
It should not come as too much of a surprise that Laos, as current hosts of the Asia-Europe Meeting (ASEM), has announced it will go ahead with the U.S. $3.8 billion construction of the Xayaburi Dam, the first to be built across the main stream of the Mekong River.

Equally, the only country to stand behind Laos’s decision was Thailand. Its companies Ch. Karnchang and PTT Pcl will own a 50 percent and 25 percent stake respectively in the dam which many in the region would like to see halted.

“The Lao government conducted studies that showed the development will not have environmental impacts as many people are concerned,” Thai Foreign Minister Surapong Tovichakchaikul told reporters from Vientiane, where he is also attending the summit of European and Asian leaders. “The project will not cause an impact on fisheries.”

The minister’s words are more the stuff of wishful thinking than scientific analysis or an independent environmental impact study. The Laos government does not like either as they have a frightful habit of telling Vientiane exactly what it does not want to hear, that fish stocks will be damaged and that the livelihoods of 60 million people living downstream will be seriously impaired by the construction of the dams.

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And to announce the decision to proceed on the eve of ASEM, Laos’ greatest diplomatic achievement since the communist takeover of 1975, should prove additionally irritating, particularly for the Vietnamese and Cambodians who are deeply concerned about how the projects will affect their countries.

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About 50 leaders from Asia and Europe are gathering in Vientiane for the biannual meeting of heads of state from the two continents and talks will focus on a range of issues from trade and global economic growth to the European debt crisis.

This was not the venue upon which Laos was expected to push its dogmatic and outdated views on dam construction. But the temptation to assert itself perhaps got the better of authorities who stand to benefit most from Xayaburi.

The United States and Australia – chief financial backers of the Mekong River Commission (MRC) – along with environmental groups and neighboring countries want further studies to be done on the environmental impact of building dams on the main stream of the Mekong. As the U.S. State Department said in a cautiously worded statement following Laos’ announcement, “While these are sovereign development decisions, we are concerned that construction is proceeding before impact studies have been completed.”


However, Laos has reacted to such calls with uncharacteristic hostility, paying lip service to the idea of further studies while regularly disparting from the truth by telling its neighbors construction at the site had stopped despite persistent reports to the contrary.

Many within the Laos Communist Party are against damning the main stream of the Mekong, but others believe the country will grow fabulously rich by selling electricity to its neighbors and making itself the “battery of Asia.”

Plans for a possible 11 dams in Laos are known although environmentalists fear a further 70 dams are actually in the planning stages – this includes the damming of less controversial sites along the Mekong’s many tributaries.

Vientiane would have done better to focus on those sites but instead set itself on a collision course with its neighbors, MRC donors and environmentalists with its decision to push ahead with a dam which nobody – outside those with a pecuniary interest – believes is ecologically sound.