MEKONG REGION: Uneven Dev't Comes with Open Borders

CHIANG MAI, Thailand, Feb 10 (IPS/Newsmekong) – In the town of Bo Ten in Laos, near the border with China, local people are now busy being trained to be card dealers, as they prepare for their new jobs at a soon-to-rise casino owned by a Chinese company.

   In January, Burma and Laos formally opened their first border checkpoint just north of the Golden Triangle. This is between Banpong in Burma, right on the west bank of the Mekong River, and Ban Mom on the Lao side.

   Earlier on Dec. 20, 2006, the second cross-border bridge spanning the Mekong River, connecting Savannakhet in Laos and Mukdahan in Thailand, was inaugurated. There are plans for a third, linking northern Chiang Rai in Thailand, with Houey Sai in Laos.

   These snapshots reflect the buzz of activity that shows how borders – territorial, economic and social – continue to be torn down in the Mekong region, one where up until two decades ago, the government officials of countries were not even on talking terms with each other. <!--break-->

   Formerly divided by war and conflict stoked by foreign intervention, the Mekong region – comprising China’s western provinces of Yunnan and Guangxi, Thailand, Laos, Burma, Cambodia and Vietnam – is becoming much more connected by roads and flights, investments across borders and by regional economic players, infrastructure projects in one country that affect another, falling tariffs at borders, as well as increasingly mobile populations.

   All of these are by no means a small amount of change. In many ways, former Thai Prime Minister Chatichai Choonhavan’s call in the eighties for “battlefields to be turned into marketplaces” is what is unfolding now.

   But while the region is now more interconnected, development and its economic benefits have also been uneven -- and raise questions about gainers and losers.

   Some trends also indicate the onset of increased competition and possible tensions with the region in the future, not least given the emerging roles of China and Thailand in the Mekong region, and concern about exploitation facilitated by easier movement in the region.

    At a conference on the ‘Critical Transitions in the Mekong Region’ in the northern Thai city of Chiang Mai in late January, no one among experts -- from Asian Development Bank (AsDB) officials to activists -- disputed that economic changes do affect different sectors differently.
   For instance, the casino project in Bo Ten in Luang Namtha in Laos, near the border with China, was given economic logic by its access from a road connecting these countries, but may have undesirable social effects.

   “Open borders are an opportunity, but there is also that downside to development,” Pattana Sitthisombat, president of the Chiang Rai Chamber of Commerce, said, calling the casino far from his definition of desirable investments. Similar concerns have been raised about other casinos at the Thai-Myanmar border and the Cambodia-Vietnam border, among others.

   The challenge in the region – where the AsDB in 1992 pushed a set of infrastructure projects key to the regional integration of it calls the ‘Greater Mekong’ Region– is how to manage the ill effects of changes these may bring.

   Today, more than 20 years after the Bank started the GMS scheme, Bank officials say they recognise this. “Connecting markets (by itself) doesn’t always work,” Jean-Pierre Verbiest, AsDB country director for Thailand, told the Chiang Mai meeting.

   Bridges can link countries but their full utility depends on the ease of movement across borders, he explains. Yet having open borders raises other worries – “there are good things” such as allowing movement of goods, “but you can also reverse everything” and realise that borders also ease the mobility of problem issues, he added.

   For a project like the second Mekong international bridge, “whether it leads to a reduction of poverty or whether poverty is just repeated” is a key issue as well, Verbiest pointed out.

   There are also fears that cross-country roads – central to the Bank’s and the governments’ recipe of interconnecting the region -- become highways leading to environmental risk and degradation.

   For instance, as the East-West corridor from Burma, Laos, Thailand and to Vietnam gets completed, there are reports of a gold mine in Laos near the border with Vietnam that elicits concerns about the exploitation of natural resources. Verbiest concedes that in parts of the North-South corridor, running from Kunming down to Bangkok, one sees truckloads of logs and mined material going in and out of Laos. “These raises a lot of questions,” he said.

   “At the end of the day, the success or failure of this programme (GMS) is really how it addresses the environmental issue,” Verbiest explained.

   What was once a sketch of plan to link the region through roads is today a network of transboundary roads, with more to come. The AsDB says the East-West corridor is completed, except for a stretch inside Burma. Work on the North-South corridor is expected to finish in 2008, and the road from Ho Chi Minh City in Vietnam to Phnom Penh, Cambodia to Bangkok is almost done.

   Where roads get built – or don’t get built – are also an issue when states weigh the benefits they get from regional linkages.

   For instance, Burmese officials are concerned about losing economic opportunities if cross-country roads connect from China by passing through Laos, rather than through Burma.

   One could ask how much Laos can gain from the East-West Corridor, which merely passes through it and facilitates transport for goods and people outside the country.

   The Mekong region is an ‘’emerging economic area” and “a new frontier for development”, but the focus on social concerns has lagged behind, says Rosalia Sciortino, a professor at Mahidol University and Chulalongkorn University in Bangkok. “While there is general growth, when you look at the distribution of growth, you see a different picture.”

   Statistics do point to increased trade among Mekong countries. About half of Laos’ trade is with Mekong countries. There has been an explosion in border trade, including in areas that only two decades also were closed – China only opened its borders to the South-east Asian neighbours in the eighties. Sciortino says the Thai-Burma border trade is about thrice the value of formal trade.

   But the bulk of this economic activity appears to be among the bigger actors like China and Thailand, also the bigger investors in the region.

   At the Chiang Mai conference, Jim Glassman of the University of British Columbia cited figures from the Bank of Thailand indicating that Thai exports to the Mekong region have increased sharply to China from 1995 to 2006, rising from about three percent of total experts in 1995 to about nine percent now.

  China has investments going to Cambodia, and assistance and investment to Laos.

   The navigation agreement that opened up transport on the Mekong River by bigger vessels has led to more ports sprouting up on the way. Pattana says some 3,000 Chinese trucks go to or pass through Chiang Khong each day, highlighting how northern Thailand has become the country’s trade conduit with China.

   Asked if China and Thailand were the winners at this stage of Mekong development, Glassman said he was not ready to conclude such but that the two are clearly major players in the region.

   Yet Chinese presence is not without controversy -- Thai media reports now and then report on complaints that cheap products like Chinese garlic would drive locals out of business.
   Regional integration and open borders also continue to give shape to the economic map of the Mekong region.
   For instance, rubber plantations can be found across swathes of land at the China-Laos border. Often, they hire Lao workers to work in Jinghong and Mengla in China, where the amount of land in Xishuangbanna planted to the crop has grown massively in recent decades.
   
   Economics is also the driving factor behind what Roy Rickson of Griffiths University in Australia calls “contracts without borders”, explaining how Thai companies are sourcing raw materials and using cheaper farm labour in neighbouring countries.
 
   But, Pattana says, competition is part of the game as the Mekong region’s economic landscape changes. “Heavyweight or lightweight, we all have to deal with one another on the same level. We have to deal with China – how to cooperate with them, and not against them." (END/IPSAP/Newsmekong/JS/100207)