Tragedy on the Mekong: Why greater government scrutiny is needed in Laos

A dam disaster

Benjamin Clarke

Development, Economics | Southeast Asia

5 September 2018

The recent dam collapse in Laos highlights major flaws in government accountability and oversight, Benjamin Clarke writes.

One of the poorest countries in Asia, Laos spotted an opportunity to harness its rivers and set sail for prosperity by selling electricity. But when a major dam burst last July and washed away entire villages, it raised fears the gamble had backfired and landed the secretive state in hot water.

Laos’s dam-building ambitions could pay off handsomely, but they have been hampered by inadequate government planning, which doesn’t match the state’s ambitious hydropower objectives.

If there is one thing Laos has lots of, it’s water. The mighty Mekong runs the length of the country along with numerous tributaries. The government envisions damming these rivers at regular intervals, producing and exporting hydropower to neighbouring countries to become the “battery of Southeast Asia.”

This vision is already becoming a reality, with 39 hydropower plants currently operational and a further 90 expected to be completed in coming years.

The scheme is an ambitious but necessary one. Laos is landlocked and mountainous with poor transport links, making it difficult to engage with international markets and build the economy. Meanwhile, electricity demand is growing over the borders in Thailand, Vietnam, and Myanmar, giving Laos a rare opportunity for economic advancement.

The conditions for profit are there and foreign investors have taken notice, allowing the economy to achieve a robust 6.8 per cent growth in 2018. If done correctly, hydropower development has the potential to benefit local communities with money directed into poverty reduction efforts.

Whilst this may present a positive case for Laos hydropower, there is also major cause for concern.

The dams have had a well-documented impact on agriculture. They have submerged riverside farmland, requiring entire communities to relocate away from lowlands where they were able to make a living.

Downstream, reduced seasonal flooding and an inhibited flow of nutrient-rich soil threaten the livelihoods of farmers who rely on them to grow their crops. At the current rate, fish stocks may fall by as much as 40 per cent.

In a country where 80 per cent of the population depends on agriculture, the consequences could be dramatic if farming communities aren’t adequately cared for. In many cases, they are not. People fear losing income and traditional ways of life without being given a viable alternative, which will only exacerbate the country’s poverty rates.

The dams also risk undermining Laos’s relations with its neighbours. After leaving Laos, the Mekong flows through Cambodia and Vietnam where it is equally important to local communities. Already suffering from water shortages blamed on upstream dams, both countries have expressed concerns about the impact of Laos’s dams and called for studies on their impact prior to further construction.

Despite claiming sensitivity to these concerns, Laos has pressed on with its plans with minimal consultation. This has raised tensions, particularly with Vietnam whose Mekong Delta region provides over 25 per cent of its GDP.

The collapse of the Xepian-Xe Nam Noy dam is a warning sign. The disaster exemplifies the lack of government scrutiny that could jeopardise the country’s future. Dam-building is a highly technical endeavour and good governance is essential to ensure it is carried out correctly, from initial planning stages to long-term management. It is clear such oversight was missing.

An Environmental Impact Assessment recommended the dam not be built, due to the devastating impact it would have on the biodiversity and livelihoods. That was ignored, and construction went ahead. An inability to enforce regulations then resulted in the dam collapse, and the residents who survived are now dependent on international aid. The disaster also caused severe flooding downstream in Cambodia, further souring bilateral relations.

What’s worse is this disastrous project may not be a one-off. The enormous Xayaburi dam has attracted concern from geologists, academics, and neighbouring countries who fear it is dangerous to the environment and the population alike. Similar concerns exist in many other places.

Eager to cash in on hydropower, can the country be steered away from ecological ruin, poverty, bad relations, and the risk of failed projects scaring away investors and customers?

Government reform is key, but it’s no easy task. Laos is a one-party state where criticism is harshly repressed. Its policies are rarely up for debate, and if local communities are suffering they have little recourse.

While public pressure has succeeded in preventing the construction of controversial dams in Myanmar and Cambodia, it remains to be seen if Laos’s government can be persuaded to moderate its ambitions in favour of a more considered approach.

Dam-building efforts may yet pay off, and hydropower may be the key to propel Laos forward. But to ensure a prosperous country and a harmonious region, much greater care needs to be taken.

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