Mekong Meet May Assess Regional Integration

Johanna Son
Thursday, March 6, 2008

BANGKOK, Mar 6 (IPS) - An opportunity to review the balance sheet of the benefits and burdens of regional integration and opening borders lies ahead, at the Third Mekong Summit to be held in Laos at end-March.

The leaders of the six Mekong countries are to gather in Vientiane for the Mar. 30-31 summit to "discuss the progress and chart future directions in GMS (Greater Mekong Subregion) cooperation", according to an announcement by the Asian Development Bank (AsDB), which is facilitating the summit.

This summit among China, Cambodia, Thailand, Vietnam, Laos and Burma is aimed at helping achieve the vision of "an integrated, harmonious and prosperous subregion", it added. Previous meetings were held in Phnom Penh in 2002 and in Kunming, China in 2005.

While no surprises are expected -- the summit does not even rank highly in the list of the region's news events --it brings to fore the continuing debate about the brand of development that the Mekong countries are pursuing, as the Bank-facilitated Mekong programme reaches some kind of a midpoint more than 15 years since its launch in 1992.

To proponents of what the Bank calls the ‘Greater Mekong Subregion' programme, regional cooperation has brought clear economic benefits especially given the fact, as Bank officials like to recall, the governments involved would hardly even sit at the same table in the past.

The early 1990s were a period when ideological and political differences were in thaw. Only in 1991 did China and Vietnam restore bilateral ties, three years after a naval battle near the disputed Spratlys, and start opening more land borders. The Paris Peace Agreement for Cambodia was signed in 1991, leading to the United Nations-sponsored elections three years later.

Economic reforms had come underway some years back. Vietnam launched its ‘doi moi' or economic renovation policy in 1986, and Laos announced reforms called the ‘New Economic Mechanism' that year as well.

Today, Bank figures point to increased linkages within the Mekong region. Exports are up more than 400 percent from 1992 to 2006, and intra-regional trade has increased by 15 percent, it says.

They add that from 1990 to 2003, poverty reduction has fallen from 46 percent to 36 percent in Cambodia, from 53 percent to 29 percent in Laos, from 51 percent to less than 10 percent in Vietnam. Some of the Asia's highest growth rates are in the region, such as Cambodia's 10 percent.

But to critics of regional integration pushed by the Bank and the Mekong governments, the GMS kind of development has too heavily focused on hard infrastructure projects. They say these are exacting a heavy price in social and environment impacts that the less developed countries are grappling with now.

The Mekong River, which flows through the region, is often cited as an example of this cost. Undammed until the nineties, it is the subject of a mix of hydropower plans by countries like China and Laos. "Death by a thousand cuts" is how Carl Middleton, South-east Asia campaigner for the U.S.-based International Rivers Network, describes the state of a river being "destroyed" by regional integration.

He argues that the development of the river's resources has been pushed as business opportunities for export-import banks and developers, amid a lack of international environment standards, effective consultation among states and communities affected by dam projects and the backdrop of large dam-building as a sunset industry in the west.

Analysts also ask whether the regional integration that has happened so far is more market integration than anything else.

It is not always easy to conceive of the Mekong region, made up diverse ethnicities, cultures and political ideologies, as one economic grouping. It has Thailand with a per capita GDP of more than 2,500 US dollars and Cambodia with 354 dollars. It is home to the stronger economies of China, Vietnam and Thailand as well as to smaller ones like Cambodia, Laos and Burma, raising the issue of which can gain the most in an unequal playing field.

Cambodia, Laos and Burma are rich in natural resources, including hydropower, that bigger economies would like to have access to. Those countries with resources to invest elsewhere can gain by the use of cheap labour across the border, or by investing in extractive industries in economies like Laos that need foreign exchange -- such as in huge agro-forestry concessions that have been given out.

The social costs often have to do with flipside of development. Open borders allow for easier commerce and mobility, but also make it easier for drugs, diseases to cross borders. Trafficking of human beings becomes easier, even though easier movement through borders is something everybody wants.

Sirivanh Khonthapane, director general of the National Economic Research Institute of Laos, saw such tradeoffs in a study of the impact of having the East-West Corridor -- one of the ADB's major initiatives -- run through Laos, which has Least Developed Country status.

Sixty percent of respondents said that integration has had "more positive effects than negative ones". Residents reported more business opportunities at the border as more traffic passes through the country.

With travel now easier to Thailand, more people have been able to look for jobs here. Remittances from residents of Savannakhet provinces working in Thailand amounted to some 20 million dollars, or seven percent of its GDP, Sirivanh said.

But there are other costs behind these economic gains. Thirty to forty percent of border households have at least one relative in Thailand and up to 70 percent of Lao migrant workers there are women. These social trends are linked to the vulnerabilities of residents, especially women, to trafficking, abuse and HIV and AIDS after being drawn to the promise of a better life across the border.

There is a need, Sirivanh says, to look into the social and cultural effects of building transboundary roads -- and educating border communities about how to manage the risks that come with them.

Yet the East-West Corridor -- it is now possible to have breakfast in Thailand, lunch in Laos and dinner in Vietnam -- is why landlocked Laos has now become "landlinked Laos", with its bigger role in the transit of goods from north-east Thailand to Vietnam.

One could ask how much benefit Laos gets if goods pass through the roads that run through it, but do not stop there. "The environment might suffer from a great increase in the passage of lorries between Thailand and China, just as it has in Thailand and Vietnam; some in Laos have doubts about the benefits of being a regional transit platform, given the damage already caused to the forests by the improved road infrastructure," added Vattana Pholsena and Ruth Banomyong in the book ‘Laos: From Buffer State to Crossroads?'.

In a late 2007 seminar, AsDB country director for Thailand Jean-Pierre Verbiest says that the first 15 years of the GMS programme focused on physical linkages. "What has been achieved has been a lot of physical infrastructure. . . a lot of hardware," he explained.

Economic cooperation is now moving to the next stages. "When we all sat down in 1992, the only thing we could discuss was hardware," he recalled. "As we go down, you involve more and more people and it's harder to agreement on software."

More efforts are needed from here on, he said, because "if we don't work together, the economic forces will be so strong to move forward and there will be no controls".

"We recognise that infrastructure development comes at a cost and sometimes, significant cost," AsDB managing director general Rajat Nag has said. "The solution is not to do nothing, but find a set of choices that accentuate the positive and minimise the costs."

One question is whether a ‘kinder' brand of development can take shape.

"There is a lot of growth, but growth has come with inequity," pointed out Rosalia Sciortino, professor at the Mahidol and Chulalongkorn universities. "So far, we have one model of development, that of market liberalisation. We can blame whatever, but we need to come up with new models of development."