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Appendix F

 

Mekong Development in Cambodia – Key Institutions

 

With the signing of the Paris Peace Accords in 1991 have come increased regional cooperation and dialogue. A large number of international investment initiatives in the lower Mekong Basin (Burma, Cambodia, Lao PDR, Thailand and Vietnam) have begun since 1992, led by both private capital and major multilateral and bilateral donors, of which the ADB, ASEAN, DANIDA, JICA, USAID and the World Bank are amongst the most important.

 

These investors often share a common approach to development and reconstruction: a regional approach based on an understanding of the Lower Mekong as an economic and geographical unit.  This ‘basin’ or ‘watershed’ approach to reconstruction and development emphasises and encourages the interdependence of the economy and environment of the Indochinese countries.  For investors, the Mekong Basin is a “subregion ripe for economic growth”; the Mekong River is a “corridor of commerce in one of the world’s fastest developing growth circles”. Of the institutions whose investment programmes and projects take a ‘watershed’ approach, the ADB and JICA are perhaps the most significant for Cambodia.

 

The Asian Development Bank (ADB)

 

Under its Greater Mekong Subregion initiative, the ADB has produced several long-term plans for various sectors: transport; energy; human resource development; environment; trade and investment; telecommunications; and tourism[1].  The ADB makes loans the various countries in the region for technical assistance and subregional infrastructure development projects;  some of the ADB are coordinated with these ‘masterplans’. The ADB plans to loan $380 million US to Cambodia from 1997 - 2000[2].  Of this amount, $70 million in loans is targeted for four environmental projects (see Appendix B for a partial list).

 

The Japanese International Cooperation Agency (JICA)

 

The Japanese government and Japanese private investors have been very active in the Mekong region. Japan’s Ministry of Foreign Affairs (which controls Japan’s governmental aid agency, JICA) has taken a regional approach and defined a “Greater Mekong Area”, including the 5 lower Mekong Basin countries and Yunnan, China , in its blueprint for Mekong development.  Within this area, various infrastructure projects (roads, dams, irrigation, and energy) have been prioritised[3].  In Cambodia, 100 million USD has been invested in technical assistance projects, infrastructure projects (notably the feasibility study for building a bridge across the Mekong), and aid.  Although the Japanese government feels that  “the rich hydroelectric potential of the Mekong should be developed and used as much as possible”[4], JICA is not currently funding any dam projects.

 

Association of South-East Asian Nations

 

ASEAN, established in 1967, is a regional intergovernmental body which mainly promotes political cooperation amongst its member states (Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam).  ASEAN’s Fund for Mekong Basin Development (initiated in 1996) is another important source of investment in the region.  The ASEAN Working Group on Economic Cooperation[5] will, together with the fund for Mekong Basin Development, be important for Cambodia when it joins the group. 

 

The Mekong River Commission

 

In addition to multilateral and bilateral investment and aid agencies, the Mekong River Commission is an important institutional actor in regional Mekong development. The Mekong River Commission is an intergovernmental organisation created by a 1995 agreement signed by Cambodia, Lao PDR, Thailand, and Vietnam.  Its predecessor, the Mekong Committee, was formed under the auspices of the United Nations and ECAFE (the predecessor to ESCAP) in 1957 "to promote, coordinate, supervise, and control the planning and investigation of water resources development projects in the Lower Mekong Basin."  The Commission had two main objectives: (1) to investigate water resources for the lower Mekong Basin; and (2) to identify the most suitable sites for water resources development, with an emphasis on hydropower.  In an era when dam-building was a global trend, and with advice and support for Western dam engineers from institutions such as the United States Federal Bureau of Reclamation, the MRC created massive water diversion plans for Cambodia – plans which are now recognised as too large, too expensive, and too environmentally damaging to be put into place.

 

As a result of regional conflict and instability, the MRC was largely  dormant during the 1960s and 1970s.  Following the Paris Peace Accords, a new agreement was negotiated in 1995 amongst the four lower riparian states (see Appendix C). The objective of the MRC is now

 

to cooperate and promote in a constructive and mutually beneficial manner in the sustainable development, utilisation, conservation and management of the Mekong River water and related resources for navigational and non-navigational purposes for social and economic development and well-being of all riparian States, consistent with the needs to protect, preserve, enhance and manage the environmental and aquatic conditions and maintenance of the ecological balance exceptional to this river basin.

 

The MRC, together with its subcommittees in the various regional countries, implements infrastructure projects, conducts research studies, and provides technical assistance to member states.  Denmark, UNDP, ADB, and JICA are the current donors to the Cambodian national counterpart of the MRC, the Cambodia National Mekong Committee[6].

 

The new Mekong Commission Agreement is generally viewed as weaker than its predecessor.  Whereas the previous agreement gave any one member country the right to veto another's project if concerned about adverse impacts, the new agreement only gives member countries the right to prior notification and consultation.  In addition, the rules concerning water utilisation (see article 26, Appendix D) are unclear.  Many new dams are being planned and built upstream from Cambodia on tributaries of the Mekong and the Mekong mainstream – 14 dams are planned for the Mekong in Yunnan alone[7].  However, the definition of ‘minimum flow’ that upstream countries must guarantee for their downstream neighbours has not been agreed upon by the member states.  Thus, under this new agreement, Cambodia is now in a much weaker position from which to address concerns about water security and adverse impacts of upstream dams and water abstractions.

 

A second criticism often made of the MRC is that it is ‘donor-driven’.  The MRC’s programme and project budget is externally funded by several multilateral and bilateral organisations, which impose their priorities on the development process as expressed through the annual MRC ‘Workplans’.  Increasingly, donors and lenders are circumventing the MRC altogether, preferring to deal directly with governments (as in the case of ongoing dam development in Lao).  In this situation, the MRC does not play a regional coordinating role; regional development and its agenda is motivated by other institutions.

 

The Cambodia National Mekong Committee

 

The CNMC is the national-level counterpart to the MRC.  It is a governmental body, specifically, an interministerial committee, involving all ministries related to water: MPW, MAFF, MRD, Ministry of Finance, Ministry of Planning, Ministry of Tourism, Ministry of Interior, Ministry of Industry.  The CNMC reports to the Council of Ministers regarding water policy and development strategy.  Cambodian law does not define ministerial responsibilities or mandate; however, the CNMC views itself as playing a “coordinating” role amongst the “political” ministries. According to many observers, however, the CNMC is a very weak institution.  Decisions concerning water development are likely to be made by or within RGC ministries or by the MRC at the regional level, and tend to be dominated by political concerns. The CNMC itself as an institution has relatively little influence, although it should be noted that its Chairman, Ing Kieth, Deputy Prime Minister and Minister of Public Works, is one of Cambodia’s most powerful government figures.

 

Aid and investment – a lack of coordination

 

There are many other institutions who are involved in Cambodia and in Mekong Development.  UNDP, for example, has traditionally been one of the primary donors and advisors to the MRC, and is currently working with the MRC to create a Mekong Basin Development Plan.  DANIDA also provides support for fisheries research within the MRC.  Numerous other institutions cooperate with governments and ministries for various projects.

 

In addition, many countries and institutions encourage the participation of the private sector in infrastructural development and investment.  BOT (Build - Own/Operate - Transfer) schemes are recommended as a means of providing governments with needed infrastructure while avoiding the need for large amounts of capital – which most countries in the region would not be able to raise themselves.

 

As larger amounts of private capital are invested in the region, governmental and coordinating bodies such as the MRC are becoming increasingly marginalised.  The large number of projects and donors operate with little or no coordination and make haphazard, inconsistent attempts at public participation. In Cambodia, for example, investment is done on an ad hoc basis. Agreements tend to be made between an investor and a governor or a ministry.  In this context, little information about planned projects is disseminated, and planned impacts are difficult to anticipate. 

 

Another issue is that of coordination of various multilateral and bilaterally funded projects. Projects are often conceived, funded, and implemented without reference to the activities of other donors.  Bi/multilateral programmes on the Tonle Sap are a good example: at present, there are at least 12 different agencies funding projects concerning the Tonle Sap with an aggregate budget of over $20 million US. Attempts are being made to coordinate donor activities, but the lack of a coordinating body to oversee research and share information may result in fragmented and uncoordinated, programmes. 

 



[1] ADB (1996) Economic Cooperation in the Greater Mekong Subregion: An Overview.

[2] Johnson, K. (27/07/97) “ADB Plans $380 million in loans.” Cambodia Daily.  p., 11.

[3] Greater Mekong Task Force (1996) Strategies for the Development of the Greater Mekong Area. Japan: Ministry of Foreign Affairs.

[4] Greater Mekong Task Force (1996) Strategies for the Development of the Greater Mekong Area. Japan: Ministry of Foreign Affairs.

[5] The ASEAN Working Group on Economic Cooperation works in close conjunction with Japan’s MITI (Ministry of International Trade and Industry).

[6] See Appendix C and directory entry for CNMC.

[7] Greater Mekong Task Force (1996) Strategies for the Development of the Greater Mekong Area. Japan: Ministry of Foreign Affairs.