Bloomberg News

Clinton Presses Laos for More Studies on Mekong Dam in Visit

July 11, 2012

U.S. Secretary of State Hillary Clinton

U.S. Secretary of State Hillary Clinton is greeted at the Ho Phra Keo Temple July 11, 2012 in Vientiane, Laos. Photographer: Brendan Smialowski/AFP/GettyImages

Hillary Clinton pushed Laos for more studies on a $3.6 billion hydropower dam on the Mekong River opposed by neighboring countries in the first visit by a U.S. Secretary of State in 57 years.

The trip is part of a broader sweep Clinton is making through Asia as the U.S. increases its engagement with the world’s fastest growing economies, in part to counter China’s growing clout. Laos, a landlocked nation of 6 million people bordering China, plans to expand its generating capacity and sell electricity to its neighbors.

Laotian Prime Minister Thongsing Thammavong assured Clinton that the Xayaburi power project wouldn’t proceed without approval from neighboring countries, according to a State Department official who wasn’t authorized to speak on the record. Laos plans to hold an international conference about the project to ease concerns, the official said.

The dam remains an area of contention as the U.S. seeks to broaden its engagement with Laos, which is still struggling with unexploded ordnance left over from the Vietnam War. Clinton discussed cooperation on the deadly material as well as accounting for U.S. personnel who remain missing, according to a joint statement. Laos is the smallest economy among members of the Association of Southeast Asian Nations.

Dam Studies

The Xayaburi dam’s approval may pave the way for seven others that Laos plans to build on the Mekong. The government has aimed to convince its neighbors by showing them studies it commissioned from Compagnie Nationale du Rhône and Switzerland- based Poyry Energy AG.

“Both the reports of Poyry and CNR indicated that the project has created a negligible impact in respect of environmental and social considerations,” Xaypaseuth Phomsoupha, director-general of Laos’s Ministry of Energy and Mines, told reporters in Bangkok on June 20.

While Laos is building access roads and other infrastructure around the dam site, construction on the river itself won’t start “in the absence of the sign-off from our neighbors,” he said.

Vietnam has recommended a 10-year delay for all hydropower projects over environmental concerns on the river, which winds through Myanmar, Thailand and Cambodia from its source in China’s Tibetan plateau. About 60 million people along the Mekong depend on the river and its tributaries for food, water and transportation.

Thai Financiers

In 2010, Thailand made an initial agreement to buy 95 percent of the electricity from the Xayaburi plant, which will have a capacity of 1,285 megawatts.

Ch. Karnchang Pcl (CK), Thailand’s third-biggest construction company by market value, owns a 57.5 percent stake in the Xayaburi project. PTT Pcl (PTT), Thailand’s biggest company, has a 25 percent stake and Electricity Generating Pcl (EGCO) owns 12.5 percent.

In her meetings with Thongsing and Deputy Prime Minister Thongloun Sisoulith, Clinton discussed environmental protection, Laos’s entry to the World Trade Organization and the reintegration of ethnic minority Hmong people who fled to Thailand in 2009, according to the statement. The U.S. resettled 130,000 Hmong who fled to Thailand from 1975 to 1996, according to the State Department.

Unauthorized by Congress, U.S. planes dropped the equivalent of one plane-load of bombs over Laos every eight minutes, 24 hours a day, between 1964 and 1973, according to the non-profit Virginia-based advocacy group, Legacies of War.

Unexploded Bombs

Intended to stop communist ground incursions and disrupt North Vietnamese traffic along the Ho Chi Minh Trail, the bombings left Laos the most heavily bombed country per capita in history. One ton of bombs was dropped for every man, woman, and child in Laos at the time.

Today, an estimated one third of land remains unusable because of unexploded ordnance, making it unavailable for food production or development, according to Legacies of War. In the 40 years since the war ended, 20,000 people have been killed or maimed by dormant explosives hidden in the soil.

Clinton’s visit demonstrates that she “recognizes that bringing along the less developed countries of the lower Mekong region is key for stability and development in the region,” Brett Dakin, head of Legacies of War’s board of directors, said in an e-mail. “However,” he said, “Laos will not reach its full potential as long as much of its land is still contaminated with unexploded bombs.”

To contact the reporters on this story: Nicole Gaouette in Washington at ngaouette@bloomberg.net; Daniel Ten Kate in Phnom Penh at dtenkate@bloomberg.net

To contact the editor responsible for this story: John Brinsley at jbrinsley@bloomberg.net


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