Water Wars in East Asia

There is a certain inevitability about water (specifically the scarcity of water) being the cause of military conflict in the future.

As economists, the "economics of dams" is something we are currently looking at. My bold.

With quotes like these it is not hard to see that these will be trouble ahead. The problem is, China is a not someone you want to pick a fight with in a hurry.

"Yet many Chinese can't quite fathom the Mekong's importance to other countries. "This is our part of the river, so we should be able to do what we want with it," says Hu Tao, a geological engineer who has worked at Xiaowan for two years."

For an economist THIS is the question:

"These dams may boost economic growth in developing countries facing severe energy crunches."

With an environmental economics hat on the issue is this:

"But dams also have severe, long-term environmental consequences."

One has a feeling that environmentalists are going to have to shout loud and long to be heard.

This TIME article is therefore timely. H/T: IPE Zone.

Charting the Mekong's Changes

As the biggest of the eight dams China plans for its portion of the Mekong, Xiaowan will dwarf the two hydropower projects that have already been built in Yunnan. Given that half the Mekong basin's water comes directly from China during the dry season, scientists worry that Xiaowan will act as a spigot that controls the destiny of millions of people in five countries. Environmental groups estimate that 35% of the silt that's needed to fertilize floodplains down south may be obstructed by the dam — distressing news for a region that depends on the Mekong for 80% of its protein needs and, in the lower river basin, rice production.

Yet many Chinese can't quite fathom the Mekong's importance to other countries. "This is our part of the river, so we should be able to do what we want with it," says Hu Tao, a geological engineer who has worked at Xiaowan for two years. "The other countries can do what they want with their sections of the river." In some ways, Hu's indifference is understandable. Roughly half the Mekong lies in China, but for most of that length its waters are too swift to support barge traffic or wide-scale fishing. (The Chinese name for the river, Lancang, means "turbulent.") The only real benefit humans can coax out of this stretch of water is hydroelectric power — and until recently the river's remoteness discouraged even that. "In China, the Mekong is not the same river as it is down in the basin," notes Eric Baran, a research scientist based in Phnom Penh for the nonprofit World Fish Center. "Here in Cambodia, it is a matter of life and death. In China, it is just another river — and not even a very major one."

But with China's energy needs soaring even in underdeveloped provinces like Yunnan, the Mekong is potent enough to be exploited for electricity. Some of that power, ironically, will be exported to countries like Thailand, where hydroelectric projects are controversial and have been blocked by ecologically minded citizens. Huaneng doesn't have to worry about public interference. The state-owned company is run by the well-connected son of China's former Premier, Li Peng. And with no shareholders calling for environmental-impact surveys or feasibility studies, Huaneng rarely makes public details of its plans until just months before it breaks ground. (The company declined requests for an interview.)

Nor does the Chinese government feel the need to consult its southern neighbors. Beijing has refused to join the Mekong River Commission, which was formed 12 years ago by four other riparian nations. (Burma is also not a member.) "I think China doesn't want to join the commission because then there will be environmental expectations," says the International River Network's Middleton. "But when the biggest country at the source of the river isn't part of the commission, it makes the group basically toothless."

That sense of helplessness extends to many in Yunnan as well. The Xiaowan project has forced 35,000 people from their homes, often with minimal compensation. Wang Zhengjun was uprooted in 2004 from his farmland on the banks of the Mekong with only six months' notice. Although he was provided a new house by Huaneng, the 42-year-old says it's much smaller than his old one — and it doesn't come with the fertile soil that supported his family for generations. Villagers were told the dam would be a financial boon to local residents. But Wang and others contend that the best jobs have gone to migrant laborers. Locals, many of whom are members of China's disenfranchised ethnic minorities, tend to earn less than half of what even the lowest paid outside workers get. "They promised us jobs, money, everything," says Wang, sitting in the ramshackle village overlooking the dam-construction site that is now his home. "But they have delivered us nothing."

China's dam building isn't limited to its sovereign stretch of the river. In June, the Laotian government gave initial approval for a $1.7 billion dam on the Mekong that will be built by two Chinese power companies. Another Chinese firm is conducting a feasibility study for a Mekong power project in Cambodia, in an area where other foreign companies have been reluctant to invest because of the adverse ecological impact. Several other Mekong tributary dams in Southeast Asia will be financed by China Exim Bank, the nation's largest credit agency, which has invested in power projects with the enthusiasm of the Great Depression-era U.S. government.

These dams may boost economic growth in developing countries facing severe energy crunches. Vietnam, for example, suffers from chronic electricity shortages, and compared with coal-fired and oil-burning plants, hydropower is a relatively clean and inexpensive solution. But dams also have severe, long-term environmental consequences. Vietnam's Mekong Delta, where the river finally meets the sea, is a vast web of waterways that serves as a giant rice bowl, providing the nation with half of its total agricultural output. Yet in part because of the increasing number of dams reducing the flow of the river, salt water from the South China Sea has begun traveling up the Mekong. The influx of brackish water over the past few years has ravaged farms and fisheries. This spring in the delta's Mo Cay district, Nguyen Thi Hong and her husband watched helplessly as salt water infiltrated their fish farms and fields. During the worst 10-day stretch, 100 catfish died a day, while their entire aquatic-vegetable crop withered. "Our pigs and cows are still sick from drinking the salty water," says Hong, who lives about 30 miles (50 km) inland. "Nothing was spared."

Even as one way of life begins to fade, another springs into existence. For so long, the Mekong Delta, despite its riverine abundance, has been scarred by a grueling cycle of war and poverty. Today, the area is welcoming Chinese investors, who have flocked to newly constructed industrial zones where Vietnamese factory workers churn out motorcycles, shoes and televisions. This year, a $1 billion industrial park funded by some 40 Chinese businesses is set to open near the South China Sea, providing jobs for tens of thousands of Vietnamese. Like the rest of the country, the delta has a booming young population that is profiting from Vietnam's economic reforms. For this striving generation, their homeland's historic enmity with China is all ancient stuff. Do Quang Tranh speaks of how magnificent imported Chinese products are, describing in wonderment the "beauty of Chinese-made bricks." If he had his wish, this farmer would trade his fields for a job in a Chinese-invested factory — even though his village's elderly commune chief warns against "that frightening country up north." The ebb and flow of the Mekong has both blessed and cursed the people of the Delta. For Tranh and other Vietnamese, they can only hope to profit from what the river now brings to Vietnam's shores: the energy of China's economic expansion, and the lure of a better life.