The fallout from the Great Fall in financial markets, equities and currencies is ricocheting through the regional economy and beginning to exact a toll – initially among badly-run companies and poorly-managed government institutions.
Even better-run operations like the Mekong River Commission (MRC) – a subregional body founded in 1995 to coordinate sustainable development – have been caught out by the fiscal mess, with donors paying much closer attention to management of a waterway that provides a livelihood for 60 million people from four Southeast Asian countries that comprise the Lower Mekong Basin.
The MRC’s finances and its performance are under the microscope for the first time since its offices were relocated from Phnom Penh about a decade ago to Vientiane, where the Lao political influence over the commission is now being criticized as overbearing and undue.
But a more immediate worry is its budget.
A collapse in currencies – most notably European currencies, the Australian dollar and the yen – has undermined the MRC’s fiscal outlook.
Sources close to the MRC say massive budget cuts are in the offing and heavy job losses are expected. Staff members have been told their jobs can only be guaranteed until the end of this year.
The current budget restraint is just one issue to beset management and Lao influence within the MRC. Donors – like Australia, European countries, Japan and the United States – are also worried about management of the largest catchment for fresh water fish in the world.
A raft of staff resignations has accompanied complaints of haughty bulling by Laos government officials over MRC senior executives.
Sources say the Laos government is attempting to undermine the MRC – in particular baseline studies being undertaken by the fisheries program which could be used by scientists to highlight the damage to future food stocks being inflicted upon the Lower Mekong by Laos and its costly plan to construct several dams across its mainstream.
The latest approval was for the 260-megawatt Don Sahong hydropower project just north of the Cambodian border. That announcement came several days after Vientiane upset scientists and downstream politicians alike with its plans to spend US$3.5 billion constructing the Xayaburi Dam. That dam will block the mainstream of the Mekong.
Disbelief among donors surrounding the attitude of the one-party communist state and its disregard for its neighbors has prompted at least one Western donor to reconsider its financial commitment with the MRC entirely and it may well scrap its annual pledge all together.
No donor will want to take responsibility for bureaucratic practices, which another source said would “cause a massive food security issue in the future.”
Vietnamese afford food security a high priority.
Insiders said Vietnamese objections to the Xayaburi Dam were in part driven by food security issues in the Middle East where spiraling prices provided the initial spark for what became the Arab Spring.
“This is the biggest catchment for fresh water fish in the world and that demands a strategy for fish,” one source said, adding that Lao staff were aware of the issues but were silenced by fears of upsetting the government.
Sources said the disappearance of agriculturalist Sombath Somphone, an advocate of rural reform and farming practices, almost three years ago had a chilling effect on bureaucrats who must toe the government line on dam construction.
“They are nasty and people don’t dare speak out,” an MRC source said.
The Laos government has fended off a barrage of international criticism over Sombath – who was last seen on CCTV being bundled into a police car – and for having little if any regard for its legal obligations to human rights.
During a recent trip to Laos, one senior bureaucrat told this journalist that anyone publicly opposed to the government’s massive infrastructure plans – aimed at developing hydropower and turning Laos into a net exporter of electricity – “can simply disappear like Sombath Somphone.”
The MRC has seen its relevance questioned in recent years, particularly as Laos continues to ignore regional concerns surrounding its dams and their potential damage to fish stocks.
The commission’s main head office in Vientiane declined to respond to questions regarding its operations and independent monitors complain they are often shut out of due process through the Lao government’s harsh restrictions on the country’s nascent press and on travel by foreigners.
Perhaps it’s time to conduct a full and transparent audit of the MRC’s finances, deal pragmatically with errant senior officials and move all head office operations to Thailand or Cambodia where a freer press will have a better chance of keeping a closer watch on what should be an important regional institution.
Luke Hunt can be followed on Twitter @lukeanthonyhunt