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3.2.Mekong Sub-Region Cooperation History and the Lancang–Mekong Cooperation Mechanism

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The LMC is the newest cooperation mechanism in the Mekong sub-region. It is a new attempt to manage conflict and promote cooperation and development in the Mekong sub-region. But the question of why this sub-region has become a strategic and essential area is pertinent.

The Mekong River is known as one of the most significant water resources in this sub-region. It is the longest river in Southeast Asia, covering an area of 800,000 square kilometers, passing through five countries in Mainland ASEAN including Thailand, Cambodia, Lao PDR, Myanmar, and Vietnam. The river also flows through the Yunnan Province of Southern China. In China, the Mekong River is called the Lancang Jiang (澜沧江, Upper Mekong). The Langcang Jiang is one of China’s longest rivers. It contributes approximately 13.5% of the Mekong’s flow. The river system provides water and food for approximately 70 million inhabitants and is a major source of livelihood. It sustains crops, livestock, fisheries, and forests; serves as a waterway for the transportation of goods and people; and is a source of tourism, recreational, and socio-cultural activities.

After World War II, the Mekong sub-region gained more influence politically and economically. The US and Japan have greatly influenced the Mekong sub-regional countries. They saw opportunities and expressed interest in building a development project in this sub-region, especially in the lower Mekong basin. The inter-state development project in the Greater Mekong Sub-region started when the US joined the Economic Commission for Asia and The Far East (ECAFE), established by the United Nations under the United Nations Economic and Social Council. ECAFE’s mission was to raise economic prosperity and security and to restore economic ties between countries in Asia. Surveys were conducted along the Mekong River in 1952 to study the feasibility and possibility of further development of the Lower Mekong Basin. The results of the survey suggested the possibility of building of dams to generate energy. The development of dams would be beneficial for energy production and the exportation of rice production. In 1957, with the push from the US, the first cooperation platform known as the Committee for Coordination of Investigation of the Lower Mekong Basin, or the Mekong Committee, was formed. The Mekong Committee began as a coalition of countries in the Lower Mekong River Basin. It included Cambodia, Laos, Thailand, and South Vietnam and was responsible for promoting and facilitating intergovernmental coordination in the development of water resources in the Lower Mekong Basin. China and Burma did not join in the cooperation. At that time, China was not yet a member of the United Nations, and Burma did not show any interest in joining the group. The establishment of the Mekong Committee was the first time that the United Nations played a leading role in the management and planning of international rivers. This was the first formal organization to manage the Mekong River Development Project and was an important step in upgrading the Mekong River Basin.

The establishment of the Mekong Committee was driven by economic and political opportunities. In terms of economic opportunities, the Lower Mekong basin countries gained socio-economic benefit through the Mekong Water Resources Development Project. At that time, the Lower Mekong Basin was underdeveloped, with most people earning less than US$100 a year, and there was low technology because of a shortage of budget for development. Funds have been distributed through various development projects, reaching the area and increasing the ability of the Mekong River to utilize water resources more effectively. The United States has expected the Mekong Water Resources Development Project to increase agricultural productivity, especially in rice (Somsawas, 1979, p. 163). In terms of political opportunities, after the end of the First Vietnam War in 1954, US policymakers planned to eliminate the spread of Communism (John, 2005, pp. 14–15). The United States viewed Communism as a hindrance to the development of its long-term global capitalist plans, but this precarious situation was also an opportunity for the United States to join hands with countries that had perhaps previously been unfriendly both politically and economically. Thus, this move could be regarded as a step to peacefully solving the problems in Indochina.

On April 5, 1995, Cambodia, Lao PDR, Thailand, and Vietnam, after the preliminary work of the Mekong Committee, signed an agreement for Cooperation for Sustainable Development of the Mekong River Basin (The Mekong Agreement), in Chiang Rai, Thailand. The agreement, which was established as the Mekong River Commission (MRC), revised the cooperative structure and framework to update and increase its effectiveness. The management responsibility of the Commission fell under the responsibility of its four Member Countries, receiving support funding from the US, Japan, Australia, and the developed countries of Europe.

At the beginning of the 21st century, the US continues to strive to improve relationships within the Mekong sub-region and gain further influence through their cooperation under the Lower Mekong Initiative (LMI). This cooperative framework was created in response to the July 23, 2009, meeting in Phuket, Thailand, between Secretary of State Hillary Clinton and the Foreign Ministers of the Lower Mekong Countries, including Thailand, Cambodia, Lao PDR, and Vietnam. The Ministers agreed to improve cooperation in the areas of environment, health, education, and infrastructure development. Since then, the five countries have sought to strengthen cooperation in these areas and build on their common interests. Myanmar formally joined the initiative in July 2012. The work of the LMI is organized into the following six broad “pillars”:

(1)agriculture and food security,

(2)“connectivity” of infrastructure,

(3)institutions and communities,

(4)education and health,

(5)energy security, and

(6)environment and water.

Since 2009, when the LMI was launched, the US has provided over US$100 million for the LMI programs. Bilateral US assistance to the LMI members across all the sectors totaled over US$285 million in fiscal year 2015. The LMI’s aim is not only promoting equitable, sustainable, and inclusive economic growth but also serving the larger and broader US goal to encourage regional cohesion, thereby slowing down the spread of Chinese influence.

At the same time, Japan has actively engaged in the development of the Mekong sub-region since the 1990s, not only for economic reasons but also diplomatic ones. Japan has opened a new dialogue with the countries of the Mekong region that was proposed as a concept in 2007. It began at the Foreign Ministers’ Meeting held in Tokyo in January 2008. In September 2009, the First Mekong–Japan Summit was hosted in Tokyo, at which the Tokyo Declaration of the First Meeting between the Heads of the Government of Japan and the Countries of the Mekong Region (hereafter, the 2009 Tokyo Declaration) and the Mekong–Japan Action Plan 63 were adopted. It was then agreed that the nations would hold annual summit meetings, periodic foreign ministers’ meetings, economic ministers’ meetings, and annual meetings of senior officials.

Moreover, the Greater Mekong Sub-region (GMS) is another crucial cooperation of the Mekong sub-region established in 1992. The aim is to strengthen economic links and collaboration between China (Yunnan Province), Cambodia, Lao PDR, Myanmar, Thailand, and Vietnam. China’s Guangxi Zhuang Autonomous Region joined the program in 2004. The GMS Program has focused primarily on promoting and facilitating economic and infrastructure development — transportation systems and other economic networks and corridors; energy grids and power interconnections; cross-border movement of goods and people; and telecommunication links — with the aim of achieving greater sub-regional integration. The GMS was driven by the following three strategies:

1.Strengthening connectivity through physical infrastructure and the development of economic corridors.

2.Improving competitiveness through market integration and the facilitation of cross-border trade and travel.

3.Building a sense of community by addressing shared social and environmental concerns.

The GMS has the Asian Development Bank (ADB) as its main financial support. The ADB also assists in research and gives consultations on GMS. The ADB was established with the help of the US. One of the ­purposes was to give funding to support ASEAN countries to improve the economy and become independent. The other reason was to discourage and prevent a relationship with the communist party. The US pushed Japan into a leading role in the ADB and other main projects. This included setting up a new framework. The first president of the ADB was Japanese, and has continued to be Japanese. Japan has increased its influence in this region by providing a support fund to the ADB to help other countries’ development through various projects through the GMS Program.

Moreover, there are additional frameworks of cooperation among other countries in the Mekong Sub-region. For instance, the Mekong–Ganga Cooperation (Lower Mekong countries and India), the Mekong–Republic of Korea Partnership, and the ASEAN Mekong Basin Development Cooperation (AMBDC), all of which illustrate the amount of interest of other countries in this region and their hope to develop their own economies.

China showed interest in taking part in developing the Mekong sub-region when it joined the GMS to help the Chinese economy and to improve its connectivity. In 2000, the China State Council launched the Western Development Strategy for encouraging economic development in the western provinces because it is an area that is far from the sea, which makes development slower and more difficult. According to this policy, China sees Yunnan Province as the keystone to interconnect Southeast Asia and South Asia. China can use the Mekong River to send goods from Southern China to the sea of Burma, Vietnam, and Thailand. This will help the Chinese economy to gain access to the Mekong sub-region’s economy. Goods and labor will be transferred between the regions, and jobs and new markets will be created. China’s economy could benefit from this jump in growth by becoming the premier partner of ASEAN and the Mekong sub-region. China has also become a big investor in Cambodia and Laos, but it still has to compete with other countries that have been investing in this region for many years, for e.g. Japan, Korea, and Malaysia. Nevertheless, the main role of the cooperation framework is that the GMS still belongs to the ADB, which is led by Japan, along with the US. In the Mekong sub-region, many attempts have been made to exclude China and to expand American and Japanese influence in the sub-region to counter China, which has made the Mekong River sub-region an arena for power competition. These interventions from powerful countries such as the US and Japan have also forced China to pay more and more attention to this mainland ASEAN sub-region.

In addition, in recent years, China’s economy has consistently grown, making the country increase production capacity to keep up with the growth of the economy and the domestic labor market. The continuous production of steel, cement, aluminum, and electronics has created excess capacity in China. The biggest problem that is haunting China is steel. China’s unused steel capacity equals the total annual output of the next four biggest producers (Japan, India, America, and Russia) combined. (The Economist, 2017) During the central economy meeting of China, in December 2015, the main priority was to solve the problem of excess capacity. In 2016, China finally came up with the policy of reducing its production capacity by buying and taking over steel and charcoal companies to reduce stock and to increase the price of steel, allowing steel companies survive. (Wen, 2016) Moreover, China has executed an international policy to strengthen international partnership. By the end of 2016, China had signed several production capacity cooperation documents with 27 other countries in Central Asia, Southeast Asia, Africa, Latin America, and Europe (Zhang, 2016).

In the Mekong sub-region, most countries are developing ones, ­creating grounds for improvement, especially in infrastructure and energy development, which need a lot of investment and raw materials for every development project. So, the Mekong sub-region is considered as a ­potential export and investment market for China to help its economy. In addition, there is the Lancang–Mekong River’s importance in connecting Europe through Southeast Asia and beyond in the Belt and Road Initiatives launched by Chinese President Xi Jinping.

This has led to the establishment of the LMC Mechanism.

On the November 13, 2014, Chinese Premier Li Keqiang formally proposed the initiative at the 17th China–ASEAN Summit, held in Nay Pyi Taw, Myanmar, to establish a framework regarding the Lancang–Mekong River Dialogue and Cooperation. Just one year later, in November 2015, the LMC mechanism was founded. Its founding members were China and five other Mekong states — Thailand, Cambodia, Laos, Myanmar, and Vietnam — all also Mainland ASEAN countries. In reality, the genesis of the LMC was Thailand’s proposal at the Conference on Sustainable Development in the Lancang–Mekong sub-region, which aimed to organize ways of addressing challenges, such as natural disasters, faced by all six Mekong riparian countries and to explore possible cooperation for sustainable development (Department of Government Public Relations, 2013). Even though the Thai Foreign Ministry was merely mentioned, in the press release saying that the LMC framework was “initiated by Thailand and endorsed by China” (Minister of Foreign Affairs of Thailand, 2015), China has acknowledged that Thailand first proposed the preliminary idea and that the Chinese proposal was echoing Thailand’s initiative on the sustainable development of the Lancang–Mekong sub-region (Li, 2014). The five countries in the Mekong sub-region all welcomed the proposal.

It is because of the positive responses from the Mekong countries that the First LMC Senior Officials’ Meeting was held in Beijing on April 6, 2015. It was co-chaired by China and Thailand. It fully displayed that since its conception, the LMC had been driven by the common aspiration of China and the Mekong River countries, as well as Mainland ASEAN countries. The participants at the meeting discussed the concept paper for creating the framework, including the objectives, direction, and priority areas.

The Second LMC Senior Officials’ Meeting was held in Chiang Rai, Thailand, on August 21, 2015. It was again co-chaired by China and Thailand. The meeting discussed the concept paper for the creation of the LMC, the Early Harvest Projects, and the arrangement for the First Foreign Ministers’ Meeting. At the meeting, China’s Vice Foreign Minister put forward a three-point proposal on the LMC that can be summarized as follows:

1.To cement a sense of community and to maintain long-lasting peace and stability in the region;

2.To enhance the overall design and long-term planning and to build a multi-layered cooperation structure and other mechanisms;

3.To stick to the philosophy of openness and inclusiveness and to complement and coordinate development and to intensify exchanges of experience with the existing mechanisms on sub-regional cooperation (Ministry of Foreign Affairs of China, 2015a).

The meeting produced the LMC Concept Paper to establish the ­framework, which would be submitted to the First Foreign Ministers’ Meeting for endorsement.

The First LMC Foreign Ministers’ Meeting took place in the city of Jinghong, Yunnan, China, on November 12, 2015, and was organized and co-chaired by Thailand. The meeting issued a joint press communiqué marking the official establishment of the LMC framework. The communiqué of the First LMC Foreign Ministers’ Meeting indicated a consensus and the outcomes reached during the meeting. It adopted the LMC Concept Paper, which specified the objectives, principles, framework mechanisms, and major areas of cooperation, agreeing to establish a multi-layered LMC structure and to hold the First LMC Leaders’ Meeting (Ministry of Foreign Affairs of China, 2015b).

Creating a framework for international cooperation is full of complexity and requires a good system, necessitating consensus from every member country. In some cases it makes the establishment of a cooperation framework difficult and slow. However, for the LMC, the establishment and progression have been quite unique and effective. It took just over a year for the cooperation to take shape from the initial proposal and planning, which is impressive. Since the beginning of 2015, multiple consultations, including work group meetings, senior diplomatic officials’ meetings, and foreign ministers’ meetings have been held in many places, from Beijing to Chiang Mai, Thailand; from Jinghong in Yunnan Province to Sanya in Hainan Province, China. During the preparation of the mechanism, the six countries have showed effective coordination, willingness to cooperate, inclusive negotiation ­attitudes, and harmonious interaction (Ministry of Foreign Affairs of China, 2016).

The First LMC Leaders’ Meeting was successfully held on March 23, 2016 in Sanya, China’s Hainan Province, and brought together Chinese Premier Li Keqiang, Thai Prime Minister Prayut Chan-o-cha, Cambodian Prime Minister Hun Sen, Lao Prime Minister Thongsing Thammavong, Vice President of Myanmar Sai Mauk Kham, and Vietnamese Deputy Prime Minister Pham Binh Minh. The summit was held with the theme of “Shared river, Shared future” and announced that the LMC’s practical cooperation would be carried out through three cooperation pillars, namely, (1) Political and Security issues, (2) Economic and Sustainable Development, and (3) Social Cultural and People-to-People exchanges. This meeting also discussed a wide range of issues concerning the Mekong region, including political issues, economic cooperation, security, the environment, and cultures of the Mekong countries. This meeting concluded with three output documents consisting of: (1) The Sanya Declaration of the 1st LMC Leaders’ Meeting; (2) Joint Statement of the Production Capacity Cooperation of the LMC Countries; (3) Joint List of the LMC Early Harvest Projects.

The Sanya Declaration contains 26 points, ranging from cooperating to fight non-traditional security threats such as transnational crime and terrorism to enhancing transport connectivity. More than 40 projects are listed under the early harvest scheme, which allows the countries in the basin to begin projects such as a water utility monitoring system at the Mekong Mainstream and Information Centre. The leaders agreed to hold an LMC Leaders’ Meeting once every two years and an LMC Foreign Ministers’ Meeting once a year to conduct policy planning and coordination for cooperation. The joint list, along with the Sanya Declaration and the Joint Statement on Production Capacity Cooperation among Lancang–Mekong Countries, laid a solid foundation and charted the course for LMC development.

The Second LMC Leaders’ Meeting was held on January 10, 2018, in Phnom Penh in the Kingdom of Cambodia, with the theme of “Our River of Peace and Sustainable Development” to chart the future course of the LMC into the next decade. The meeting endorsed two outcome documents: the Phnom Penh Declaration and the Five-Year Plan of Action (2018–2022). The Phnom Penh Declaration reflects the leaders’determination to utilize the LMC to achieve its goals in social and economic development for people in the Mekong sub-region. The Five-Year Plan of Action 2018–2022 has been formulated in accordance with documents including the Sanya Declaration adopted at the first LMC Leaders’ Meeting, which aims to contribute to the economic and social development of sub-regional countries, enhancing the well-being of the people, narrowing the development gap within the region, and ­building a Community with a Shared Future of Peace and Prosperity among the Lancang–Mekong Countries. We can say that the Five-Year Plan of Action not only points the way for the development of the LMC mechanism but also paints a detailed blueprint for the specific implementation and progress of cooperation matters.

China's Rise in Mainland ASEAN

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