on its section of the river upstream and, increasingly, in Southeast Asia -- is dramatically changing the livelihoods of many of the 60 million people living in the region who depend on the Mekong for water, fish, transportation and irrigation.

Its control of the water upstream is a particular source of friction and concern to the countries further south. Some experts compare the downstream Mekong countries' water security risk -- which includes risks to their food supplies and commercial activity -- to China's controversial island-building in the South China Sea.

A fisherman in Laos attempts to clean debris from a traditional bamboo fish trap. Many Laotians depend on the Mekong for their food and livelihoods. (Photo by Thomas Cristofoletti/Ruom)

"What China has done by damming the Mekong and gaining undue leverage over downstream countries is analogous and connected to its ongoing construction and weaponization of artificial islands in the South China Sea," said Thitinan Pongsudhirak, director of the Institute of Security and International Studies at Thailand's Chulalongkorn University. "Beijing's approach is as simple as it is controversial, for all to see: build first, talk later."

The 4,800-km long Mekong River starts in the Tibetan Plateau in China and runs through Yunnan Province into Southeast Asia --Myanmar, Laos, Thailand and Cambodia -- then down into Vietnam, where it exits into the South China Sea. It is the 12th-longest river on earth and boasts some of the most diverse fish species in the world, second only to the Amazon.

The waters of the Mekong run freer than most of the world's major rivers, as dam-building and other projects were forestalled by the wars in Vietnam and Cambodia, says Courtney Weatherby, an analyst at the Stimson Center, a U.S. think tank. Although Thailand and Vietnam have dammed parts of the river, the need for regional coordination became clear when China started damming the upper Mekong in the 1990s without consulting with the downstream countries.

The economies of  all the Mekong countries rely on the river, but in distinct ways. China and Laos largely see the Mekong as a source of electricity production. Cambodia -- and many locals in Laos and Thailand -- depend on the bountiful wild-catch fisheries in the Mekong for protein, food production and their livelihoods. The 20 million people living in Vietnam's Mekong Delta depend on the natural deposit of sediments and nutrients from the river's flow for their rice crops and fishing.

With so many overlapping interests, the Mekong countries need better information-sharing and "political management of inevitable tradeoffs between each nation's interests," Weatherby said.

Such coordination is growing more complex now that China is funding dam-building in the less developed lower basin countries such as Cambodia and Laos. Of the 11 dams planned on the Mekong's lower mainstream, six are backed by China, according to U.S.-based non-government organization International Rivers. Another 30 dams are planned on the tributaries.

Yet as China pushes ahead, other investors -- including Western countries and Japan -- are pulling back on Mekong dam development. The Japan-led Asian Development Bank, for example, has halted financing for hydropower projects on the Mekong mainstream because "the potentially negative impacts of mainstream hydropower projects are substantial," said Andrew Jeffries, director of the energy division of the institution's Southeast Asia department. Japan pledged $6 billion in other infrastructure aid to Mekong nations in 2015 in a bid to enhance its influence in the region, but that expires this year. 

Chinese officials frame their activity as encouraging other countries to draw benefits from the river.

Birds gather on a sandbar in the Mekong River that was exposed by unusually low water levels near Chiang Rai. (Photo by Takaki Kashiwabara)
The Lower Sesan 2 Dam will be the largest dam in Cambodia when it begins full operation later this year. (Photo by Thomas Cristofoletti/Ruom)

"What benefit does Cambodia get from upstream dams? Nothing," Li Hong, China's permanent representative to the United Nations Economic and Social Commission for Asia and the Pacific, said at a Mekong River conference held in Cambodia in April. "But Cambodia can benefit by developing its own dams. We should all benefit from the river."

Geopolitical risk

Somchit Chittapong has been plying the Mekong River for more than 40 years in northern Thailand's Chiang Rai Province, but on a March day this year he noticed that the water was unusually low.

"Can you see the flock of ducks there?" he asked, pointing to a nearby sand bank. "They never come here at this time of the year because that island is normally under water."

Somchit gestured toward a boat beached on the riverbank that he said was owned by his brother, who had been shipping rubber to China. The boat had been stranded for more than five days.

It was just one of many cargo boats operating from Chiang Rai, Thailand's main northern export hub to China, stranded in early March due to unusually low water levels caused by the sudden stoppage of flows by Chinese dams upstream.

Local businesses have called on China to share its schedules for releasing water from the dams. China agreed to release daily information from the rainy season months of June to October, but not for the rest of the year. The Chinese side refers to the dam information as "internal matters."

"China is crazy," said Pakaimas Vierra, vice chairman of Chiang Rai's chamber of commerce. "They give us no information in advance so we cannot plan business at all. Inventories are piling up."

Pakaimas said there were dozens of boats loaded with goods for China docked along the banks of the river between Myanmar and Laos in mid-March that could go no further because of the shallow waters. One exporter estimated about 60 boats had been stranded.

Experts said that excess supply of electricity in Yunnan Province could have led to the abrupt stoppage of water flow from the Lancang dams.

Trade with other countries, especially China, is the major source of revenue for Chiang Rai, located near the storied Golden Triangle, where the Mekong forms the borders between Thailand, Laos and Myanmar. The potential for China to inflict economic damage with its control of the water flow is a major concern for downstream countries, experts say.

"China's damming of the upper Mekong has long been considered a geopolitical risk for the lower riparian states," Thitinan of Chulalongkorn University said.

Sediment brought by the Mekong makes for fertile farmland. (Photo by Ken Kobayashi)
School children in the floating village of Chnok Trou in Cambodia (Photo by Ken Kobayashi)

But Beijing has also displayed deft water diplomacy skills. During a 2016 drought, it announced it would release water from its upstream dam for one month to ease water conditions, an effort to reduce tensions with its southern neighbors -- especially Vietnam.

The lower basin countries have found it difficult to push back against China, which has become one of the largest trade partners and investors in the region. Bilateral trade between China and the five riparian countries totaled $220 billion in 2017, up 16% from the year earlier, while investment reached $42 billion.

The Mekong River Commission, an intergovernmental organization of the Mekong riparian countries, does not include China; many experts believe it opted out due to the group's funding from Western countries. The four member countries -- Thailand, Laos, Cambodia and Vietnam -- have largely failed to have fruitful discussions about the transboundary effects with its most powerful neighbor.

Instead, the countries are banking on China as an investor-- a role Beijing is happy to play. The lower Mekong area has become a focus of the Belt and Road Initiative championed by Xi Jinping, China's president.

In 2014, China initiated the Lancang-Mekong River Cooperation Framework, or LMC, which is providing a host of aid programs to the five riparian countries. In an LMC summit in January, Premier Li Keqiang promised that China will provide 7 billion yuan ($1.08 billion) in loans, adding to the 10 billion yuan already promised. It would also add a $5 billion credit line on top of the previously committed $10 billion for infrastructure investment in the region. Experts say China wants to demonstrate its leadership to the downstream countries and improve its image through the LMC, the first multilateral initiative led by China in the Mekong area.

Sak Seam, the head of Chnok Trou village, sits on a hammock made of illegal small-mesh fishing nets. (Photo by Ken Kobayashi)
The floating village of Chnok Trou in Cambodia (Photo by Ken Kobayashi)

Yet the emphasis on hydropower runs counter to the findings of various studies that say the negative impacts of dams outweigh the benefits of the resulting boost to electricity supplies. A 2017 paper published by Thailand's Mae Fah Luang University found that if all the 40-plus planned dam projects on the Mekong's mainstream and tributaries are built by 2030, the net economic impact on the four lower basin countries will be a negative $7.3 billion. The loss from the drop in fishery catch is larger than the benefit from the 110,000 gigawatt-hours of electricity generated, the report said.

However, "construction of dams in the lower Mekong has typically proceeded without comprehensive assessments of impacts on the river and its local communities," said Maureen Harris, Southeast Asia program director at International Rivers.

Some who work on the river back this view. Le Hong Duc, 60, a fish farmer in Vietnam's Dong Thap Province, called damming the river to produce electricity "unsustainable development."

"If they build the dams, causing lack of water, we have to reduce fisheries farms and move to other businesses," Duc said. "That is not worth exchanging the environment and water of the rivers for the electricity." 

Tonle Sap Lake provides more than half of Cambodia's total fish catch. (Photo by Ken Kobayashi)

The need for electricity is real, however. Cambodia is vowing to connect 70% of its households to the power grid by 2030, up from roughly 50%. The country's expensive utility charges, among the highest in the region, are discouraging businesses from entering the market and setting up large-scale operations.

Laos, the poorest country in the region, has been the most aggressive in developing dams on the Mekong. The landlocked country hopes to sell electricity to its neighbors and become the "battery of Southeast Asia," though the benefits to its own people are less clear.

Thailand, the largest electricity consumer in the region, has become a prominent investor of hydropower projects in Laos and Cambodia. Vietnam is also purchasing from the two countries.

The U.S. and Japan should counter China's damming push by promoting alternatives to hydropower, said Nguyen Huu Thien, an independent ecologist in Vietnam and expert on the Mekong Delta. "If the large powers such as U.S. and Japan can see that the Mekong issue is a serious nontraditional security issue that affects peace and stability of the region, they should take it seriously and help promote renewable energy such as solar and wind power," Thien said.

Tough times for fishermen

Like other fishermen on Cambodia's Tonle Sap Lake, Oeru Navy has seen his catch plummet in recent years. Tonle Sap is the largest fresh water lake in Southeast Asia and provides more than half of the Cambodia's total fish catch. About 60% of its water comes from the Mekong, and dam developments upstream are interrupting fish migration. Oeru Navy says his catch has nearly halved over the last decade.

The lower catch is prompting some fishermen to use illegal fishing methods, such as using small-mesh nets that capture baby fishes. This only makes the problem worse. 

But for the 31-year-old Oeru Navy, the reasons behind his reduced livelihood seem far away.

"I've heard about some government building dams on the river for electricity but I don't think that is relevant to me," he said. "All we want is more fish so that we can survive."

Additional reporting by Gwen Robinson in Bangkok

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