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Regional Electricity Planning and Transboundary Rural-Urban Divide
Dr. Carl Middleton
1
, Lecturer, Master of Arts in International Development Studies(MAIDS), Faculty of Political Science, Chulalongkorn University
Prepared for
“International Seminar on Rural-Urban Tensions, Violence, & Conflict Transformation:Thailand in Global Comparative Perspective”26-27 August 2010, Chulalongkorn University, Bangkok, Thailand
Introduction
In the Mekong Region, demand for electricity is growing rapidly, especially in Thailandand Vietnam, driven by rapid industrialization, export-led industrial expansion, andexpanding domestic consumer markets. Whilst the extent of this growth and the best wayto meet it is increasingly contested between civil society and government agencies,exploitation of the region’s hydropower resources remains high on each Mekonggovernments’ agenda, including through developing a regional market for electricitytrade (Middleton
et al
, 2009).Over the past five decades, numerous large hydropower projects in the Mekong Region,such as the World Bank-financed Pak Mun Dam in Thailand and the Asian DevelopmentBank (ADB) backed Theun Hinboun Dam in Laos, have often left affected localcommunities worse off to this day (Amornsakchai
et al.
, 2000; FIVAS, 2007). Mostrecently, the ADB and World Bank were instrumental in pushing through the Nam Thuen2 project in Lao, approved in 2005, after a fiercely contested decade-long projectpreparation process that questioned the project’s consistency with the banks’ safeguardstandards (Lawrence, 2009).Whilst Western governments, corporations and consultancies, backed by the ADB andthe World Bank, have been influential in promoting and financing major hydropowerschemes in the Mekong region in the past, in particular in Laos and Thailand, over thepast ten years a new generation of hydropower developers has emerged as the keyadvocates of hydropower development. These new developers, mainly from Thailand,Vietnam, China, and Malaysia, have picked up many projects that were abandoned byWestern corporations during the 1997 Asian financial crisis. In a complex interplay of political support, development aid, and entrepreneurial spirit, these new proponents haveled the revived push for widespread hydropower exploitation, often backed by exportcredit agencies and commercial financiers from their own countries. Yet, to date, thesedevelopers and their financiers have demonstrated little commitment to InternationalStandards or meaningful Corporate Social Responsibility (CSR).
1
Author’s email: Carl.Chulalongkorn@gmail.com
2Securing a reliable and sufficient supply of electricity is important to many dimensions of development. Yet, in a region where millions of people depend on the natural resourcesthat rivers provide, many proposed dams pose risks for to the livelihoods of ruralcommunities and threaten to create conflicts with project developers, their financiers, thegovernments.With a focus on hydropower development and regional power trade, this paper exploresthe trends towards regionalization in the Mekong region and its consequences, inparticular the externalization of environmental and social costs by Thailand and China,and increasingly Vietnam, to neighboring countries where governance is weak, namelyCambodia, Lao and Burma, that is creating new forms of transboundary urban-ruraldivide and potential conflict. Three power-export projects in Lao are examined in detail:Nam Theun 2 Dam; Theun Hinboun Dam; and the Nam Ngum 2 Dam. The causes andimplications of transboundary conflicts on transboundary rivers are also discussed,namely on the Sesan River shared between Cambodia and Vietnam, and on the Lancang-Mekong mainstream shared between China and the downstream Mekong countries. Thepaper concludes by considering how electricity planning could be undertaken better toreduce costs and maximize benefits, and considers the appropriate role of governmentand the private sector.
Regionalization in the “Greater Mekong Subregion”
Since the early 1990s, the Asian Development Bank (ADB) has promoted regionaleconomic integration between Burma, Cambodia, Laos, Thailand, Vietnam, and Yunnanand Guangxi provinces of China through its Greater Mekong Subregion (GMS) program.Following the GMS’s 3C principles of “Competitiveness, Connectivity and Community,”and with a vision to create a single, borderless economy, an important focus of the GMSprogram has been building large-scale infrastructure to physically interconnect the region,such as roads, railways, high-voltage transmission lines and hydropower dams. The GMSframework promotes private sector investment as the principle engine of development,including the privatization of public services such as water, gas and electricity (ADB,2008).Economic regional integration has undoubtedly brought benefits to some. The region’srising GDP, which has increased significantly since the early 1990s, is cited by the ADBas the key measure of the GMS’s success. Furthermore, by the ADB’s measurement theproportion of people living in extreme poverty (on less than $1 a day) has also droppedsignificantly; between 1990 and 2003, the proportion of people living on less than $1 aday fell from 46% to 34% in Cambodia, 33% to 13% in the People’s Republic of China,53% to 29% in the Lao People’s Democratic Republic, 10% to less than 1% in Thailand,and 51% to 10% in Viet Nam.Yet, whilst conventional economic indicators such as GDP may show growth, statisticssuch as these say little about whether quality of life is actually improving or inequalitiesnarrowing. Within the Mekong Region a large portion of the goods and services thatenrich people’s quality of life are found outside of the formal monetary economy and,
3unfortunately, there is a growing body of evidence indicating that life is getting harder, inparticular for those at the margins of the region’s new market-based economy. OxfamAustralia, in a recent report, observe that “Most GMS projects focus on promotingeconomic growth or regional integration, with little explicit focus on targeted povertyinterventions” and suggest that
growing inequality in the region and acceleratingenvironmental degradation is symptomatic of the regional integration and economicmodernization model (Cornford and Matthews, 2007).The regionalization now underway in the Mekong region is establishing a “resourceextraction economy” which is increasingly integrated into the global economy and thatfacilitates regional and multinational investors to gain access to new markets and naturalresources (Guttal, 2006). This development path threatens to undermine the naturalresource base upon which the region’s majority rural populations depend for their foodsecurity and other basic needs (Peterson and Middleton, 2009).
Regional power trade in the Mekong region
The plans for regional electricity integration, first prepared by the ADB in the early1990s and now widely supported by the Mekong region’s governments, serves as apoignant case study to illustrate the potential for creating inequality and rural-urbandivide – including across borders – as a result of poorly-planned, large-scaleinfrastructure projects.The ADB’s first regional electricity study, completed in 1994, was carried out byNorconsult International, one of Norway’s largest hydropower consulting companies(Norconsult, 1994). Reflecting both the study’s terms of reference and the consultants’own bias, the plan envisaged a network of high-voltage transmission lines linking theMekong countries and opening up mountainous regions mostly in Laos, Yunnan provinceof China, and Burma to hydropower development to export electricity to Thailand andVietnam. In 2002, a second study funded by the ADB filled out the details of this masterplan and in 2009 the plan’s logic was extended to the wider energy sector, including coaland gas, which was endorsed at the GMS Ministers’ Summit in June 2009 in Thailand(ADB 2009).In many ways, these plans reflect the Mekong region’s governments’ own preconceivedideas for electricity generation and limited consultation with the public, and are a missedopportunity to assess all potential options to meet the region’s energy needs. These plansalso fail to take account of the cumulative social and environmental impacts, and havebeen prepared largely without the participation of diverse stakeholders. As such, theplanning process to date falls well short of international standards in energy planning,such as Integrated Resources Planning that is now common in many highly-industrializedcountries.These regional power development plans have also been the root source of injustice to thetens of thousands of people who have already been affected by export-orientated
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