Stratfor
APRIL 11, 2016
Analysis
In times of scarcity, nations compete more fiercely to meet their essential needs and defend precious commodities. Water is no exception, particularly the water of the Mekong River of mainland Southeast Asia. Mekong translates to “mother of rivers,” and the river lives up to its name, providing water in six different countries for agriculture, trade and millions of people. Originating in the remote Tibetan Plateau, the river rolls 3,000 miles through China’s Yunnan province, northeast Myanmar, and the lowlands of Thailand, Laos and Cambodia
But the Mekong region is currently in a severe drought, in part because of El Nino weather patterns. As stress on diminishing water resources increases, it will be difficult for Southeast Asia, already geographically and ethnically fractured, to foster cooperation. Differing economic, agricultural and electric needs between countries have left comprehensive water management wanting, in this crisis and beyond. To complicate matters, China, a dominant power in the region, controls the river’s headwaters. Thus the country can dictate not only how it uses water but also, in part, how its downstream neighbors do. Additionally, China has a diverse economy that, unlike its neighbors’, does not depend on the Mekong and its tributaries.
But the drought also carries opportunity for overarching competitions in the region, particularly for China. Along with its advances into the South China Sea, Beijing is moving overland, expanding trade routes and supply lines. The Mekong River is one component of the broader strategy. And amid a drought, China could use its influence over the control and release of water to gain political and economic concessions from the countries of the Mekong Basin.
A Drought in Southeast Asia
For two years, drought conditions have plagued much of Southeast Asia, contributing to declining reservoir levels and significant agricultural losses along with severe forest fires in Indonesia. El Nino — a weather phenomenon that traditionally brings below-average rainfall and generally higher temperatures to the region, creating abnormally dry conditions — is exacerbating the drought, which will likely continue mostly unabated until at least June 2016.
Monitoring stations upstream do not indicate extremely low water, but measures at several monitoring stations along the Lower Mekong came in below 20-year drought levels at the beginning of 2016. Meanwhile, the Vietnamese government has said that some parts of the river are at their lowest levels since 1926. Perhaps more damaging are saltwater intrusions, which threaten soil quality in the rice-growing delta regions. In dry years, saltwater intrudes farther inland: This year it extended an additional 25 kilometers beyond its usual reach (as much as 90 kilometers in some places) and began two months earlier than in an average year.
Similarly, the drought encompasses several regions in Thailand, and many of its reservoirs are at very low levels. For example, the Ubonrat reservoir has only 1 percent of usable water left. Thailand is planning to install pumps to draw water that cannot be drained by gravity through existing infrastructure, known as dead water, much as Brazil did in Sao Paulo during its 2015 drought.
The drought has been devastating for Southeast Asia, which depends on agriculture. Food crops feed vast swaths of the population; cash crops buoy the economy. Understandably, then, irrigation accounts for roughly 90 percent of total Mekong water usage. As the region’s primary agricultural producers, Vietnam and Thailand are responsible for over 80 percent of total withdrawals from the river and its tributaries. Already, the drought has hurt the rice harvests in Vietnam and Thailand, along with other major regional crops.
In Vietnam alone, nearly 160,000 hectares of farmland had been ruined by saltwater intrusion as of March 9, totaling $10.5 million in losses in the agriculture sector. Brackish water will likely damage an additional 500,000 hectares of paddy rice in the first half of 2016, a small but significant portion of the year’s harvest. Thailand’s rice production during the dry season has likewise been adversely affected in recent months, as has sugar crop production. Poor rice quality and lower yields in the Mekong and nearby Chao Phraya basins, coupled with an unplanted second offseason crop, have hindered production. Harvests of poor quality sugarcane likewise resulted in lower yields. In the first three months of the season, sugar production is already down 10 percent from the previous season, and even optimistic estimates predict the smallest crop in at least four years.
Beyond their agricultural importance, the waters of the Mekong provide electricity from numerous hydropower installations, which have surged in recent decades to spur industrialization and development. The drought is causing controversies surrounding hydropower projects to resurface. Laos and China have an interest in using the river to produce electricity and enhance trade. Furthermore, the artificial regulation that dams and reservoirs bring can mitigate seasonal disruptions to the river’s overall water level. There are already six major dams on the Upper Mekong, located in China. Nine dams are planned in Laos, where the government ultimately hopes to harness the country’s vast hydropower potential to supply electricity for the region. It is a goal that China and even Thailand support with financing and construction efforts.
Still, Vietnam and other countries fear the projects could cause ecological damage and change agricultural patterns currently hampered by the drought. Depleted fishing stocks are also a concern for all nations along the Lower Mekong, including Laos, where subsistence fishing is common. Simply put, several countries do not want to give some countries more control than others over the shared water resource. Subsequently, domestic tension could increase in specific countries, especially where agricultural producers hold more political clout. Producers could motivate governments to oppose hydropower projects, making overall basin-wide cooperation difficult.
Enter China, which can use its commanding position upriver and relative economic independence from the Mekong water system to take greater control of cooperation efforts regardless.
China’s Influence
China has not always been included in the cooperative politics of the Mekong Basin. The Mekong River Commission — a body created to coordinate and ensure sustainable management and development of the basin’s water — was established by Lower Mekong states in 1995. However, like many international efforts, the commission has limited authority. It has also lost funding and is vulnerable to the crippling effects of political infighting. Moreover, the commission does not include China or Myanmar and therefore fails to fully represent the entire basin.
In 2009, the Lower Mekong Initiative, led by the United States to promote broader cooperation in the region, was established. But most of the initiative’s actions have focused on education and humanitarian efforts, including supporting disease detection and outbreak control, rather than water management. And again, China was excluded as a member.
The situation changed in 2014, when government officials from the six nations of the Mekong Basin met in China and proposed the Lancang-Mekong Cooperation Mechanism. Its goals span beyond mere international cooperation and water management, delving into political and security issues, economic development and social affairs. The first leaders’ meeting was held in China from March 22-23, 2016, and it is yet unclear whether this coalition will be any more effective in making actionable changes than the other commissions have been. Yet following the meeting, Chinese Premier Li Keqiang announced loans of over $1.5 billion and credit lines of up to $10 billion to support infrastructure construction in the region.
China will look to promote individual economic and political relationships with basin countries, too. Beijing has released water from the Jinghong Dam and is expected to continue draining it through mid-April to help alleviate the drought. The release of water is meant to show China’s goodwill and willingness to play a regulating role during the drought — and into the future. However, it is debatable just how much these releases will do to relieve the drought, especially in the delta regions of Vietnam. And China’s actions were not entirely selfless; the country needs to maintain certain water levels to sustain river trade between the landlocked Yunnan province and ports downstream.
Regardless, China’s experience with large-scale water projects will prove useful. It has already built major dam and water transfer projects domestically, such as the South-North conveyance project and the Three Gorges dam, and is involved in 330 dam projects in 74 different countries. Along the Mekong Basin, Chinese companies are already involved in financing and building many of the dams in Laos and have several active projects in Cambodia and Myanmar.
And Beijing’s ambition is not limited to water infrastructure. The Mekong Basin is a gateway to Indochina, one of the economic corridors of the belt and road initiative. The project, under partial construction and with rails linking Singapore to Kunming, would further facilitate the transportation of goods from Yunnan, Sichuan and other interior provinces to the pivotal shipping lanes of the South China Sea. Infrastructure development in the region would ensure multiple supply lines and increase economic and political integration with Southeast Asia.
China can exploit its role upstream to help bring the other Mekong Basin countries into closer alignment, likely through infrastructure development first. China’s interest in the area to diversify economic connections, maritime routes and other supply lines will not ebb anytime soon. The drought will only assist its policies, highlighting water politics in a region where they already play an important role.
