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Thai economy at risk from development on Mekong River: WWF report

Nov 10. 2016
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By World Wildlife Fund

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Economic growth in the Greater Mekong region depends on the Mekong River, but unsustainable and uncoordinated development is pushing the river system to the brink, including in Thailand, a new report from the World Wildlife Fund finds.

Governments, businesses and communities in the region must come together to better manage the river in a way that respects the ecosystem’s limits if economic growth is to continue.

The WWF’s “Mekong River in the Economy” report explores the critical role of the river in the economy, highlighting important risks and opportunities for each country and key business sectors. The Mekong underpins everything from agriculture and fisheries to energy production and manufacturing, and its natural resources provide huge economic value – its fisheries alone are worth an estimated $17 billion a year. All economic activity in the region is directly or indirectly linked to the river and therefore vulnerable to any negative changes to the river.

“Water is liquid capital and it flows through the economy just as much as it does through our rivers and lakes,” says Stuart Orr, leader of the WWF Water Practice. “Water underpins our agricultural systems, our energy production, manufacturing, ecosystems, food security and our wellbeing as humans.”

In Thailand, agricultural irrigation, especially in the Northeast, relies heavily on the Mekong River, creating reduced water supply downstream. Food and beverage manufacturing also depend heavily on the Mekong River’s resources. A booming construction industry is increasing the demand for sand and gravel used in construction, which may slow economic growth as these sediments are essential for a functioning Mekong ecosystem. In addition, hydropower dam development in Laos to feed Thailand’s energy demand is reducing sediment flowing down river, causing serious consequences for Thailand, Cambodia and Vietnam.

“Thailand needs a healthy, functioning and productive Mekong River to ensure economic growth well into the future,” says Yowalak Thiarachow, WWF director for Thailand. “We are over-stressing the very engine that drives a big part of our economy and we have to come together – nationally and regionally – to find sustainable solutions for the Mekong and its bounty of riches.”

The Mekong’s rich natural resources have contributed to an average 5-8 per cent economic growth rate in the region, which is currently undergoing a construction and urbanisation boom: by 2050, 50 per cent of the Greater Mekong subregion is expected to be urbanised.

Development projects in the Lower Mekong River basin –Cambodia, Laos, Thailand and Vietnam – such as hydropower dams, in-channel sand mining and irrigation are intended to harness the Mekong’s natural resources for further economic growth. However, if their cumulative impacts are not carefully considered, they could instead undermine the very basis of the economy and their impacts will be felt for decades to come.

“Governments, companies and communities in the Mekong region must come together to develop joint solutions to water governance challenges,” Orr adds. “These challenges are difficult but not unsolvable. Mekong decision-makers can draw on good examples from around the world of using public-private partnerships and financial innovation to effectively conserve natural resources for everyone’s benefit.”

According to the report, economic development is putting a strain on the very river system that sustains it.

l Sand mining to fuel the construction boom is altering the river’s sediment flows, changing the shape of the river bed and causing widespread erosion. This threatens communities and infrastructure along collapsing riverbanks and causes the delta to subside and its coastline to erode, making it more vulnerable to damaging floods, worsens salinisation of land and access to freshwater.

l Hydropower dam development further alters sediment flows and threatens the fish migration that makes the Mekong the world’s most productive inland fishery, providing affordable protein to millions of people and contributing nearly 12 per cent of Cambodia’s GDP and 7 per cent of Laos’s.

l The agriculture losses from water shortages and, in Vietnam, saltwater intrusion into fertile fields, have diminished GDP in several countries. If food prices rise, it would also affect cost of living and labour costs, compromising one of the region’s key economic advantages.

 “Twenty years ago, the Mekong was one of the last large healthy tropical systems,” says Marc Goichot of the WWF. “Today, water quality is degrading fast, last year’s drought was the worst on record, floods are more frequent, fish catches are declining and the entire riverbed and riverbank are eroding.  Meanwhile, the Mekong delta is literally sinking and shrinking. All of this is pushing more freshwater species such as river dolphins to the brink of extinction.”

The report goes on to propose concrete steps including economic incentives to use resources more sustainably, such as taxes, subsidies, tradable permits or compliance offsets. The business sector can coordinate and engage in water governance through a corporate water stewardship platform. Development agencies, donors and direct foreign investors can support policies that encourage systemic, integrated economic planning and private sector engagement.

“Too often, economic development planners and water resource planners operate in isolation. They may not realise how dependent they are on the Mekong River, or how they affect the ecosystem and other economic sectors,” Goichot adds. 

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