Coercive Water-Diplomacy

An official stands guard at the Three Gorges Dam

Thus far, fresh river water is an infinite resource as the natural hydrological cycle runs its course on earth. Rivers are integral to ecological and socio-economic activities in the regions they supply. And often, they are the most important constituent of food, energy, and economic security. However, this article intends to demonstrate by specifically highlighting the case of the Southeast Asian Mekong River that reality often differs. Occasionally, trans-boundary waterways are under de facto control of a single state that happens to occupy the geographically most advantageous position of being a stream’s upmost country. The intention of this article is to give specific insight into Chinese hydropower-infrastructure development along the Mekong and the ecological, socio-economic, but most importantly, geopolitical ramifications. By doing so, the article illuminates two interrelated conundrums: questions of non-traditional security in Asia and Chinese assertiveness across all political and economic arenas in the Asia-Pacific.

“Whiskey Is for Drinking. Water Is for Fighting Over.” – Asia’s Troubled Waters

Chinese conduct as the rising great power in the Asia-Pacific region has become one of the most critical issues in regional, perhaps global politics. The way China designs its ascendance, revisionist or accommodative of the present post-Cold War regional order, will be the decisive factor as to whether or not the region is heading for instability and conflict. In Asia, Chinese attempts at rearranging this essentially stable order so as to enhance its own control capabilities, materialise with and within water. Thus, water has become highly politicised and the one dominating security arena in East Asia.

When one thinks of water and China, one first thinks of the South China Sea (SCS). But there is more to Asia’s troubled waters. At first blush, there seem to be very few concrete parallels between the Mekong River and the SCS. And yet, both are part of the same geopolitical strategy, as both reflect China’s growing ambition to assert itself in the region and to restrain its neighbourhood; not exclusively, but most obviously, Southeast Asia. Questionable Chinese conduct in the SCS has received broad attention in recent years and it is here where Beijing’s revisionist tendencies are most palpable. Individual claimants quarrel over territory, military bases and fortifications, and access to resources. Despite U.S. military backing and international diplomatic and juridical support, smaller Southeast Asian countries have not been able to balance increasing Chinese assertiveness, relative power gains, and strategies of dividing its neighbourhood within international institutions. Reminiscent of the SCS, nations affected by China’s “coercive water-diplomacy” along the Mekong streams have very little capacity, yet, to answer the ‘Middle Kingdom’.

The “Mother of Water” – A Unique Ecosystem and Lifeline to Millions

Southeast Asia’s longest river, the Mekong, is a trans-boundary waterway, crossing six countries, and consists of an upper (China and Myanmar) and a lower basin (Laos, Thailand, Cambodia, Vietnam). Originating in the Tibetan Highlands, it cascades over some 4,500 kilometres through southern China, before reaching its delta in Vietnam, where it issues into the South China Sea (SCS). Along the way, the Mekong crosses five Southeast Asian countries and is fed by numerous tributaries in both basins.

Fig. 1: Mekong and Surroundings

The stream’s Thai name, Mae Nam Kong, translates into “Mother of Water”, symbolising the Mekong’s importance. Its ecosystem corresponds with and depends on seasonal tides. The flood season is critical to the sustainability of the environment and agricultural activity in the lower basin. During dry-season, snow-melt from China contributes to over 24 per cent of the total flow. In particular during monsoon, it floods the Indochinese wetlands and supports a biodiversity second only to the Amazon. Despite significant seasonal variations, the Mekong is a major trade route and vital to all riparian countries’ economies. Wetland habitats rely on monsoon floods as the aquatic life migrates between lakes, such as the Tonle Sap in Cambodia, during the dry season, and the nutrient-rich grounds in the wetland plains during the wet season. The Mekong and its unique ecosystem is therefore a lifeline not only for natural wildlife, but also for some 60 million river dwellers. In other words, all riparian countries have at least one thing in common: a significant stake in the river’s functionality.

In Cambodia for instance, freshwater fisheries are estimated to account for seven to twelve per cent of gross-domestic-product (GDP) and are the basis for food security and nutrition, accounting for two-thirds of Cambodia’s protein consumption. Southeast Asia’s largest lake, the Tonle Sap, is fed by the Mekong and has been the main source for fish supply in Cambodia since the times of the Angkor Kingdom. During the dry season for instance, the lake quadruples in size, swallowing ice-melts from the Tibetan Highlands to keep the lake waterlogged via the Tonle Sap River. The Mekong is responsible for a unique ecological phenomenon, where this tributary changes direction six-monthly. Man-made modifications in the upper Mekong basin threaten this highly unique ecological process and have already irreversibly impacted this complex, but vital ecosystem.

Similarly, Vietnam has a rice-based agricultural sector, occupying over 80 per cent of the arable land. The Mekong Delta is Vietnam’s “rice-bowl” and accounts for over half of all Vietnamese production. Rice provides over 50 per cent of total domestic calorie consumption. In terms of trade, the delta supports the country’s status as the fifth-largest rice producer in the world and a top-five rice exporter.

Taming the “Mother of Water” – Damming the Mekong

Approximately half of the Mekong lies on sovereign Chinese territory, where the river is called Lancang. Here, it drops over 4,000 metres in height from the Tibetan Plateau to Yunnan Province, making the downstream a perfect source for hydro-electricity. Flowing water creates energy that can be harnessed and turned into electricity via electricity-generating turbines in hydropower plants, propelled by controllably releasing water from reservoirs through river dams.

Over the past two decades, the Chinese government has either directly constructed or financed numerous large-scale hydropower dams along the Mekong mainstream and tributaries on both Chinese and foreign territory (mostly in Laos, Cambodia, and Thailand). At the time of writing, eight mega dams had already been completed on the Chinese mainstream alone, and more than 20 are under construction or in the planning stages. Laos, and soon Cambodia, too, will be highly congested in terms of hydropower infrastructure.

Hydropowering Towards Sustainable Development?

Dam construction is a double-edged sword. Developing hydro-electricity offers significant development potential for poorer countries in Indochina, and governments understandably intend to capitalise on their geographic position along the river-system. Increasingly, they satisfy their own energy needs with comparatively cheap hydro-electricity, and even go beyond that in order to export overproduction. In particular Laos, one of the least developed countries in Asia, regards thus generated earnings as a means to leapfrog development and reduce poverty. Through its favourable geographic position and large, mostly Chinese financed hydropower dams, Laos intends to become the “battery of Southeast Asia”. Energy generation projects accounted for almost half of the country’s total incoming foreign-direct investment (FDI) in 2015, with China being the main contributor.

In Cambodia, Chinese state-owned enterprises (CSOE), backed by Chinese-spawned financing institutions, invest heavily, capitalising on their reputation for delivering infrastructure projects without tiresome delays over human-rights or environmental concerns. Hydropower is one of the main targets, as the humongous Lower Sesan 2 dam exemplifies. The CSOE HydroLancang plans to complete the dam by 2019, despite serious environmental concerns as well as some 5,000 displaced villagers. So far, the country’s long-term leader Hun Sen has been utterly complacent and continuously sells large stakes in Cambodian infrastructure development and Cambodian soil to a number of CSOE.

Moreover, energy demands across Asia are ever growing, and so is the need for renewable energy sources in lieu of fossils. China is the world’s leading country in renewable electricity production and is likely to even extend this lead in the medium-term future. Hydro-electric power already is the largest component of China’s renewable energy portfolio, second only to coal in overall production. As the energy demand rises and the impact of climate change becomes ever more apparent, investing in hydro-energy and accelerating economic development are laudable causes – even if question marks over dubious financing remain.

Not All Is Well Along the River

Such positives are offset, however, by mounting evidence as to the significant negative ecological and socio-economic impact of the Mekong dams. Constructions raise questions pertaining to future food and environmental security. According to environmental NGOs, large damming projects already have an adverse domino effect, impacting wildlife, altering flow patterns and sediment delivery (e. g. Tonle Sap), leading to shoreline erosion and increasing salinization of agricultural land. Surprisingly, Laos and Cambodia have put very little effort into determining whether their approaches are sustainable development strategies.

Ecological harm aside, the political component is as worrying. Unintended consequences include upsetting regional neighbours, most of all, downstream countries such as Vietnam, who directly suffer the consequences, but also the wider region within the framework of the Association of Southeast Asian Nations (ASEAN). Cambodia and Laos already are at the executing end of China’s “divide and rule” tactics in Southeast Asia, whereby Beijing relatively successfully manages to sow the seed of discord within ASEAN, in order to prevent collective regional action; mostly by virtue of being their main source of foreign direct investment (FDI).

Expert Brahma Chellaney shows that China’s hydro-engineering projects and Mekong-damming already have a direct bearing on both quality and quantity of river water flows to Southeast Asia. Beijing now has the potential to use its position to pressure downstream riparians into compliance, even subjugate them. At the ASEAN Summits in 2012 and 2016, Cambodia and Laos respectively capitalised the regional grouping’s consensus principle and held ASEAN decision-making processes hostage by de facto vetoing the resolution of other members (in particular Vietnam) to issue the usual Joint Communique, which was supposed to include references to Chinese aggression in the SCS. This exemplifies how Beijing fragments an increasingly incoherent ASEAN. Directly constructing or financing hydropower dams in Laos and Cambodia adds to China’s “divide and rule” toolbox. There are several strategically placed dam projects in both Laos and Cambodia, such as the Lower Sesan 2, which effectively cut out Laos and Cambodia from potential water flow disruption and isolate Vietnam as the one country that can be targeted.

Thus far, China successfully publicises hydropower construction as a means for economic development, renewable energy policy and carbon reduction, fitting well into its Belt and Road Initiative (BRI). Of course, China is not the only country to manipulate the river’s natural flow. Laos has also been criticised for dam construction and Thailand unilaterally diverted the river in order to support Thai farmers. Nor is political leverage over other countries the main reason for damming projects. But China is the one country that does so with more than its own economic development in mind; to play politics with water-control capability. Beijing is able to literally “turn off the tap”. As regional tensions in various political arenas grow, in the SCS for example, so does Laos’ and Cambodia’s value to Beijing’s regional power-positioning. The “coin’s flip side” may become ever more apparent as Chinese fresh-water water control capability further pressurises downstream countries and turns into a forceful political instrument.

Vietnam May Feel the Real Force of Coercive Water-Diplomacy

Certainly, all aspects affect much of the Indochinese Peninsula, but the brunt of it is most profoundly felt in Vietnam. Geographical fate determines that a vital mighty river that knows no human drawn boundaries flows downstream, from China all the way to Vietnam. Depending on how far up or down on the Mekong one country is located, such is its influence over the further flow. Geographical fate also determines that Vietnam sits lowest along the Mekong, where the river finds its delta – a jackpot once, ill fate now.

In southern Vietnam, the ecological and socio-economic consequences of waterway manipulation are most severe in terms of human and economic costs. It is also policy-makers and diplomats in Hanoi that fear and feel Beijing’s coercive water-diplomacy most and where awareness as to the consequential political vulnerability and potential spill-over effects of disputes into other international arenas is highest. Sino-Vietnamese relations are riddled with entrenched, historical antagonisms and mutual distrust. There are deep anti-China resentments in the public domain, which are occasionally politically utilised and do have the potential to upset domestic stability. Such domestic populist opposition regularly forces Hanoi to react strongly on the international scene, thereby potentially furthering a complicated and already tense relationship.

In 2016, millions of lower basin dwellers were affected by the worst drought Southeast Asia had seen in many years. Dramatically low Mekong levels caused fresh-water shortage. In particular in Vietnam, limited supply had devastating effects on rice-agriculture, as the depleted delta became salinized from the SCS. In Cambodia, too, the low water level of the Mekong was keenly felt, as the Tonle Sap water level fell to a 50-year low. Beijing was quick to blame the El Niño weather phenomenon, but in response to a desperate request from Hanoi, it agreed to help. In an apparently benevolent act of water-diplomacy, Beijing announced it would ease fresh-water shortages by discharging massive quantities downstream from its Jinghong hydropower station.

China’s Foreign Ministry stated that “China and Mekong River countries on the Indochina Peninsula are friendly neighbours (…) nourished by the same river. It goes without saying that friends should help each other when help is needed.” An alternative reading however, could argue that Beijing did not act as selflessly as it claimed. Firstly, the discharging came at no cost to Beijing. Secondly, it only slightly relieved an ecological disaster that was at least partially caused by Chinese dam construction in the first place. Most of all, the apparently benevolent discharge reminded Hanoi of just how much influence Beijing has over their economic, ecological, and socio-economic security.

While it would be unfair to allege exclusively ulterior motives, the Jinghong dam discharge underlined the power Beijing wields over a shared trans-boundary resource and was a stark reminder of the extent to which downstream riparians depend on Chinese goodwill for their economic and humanitarian wellbeing. Reminiscent of the aforementioned Beijing-influenced ASEAN disagreements, Vietnam got a direct taste of Chinese influence on their political affairs via water-control capabilities. This leverage can be expected to add to Beijing’s strategic leeway in all matters of regional concern. It is not implausible to reach the conclusion that Beijing could easily further their strategic ends via coercive water-diplomacy.

Managing the Mekong?

Beijing is generally reluctant to ratify international treaties. Correspondingly, it has refused all international water-management agreements, such as a 1997 United Nations treaty. In 1992, the Asian Development Bank (ADB) created the Greater Mekong Sub-region (GMS) as the first locally designated project for wider Mekong governance. The GMS brought together all six riparian states into one management programme to enhance economic relations. Via ADB funding, the GMS intended to implement development projects across a wide range of industries for socio-economic development. Security and political questions were not on the agenda.

Another well-known management body is the Mekong River Commission (MRC). The MRC is the implementation body of an agreement between Vietnam, Thailand, Laos, and Cambodia. Despite recent structural reforms, including improved financing and operative effectiveness; it remains bereft of any enforcement powers, is chronically underfunded, and excludes the most important country, China. The MRC is a body strong on ecological and socio-economic research, but in light of its structural limitations, unlikely to bear any influence to speak of in this case.

The MRC has recently been pushed aside by a Chinese spawned alternative, the Lancang-Mekong Cooperation (LMC). The LMC was inaugurated in 2016 and unlike the MRC, includes all six riparian countries. With the LMC, China has convened an institutional alternative, furnished with some 11.5 billion U.S. dollars for development projects, marginalising the underfunded MRC.

From a Chinese perspective, adding to existing multilateral frameworks fits into the wider BRI, complementing infrastructure FDI in Southeast Asia. But institutional rearrangements also cement China’s ascent on the economic and political theatre in the Asia-Pacific. Just like the new Asian Infrastructure Investment Bank or the planned Chinese maritime tribunal, the Chinese initiated LMC implicitly intends to replace, not complement, existing mechanisms.

Such critical reading sees the LMC as yet another Chinese measure to revise, not join, the established rules-based superstructure by devising amply financed homemade institutions and regimes with the intention of creating their own version of order. It was hardly coincidental that the Jinghong water discharge came right before the inaugural LMC summit. This act of water-diplomacy supported Beijing’s inaugural negotiation position over new LMC river-management rules. The Vietnamese CEO of the MRC, Dr Pham Tuan Phan, argued that the LMC was “yet another framework for the Mekong”, bringing their number up to 15 overlapping mechanisms. Although it was not clear how the LMC would see its future role, it had communicated that it would “build on, not duplicate the MRC.” But it is already evident that there will be no role for existing mechanisms within the LMC and the financing makes it de facto the strongest instrument.

A “Fresh-Water” Version of the South China Sea?

To be clear, the situation in the Mekong is nowhere near the level of militarisation and unilateral expansion in the SCS. It is also a very different form of conflict. And yet, this article has argued that worrisome commonalities within a wider Chinese strategy of incremental regional expansion in terms of both relative power and institutional hegemony exist.

In this light, Mekong management is important for at least two reasons. For one, the region’s future is likely to be characterised by greater industrialisation, consumption, pollution, resource scarcity, and unpredictable environmental changes. Second, hydropower-damming the Mekong adds to China’s already asymmetric power advantage vis-à-vis its Southeast Asian neighbours. Ecological consequences aside, manipulation of natural water flow is by itself an enormous lever, to be utilised almost at will in times of dispute.

China has a concise plan. The Mekong is not the scene of clashing of militaries, but of gradual creation of a Chinese sphere of influence in Southeast Asia. Within a sphere of influence, the hegemonic state can influence policy choices of other actors without using military coercion. Coercive water-diplomacy and hydropower FDI are new foreign policy tools for Beijing. This provides de facto veto power over foreign activities, which may be conflicting with Chinese national interests, while staying just shy of escalation.

On the other end, the downstream countries have unfortunately no plan at all. Policy there is devoid of long-term strategic thinking, leverage, and most of all of multilateral cooperation. In particular Vietnam is apprehensive that Chinese hydropower infrastructure will not only be detrimental in a socio-economic and ecological sense, but also allow China to further dominate Southeast Asia by isolating and pressuring individual ASEAN members. Hence, adding to the great risk to food and environmental security is the thus gained ability to dictate terms of future regional rules and to further upset institutional coherence in Southeast Asia.

So far, China has been acquiescent and released water when requested. The region has also by and large responded positively to Chinese spawned institutions and investment initiatives. But Beijing has scored a political point by demonstrating its leverage, linking dam development directly to its BRI, and also set up institutions so as to create its own regional rules. One must be mindful, however, that states do disagree occasionally. Given Beijing’s inclination towards unilateralism, as forcefully demonstrated in other international arenas, China is likely to use coercive water-diplomacy to get concessions, perhaps even submission of governments in cases of dispute, e. g. territorial disputes in the SCS.

Institutional Reset towards a Rules-Based Management System

Hydropower is a cost effective source of renewable energy, and in a region where demand will only increase, it will continue to add to the non-fossil energy arsenal. It can also have a potentially transformative impact on developing nations and allow them to leapfrog development towards becoming middle-income economies.

This article highlighted the importance of the Mekong for ecological and socio-economic security, but even more so for multilateral cooperation in Asia. Yet, even at the level of large hydropower projects, there is no effective coordination among riparian countries. The cacophony among the myriad of 15 overlapping, fragmented institutions, the Mekong region is in desperate need of institutionalised multilateral water cooperation. It also needs a code-of-conduct for effective and non-discriminatory dam operation.

Human security hinges on the wellbeing of the Mekong, making the river arguably even more critical than the SCS. Therefore, in the absence of a rules-based order, coercive water-diplomacy is a potent, potentially dangerous political instrument that must be harnessed by institutional binding, lest probable spill-over affect other areas of diplomatic and economic relations. The ecological impact is equally threatening. Hence the region’s need for genuine dialogue among all stakeholders within one cohesive forum.

Some have suggested reviving the almost faded GMS. In theory, this is a sensible suggestion, as, unlike the MRC, the GMS programme includes all six riparians and is financially independent of China. This is unlikely to be successful, precisely because it is independent from China. Beijing is unlikely to call it a day for the LMC. Again in theory, this makes the LMC most realistic, but legitimate questions over the equality among members immediately arise. For its being a success, China would need to demonstrate willingness and readiness to be a reasonable, responsible citizen of the regional community.

On a positive note, it is not unthinkable that the region can work together within the LMC towards a transparent, rules-based Mekong management system. China can have no long-term interest in simply coercing its neighbours into acquiescence. With aggressive and at times manipulative water-politics, China risks antagonising the region further and may even prompt an alliance against its inevitably ever-increasing regional influence. Instead, cooperation over the shared Mekong within the LMC represents a great chance for China to buttress claims as to its peaceful rise and the “community of common destiny” President Xi frequently speaks of. Moreover, apart from geostrategic considerations, for China’s BRI to be a success, Beijing has a genuine interest in the region’s economic and ecological wellbeing. For its part, Southeast Asia in general must continue attempts to bring Beijing to the negotiating table and convince China that its role as a responsible stakeholder will be integral to its ascent.

In this scenario, the LMC could function as a comprehensive multilateral track-1 platform, involving all stakeholders on equal terms to jointly manage a shared resource. For Beijing, this would be an appropriate micromanagement tool within the wider BRI project. For downstream riparians, this offers a chance to establish rules-based reliability and water-security without jeopardising beneficial hydropower development.

There is also room for track-2 initiatives via the MRC, which ought to focus on research and provide scientific input, informing binding decisions within the LMC framework. MRC officials have clearly articulated a desire to join forces with the LMC. It could be an advisory body as to the river’s health, ecological and socio-economic consequences of infrastructural development, and a generator of new ideas. This represents the best feasible outcome. And, in the absence of a mitigating actor, such as the U.S. Navy in the SCS, it represents the region’s only chance to peacefully manage the “mother of water” on equal and lasting terms.

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Rabea Brauer is Head of the Team Asia and Pacific of the Konrad-Adenauer-Stiftung.

Dr. Frederick Kliem is Senior Programme Manager at the Regional Programme Political Dialogue Asia of the Konrad-Adenauer-Stiftung based in Singapore.

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