Economics, Rights and the Salween: markets versus people or markets for the people?

A recent publication by the Asia-Pacific Water Forum recognizes the significance of water for economic and environmental security and calls for an improvement to the management of natural resources to minimize economic and human losses in the Asian region. ASEAN’s natural resource policies should focus on human and energy security issues both long term (i.e. ensuring sufficient energy to power economic growth) and short term in nature (i.e. building the capacity to react to fluctuations in supply or demand). Some governments have touted large-scale hydropower infrastructure projects as a viable solution to these challenges in light of rising industrial demand in ASEAN. The 13 hydro dam projects on the Nu/Salween River, one of the longest free-flowing rivers in Southeast Asia running through China, Thailand and Myanmar, are altogether expected to generate more than 15,000 megawatts of electricity.

But not everything is smooth sailing. The Electricity Generating Authority of Thailand (EGAT) has warned that communities living along the river at the proposed Hat Gyi dam site bordering Myanmar and Thailand will be directly affected by the infrastructure project. More worryingly, studies of hydro dams around the world suggest an even greater number of downstream communities experience alterations in aquaculture and floodplain agriculture and flooding with the construction of such dam projects.[1] Many of the ethnic minority communities by the Hat Gyi site have been entrenched in long-lasting conflict with the Myanmar government about natural resources, corroborating the need for a management approach to the dam issue that incorporates public participation and appropriate compensation for environmental and human injury or loss arising from the project. Similarly, Canada has had its own share of conflict between oil pipeline proponents and affected First Nations communities, demonstrating the international scope of these issues.[2]

Fortunately, both law and economics may provide recourse to affected communities as well as help to secure energy resources for economic development. The UN has a number of instruments governing the rights of indigenous communities; however, minority groups have seemingly fewer resources.[3] Economic theory, particularly valuation of environmental goods and services, can be constructive in the Hat Gyi scenario whereby it creates a price, or “monetizes”, the Salween’s water resources. Monetization, while contested by economic experts[4], may facilitate discussions with decision-makers in a language relevant to the economic development discourse and provide a means to incorporate non-market values into the determination of appropriate financial returns on natural resources. Tangible tools include Canada’s Department of Natural Resources’ guidelines on participation of aboriginal communities in the country’s natural resource sector; and the Canadian Council of Ministers of the Environment’s recommendations on water valuation methods and applicable situations.

Ultimately, however, no law or economic tool will be necessary and sufficient for compensating for potential losses or changes faced by riparian communities in the quest for economic development. Above all, infrastructure projects that may have adverse impacts on the people within a country’s borders should entail a requirement for transparent, well-governed and meaningful redistribution process to all parties affected.

In light of these circumstances, my project under the ASEAN-Canada Research Fellowship seeks to conduct an economic valuation of the Salween’s water resources along the Thai-Myanmar. By integrating advanced environmental economic methodologies with multi-disciplinary methods, the project hopes to contribute to the knowledge and acceptance of integrating local community knowledge, participation and value perceptions in market mechanisms that determine natural resource development along ASEAN trans-boundary waterways.

This blog post has been written by Liliana Camacho. Liliana is an economist and policy advisor with the federal Department of Environment in Canada, and Junior Fellow (2013-2014) under the ASEAN-Canada Research Partnership. For more information on the ASEAN-Canada Research Partnership, please click here.