Mekong River Commission Faces Radical Change

Donors have dropped their funding, forcing a radical restructuring.

By Luke Hunt

January 22, 2016 TD

Financial mismanagement and political bullying has contributed to spending cuts at the Mekong River Commission (MRC) forcing the troubled, Vientiane-based research and management institution into a radical restructuring under a new chief executive officer.

Image Credit: Mekong River via Shutterstock.com

In Phnom Penh recently, the MRC’s 22nd annual meeting was confronted with an array of unwanted issues that began with substantial funding cuts caused by dramatic falls in the value of the currencies of major donors, including Australia, EU countries, and Japan.

From there the agenda has been complicated by donor anger directed at the Laotian government, which many within the agency feel has abused the MRC by using its base in Vientiane to push for a widely unpopular dam construction program.

Many of those dams will cut across the mainstream of the Mekong River, raising fears that the annual fish catch will be ruined, with fish unable to swim upstream to spawn.

“This is a real and powerful issue confronting the MRC, regional governments and the people who depend upon the river,” one long-time observer said. “This meeting, however, focused on none of that, instead it’s all about how to manage a bureaucracy with not enough money.”

Much of the foreign funding has since been dropped all together with traditional donors urging the MRC to establish an independent framework to investigate allegations of fraud.

Deputy head of the MRC’s European Commission Luisa Ragher said the MRC needs to increase its transparency if it was to regain donor trust, noting the number of independent observers allowed to attend certain MRC meetings had been cut to two from 15.

“We need to create a framework for people to report instances of fraud and misconduct,” she said ahead of the meeting.

Under the new plan for running the MRC bureaucracy, Pham Tuan Phan, 62, from Vietnam has been appointed CEO and been handed the task of making the MRC self-sufficient by 2030.

“I will do whatever it takes to lead and guide this organization to effectively achieve its goals, with greater vision and a finer spirit of hope and achievement,” he said.

A restructuring of the MRC was dressed-up in a clumsy worded press release which forgot to remind the reader that this next course of action was forced upon the MRC by the enormous spending cuts. It is not an initiative of its own making.

“The move coincides with the MRC’s efforts in structural reforms of decentralization and ‘riparianisation’ to make the organization self-sufficient by 2030,” the agency said.

As a journalist, your correspondent was amused by the MRC’s use of the word “riparian” – a Latin word from northern Italy which as an adjective means: of, relating to, or situated or dwelling on the bank of a river or other body of water. As a noun, “riparian” is a person who owns land on the bank of a natural watercourse or body of water.

Poor attempts at English subtleties aside, Phan, who was described as a “riparian,” has his work cut out for him.

Speculation persists that MRC operations are to be moved out of Vientiane to Phnom Penh, already a key base for its operations, as part of its just approved 2016-2020 plan. Despite plenty of opportunities the MRC has declined to quash the rumors its offices in the Laos capital are to be downsized significantly or abandoned all together.

Further details about the restructuring are sketchy.

“Core functions include the enhancement of national plans, projects and resources based on basin-wide perspectives; strengthening regional cooperation; better monitoring and communication of Mekong basin conditions; and leaner river basin organization,” the MRC statement also said.

Contributions from member countries; Cambodia, Laos, Thailand and Vietnam, have been raised 10 percent annually but remains paltry. The MRC needs $65 million to fund the next five-year plan, with $15 million coming from member countries, $9 million from an ongoing fund, while the balance of $41 million “will require external support from the donor community.”

It did not name the members of that donor community but the amount of money required compares with what was labeled as “development partner funding” for the previous five years, totaling $115 million.

In other words, MRC funding plans has been sharply reduced by $50 million to $65 million, with the potential to fall much further if the appeal for extra foreign funds fails to materialize.

As it currently stands the MRC has just $24 million it can count on.

“That’s a drastic funding cut and given the weak health of the global economy and the problems elsewhere in the world any further financial support would seem unlikely,” the long term observer said. “Western countries who have always backed the MRC are no longer in a generous mood.”

The reality is the MRC has been reduced to a cheap parody of its former glory when the interests of up to 70 million people who rely on the Mekong River for their livelihoods featured prominently in the MRC’s five-year planning.

That traditional agenda has been dramatically upset by a Laos determination to dam and sell hydro-powered electricity to its neighbors and with it the Mekong River as a primary source of food and income for those who live along it has been compromised.

According to the MRC’s own in-house magazine Catch and Culture the value of the annual 4.4 million ton catch is worth almost $17 billion. That represents 13 percent of the value of the world’s total freshwater fish catch – estimated at $130 billion in 2015.

Dam construction, climate change, and salt contamination from rising sea levels head a list of major issues threatening the waterway, which also contributed $3 billion to Cambodia’s economy in 2015 or about 18 percent of its total $16.71 billion GDP.

In Laos, fish production was expected to fetch $1.51 billion, or 12.8 percent of its $11.78 billion economy.

The figures are not as significant in bigger economies. Vietnam expects $5.74 billion in Mekong fishery receipts, representing 3.1 percent of its $186.21 billion GDP. In Thailand, the annual catch was expected to fetch $6.72 billion and contribute 1.8 percent to its GDP of $373.8 billion.

Still, these figures are important. They represent the real value of the Mekong River while highlighting the need for proper management, which for the last two decades had been the role of the MRC.

Whether a new leadership with a fresh agenda can regain the trust of donors, as the EU’s Ragher put it, is key. However, this is unlikely to happen unless the MRC can bring Laos into line with the interests of all those who live by the river and its tributaries, and improve transparency across the board.

Luke Hunt can be followed on Twitter @lukeanthonyhunt