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What are the causes of the current calamity in Laos? An Interview with Dr. Lia Genovese

Rattana Lao

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The Xe Pian-Xe Nam Noy hydropower project is financed by companies from South Korea (SK Engineering and Korea Western Power), Thailand’s Ratchaburi Electricity Generating Holding and the Lao government. A statement issued by Mekong Eye on 31 July 2018 stated that Japan is also involved in its financing.

A devastating incident occurred in the Sanamxay district of Attapeu province in southern Laos. On the evening of 22 July 2018, engineers at SK Engineering discovered that one of the project’s supporting dams had been partially washed out and notified the Lao authorities. Apparently, efforts to repair the damaged structure were hampered by the state of the roads, which delayed the necessary heavy equipment reaching the area before disaster struck the very next day. On 23 July, the top of a saddle dam at one of the Xe Pian-Xe Nam Noy reservoirs collapsed, releasing billions of cubic feet of water. Over 6,000 people have already been evacuated to emergency shelters. The flood has caused severe damage to private property and infrastructure. The dam collapse has also affected villages downstream in Cambodia.

The precise death toll is still unknown and has oscillated between 31 and 35 victims. On 5 August, the Chinese agency Xinhua stated that 34 people were confirmed dead and scores more are still unaccounted for.

Early official statements calling the catastrophe a natural disaster caused by seasonal rains, are being disputed by experts. During an interview with the BBC World Service on 25 July, Dr. Ian Baird, Associate professor of geography at the University of Wisconsin-Madison, USA, unequivocally attributed the disaster to poor management. Furthermore, the South Korean building company, SK Engineering & Construction, asserts that “it warned the [Lao] government”.

The disaster could have been prevented with better management, greater risk assessment and better building standards, according to the Lao government. On 27 July, four days after the dam collapse, the Lao Energy Minister, Mr. Khammany Inthirath, told a press conference in Vientiane that the disaster was caused by substandard construction.

Attapeu province is highly contaminated by unexploded ordnances (UXO, remnants of the Vietnam conflict), and although parts of the province have been cleared of UXO, the UN recommends caution when digging, since cluster bombs are more likely to be buried (‘Lao PDR: Flash Flooding in Sanamxay’, District Office of the UN Resident Coordinator Situation Report No. 05 (as of 1 August 2018).

Livestock, buffaloes and domestic animals have perished. On 3 August, the Vientiane Times reported the loss at more than 12,000 animals, as well as more than 19,000 chickens and other fowl, while 280 fishponds were damaged.

What are the immediate needs to help rebuild Laos?

Numerous governments have sent funds and humanitarian aid, including Thailand, Vietnam, China, Singapore, Cambodia, the European Union (EU), the US and North Korea. It seems that supplies have reached the affected areas with some difficulty, due to the state of the roads, damaged by the flood and covered in rivers of mud. According to a Voice of America report published on 6 August: “Satellite images show Attapeu lying on a bend of the river with a pre-crisis network of roads, but a later image shows the flooded area as a brown mass of mud with few structures left recognizable”.

Cash donations have also been collected. The Lao bank BCEL set up the One Heart fund-raising initiative for people to donate by debit or credit cards. In Thailand, donations collected by Krungthai Bank for the flood victims had reached 25 million baht by the end of July (account number 067-12886-4 of Krungthai Bank, Government House branch, Cash donations are proving effective in helping victims of this disaster, while the delivery of relief aid (blankets, medicines, safe drinking water, food, etc.) is hampered by practical difficulties in accessing the affected areas.

Do you think the country is resilient enough to weather this chaos?

As a concerned citizen of the world, rather than an expert on development strategies, in my view there are good chances that Laos, and particularly the affected areas in Attapeu province, will weather this catastrophe. Laos has much at stake in its chosen development strategy aimed at energy generation. This is a setback in the country’s ambitious plan to have a total of 100 dams by 2040. Approximately, 85 percent of the energy generated by these dams is exported.

What needs to be done differently for Laos to recover and sustain?

Since 1971, the UN has classed Laos as a Least Developed Country (LDC), a label the country is trying to shed. Laos is traversed by the Mekong for hundreds of miles, from north to south, before this great river flows into Cambodia and the delta in Vietnam. Laos has said in the past that it is making the best of a punishing geography, due to the country being landlocked.

Yearly, the sale of energy contributes around $650 million to the country’s GDP, but still only half of the revenue generated by ore production from mining investment projects approved by the central government, which in 2017 reached around $1.2 billion.

Unlike some of her neighbours (Thailand and the Philippines, chiefly), Laos has shown negligible interest in the potential of renewable energy, despite enjoying an average of 1,800-2,000 hours of sunlight per year, or 200-300 sunlight days per year, particularly in the south of the country. Consequently, progress in sources of renewable energy has been slow and foreign investment has lagged behind, in contrast to the aggressive push for hydropower projects.

What Laos wishes to do is secondary to other countries’ vision for Laos. A number of countries, as well as NGOs, environmental and human rights organisations, have expressed their reservations about Laos’ stated hydropower goals, because of the cost to the country’s ecology, and the human cost caused by the displacement of thousands of families. Laos’ potential in generating energy for sale was known to the French colonisers a century ago but, despite a number of surveys shortly after the 1893 annexation of Laos as the fifth province of French Indochina, the French colonial government elected not to exploit the potential of the Nam Theun river, due to the massive investment required in building an often non-existent infrastructure. Only in recent years, was this massive hydropower project built, with funding from the World Bank, among others.

Laos can recover from this tragedy, through its own resources and with help from the international community.

What can the public immediately do to save Laos?

In the immediate aftermath of this man-made disaster, the public should follow events and contribute with cash donations and goods in kind, and pay attention to messages from the Lao government and aid agencies as to the most effective ways to assist the affected communities.

For the longer term, a rethink of Laos’ development goals is essential. Much of Laos’ energy for sale is exported to its neighbours, where it is squandered on excessive air-conditioning for shopping malls, supermarkets, offices and homes, entertainment places, etc. Laos’ energy-hungry neighbours need to understand the hidden “costs” to a poor country like Laos, where the race to become the “Battery of Southeast Asia” is being achieved at the expense of natural resources, human capital and tragedies.

Concerned members of the public can lobby their respective governments for civil society to be respected in Laos, as a forum for free expression. It is essential that Lao citizens are involved in the consultation process for new hydropower projects or other large-scale projects which involve environmental degradation, a high level of risk and loss of a traditional way of life for communities along the Mekong.

Building dams along the Mekong must be discussed as a transnational issue, rather than pertaining to Laos alone, as was made clear in the Xe Pian-Xe Nam Noy disaster affecting downstream villages in Cambodia.

Pressure should be applied on the Lao government to ensure transparency in its investigations of Lao communities affected by the massive flooding in Attapeu province.

The 31 July statement issued by Mekong Watch, mentioned earlier, urges donor countries and development agencies to support the Lao government “in seeking compensation from the dam companies, and re-direct their aid policies that rely on hydropower development”.

About Lia Genovese

Lia Genovese holds a PhD from SOAS-University of London for a Dissertation titled ‘The Plain of Jars of North Laos – Beyond Madeleine Colani’. Her current research interests include: the Plain of Jars of Laos; French colonial archaeology; the megaliths of South and Southeast Asia; Iron Age mortuary practices; cultural heritage and conservation. She is currently working on a critical biography of the life and work of the French archaeologist Madeleine Colani.

Rattana Lao holds a doctorate in Comparative and International Education from Teachers College, Columbia University and writes on education and development. She is based in Bangkok, Thailand.

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Southeast Asia

A Short History of the ASEAN Digital Future

Dr. Andrew Sheng

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This month, Malaysia celebrates its 62nd anniversary of Independence, led by 94-year old but digitally savvy Prime Minister Mahathir Mohamad. Singapore also celebrated its 54th National Day this month, with Prime Minister Lee Hsien Loong speaking in Malay, Mandarin and English about how to prepare Singapore for climate change. At the 74th anniversary of Independence, Indonesian President Joko “Jokowi” Widodo announced an ambitious plan to move the capital from Jakarta to Borneo.

Traveling around ASEAN this month made me realize that while the rest of the world is more preoccupied with the turbulent present, Southeast Asia is already thinking and preparing for the future.

The reason for this is pretty straight forward. At 600 million people with more than US$2.5 trillion in gross domestic product (GDP), ASEAN economies remain one of the youngest and fastest growing region in the world. ASEAN’s success since the 1960s has been built on trade, peace and stability, and dedication to economic growth rather than politics. Its future success hinges on its political neutrality, despite attempts by the Great Powers asking the region to choose sides.

In Hanoi for a Young Scholars Initiative meeting of young academics, I was struck by how Vietnam was already planning for a digital economy by 2030 and 2045.

Having touched 7.1 percent GDP growth in 2018, and with just under 100 million population, Vietnam has been a major beneficiary of China shedding its low-cost industries and the diversification of the Asian global supply chain.

In 2010, Vietnam achieved the World Bank’s middle-income status and at the current trajectory, could be larger than Singapore’s economy by 2029, according to a DBS study.

In order to maintain its growth momentum and to provide jobs for its growing youth, Vietnam envisaged four possible digital futures, as buyer or seller of digital products and services.

In the first Heritage scenario, using traditional engines of growth with low digital transformation, the additional growth could be minimal.

In the second scenario of Digital Exporter, using overseas companies hiring Vietnamese workers for exports, the projection shows some improvement, but only marginal benefits.

The third scenario of Digital Consumer leverages off Vietnam’s own large consumer market, but the amount of current jobs at risk would be one-third higher than the two earlier scenarios.

The fourth scenario of a Digitally Transformed Economy, across all industries and government services, predicted an increase of 1.1 percent additional annual GDP growth, but 38.1 percent of current jobs would be at risk of transformation or disruption.

In essence, Vietnam realizes that its own industries can be cannibalized by relying only on the foreign sector and should therefore have a total domestic transformation that engages digitally with the rest of the world. That scenario lays out a road map that would give priority to infrastructure, network security, increasing digital skills and capabilities, modernizing government, an industry 4.0 and national innovation plan, and significant tax and regulatory reform.

Arriving in Jakarta last week for a conference on digital finance, I was struck how traffic from the airport has significantly improved, while everyone was also very focused on how digital transformation, social justice and climate change would be critical to Indonesia’s future.

The move out of Jakarta, one of the most congested urban conglomerations in the world, would cost $33 billion over 10 years to build the new capital in Kalimantan. But another $40 billion would be spent on transforming Jakarta, as two-fifths of the city is below sea level and parts are sinking due to rising seas and soil settlement.

Indonesia is moving fast into the digital space, because its internet user growth rate is three times faster than the global average, and its internet user community is only 56 percent or 150 million out of its total population of 268 million. President Jokowi understands fully that “data is the new type of wealth for our nation, it is now more valuable than oil”.

But since Indonesia is one of the biggest markets for Google, Facebook, Youtube and WhatsApp, the key to future growth will be the access to data. Will Indonesian companies, government and start-ups have access to data so that they can compete equally with multinationals that are willing to pay for such data? If we as individuals cede our private data to these platform companies, which then sell them as “private income”, when will data become a public good for growth?

One reason why I am optimistic about ASEAN as digital economies is that they are actually more innovative than the present indicators suggest. If you look at the Global Innovation Index 2019, you would find that Switzerland is number 1, the United States (3) and Singapore (8), while Hong Kong, China and Japan are 13, 14 and 15th respectively. On the other hand, Malaysia ( 35 ), Vietnam ( 42 ), Thailand ( 43 ) and Philippines ( 54 ) are behind Latvia ( 34 ) and nearer India ( 52 ).

These scores are essentially weighted in ways like the famous IQ tests, which were essentially Euro-centric in bias. In the digital space, innovation and ability to capture markets are very much in the SPEED x SCALE x SCOPE framework. China was able to compete rapidly with the US, because of the scale of its internal market (800 million internet users), high speed broadband infrastructure available, and scope of hybrid services across multiple sectors (Alibaba and WeChat).

Clearly, within ASEAN, Indonesia, Vietnam and Philippines have scale, with populations over 100 million each. ASEAN’s real strength is the youth of the population, already digitally savvy and moving into middle and higher income ranges. Hong Kong and Singapore score highly, but that is due to the higher weighting given to institutions, infrastructure and market sophistication, as you would expect from world-class cities. But Singapore came only 34th in terms of creative output, and Hong Kong came 33rd in terms of knowledge and technology outputs.

It is precisely because the ASEAN countries have youth, diversity of culture and access to world-class knowledge, as well as strategic geographical location, that they will become the cutting edge digital future. And since they are, as prof. Anis H. Bajrektarevic rightfully claims, ‘champions of multilateralism’ so much needed in a ‘theatre of brewing expectations’, that of  ‘still worryingly bilateral’ Asia. 

No economy today can afford to be complacent. Least of all in terms of flawed indices. To think that Hong Kong, considered by the Heritage Foundation to be number one in economic freedom, can descend into protests because of an intergenerational dispute over the rule of law and inequality, means that we need a root-and-branch review of how to compete in a complex digital world.

An earlier version of this text appeared in Jakarta Post under the title: A digital August in ASEAN.

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Southeast Asia

Indonesia abandoning its Capital ?

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I have almost always lived in capital cities. I was born in New Delhi, resided in London, Prague (before Czechoslovakia split in 1993), Budapest, Rome, Bonn (long before the capital moved to Berlin in 1991), when my parents were posted there as diplomats. When in Indonesia, it’s always been in Jakarta. 

So am I a capital city snob? In connection to the uber-densely populated, polluted, badly planned, garbage-filled, flood prone, traffic-choked, sinking city that Jakarta is? Hah! Not likely. 

Jakarta is Indonesia’s gateway to the world, Southeast Asia’s most dynamic metropolitan area, and the nation’s economic, political, cultural and intellectual center. It provides all sorts of opportunities unavailable elsewhere in the country, which is what draws migrants in. 

Jakarta proper hosts about 11 million in an area of 661.5 square kilometers, while the entire metropolis is home to over 30 million people across 6,400 sq km. Pretty squeezy huh?

Furthermore, Jakarta could also be hit by a powerful earthquake, not just the tremors we’ve been experiencing. Then we wouldn’t have a capital. Oh boy!

So when I heard about the plan to move the capital from Jakarta to Kalimantan, I thought, hmmm (read: thinking hard!). A recent survey (posted in Coconuts Jakarta) unsurprisingly found that 95.7 percent of Jakartans were against the move. They suggested the new capital be called “Jokograd” or “Saint Jokoburg”, mocking what they consider President Joko “Jokowi” Widodo’s overly ambitious plan. 

Megalomania? Overly enthusiastic? Or just like all leaders, wanting a legacy? Pak Jokowi, you have left legacies aplenty already! Yeah, sure, some failures, misguided policies, and many unmet promises as well, but no one’s perfect!

So what and who is behind Jokowi’s burning ambition? Could former president Megawati Soekarnoputri be one of them? Her father had also wanted to move the capital to Palangkaraya in Central Kalimantan (Jokowi decided on North PenajamPaser regency and part of Kutai Kertanegara regency in East Kalimantan). Moving the capital was one of first president Sukarno’s unmet goals, so is “Mama Mega” passing it on to Jokowi?

Those who are for the move say it’s courageous and revolutionary. Not really. Besides Sukarno, almost every president — certainly Soeharto and Susilo Bambang Yudhoyono, wanted to do it. But Jokowi is typically the Nike guy who says “just do it!” 

Since independence in 1945, we’ve always been too Java-centric, even more than during colonial times. It’s curious considering Java is an island comprising 7 percent (128,297 sq km) of the size of Indonesia (1,905 million sq km), populated by almost 160 million people, nearly 60 percent of the total population.

Kalimantan meanwhile has a land mass of 542,630 sq km, hosting under 14 million people. Transmigration from Java to the lesser populated islands of Kalimantan, Sumatra, Sulawesi and even Papua seemed an obvious solution to reduce overpopulation and poverty. 

Transmigration programs, starting since the Dutch colonial period, later stoked fears of Javanization and Islamization, triggering conflicts, communal violence and bolstering separatist movements. Uh-oh!

In 2015 Jokowi scrapped the transmigration program, but now he’s ferociously adamant about moving the capital to Kalimantan? 

OK, let’s look at the pros: like the transmigration program, it certainly looks good on paper. It suggests the government is serious about paying more attention to parts of Indonesia other than Java. 

The move is expected to stimulate economic growth in the outer islands, and give a nod to non-Javanese culture. According to EndyBayuni of The Jakarta Post, “It’s a step toward the ‘de-Javanization’ of Indonesia […] decentralization and regional autonomy are not enough”. 

My nephew, Andi Haswidi, a researcher, said, “Jakarta is sinking, and relocating the capital could induce a more equitable economic development”. But he warned, the process will be incredibly hard and will require the revision of so many laws, unless the government resorts to using government regulations in lieu of law (Perppu). “It also requires incredible leadership, a serious commitment to the rule of law, and a more relaxed fiscal policy”. Right. Just minor things.

The cons: extremely costly with an expected budget of Rp 477 trillion (US$36.6 billion) and humungous disruption, while the benefits are still uncertain. And remember Murphy’s Law: expect the unexpected!

It’s also one way to shrink the civil service, and possibly not getting the best human resources to work there. Would you be willing to just get up and leave everything that constitutes your life in Jakarta/Java? Family, friends and facilities, from health, education, entertainment and access to other places, both domestic and international?

Emil Salim, senior economist and extremely seasoned politician who held several governmental and Cabinet posts, reminds us of Indonesia’s archipelago of 17,000 islands, flanked by two oceans, located smack bang in the middle of maritime traffic. A capital in Kalimantan would be very difficult to access.

“If Jakarta is fraught with problems, fix them”, he said, “Moving is shirking responsibility”. His opinion is echoed by Jeffrey Winters, a professor of Northwestern University who said, “It’s capitulation. Jakarta is such a colossal failure, they’ve given up on trying to fix the city.” But Winters also said, “It would be irresponsible to keep a capital in a sinking city that is going to be completely under water in less than five decades”. 

Environmental activists warn that the move could spark “a fresh environmental crisis in a region home to rainforests and endangered orangutans”. They say mining and palm oil plantations are already threatening Kalimantan’s environment and endangered species habitats, which could worsen if a big city is built near a key conservation area. And don’t forget the forest fires! 

“Equitable development” has always been a catchphrase in every president’s rhetoric and every regime. According to Monique Rijkers in an article in Deutsche Welle, Indonesia doesn’t need a new capital, what it needs are more metropolitan cities and infrastructure spread throughout Indonesia. As she points out, even the basic needs of the people such as access to water, electricity, health, education have not been met, and the government wants to move the capital?

Oh dear! Everyone has a point. It’s so dilemmatic! Even those against the relocation admit that at some point the capital has to move, but not now. There are still too many pressing issues that need urgently to be tended to. 

I give up. The House of Representatives needs to give its approval first anyway. Let’s take it one step at a time, shall we, and let history, politics, science, and nature, run its course. 

Author’s note: Early version of this text published by the Jakarta Post under the title: Jakarta to Kalimantan: Capital gain or capitulation?

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In Myanmar, Better Oversight of Forests a Vital Step in Transition to Rule of Law

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Authors: Art Blundell and Khin Saw Htay

For the first time, the Myanmar Extractive Industries Transparency Initiative (MEITI) has opened the books to share information with the public on revenue Myanmar’s government collects from harvesting timber. Last month, the MEITI released two reports juxtaposing statistics on production and tax payments from government ministries’ ledgers with corresponding figures reported by the state-owned Myanma Timber Enterprise (MTE) and forestry companies.

The reports are an important step toward improved transparency and accountability in Myanmar’s forest sector because they shine a light on irregularities that may point toward mismanagement or illegal activities. Unclear legal frameworks and weak enforcement in Myanmar’s forestry sector – a remnant of decades of military rule – have created an environment ripe for illegal logging and illicit trade, and mismanagement of natural resources.

The role of forests in Myanmar’s transition to democracy cannot be overemphasized. Money from illegal logging helped to fuel Myanmar’s decades-long civil war. Smuggling of illegally harvested timber to countries like Chinahas led to the loss of millions of dollars each year in government revenue. Corruption also fuels continued violence and prolongs armed conflict, especially in the heavily forested states that are home to most of Myanmar’s ethnic minorities.

The MEITI is committed to sharing its results at the state level—especially in Myanmar’s forest-rich regions. Myanmar’s citizens have the right to understand how their forests are being managed for the public good.

The EITI framework was launched globally in 2003 with a focus on oil, gas, and mining, given that these lucrative sectors are often key drivers of corruption in resource-rich countries. Myanmar is one of only a few countries (following Liberia’s lead) to add forestry to its EITI reporting, thanks to advocacy from civil society. 

Myanmar’s newest MEITI reports are a commendable step by the government toward transparency. But producing a report like this is not easy. The reporting highlights numerous disparities and irregularities in government record-keeping. This is not unusual for a first EITI report. It is also a major objective of the EITI: transparency leads to meaningful discussion about necessary reforms, while regular reporting creates an accountability mechanism to demonstrate progress.  MEITI is now preparing their next report covering fiscal years 2016-2017 and 2017-2018.

The MEITI is already driving progress. Myanmar’s Ministry of Planning and Finance (MoPF) has announced it will close the so-called “other accounts” maintained by State-owned Economic Enterprises, like the MTE, that have kept more than half their profits separate from the government’s central budget. Data in the MEITI report suggest that MTEretained74% of its $1 billion profits from fiscal years 2014-2015and2015-2016 in these other accounts–significantly more than the 55% that is permissible.

Myanmar’s Ministry of Natural Resources and Environmental Conservation (MoNREC) now holds important data that can be used to investigate and resolve irregularities uncovered by the MEITI reporting. For instance, the Forestry Department’s data on production does not match the data provided by the MTE, and it is substantially more than the Annual Allowable Cut (a government-determined sustainable level of harvest). Likewise, the MTE indicated that more teak was sold than its total reported supply. The source of the additional volume of teak logs is unexplained.

Reforms should help MoNREC address these irregularities.  Current reporting is obviously insufficient to capture reality.  With the help of a workshop that followed the MEITI launch, stakeholders are working with MoNREC to develop appropriate reforms for MTE and the Forestry Department, and to improve forestry sector governance in general. 

Opacity hurts the country in more ways than one. Illegal logging, corruption, and smuggling siphon off revenues meant for programs serving the public. Illegalities also threaten forests – and the communities that rely on forests for their livelihoods – and they drive off credible investment, leaving a gap often filled by investors with less regard for environmental and social regulations.

It is important to note that the MEITI reports cover only the period from April 2014 through March 2016, prior to Aung San Suu Kyi’s NLD Party coming into power. The current administration has committed to fairer distribution of benefits from Myanmar’s natural resources among its citizens, yet systematic barriers remain. Endorsing the recommendations from the MEITI report and implementing a roadmap for reform would signal the NLD’s commitment to good forest governance. Meanwhile, companies should do their part to comply with the law and accurately report production, sales, and other data in an accessible manner that allows for independent monitoring.

Myanmar’s forest resources hold great promise for the country’s people, its economy, and the government budget, if managed responsibly. The MEITI has a clear role in charting that path forward and in helping Myanmar manage its natural resources based on the principles of good governance.

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