Workers seen at the China-Laos railway construction site in Vientiane. China has been ramping up investment in the Mekong region in recent years. Photo: Xinhua

Opinion

Pongphisoot Busbarat

As China’s role in Mekong grows, Asean states must weigh ties with US, other powers

China’s belt and road projects and its engagement with the region via the Lancang-Mekong Cooperation are fuelling a strategic competition in Southeast Asia
The US, Japan and South Korea have deepened their commitment to Mekong nations, with each also affirming Washington’s policy of a free and open Indo-Pacific

Pongphisoot Busbarat

Published: 6:00am, 27 Aug 2020

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Mainland Southeast Asia, especially the Mekong subregion, has become a site for renewed engagement by external powers, a trend driven by China’s proactive foreign policy as well as its promotion of the Belt and Road Initiative and minilateral forum, the Lancang-Mekong Cooperation (LMC).

The United States is at the front line of this strategic competition, especially under its Free and Open Indo-Pacific strategy. The US action has spurred other regional players, namely Japan and South Korea, to deepen their ties with the Mekong countries through their respective cooperative schemes.

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While the three hold separate policy objectives, the strategic outcome of their various moves seems to be harmonised. In particular, Japan and South Korea have included a commitment to America’s Indo-Pacific strategy within their own arrangements.

It is worth looking at how each is re-engaging the region as China’s role and influence grows among Mekong states.

US Secretary of State Mike Pompeo attends the Lower Mekong Initiative meeting in Bangkok on August 1, 2019. File photo: AP

The United States

The US presence in the region is an important factor amid the ongoing major power shifts. Washington possesses various advantages not only from its military might, but also its economic strength and soft power. It has extensive security arrangements with most Southeast Asian nations, both in security alliance and partnership.

However, US foreign policy towards Southeast Asia is inconsistent. This is even more so when it comes to the subregion. But since the introduction of the US Free and Open Indo-Pacific strategy in 2018, the region has seen some improvement in Washington’s commitment.

Within the Indo-Pacific strategy, the Lower Mekong Initiative (LMI) has been reinvigorated as a tool for Washington’s re-engagement with the subregion. The LMI, established in 2009, is a partnership between the US and Mekong nations to advance sustainable economic growth.

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At the 10th LMI Ministerial Meeting in 2017, then-US Secretary of State Rex Tillerson proposed the “Mekong Water Data Initiative”, which aims to enhance the Mekong River Commission’s capabilities to share and use data about the river system.

In 2018, US Secretary of State Mike Pompeo reaffirmed the LMI as a key driver for promoting connectivity, economic integration, sustainable development, and good governance. The following year, Pompeo criticised China and the negative impact of its infrastructure projects in the Mekong subregion, especially on the environment and on water management.

“I am sorry to report that we’ve seen some troubling trends. We see a spree of upstream dam-building which concentrates control over downstream flows,” he said. “China operates extraterritorial river patrols. And we see a push to craft new Beijing-directed rules to govern the river.”

Pompeo also promised initial funding of US$45 million for various LMI projects, including education, clean drinking water, sanitation, better infrastructure, and environmental sustainability.

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In December 2019, the US-sponsored LMI Annual Scientific Symposium was held in Yangon to seek new solutions to cross-border environmental and health challenges.

The US has further offered an annual seed grant of up to US$15,000 for collaborative research projects. It is planning additional support for other activities, for example, US$14 million to counter transnational crimes, a conference on rules-based governance of trans-boundary rivers, a Mekong water data-sharing platform, and a new LMI public impact programme.

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Importantly, the LMI provides a platform to bring in Japan, South Korea, and other stakeholders to collaborate on projects.

For instance, the US partners with Japan to provide US$29.5 million to develop regional electricity grids. It is funding a project with South Korea on satellite imagery to improve flood and drought patterns assessment in the Mekong basin.

The US also supports Thailand’s recent plan to use the AyeyawadyChao Phraya-Mekong Economic Cooperation Strategy (ACMECS) as a platform to coordinate projects related to rural development and capacity-building.

Japan

Japan has played an essential role in the Mekong subregion since the end of the Cold War, through overseas development assistance and regional organisations such as Asean and the Asian Development Bank.

The Japan-Mekong Region Partnership Programme in 2007 formalised Japan’s engagement with the subregion. In 2009, the first leaders’ summit adopted the Tokyo Declaration to establish “A New Partnership for the Common Flourishing Future” between Japan and the Mekong region. This commitment was renewed in 2012.

Since then, Prime Minister Shinzo Abe has continued to update the strategy. In 2015, Japan pledged some US$7 million in development assistance, and committed US$110 billion to develop high-quality infrastructure development.

Tokyo’s move took place around the time Beijing embarked on the Belt and Road Initiative in 2014 and was preparing to form the LMC.

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In 2018, Japan updated its strategy and aligned its policy with America’s Indo-Pacific strategy. Japan views that “the Mekong subregion … has the geographical advantage of receiving considerable benefits from the realisation of a free and open Indo-Pacific”.

At a meeting in November 2018, Abe and US Vice President Pence agreed to inject up to US$70 billion for infrastructure development in the Indo-Pacific region, especially on energy projects in Southeast Asia.

Japan also supports Thailand’s ACMECS programme, which it sees as a venue for policy coordination between Japan’s overseas development assistance and the needs of the subregional countries.

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Japan’s long-standing role in economic development, trade, investment, and development assistance are advantageous to its deeper engagement with the subregion. The acceptance of Japan’s role can be gleaned from the views of Cambodia, which China regards as an “ironclad” friend.

Cambodia was the first Asean country to welcome Japan’s free and open Indo-Pacific message and regards Tokyo as “one of the key strategic and economic partners in its diversification and hedging strategy”.

The regional acceptance of Japan is a hallmark of its soft power in the Mekong subregion, which helps to improve the power equilibrium.

South Korea

South Korea has become more active in the Mekong subregion under President Moon Jae-in’s New Southern Policy (NSP), as Southeast Asia becomes an alternative location for investment.

Of Seoul’s total overseas development assistance in 2018, one-quarter went to Cambodia, Laos, Myanmar, and Vietnam (CLMV).

South Korea has an especially deep interest in Vietnam as part of a strategy to mitigate the impact of the US-China trade war.

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In 2018, it invested US$3.3 billion in Vietnam – more than 90 per cent of its total foreign direct investments that year. South Korea in 2018 also made US$48.6 billion worth of exports to Vietnam, up from US$27.7 billion in 2015. This makes Vietnam its third largest export destination after China and the US.

Last September, Moon visited the subregion in a week-long tour, during which he said South Korea could support its human development and preparation for the fourth industrial revolution.

Two months later, Moon hosted the Asean-ROK Commemorative Summit in Busan, where he emphasised the Mekong-ROK Cooperation as a platform for deepening its engagement with the subregion, and launched the inaugural Mekong-ROK Summit.

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Under South Korea’s NSP, there is some alignment with America’s Indo-Pacific strategy, whose principles of openness and inclusivity are viewed by Seoul to be beneficial to its economic interest.

The NSP also backs the Thailand-led ACMECS, under which it has pledged funds of US$1 million annually.

As the CLMV countries have diplomatic ties with Pyongyang, Seoul expects the subregion’s support for the peace process in the Korean peninsula.

South Korean President Moon Jae-in and his Laotian counterpart, Bounnhang Vorachith, water a tree after planting it on the bank of the Mekong River in Vientiane in September 2019. Photo: EPA-EFE

Benefits to Southeast Asia

The renewed engagement by the US, Japan and South Korea benefits Mekong states as it offers them more options to increase their economic development.

However, maintaining a fine balance among the major powers, especially between the US and China, is a growing challenge.

The recent online battle between the US and Chinese embassies in Bangkok is a case in point. The US embassy’s website ran an op-ed by its ambassador which questioned China’s water control in the Mekong upstream. The Chinese embassy carried a rejoinder justifying why the drought and flood could not be attributable to dams erected upstream in Yunnan Province.

Ultimately, the Mekong region will need to grapple with big power dynamics and send a clear signal to external powers that increasing cooperation with them does not equate to choosing sides.

Pongphisoot Busbarat is Lecturer at the Department of International Relations, Faculty of Political Science, Chulalongkorn University in Bangkok, Thailand. This article was first published in Iseas-Yusof Ishak Institute’s Perspectives Issue 2020/88 on August 20, 2020, and titled, Re-enmeshment in the Mekong: External Powers’ Turn.

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