Bungalow 10 Hotel le Royal Phnom Penh, Cambodia 8 February 1967
Mr. Noel Is an Alicia Patterson Fund fellowship award winner on leave from the Hartford (Conn.) Times. Permission to publish these articles may be sought from the Managing Editor, The Hartford Times.
Cooperation and Competition
VENTIANE, LAOS — The four-nation Mekong Coordination Committee moved into its tenth year this month on a note of crisis: a boycott by Cambodia threatened the life of the organization.
It was, in a sense, an artificial crisis. Cambodia’s plans for a major multi-purpose dam were set back last fall when the U.S. Congress barred American participation in the project. Prince Norodom Sihano” was — it was hoped — just making sure his Mekong partners did their very best to remedy the deficit
This diplomatic blackmail was accepted with remarkably good grace here in Vientiane. South Vietnam and Thailand, who have no diplomatic relations with Cambodia, and Laos, whose relations have chilled to the chargé d’affaires level, did everything they could, both in public and in private, to find the missing money.
They had to. Under the Committee’s self-imposed rules, all actions must be unanimous. Nor is this mere formality. The Mekong is an international waterway. Like it or not, powers upstream and downstream can’t legally interfere with the flow of water or river traffic without the consent of all riparians (co-owners of the river, so to speak) affected. Cambodia sits astride the middle of the Mekong.
The actions taken at Vientiane can be ratified by Cambodia later, and hopefully will be before spring. The three-member committee, with willing help from its 21 associate-member nations (including a hard-working U.S. team) put in long hours beating the money bushes, and came within $2 million of their goal. With luck, the rest will be found, and Cambodia will be persuaded to swallow her wounded pride and rejoin her colleagues.
Cambodia was not the only nation with wounded pride this month. South Vietnam also came to the meeting with a favorite project unfunded: a bridge across the Mekong, linking her populous Delta provinces with the capital at Saigon. By coincidence, South Vietnam, too, felt she had been left in the lurch by the United States.
But South Vietnam’s problem was less threatening, and seemed likely to win grudging U.S. approval. It did not pose a major crisis in the life of the organization.
Both problems did, however, represent a new stage in the Mekong Committee’s growth.
The Mekong development program, greeted with skepticism when it began nine years ago, has more recently been optimistically viewed as the springboard for an unprecedented experiment in regional development.
The huge potential of the Lower Mekong River — comparable, roughly, to our northwest Columbia Basin — offers more power and irrigation water than any of the four nations could exploit and use by themselves for generations. Using the power, moreover, implies exploitation of mineral and forest resources, and development of industry, on a scale, which any single nation of the four would find economically unviable.
Also, although the Mekong tributaries can be tapped unilaterally, every project on the mainstream has international legal implications: water impounded in one nation will affect crops grown in another; water and power from some projects will find their most likely users across borders; every one will affect navigation.
Fascinated by the ramifications of this prospect, the international community has increasingly provided money and manpower to study the possibilities, and the effects, of regional planning and growth.
The riparians themselves have been slower to accept the regional implications of their work. It was not until 1960 that the Committee agreed to put an economist on their high-level advisory board. Until then, money had been sought primarily for technical studies, mostly hydrological.
Following a Ford-Foundation-backed study in 1961, the Committee, with grants from the international community, has commissioned a widening variety of studies: rice markets; manpower needs; standards for export products; administrative and legal problems; domestic power markets; electric-powered industry for regional and world markets, and an atlas of basin-wide resources and their uses.
It has begun training personnel in economics, social studies, and systems analysis, and has added skilled personnel in these fields to its secretariat staff.
At the Vientiane meeting this month, the Committee approved a seminar on economic planning; a basin-wide canal survey; a new staff Dost in agricultural economics; a regional statistical training center, a survey of basin-wide industrial potential, and coordinated planning of two mainstream dams which will impound waters in three countries.
It also took tentative steps to ask the Asian Development Bank to establish a special fund for projects, which the Committee, rather than individual nations, might tap for a single project, or even for several projects at one time.
With all this, it might seem that regionalism is just around the corner.
It is not. Despite cooperation on the technical level, the undercurrent along the Mekong is still competitive. After the “Cambodia crisis.” however, it may be a more generous competition.
Early in the 1960’s, it became apparent that development along the tributaries would be possible long before data was available for the later, giant mainstream dams, and that experience with them would help accumulate some of the data. Small early projects, moreover, would keep the riparians from becoming impatient with the slow workings of hydrology, when the only way to measure high and low stream flows is to wait for floods and droughts.
The Mekong Committee’s annual report gradually became a kind of international shopping list. Each country presented its pet ideas for Mekong-related projects; the Committee would “authorize” feasibility studies and, later, detailed design.
The secretariat would then go shopping for sponsors to undertake the studies, usually as outright gifts, sometimes with part of the cost paid by the host country.
There were always buyers: industrial countries are hungry for business. “Aid” of $100,000 or so (or sometimes, in Japan’s case, “reparations,”) is a worthwhile investment if a national firm can later win a multi-million dollar construction contract. It may even be worthwhile for the industrial nation itself to put up a long-term, low-interest loan to land the contract.
With designs and estimates in hand, the secretariat would then go shopping again for grants and loans.
It was here that the system began running into trouble.
Thai-land, the most prosperous of the four, was able to pay most of the cost of its first small ($5.5 million) dam herself, and to get a $19 million West German loan for a second, $33.5 million project. Thailand now has three more small-to-medium dams under study, combining her own resources with grants and loans from Japan and Austria.
Laos, the most backward of the four, was obviously in no position to take on major loans. But two tiny ($650,000 and $1.6 million) dam were quickly built with loans and grants from France, The first major dam, Nam Ngum, was dedicated during the Vientiane session, and will get under construction this year.
It is probably no coincidence that Thailand, a close ally of the United States, wants to buy much of the power output from Nam Ngum. The Thai delegate claims credit for the key negotiations, which produced the money for the dam; the U.S. contributed $12 million.
The United States has also contributed already $10 million toward the gigantic Pa Mong Dam between Laos and Thailand. Still under study, it will some day dwarf Boulder Dam. Although both Thailand and Laos will benefit, four-fifths of the irrigation water will go to Thailand.
Meanwhile South Vietnam, embroiled in war, was an unlikely place to start peaceful long-range building projects.
(Both the Viet Cong and the Pathet Lao, during early Mekong years, implied their approval by leaving field work noticeably unmolested. But last year, parts of the Pa Mong site being surveyed by a U.S. team were mined. The safety of any Mekong project will probably depend on the desperation of guerrillas and their, readiness to adopt terror tactics.)
South Vietnam has had several dams studied, and a major bridge, but has no visible results except a $1 million U.S.-sponsored tug- and barge-building program.
Cambodia, which three years ago rejected U.S. aid in its attempt to remain neutral and uninvolved in the war in Vietnam, has two large dams and a distribution system planned in detail, but nothing built under Mekong.
At its meeting last March, the Mekong members agreed to put top priority on funding the three projects in Cambodia, and the bridge in South Vietnam. They met this month to discover none of the four projects funded, and a crisis on their hands.
Boycott and Backchat
“We shall…continue to support enthusiastically… such promising cooperative regional efforts as … (among others) the Mekong development fund of the United Nations…. “We will continue to respond constructively to the aspirations of the developing nations. We will give first priority…in those free world countries which are resolutely committed to helping themselves…”
Lyndon B. Johnson, Economic Message to Congress, January 25, 1967
Prek Thnot Dam is designed as a multi-purpose project providing, ultimately, irrigation for some 175,000 acres of land within market distance of Phnom Penh, and 18,000 kilowatts of electricity.
First designed in 1962, under the auspices of the Mekong Committee, it was postponed twice. (1) Last April, the Mekong Committee and ECAFE (the UN’s Economic Commission for Asia and the Par East) declared 1966 “Cambodia Year,” and placed top priority on finding $22,million in loans and grants to match Cambodia’s $11 million to build Prek Thnot.
As late as October, it was assumed the U.S. would play a major role, estimated at $10 million, in the project. In the intricate politics of Cambodia neutrality, this represented a major concession by Prince Norodom Sihanouk, who opposes the U.S. role in neighboring Vietnam, and rejected all U.S. aid in 1963 to stay clear of the war.
The nature of the concession was evidently recognized by U.S. diplomats, who since last summer have been looking for a way to re-establish friendly relations with Phnom Penh.
But in November, UN and Mekong officials were informed that recent Congressional action ruled out American aid to any country “selling or furnishing…items of economic assistance… to North Vietnam.” The President, formerly able to waive such bans upon a showing of “national interest,” may now do so only on showing that waiver would be “important to the security of the United States.”
U.S. funding of Prek Thnot, it was reluctantly reported, was not possible.
There are those who believe Sihanouk, in 1963, was opportunistically dallying with China, expecting the U.S. to lose in Vietnam. Others, including this observer, think that is a gross oversimplification of a complex political position.
For a detailed description of events leading up to the Vientiane session of the Mekong Committee, see DON-3.
Whichever view one accepts, it is evident that many Cambodians now feel the need to balance their neutrality, and would welcome a limited relationship with the U.S. Prek Thnot seemed a good opportunity.
(It would also seem in the long-range security interest of the U.S., although a public showing of the relationship would probably force Sihanouk to reject it. Cambodian rice sales to North Vietnam, of course, are within her rights as a neutral. The entire bill — which the record shows no significant Administration attempt to block — seems, from the perspective of an American in Phnom Penh, a mistake.)
U.S. withdrawal from the project did more than fumble a chance for rapprochement. It discredited, in Cambodian eyes, the U.S. claim of politically disinterested assistance to developing nations; and it embarrassed the UN and the Mekong program itself.
The U.S. and the UN joined forces to find other means of financing Prek Thnot. But by early December, when a meeting was slated in Phnom Penh to work out details of loans and grants, they could report only partial success. Sihanouk, who felt he risked both domestic and international embarrassment, cancelled the meeting.
Shortly thereafter, he published in Phnom Penh an article questioning the entire project, and also Cambodia’s recent adherence to the Asian Development Bank. It was, in the view of several Western diplomats in Cambodia, a face-saving retreat if funds could not soon be found.
“Cambodia Year” was quietly extended to March 31, the end of most nation’s fiscal year; but the real deadline was February 1, the date of the Vientiane meeting of the Mekong Committee. By the end of January, despite a personal appeal by U Than and round-the-world negotiations by C.V. Narasimhan, his undersecretary, the international financing was still $6 million short.
Cambodia let it be known she would not attend the Vientiane meeting. Without a word of explanation or formal announcement, she stayed home.
The members of the Mekong Committee in Vientiane needed no explanation.
Narasimhan, who came to Vientiane and then went to court Cambodia in Phnom Penh, opened the meeting with a plea that “all of us, animated as we are by the Mekong spirit, should never let temporary setbacks discourage us. Rather, they should be regarded as a challenge and a spur to greater effort.”
Others, including delegates from Laos, Thailand and South Vietnam (all of whom have intense political differences with Cambodia on everything except Mekong development) were even more explicit in their plea that money be found for Prek Thnot.
This does not mean the Vientiane delegates were not annoyed, many who sympathized when the U.S. withdrew now felt Cambodia had carried her pique too far.
The diplomatic Community had argued for two months that Sihanouk’s take-it-or-leave-it attitude made their Money-raising task doubly difficult.
“My government has a half-dozen nations lobbying hard for aid,” a Western representative told me. “Sihanouk won’t even make clear whether he wants the dam or not. You can’t stand on your pride in this day and age; if you want money, you have to go ask for it, and make a case for it.”
Nonetheless, in a closed-door meeting with Narasimhan, government said it would “seriously consider” a $2 million loan and grant, and would intercede with several smaller countries. A European government made known its willingness to consider a $4 million loan for purchase of its manufacturers’ generators.
Narasimhan left Vientiane still short $2 million. The Mekong delegates left a few days later in the fervent hope than before they met in Tokyo in April, Prek Thnot would be funded and Cambodia would be back in the fold.
More was involved than Western strategy to woo Sihanouk. The other three nations, for purely selfish reasons, need Cambodia. The Committee cannot act without her. If they tried, many of their decisions would be open to challenge under international law. And international financing, in the long range, depends on the appeal of a united, non-political regional effort.
Meantime, another crisis loomed: the first bridge over the Mekong, at My Thuan in South Vietnam, linking the populous Delta with the Saigon capital region.
Two years ago, South Vietnam — with Japanese war reparations commissioned a Japanese firm to design a low bridge. Cambodia immediately protested that it would block ocean-going vessels bound for Phnom Penh.
The Mekong Committee agreed, and adopted the principle (with concurrent advice from its own advisory board and Europe’s Danube Commission) that the Mekong could be bridged only by high, fixed spans, which would not impede traffic.
The Committee also agreed that the extra cost of high bridges should be financed internationally. South Vietnam agreed to commission a revised design, and challenged the Committee to go raise the money, now estimated to be at least $10 million more than the $6 million cost of a low span.
My Thuan, along with Prek Thnot and two other Cambodian projects, was a top-priority item in last year’s shopping list.
There followed a long dialogue with the obvious donor, the United States. The U.S. argues that the extra cost is not justified, and at one point suggested a movable bridge instead. All engineering advice so far, however, says this will cost more in the long run, and will impede river traffic by occasional breakdown, if not by provocation when diplomatic relations are strained.
The U.S. also argues, on the basis of a recent survey of all transportation in South Vietnam, that improved ferry service will meet present needs. Some Mekong advisors agree this may be so, but say the impact of a bridge is very difficult to measure.
(The U.S. a year ago gave South Vietnam two high-speed ferries, which in early February were en route. South Vietnam’s delegate at Vientiane said they were accepted only as a stopgap until the bridge is built.)
The American position is obviously also based, in part at least, on the security problem: What are the chances that a $16 million bridge will survive the war?
(One private American engineer attending the Vientiane meeting told me he considered it an acceptable risk. He said the high bridge would be harder to destroy than either a fixed-low or a movable-low span. He had recently come from supervising re-flotation of the giant dredge sunk by the Viet Cong a few miles from the bridge site; he insisted the problems were different. He also agreed with a comment by several others at the meeting that a $16 million risk must be measured against a $50-million-a-day war.)
The South Vietnamese position at Vientiane was clear: they see the bridge as a visible symbol for Delta residents that Saigon can build for the peaceful future. They believe the risk worthwhile.
To buttress their position, they too came to Vientiane with some diplomatic blackmail. They proposed building a low, fixed bridge with their own funds, and diverting river traffic to the nearby Bassac, which joins the Mekong at Phnom Penh.
The proposal was quickly squelched by the advisory board. It noted that the Bassac is uncharted, might need extensive dredging which would be an endless cost, and that ultimately some kind of bridge would have to cross the Bassac, too.
Had the Vietnamese threat been taken seriously, delegates at Vientiane might have been more concerned: it would violate general international law and a specific 1954 treaty between Cambodia and Vietnam, and would end any chances for Cambodian participation in further Mekong development.
They were obviously not worried. Laos and Thailand went on record favoring a high bridge “in the very near future.” The session accepted, after elaborate backstage huddles, a Vietnamese-American agreement to a new U.S. survey of all aspects of the problem, to be completed by early summer.
“This isn’t a real crisis,” one Mekong advisor told me afterward. “The U.S. will build it. It will have to.”
The Budget Shopping List
Many Americans would like to see in the Mekong Coordination Committee a dramatic example of regionalism, a start toward a common market and common development which could unite all of Southeast Asia — including eventually North Vietnam — under the boon of international assistance.
That stage may come. But today, after a decade, it is still a long way off.
Stage One, as suggested earlier, was competitive. Each of the four member nations put its pet projects on an international shopping list, and then raced its neighbors for the financing.
The result was rather like income distribution in U.S. society. Prosperous Thailand was a good credit risk. Destitute Laos received welfare. Lower-middle -income Cambodia got neither, possibly because she insulted the banker. South Vietnam is awaiting the outcome of a messy divorce case to see who gets custody of the country.
Stage Two, which probably began at Vientiane this month, will be a drastically curtailed competitiveness, and a much more budget-minded shopping list.
The lessons about competition were really learned earlier. A year ago, when top priority was put on Prek Thnot and My Thuan, the Mekong nations were obviously recognizing that the international riches must be shared if any measure of cooperation were to continue.
The crisis brought about by Cambodian boycott merely drove the lesson home.
My Thuan may be illustrative of a different lesson: Mekong projects have to be good.
Let me return to my slightly strained example of income distribution.
Thailand’s projects have been funded primarily on a hard-cash basis, with money bought on a market only slightly charitable. Thailand is, by “developing nation” standards, a going concern. It has an 8 per cent annual growth rate (boosted by tourism, 35,000 U.S. troops and thousands more on rest and rehab from Vietnam) and is rapidly becoming the industrial core of Southeast Asia, attracting both American and Japanese capital.
Thai power projects are obviously good investments. They are not such obviously good investments for irrigation, and Thailand — to the irritation of some Mekong experts — is minimizing irrigation aspects of its next three dams.
Laos is desperately poor, and everybody pitches in. But like all welfare clients, she will rapidly become suspect: is she really trying hard enough to be self-sufficient?
(The United States reportedly underwrites some 90 per cent of the Laos national budget, in addition to helping on dams. It is not hard to find Americans with exaggerated, one-sided tales of Lao “laziness.”)
Lao dams will certainly show a profit for the electricity sold to Thailand, and Probably for domestic consumption as well, although that will require that peasant farmers have money to pay for it. That may depend on the success of their irrigation projects.
Irrigation is going to be a major problem.
“Experimental farms,” warned the advisory board in a special report at Vientiane, “give an idea of possible cultures on small areas ‘under a highly staffed technical management.
“The yields will be much lower if we operate on larger areas, with peasants working without guidance; and, in any case, this would require several decades.
“But as we know, time is money, particularly in poor countries who cannot do otherwise but borrow and reimburse. It is therefore necessary to know what actual tempo of development we can hope for, and the means of accelerating this development rate; then to take all necessary measures to obtain full effect in the minimum of time.”
What the advisory board was saying, in veiled terms, is that the Mekong Committee — and its secretariat — have accepted too easily the rosy picture of barren acres bursting into bloom under the gush of water.
There was a time when this was crucial. Had it not been for the exuberant, unquenchable optimism of Executive Agent C. Hart Schaaf, the Mekong Committee would never have gotten off the ground. Without his persistent money raising, it would falter now. Without his drive, its efforts would sag. (“What I need,” said a tired secretariat member after a trying behind-the-scenes session which had left him pessimistic, “is a dose of Hart.”)
This kind of optimism — and in the opinion of most Mekong delegates and staff, Schaaf himself — is still needed. But it must now be complemented by tougher technical challenge.
The hard fact is that technical data is still lacking on such basics as water consumption on huge areas. How much will peasants waste? How much will be lost in crude canals? How much water do the untried soils need, and how many acres will a given reservoir irrigate? How much will irrigation in Northeast Thailand raise the level of deep saline water tables and taint the soil?
Equally important are the sociological questions: how to teach backward peasants to farm efficiently with modern methods, and how to persuade them to grow more than they need to eat.
(A collateral question, which readers of a recent newsletter on Cambodian co-ops may recall, is what cash incentives are needed to -persuade a farmer to put in the extra labor of, for instance, double- or triple-cropping with irrigation.
(In Cambodia and Thailand today, the farmer is the most heavily taxed producer: the government buys his rice, and sells it abroad for a handsome mark-up. The whole question of agricultural taxation has barely been broached in the Mekong Committee. Should the farmer pay for irrigation water? Obviously the government, having invested in dams, must make enough money from him to retire the debt. But how much is enough? How should it be collected? How much of the other costs of national modernization will farmers productively bear?)
The return from irrigation portions of dam projects will affect all countries in the Mekong basin.
A collateral problem will increasingly affect Cambodia and South Vietnam, Thailand to a lesser extent, and later Laos. It will affect them all when they pool efforts on the giant mainstream projects. Who will buy the power?
This problem, too, was touched on by the Mekong’s advisory board. They saw it as less pressing, because in all four countries there is suppressed demand for electricity, and industrialization in all four will grow apace. But none of them can afford to produce the electricity and then spend several deficit years scouting up industrial users.
The problem, in short, is that Mekong projects will have to be good, which means they will have to be profitable. They must be good enough to win credit on reasonable terms, and to win continuing charity even from generous friends. The U.S. may eventually decide the My Thuan Bridge is a good project; but until it studies it carefully, it is willing to risk irritating its wartime ally.
Moreover, it might be added — since the Mekong nations will be paying part of the costs out of pocket, and reimbursing most of the rest — projects will have to be good enough to convince taxpayers and government officials at home. As their experience grows, each nation will demand greater realism in its feasibility reports.
Stage Three will be a limited amount of regional planning.
By the time Pa Mong is built, most of the above questions will be answered. Pa Mong and a second giant mainstream project, Sambor, being talked of for simultaneous development, will together cost $1 billion.
Not much of that will be charity. The four nations will probably go to a multi-lateral banking institution — the World Bank, or the new Asian Development Bank — with a joint application for a hardheaded business loan.
By that time — the current priority list suggests optimistically 1970, but the professionals say1980 will, be early — each nation, and the four collectively, will have answered not only the economic and technical questions, but will have some ideas about sociological implications as well.
At that point, there is every reason for the three smaller nations — Laos, Cambodia and South Vietnam, whose combined populations are less than Thailand’s — to insist on regional planning of industry as their price to co-sponsor the giant projects.
Without some such planning, although the smaller nations will prosper, the gap between their economies and Thailand’s will grow larger.
Laos already stands in danger of becoming a supplier of raw materials and electricity for the huge industrial complex growing around Bangkok. South Vietnam, if the war’s end should be accompanied by massive U.S. aid, might develop as a limited rival, and North Vietnam might also under certain postwar conditions. Cambodia’s industrialization, given its size and wealth, is impressive, but no match for Thailand’s.
The Mekong secretariat is talking of using Sambor power to provide pumped-irrigation water for the Cambodian-South Vietnam Delta, while Thailand gets industrial power from Pa Mong — a proposal which could lead to a permanent imbalance which only regional sharing would equalize.
Eventually — probably long before Pa Mong is built — the “Little Three” will see this. At that point they will begin working together; will send not skilled technicians, but influential political leaders, to Mekong meetings; and will begin demanding quids-pro-quo of Bangkok.
But they cannot be forced to, and the Mekong secretariat, like its parent ECAFE, is not pressing the issue.
In an interview at Vientiane with Paul Bourrieres, the greying French professional engineer who led the advisory board in its common-sense recommendations, I asked whether the secretariat couldn’t do more to help the nations see the wisdom of regionalism.
“People don’t like to be coordinated,” he answered, “especially by other people.
“The absence of coordination can of course be bad. But so can premature coordination. The problem in this area is getting things started, not slowing them down. If unplanned industrial growth means some national industries will prove unviable and fail, that is an acceptable price to pay.
“It is also.” he added, “a price that must be paid. These are young, nationalistic nations. No one could tell them now that they must harmonize their efforts.
“In time, they will learn. That will be time enough.”
Received in New York February 13, 1967.
