The Mekong River's Pandora s box 

A woman fishes in the Mekong River in Laos in September 2010.

Though Zeus warned Pandora never to open the box given to her, the temptation proved too strong and Pandora forever unleashed into the world misery, suffering and sorrow.

Today, much like this mythical Greek tragedy, the decision-makers of the Mekong sub-region face a similar temptation in the form of a cascade of hydropower dams proposed for the Mekong River.

They have also received Zeus’ warning from a Strategic Environmental Assessment (SEA) report that warns of grave social and environmental consequences should the dams proceed.

In September last year, the government of Laos initiated a regional decision-making process, facilitated by the Mekong River Commission (MRC), for the proposed Xayaboury dam located in the eponymous mountainous province in northern Laos.

Over the next four months, the governments of Thailand, Laos, Cambodia and Vietnam will make a joint decision on whether or not to approve construction of the dam, which would be the first of 11 mainstream dams proposed for the lower stretch of the river that runs through the four countries.

The initiation of this regional decision-making process on the Xayaboury dam pre-empted by three weeks the release of the SEA report, which was commissioned by the MRC in May 2009 and was originally intended to inform future decisions on mainstream dam development.

Whilst to most it would seem common sense to consider the SEA report’s recommendations before moving to more advanced stages of decision-making, it is perhaps not surprising that the Xayaboury dam has been pushed quickly ahead by its proponents, leapfrogging the launch of the SEA report by weeks.

The SEA report concludes that construction of dams on the Mekong River’s mainstream would irreversibly undermine the ecology and economic productivity of the river and will place at risk the livelihoods and food security of millions of people who depend upon the river’s resources.

It recommends that decision-making on Mekong mainstream dams, including Xayaboury, be deferred for 10 years due to the massive risks and vast impact associated with the projects, and the need for more than 50 more critical studies to ensure that decision-makers are fully informed about these risks.

With very limited commitment to transparency and accountability in this new decision-making process, however, it seems that common sense might be in short supply, although civil society groups and the wider public have tried to make their opinions heard.

While the regional decision-making procedures over the Xayaboury dam began three months ago, the MRC only publicly released an ambiguous roadmap for its implementation late last month.

Remarkably, whilst comment is invited, the project’s documents have not been disclosed to the public, rendering the process opaque, unaccountable and increasingly lacking in credibility.

In October 2009, for example, a 23,000-signature petition calling for the Mekong River’s mainstream to remain free of dams was sent to the prime ministers of Cambodia, Laos, Thailand and Vietnam.

More recently, in September last year, Thai community groups representing about 24,000 people in five provinces along the Mekong River submitted a petition to Thailand’s Prime Minister asking him to cancel the Xayaboury dam.

If built, the Xayaboury dam will displace over 2,100 people, at least 200,000 people would suffer a direct impact on their livelihoods through the loss of fisheries, riverbank gardens, agricultural land and forests.

The dam would also block a critical fish migration route – including for 23 fish species that travel from Cambodia’s Tonle Sap lake – and scientists from around the world have concluded that there is no viable mitigation technology. Up to 41 fish species would face the threat of extinction, including the iconic Mekong Giant Catfish.

The myth of Pandora’s box has long been used as a lesson in the dangers of curiosity, temptation and the weaknesses of human nature. The question is, can we heed Pandora’s lesson before it is too late?

The decision lies in the hands of the governments of Thailand, Laos, Cambodia and Vietnam.

On first inspection it may appear that Thailand is a key decision-maker, as it plans to purchase 95 percent of the Xayaboury dam’s electricity. In addition, the project’s lead developer is Thailand’s second largest construction company, Ch. Karnchang, and four major Thai banks are considering financing the project.

However, as the Mekong River is a shared resource between all four lower Mekong countries, and joint decision-making over its sustainable and equitable sharing is embodied in the 1995 “Mekong Agreement” that mandates the MRC, in fact it is decision-makers from all four Mekong countries that will formulate the final decision on whether the project is approved or not.

As Vietnam contemplates this crucial decision, serious consideration must be given to the trans-boundary impacts the Mekong Delta may suffer as a result of the development of the Xayaboury and ten other proposed dams on the Mekong River’s mainstream.

The Mekong River is an integrated ecosystem and upstream development can have unintended – but severe – downstream consequences.

By altering the delta’s important life-cycle of water, silt and nutrients, the mainstream dams could have far-reaching implications for the delta’s rice production, fisheries, and agriculture, with implications for the local and national economy.

In a world facing a growing food and water crisis, working together to protect and share the Mekong River’s rich natural resources, rather than undermining them, should be a high priority for the region’s decision-makers.

If, like Pandora, decision-makers choose not to heed the advice of the SEA report and instead open the dam-building box, grave misfortune is certain to follow.

It is yet not too late to prevent the tragedy of these dams from being unleashed. Some boxes are meant to remain unopened.

By Ame Trandem
Ame Trandem is a campaigner with the NGO International Rivers, a partner of the Save the Mekong coalition.

Vietnam denies participation in joint military drills 

 

A senior military official squashes rumors that Vietnam participated in a US-Thai military exercise


Deputy Defense Minister Lieutenant Colonel Nguyen Chi Vinh says Vietnam has no intention of joining the Cobra Gold joint military exercise in Thailand. Meanwhile, he said that Vietnam will reinforce defense cooperation and is preparing to join the United Nations Peacekeeping Commission.

Deputy Defense Minister Nguyen Chi Vinh has rejected claims about Vietnam’s participation in the Cobra Gold 2011 military drill in Thailand (from February 7-18). Vinh has said that Vietnam doesn’t have any intention of joining another military exercise.

“This year, Vietnam didn’t send participants to the [Cobra Gold] military exercise,” Defense Ministry-owned Quan Doi Nhan Dan (People’s Army) newspaper quoted Lieutenant General Vinh as saying on Wednesday (February 16). “It is wrong to say Vietnam sent its people to prepare battle strategies [in the exercise],” he was quoted as saying. “I wonder where it came from. This incorrect information could mislead the public about Vietnam’s policy.”

Vinh was denying rumors that had surfaced suggesting Vietnam would join the other participating nations in formulating a regional battle plan.   

Count us out

The Cobra Gold exercise, hosted annually by Thailand, was launched in 1982 as a bilateral effort between the US and Thai militaries. It was promoted as a multi-national exercise in 2000, when Singapore joined, and has since grown to become one of the largest land-based, combined military training exercises in the world.

Cobra Gold 2011 was officially kicked off on February 7 in Thailand’s north-eastern province of Chiang Mai.

Besides hosts US and Thailand, Indonesia, Japan, the Republic of Korea, Malaysia and Singapore are participating in the exercise that will be observed by military teams from China, India, Sri Lanka, Laos, Brunei, Russia, Mongolia, South Africa, the United Arab Emirates and New Zealand.

Vinh said Vietnam joined the exercise for the first time in 2003, as an observer, but has not regularly participated in the annual event since then.

“The purpose of Vietnam’s participation was to observe military exercises of other countries,” he said.

Recently, speaking in Malaysia, US Navy Adm., Patrick Walsh, Commander of the US Pacific Command, expressed the intention of inviting Vietnam to join the Cooperation Afloat Readiness and Training (CARAT) military exercise with the US and some other countries in the region.

However, Vinh said that Vietnam has not received an official invitation nor studied the military exercise.

“I want to stress again that Vietnam is not participating in any [joint] military exercise,” he said. “In the near future, Vietnam will only join joint humanitarian exercises like deactivating landmines.”

Peacekeepers to be

Vinh confirmed that the country has “actively” prepared to become a member of the United Nations Peacekeeping Commission as well as integrating with the international defense community.

He said that Vietnam has expressed its willingness to join the UN peacekeeping force at the right time and this would help the country improve its position and study various issues around the world.

Vinh said that Vietnam began preparing to join the UN force some four years ago, by training personnel, securing government approval and seeking for investment, “because the country is still poor.”

Any international military participation will be purely humanitarian, he stressed.

“Vietnam’s policy is not to send its peacekeepers to places where there are conflicts,” he said.

Vinh said that a new “security structure” was formed during the first ASEAN Defense Ministers Meeting (Plus Eight) in 2010 when many countries from outside the region joined the bloc. The Vietnamese army has participated in the ASEAN Defense Ministers’ Meeting (ADMM) and other defense conferences of the Southeast Asian bloc, he added.

In defense cooperation, Vietnam will boost current bilateral and multilateral relations, especially defense forums like the ADMMs, Vinh said.

“Vietnam will actively contribute to ASEAN, first and foremost for its own benefit,” he said. Vinh claimed that Vietnam’s participation would improve its international image, help modernize its army and help protect its sovereignty in the region and the world.

Asked about how Vietnam would contribute to ASEAN in solving the conflict between two members in the bloc – Thailand and Cambodia – that has recently flared up near the disputed Preah Vihear temple, Vinh said Indonesia (ASEAN’s 2011 Chair) and all members should help find solutions to maintain peace and stability in the region.

The disputes should be solved through peaceful negotiations that comply with international laws, he said.

Higher rates hurting economy 

The Hanoi-based Southeast Asia Commercial Joint Stock Bank (SeABank) on Thursday raised deposit interest rates to 18 percent early Wednesday before reduced them to 13.5 to 14 percent.

Interest rates in Vietnam have soared over the past few weeks after the central bank signaled tighter monetary policies to curb inflation and stabilize the foreign exchange market.

While raising interest rates can help contain inflation, very high rates can hurt the economy, Tran Hoang Ngan, a member of the National Monetary and Financial Policy Advisory Council, told Thanh Nien Weekly. A deposit rate of 12 percent is reasonable, as it is higher than the anticipated full-year inflation rate of 11 percent or so, ensuring that depositors can cover the higher prices of goods.

Thanh Nien Weekly: Each time the interest rates rise, several explanations are offered, such as stronger capital inflow into the stock market, higher inflation, and tightened monetary policies. What about the latest increases?

Tran Hoang Ngan: The higher interest rates are due to increasing inflation and exchange rates. To curb inflation and stabilize the exchange rate, the central bank increased the base rate, pushing up the interest rates in the banking market.

However, the (interest rate) hike should be seen as a short term phenomenon. The central bank should consider bringing them to a reasonable level. In theory, when inflation rises, countries will increase interest rates, but the increase must stand at levels firms can accept. This is where the central bank should come in.

The latest interest rate hike has hurt local production and business, so current levels should not be allowed to continue.

Some say that the capital mobilization capacity of commercial banks is still limited, and that this has contributed to the sharp rise. Would do you agree?

High interest rates are also due to the weak management of commercial banks. They increase the cost of credit for businesses.

Under the mechanism of free interest rates, we apply a policy of negotiable interest rates, which makes banks compete against each other to lure deposits through increased deposit rates.

The banking network has extended after some rural banks turned urban in 2006. Operating on a larger scale, the banks’ expenditures have increased, so they have to raise their interest rates as well. Besides, banks looking to strengthen lending operations increase deposit rates to increase their capital supply. Thus, their lending interest rates increase as does the risk they face.

In general, local banks’ business effectiveness is still low. The prices of banking stocks, which were high several years ago, are now very low. Some banks have seen their stocks falling below their face value. This shows that the banks’ use of capital has not been efficient or effective, and that it is necessary to restructure the banking system, merging weak banks with stronger ones and dissolving those without sufficient charter capital.

In the context of the economy always needing foreign capital, how is credit supply affected?

Our savings now are lower than investment requirements, so we need foreign capital sources. However, there is a problem with this as well. From foreign direct investment (FDI) projects, we expected technology transfer and a reduction in imports. However, after 20 years (of opening the market to FDI) we receive outdated technology, and the FDI sector sees a trade deficit.

Vietnam is one of the countries with the highest interest rates in the world. This will discourage investors and encourage people to deposit money in banks. So, prolonged high interest rates will destroy small firms in the country, causing a shortage of goods, and therefore, increasing inflation again. The central bank should intervene to keep interest rates at a reasonable level.

What do you think is reasonable?

It is the correct thing to do, to accept high interest rates to curb inflation, but not at extraordinary levels. So, keeping the deposit rates at 12 percent is reasonable, ensuring that it is higher than inflation. Our country’s full-year inflation is estimated at 11 percent, so a 12-percent deposit rate can help depositors cover the higher prices they pay for goods.

Inflation in Vietnam is caused by a number of factors not decided by money supply. Some countries have an interest rate policy based on base inflation in which non-monetary factors are not calculated.

For example, prices of crude oil and food in the market are not increasing because of higher money circulation in Vietnam, but because of world supply and demand.

So it is necessary to pay attention to this issue. Interest rate adjustments should be based on the base inflation rate, not the general inflation index (or headline inflation rate that has a larger basket of goods and services).

The latter is a measure of living standards that can be used to adjust wages, but the base inflation rate should come into play in formulating interest rate policies.

Vietnam helps Australia probe banknote graft scandal 

 

Interpol Vietnam has supported Australian police in investigating a case where an international banknote material supplier has been accused of bribing foreign officials in customer countries.

 

Australian ambassador Allaster Cox revelaed this on the sidelines of the conference of international sponsors in Hanoi Wednesday.

 

In May 2009, Australian Federal Police began investigating the Australian-owned Securency International following allegations that the firm had engaged in the systemic bribery of foreign officials in nearly 30 countries, including Vietnam.  

 

The ambassador said the investigation was still under way, and that so far Australia and Vietnam were yet to make official diplomatic exchanges in the case, except for technical collaboration between the countries’ police forces.

 

Earlier, Pham Anh Tuan, Deputy Chief of the Central Committee for Anti Corruption, had said that Vietnamese investigators were also working with Swedish justice officials in pursuing graft charges related to the scandal.

 

The case has prompted police in Securency’s custom countries like England, Malaysia and Sweden to launch investigations and several arrests have been made.

 

US sees no ‘game-changer’ in China’s emissions goal 

Environmental activists from Bolivia march toward the Pitaya Cancun Messe, where climate talks are taking place in Cancun, December 7, 2010.

China’s most recent stance on bringing its emissions-reduction goals into a United Nations deal marks “business as usual” and doesn’t advance fractured climate negotiations in Mexico, US envoy Todd Stern said.

China’s delegation chief Xie Zhenhua said Monday he’s prepared to include in an official United Nations document a “voluntary” pledge to rein in emissions, a response to demands from the US and the European Union that current promises be anchored within the negotiating process.

“I’ve seen quotes from some people saying this can be a game-changer,” Stern, the lead US envoy at the UN talks in Cancun, Mexico, said at a briefing Tuesday. “I’d love it to be a game-changer, but as far as I’m concerned, this is business as usual.”

China’s comment, as leaders from 35 nations arrived for the final four days of the discussions, came as delegates work able to bridge differences between rich and poor nations blocking an agreement.

Presidents Hugo Chavez of Venezuela, Evo Morales of Bolivia and Rafael Correa of Ecuador are among the leaders arriving for the final four days of the conference. US President Barack Obama, who attended last year in Copenhagen, is not coming this time. UN Secretary General Ban Ki-Moon told the delegates they were “not rising to the challenge” of making an agreement.

“We need results now,” he said. “Our efforts so far have been insufficient. We need to make progress in these negotiations. The longer we delay the more we will have to pay.

Glaciers retreat

A UN report on Tuesday said glaciers in Chile and Alaska retreating the quickest in the world. Those in Europe, which were building mass during the 1970s, now are shrinking. A text for this week’s talks suggests keeping temperature increases since the 1700s to “below 2 degrees Celsius.”

Carbon dioxide emissions have risen 40 percent from 1990 to 2008, double the level that would produce a 3.5 degrees Celsius increase in global temperatures, the International Energy Agency said Monday.

“The environmental stakes are high,” said Christiana Figueres, the UN diplomat leading the talks. “We are quickly running out of time to safeguard our future. Sooner or later island nations will have to seek refuge in higher-lying countries. There will be worse impacts.”

Pollution limits

Current emissions goals from the world’s biggest polluters are enshrined in the Copenhagen Accord, a non-binding document that envoys to the UN Framework Convention on Climate Change don’t formally recognize.

Zhenhua said Monday that developing countries, including China, “could choose to make voluntary action utilizing their own resources under the UNFCCC framework.”

Chinese remarks show “there’s a move toward the middle ground,” European Commission envoy Artur Runge-Metzger said in an interview Tuesday in Cancun.

“It looks like things are coalescing,” Andrew Deutz, head of international government relations at the Nature Conservancy, an environmental advocacy group in Arlington, Virginia, said in an interview today in Cancun. “There are two big road blocks in the way and one is MRV. I think that roadblock should be removable.”

The other big source of disagreement is how to ensure greenhouse gas emissions are reduced after 2012, when limits for rich nations set out in the 1997 Kyoto Protocol expire. Japan, Canada and Russia are refusing to sign up for a second period of commitments. China, India and Brazil say those further reductions are essential.

‘Hard pounding’

“It’s hard pounding,” said Chris Huhne, Britain’s energy secretary, who along with his Brazilian counterpart was tapped by the UN to work out a compromise on the Kyoto issue. “We’re getting there. I’m a half-glass full man.”

Envoys are working on measures including a $100-billion-a- year climate aid fund, rules that would protect forests and the system of monitoring, reporting and verifying emissions cuts, known as MRV in UN jargon. Two draft documents released today on the MRV issue were filled with brackets, an indication the wording has yet to be agreed.

“There’s been quite some progress on MRV,” Runge-Metzger said. “It’s kind of a skeleton now, and what we need to do now is to put flesh onto the bones.”

Under the text, developed countries were urged to adopt more ambitious, legally-binding targets.

Country’s concerns

Developing country’s mitigation actions would be subject to MRV procedures when supported by aid, and when not supported, they would conduct their own monitoring and then submit the report to international analysis, according to the text.

The MRV package was one of the key tensions between the US and China that prevented a global warming agreement at last year’s talks in Copenhagen.

Stern said China hasn’t gone far enough in giving transparency to its efforts limiting greenhouse gases, adding to doubt about the prospects for an agreement this week.

“The transparency issue is lagging way behind,” said Stern of the US. “There is a lot of support in the conference and among developing countries for the proposal the Indians have put forward,” he said, referring to an attempt by Indian Environment Minister Jairam Ramesh to unlock the process.

India has proposed guidelines that would differentiate between rich and poor nations and also put rapidly emerging developing countries like China into a separate category than the poorest nations.

Developing nations have been voicing concerns about the verification program, which they viewed as encroaching on their sovereignty.

“If MRV issues are resolve and targets are resolved, then everything can be resolved,” Quamrul Chowdhury, Bangladeshi envoy, said today in an interview. “But those are the crux issues where there hasn’t been much progress.”

Zhenua said Monday that China, India, Brazil and South Africa had reached agreement in principle on the transparency issue.

A new chapter 

US Secretary of State Hillary Clinton speaks at a luncheon in Hanoi in July. Her back-to-back visits to Vietnam this year articulated the rising US commitment to bilateral relations.

Hillary Clinton’s back-to-back visits to Hanoi articulated the rising US commitment to US-Vietnam relations. Clinton’s recent announcement “The US is back in Southeast Asia,” struck a chord of surprise for many in the region.

In his farewell interview with Thanh Nien Weekly, departing US Ambassador Michael W. Michalak speaks broadly of the new cooperation between the two countries. The US has publicly opposed the damming of the Mekong River and Michalak articulates an emerging US position toward the Lower Mekong River Basin.

Michalak will leave Vietnam for his next assignment in the first week of January 2011.

Thanh Nien Weekly: How do you view your term as US Ambassador to Vietnam in the scope of your long career as a diplomat?

Michael W. Michalak: My experience as Ambassador to Vietnam has been one of the most interesting and rewarding experiences of my life, and certainly of my 30-plus years with the Department of State. Being able to play a role in moving beyond our painful past and building a strong partnership has been a tremendous honor.

What effects will the damming of the Mekong River in China, Laos and Cambodia have on the Mekong Delta?

During her visit to Hanoi (in October), Secretary of State Clinton discussed the potential impact of proposed dams on the mainstream of the Mekong River with her Lower Mekong Initiative partners in Cambodia, Laos, Thailand, and Vietnam. The Secretary recommended a pause before major construction continues and said the US would sponsor a study of the issue. Hydropower development on the Mekong mainstream is an issue of concern, as recent studies show that even one dam could cause irreparable damage to the complex ecosystem of the Mekong River Basin and pose an immediate and long-term threat to the food security and livelihoods of millions. For Vietnam, upstream dams will reduce water and sediment flows, resulting in saltwater intrusion, soil erosion, and decreased soil fertility, threatening agriculture and aquaculture productivity. The Mekong Delta is Vietnam’s “rice basket,” and Vietnam is the world’s number two rice exporter. This issue has consequences for global food security.


US Ambassador Michael W. Michalak

If these dams are built, how will they impact the livelihoods of those living in Vietnam’s Mekong Delta and in other lower Mekong countries? How will the residents of the Mekong Delta survive if they can no longer make a living farming and fishing?

It is critical to address the livelihoods of the 20 million Mekong Delta residents in Vietnam, 85 percent of whom rely on agricultural activities. The Delta has a higher GDP than the national average—10.2 perent growth in 2008, compared with 7-8 percent national growth. What’s more, Delta rice production accounts for 60 percent of the country’s total export turnover.

While some research is currently underway about adapting agricultural practices to address increased water salinity, for example, more is needed. The US’s Lower Mekong Initiative (LMI) addresses education and environment among its four pillars. The DRAGON (Delta Research and Global Observation Network) Institute at Can Tho University, jointly established by the US and Vietnamese governments in 2008, continues to research Delta ecosystems and sustainable river deltas in the context of climate change.

Do you have any suggestions to promote more effective cooperation between the members of the Mekong River Commission?

In 2009, the US joined with Cambodia, Laos, Thailand, and Vietnam to launch the LMI. These four countries also make up the Mekong River Commission. The purpose of the LMI is to enhance cooperation on issues of regional importance.

One of the ways we have pursued this is through the sister-river partnership between the Mekong River Commission and the Mississippi River Commission. The Mekong River Commission and the Mississippi River Commission both play key roles in managing waterways that are vital to the livelihoods of millions of people. The sister-river partnership enables the two bodies to cooperate and share expertise and best practices in areas such as climate change adaptation, flood and drought management, hydropower impact assessment, water demand, and food security.

Data-sharing among the countries of the Mekong River Basin is key to finding sustainable ways to develop the basin. Last December, the US Geological Survey and Can Tho University brought together scientists and experts from throughout the region to share information on how climate change and human activities could impact the ecology and food security of the basin.

The US remains committed to forging fruitful, long-term ties to all four Mekong River Basin countries.

The recent visits of US Secretary of State Hillary Clinton further strengthened the commitment of Vietnam and the US to ambitious cooperation in the areas of climate change, education, business, security and nuclear energy. Could you please give us more specific details regarding this cooperation?

The two visits by Secretary Clinton to Hanoi, less than four months apart, demonstrate the importance of the US-Vietnam relationship. In just 15 years, the scale of bilateral cooperation has increased dramatically in several areas, particularly in terms of trade, education and security.

During Secretary Clinton’s visit, she witnessed the signing of two very significant commercial agreements—between Vietnam Airlines and Boeing, and between Microsoft and the Ministry of Information and Communications.

Education has been another of my top priorities as Ambassador. And I’m very happy to say that in three years, the number of Vietnamese studying in the US has nearly tripled.

However, let me be clear: there is much work to be done. I agree with those Vietnamese who say that educational reform is key to taking Vietnam to the next developmental level, and the US looks forward to working with Vietnam as it takes the necessary, tough steps to strengthen its educational system.

Both Secretary of Defense Gates, who participated in October’s ASEAN Defense Ministers Meeting-Plus Summit, and Secretary of State Clinton reaffirmed the US government’s interest in deepening security cooperation with Vietnam. Specifically, the US and Vietnam agreed to work bilaterally and through regional institutions such as ASEAN to address such challenges as humanitarian assistance/disaster relief, search and rescue, maritime security, and peacekeeping.

Our two countries also agreed to deepen cooperation in military education and exchanges. It is an area that has developed at a deliberate pace, but one that has great potential and is very important to maintain peace, prosperity, and stability in the region.

On nuclear energy, the US and Vietnam concluded a general Memorandum of Understanding on civilian nuclear cooperation in March. We have not yet opened formal negotiations on the 123 agreement, but we look forward to doing so.

Climate change is an issue both the US and Vietnam take very seriously, which is why we established a joint working group to deal with this global threat. Vietnam is one of the countries that will be most severely impacted by rising sea levels caused by climate change, and we applaud it for its pro-active response.

What do you consider the most significant changes and improvements to the bilateral relationship during your term as US Ambassador to Vietnam?

I think the most significant progress in the bilateral relationship has been made in three areas: our trading partnership, educational exchanges, and security cooperation. Secretary Clinton, in fact, recently said the progress made in our relationship has been “breathtaking.”