Philip Hirsch of Sydney University has a fascinating article in Sunday’s (1 May 2011) Bangkok Post on the broader ramifications of last month’s decision to take the prior consultation process on the Xayaburi dam to ministerial level. Here are a couple of excerpts:

Messy and inconclusive though the interim outcome on the Xayaburi dam may seem, it nevertheless carries considerable significance for the way in which river policy decisions are conducted in the Mekong. It reflects a maturing of the relationship between the four riparian countries, and it represents a tentative step toward a much more inclusive and informed process of decision-making and influence around the all-important question of the Mekong’s future as a flowing river or a stepped series of lakes.

Formally, the consultation process over Xayaburi has been elevated to the [ministerial] council, which meets once a year in October. It is conceivable that a special meeting could be convened prior to this. In principle, Laos could even go it alone, but just as decisions to date over dams have been bound in a wider regional geopolitics geared at respecting national sovereignty, the Xayaburi decision is now caught up in a regional geopolitics in which a decision to proceed would represent a snub to downstream countries and also poison the normally close relationship between Laos and its larger political ally to the East.

Hirsch also draws attention to the fact that at least one of the Thai banks underwriting the project is wavering, “which could foreshadow an unravelling of the commercial arrangements necessary for the project to proceed”. Other reports suggest work on the project is proceeding regardless.

A couple of questions spring to mind here. First, the 3.5 billion dollar question: where is this particular project likely to end up? It’s obviously too early to say with any certainty, but it is worth considering some of the main factors at play. In particular, how might the Laos-Vietnam relationship figure in any outcome? One of the intriguing aspects of this episode is the loose coalescence of Lao and Thai government interests and those of Cambodia and Vietnam – unlikely sets of bedfellows indeed.

More fundamentally, where might a “new geopolitics of Mekong dams” – together with the stalling of the $7 billion Boten-Vientiane train project – leave the Lao government’s strategy of fostering high economic growth and “mega-projects” through regional investment in resource extractive industries (see last year’s 7th National Socio-Economic Development Plan)? Are the resultant delays blips on the way to implementing this strategy or do they speak to broader problems with it? To be sure, the train project seems to have been held up by domestic issues in China rather than cross-border complications. Moreover, Lao polities – small and surrounded by much larger ones – have long reconciled regional dependancies with autonomy (what choice do they have, after all?) But delays in these two “mega-projects” also show how much must go right (and what can go wrong) in the government’s plan to mobilise regional resources.