In the last decade, the Mekong Region (MR) — that is, the area crossed by the Mekong River and encompassing Myanmar, Thailand, Laos, Cambodia and Vietnam — has become central to the strategies of major global powers due to a series of economic and geopolitical factors. The most prominent are the region’s growing importance in global trade routes, its geographical proximity to major hotspots (such as the South China Sea and the Malacca Strait) and China’s growing regional activism. The growing importance of the MR in global dynamics spurred several actors to develop specific strategies. While liberal democracies such as the United States (US) and Japan both created regional fora for policy discussions as well as development funds, China increased its presence by offering loans, constructing infrastructures and creating a specific regional institution. Due to the mounting competition, the MR is set to become a major geopolitical hotspot in the Indo-Pacific region.
The United States
The first country to adopt a specific policy for the MR was the United States. Since the early Fifties, until defeat in the Vietnam War in 1975, the area has held a significant importance for Washington’s foreign policy and, after the end of the Cold War, the US multilaterally and bilaterally re-engaged with the MR. The major turning-point in the relation with Southeast Asia occurred with the Obama administration, when then-Secretary of State Hillary Clinton announced the creation of the “Lower Mekong Initiative” (LMI) in July 2009. The LMI is a programme that involves Thailand, Laos, Cambodia, Vietnam and Myanmar. According to its statute, the main goal of the LMI is to “deliver equitable, sustainable, and inclusive economic growth among the five LMI partner countries by promoting connectivity and collaboratively addressing regional trans-boundary development and policy challenges”. In practice, this implied the identification of six areas of action (related to issues such as the environment and water, health, agriculture, connectivity, education and energy security) and carry out a series of development projects, managed by the US together with the countries concerned.
The LMI is complemented by the “Friends of the Lower Mekong” (FLM), a platform that encompasses “like-minded” donors active in the region, namely Australia, Japan, South Korea, New Zealand, the European Union, the Asian Development Bank and the World Bank. Its aim is to improve aid coordination and information sharing, in an effort to avoid overlapping development programmes.
Beside the LMI and the FLM, the US also represents a key economic partner for the region. Data showthat in the last decade various US agencies provided more than $US 3.5 billion to the region, and in 2017 US direct investments amounted to $US 17 billion. Bilateral trade in 2018 was worth $US 109 billion. Thus, it is evident that the Mekong Region is a key area for Washington’s affairs in Asia.
Among US allies, Japan is the one that proved to be the most active in the MR. Like the US, Japan has a past of military intervention in the region, since during the Second World War the Japanese army conquered and occupied most of Southeast Asia. In 1942-45 the Mekong Region was part of the “Greater East Asia Co-Prosperity Sphere” – that is, a military and political bloc working as Asia’s response to Western colonialism. Japan’s defeat, and the legacy of its occupation, ended Tokyo’s political clout in the area. After the conflict, Tokyo thus started to focus on increasing its economic presence.
The turning-point for Japan-Southeast Asia relations was in 1977, when Japan proclaimed the “Fukuda Doctrine”. Indeed, Tokyo pledged to establish a heart-to-heart relation with the MR, and presented itself as an equal partner, willing to help the region achieve peace and economic growth. From that moment on, Japan’s presence has been growing steadily, and nowadays the country is a powerful ally for Southeast Asia as a whole.
Just like the US, Japan developed a specific policy framework for the MR – that is, the “Japan-Mekong Summits”. The first of such meetings was held in November 2009, as a response to the American LMI, which had been launched only months before. The summits mainly aim to identify the region’s development needs, which are addressed, in practice, through multi-year financing plans. Between 2015 and 2018, under the framework of the “New Tokyo Strategy 2015”, Japan allocated to the MR a total of $US 6.8 billionin official development assistance (ODA). More importantly, Tokyo stressed the need to a) build quality and long-lasting infrastructures — which were described both as “hard” (such as roads and bridges) and “soft” (such as human capital); b) guarantee the sustainable development of the MR under the Sustainable Development Goals (SDGs), and c) coordinate with other regional actors, whenever feasible.
The current financing period — the “Tokyo Strategy 2018” — continues on this path. In practice, the Japanese government promised to invest in 150 projects in the MR that focus on three main domains: connectivity, people-centred societies, and environment and disaster relief. Yet, this strategy is not the exclusive initiative of the Japanese government, but is complemented by numerous national enterprises already active in Southeast Asia.
In contrast with the US and Japan, Beijing shares a border with the MR, and has been involved with the area for centuries in terms of military, economic and cultural affairs. As the Mekong River originates on the Tibetan plateau (where it is known as 澜沧 Lancang), and flows through China for half its length before entering Myanmar (where it assumes the name “Mekong”), Beijing developed an initiative — mainly focused on water management, regional cooperation and sustainable development — called the “Lancang-Mekong Cooperation” (LMC).
The first meeting of the LMC was held in 2016 in Sanya, a city on China’s southern Hainan island. It was attended by Chinese Premier Li Keqiang and top leaders from Vietnam, Cambodia, Laos, Myanmar and Thailand. The LMC on paper aims to “bolster the economic and social development of the sub-regional countries, enhance the well-being of their people, narrow the development gap among regional countries, and support the ASEAN community building as well as promote the implementation of the UN 2030 Agenda for Sustainable Development and advance South-South cooperation”.
Nonetheless, since the very first meeting, China has stressed the issue of infrastructures. In 2016, Premier Li had in fact offered $US 1.6 billion in preferential loans, and an extra $US 10 billion in traditional credit lines. Two years later, the “Five-Year Plan of Action on Lancang-Mekong Cooperation 2018-2022” reiterated this objective. The document, in fact, presents a section called “connectivity”, which states that the LMC aims to “promote infrastructure upgrade and construction, such as railways, highways, waterways, ports, power grids, information networks and aviation”. According to the latest Chinese data, Beijing is currently involved in 132 LMC projects.
China conceives of the LMC as a branch of the Belt and Road Initiative (BRI) that is not only tailored to the needs of the MR but also carries on China’s strategic interests in the area. Beijing’s increased engagement is exemplified by trade exchanges between China and the five Mekong countries (which in 2018 amounted to $US 260 billion), as well as by China’s primacy in providing foreign direct investments to most of the MR. However, the LMC is not a mere economic platform, but also makes a good example of “China’s emerging institutional statecraft” – that is, Beijing’s attempts to override existing institutions to have a say in regional affairs.
As previously noted, one of the LMC’s main efforts is in water management. In November 2018, representatives from Beijing and the Mekong countries met in the city of Kunming in China’s Yunnan province for the first “Mekong-Lancang Water Resources Cooperation Forum”. Discussions concerned the balanced use of water resources, and flood and drought management.
All these issues correspond to the mandate of the “Mekong River Commission” (MRC), an intergovernmental (Western-backed) organization established in 1995 that encompasses Vietnam, Laos, Cambodia and Thailand. Prior to this forum, the MRC had been the sole agent tasked with addressing the Mekong River. Thus, by setting up the LMC, China has created an alternative to the MRC, and a “multilateral mechanism that serves its own national interests”. At the same time, the country has deployed a vast amount of funds to persuade neighbours to join the LMC, thus signalling the wide extent of Beijing’s engagement with the area.
First, the MR is a vital passageway for the BRI. Second, the LMC can potentially solve China’s “Malacca dilemma”. Indeed, more than 80% of China’s oil imports transit through the Malacca Strait, one of the world’s trade chokepoints located between Malaysia, Indonesia and Singapore. Due to its narrowness, the Malacca Strait is often at risk of blockades: events that would be catastrophic for China’s energy supply and economic production. Several studies have shown the connection between the Malacca dilemma and the BRI, and the LMC focus on infrastructure should then be interpreted as an attempt to develop trade routes alternative to the Malacca Strait.
The Free and Open Indo-Pacific Strategy
Japan considers the MR a key component of the “Free and Open Indo-Pacific Strategy (FOIP)”. The strategy was first conceptualized in 2016 by Japanese Prime Minister Shinzo Abe. The FOIP is based on the assumption that the Indian and Pacific Oceans should be considered a united, free and open space, and that the freedom of this area is of global interest. The FOIP comprises three pillars: a) compliance with international norms (especially freedom of navigation and respect for the rule of law); b) pursuit of economic prosperity; and c) peace and stability.
The importance of the MR for this strategy is emphasized by its geographic location, in between the Indian and Pacific Oceans. Despite the FOIP’s focus on navigation, land-based connectivity also plays an important part, and the mainland countries of the Association of Southeast Asian Nations (ASEAN) are identified by Tokyo as the “hinge” of the two oceans. Moreover, as it is for China, the south Mekong is vital for Japan as trade routes in the area ensure the country’s imports of raw materials and exports of processed goods to Africa and Europe.
During the tenth “Japan-Mekong Summit”, held in October 2018, the five Mekong countries fully endorsedthe three pillars of the FOIP, and the final statement of the summit noted that recent actions had “eroded trust and confidence, increased tensions and may undermine peace, security and stability in the region”. From this declaration, it is appropriate to find a reference to Beijing’s activities in the South China Sea. Such a statement is thus an attempt to expand the scope of the “Japan-Mekong Summits” to include a political and a strategic domain, and support the Japanese vision for the MR. Yet Tokyo denies any desire to establish or override institutions, and considers the Indo-Pacific area as capable of bringing economic benefits not just to Japan but also to regional states and beyond.
The FOIP’s universality made the concept easier to be adopted by like-minded states — namely India, Australia and the US. Since 2017 these have been members of the “Quad” – i.e. an informal forum that encompasses foreign ministers and diplomats held to share information, and discuss security in the area.
The US notion of the FOIP, however, differs from Japan’s in terms of China’s role. Indeed, the US sees the FOIP as a containment strategy for China, as shown in the 2019 “Indo-Pacific Strategy Report”, where China is presented as the major challenge to regional stability. In practice, the report states that “the People’s Republic of China […] undermines the international system from within by exploiting its benefits while simultaneously eroding the values and principles of the rules-based order”, and goes on to stress that “as China continues its economic and military ascendance, it seeks Indo-Pacific regional hegemony in the near-term and, ultimately, global pre-eminence in the long-term”. It concludes by reporting that China’s actions in the South China Sea “endanger the free flow of trade, threaten the sovereignty of other nations, and undermine regional stability” and that “such activities are inconsistent with the principles of a free and open Indo-Pacific”. From the US viewpoint, the FOIP thus embodies a hard-power competition, in which the military plays a key role. Such a conceptualization is further characterized by renaming the US “Pacific Command” the “Indo-Pacific Command”. The Pacific Command was the largest of the six Unified Combatant Commands that compose the US Army, responsible for coordinating US military activities in an area.
Washington’s renewed attention to regional power dynamics is prime in the MR. During the tenth meeting of the LMI, US Secretary of State Mike Pompeo criticized China’s extra-territorial river patrols, as well as the country’s attempts to control the flow of the Mekong River and weaken the MRC. Such remarks suggest a partial shift of the LMI mandate towards regional security: a trend that is similar to what Tokyo had done with the “Japan-Mekong Summits”. During the 2019 ASEAN Summit in Bangkok, Pompeo also openly condemned China’s “coercive” actions in the South China Sea. The US is thus attempting to become an essential ally to Mekong states against foreign interference. In other words, Washington is advocating to become a security guarantor, essential to counterbalance China.
In recent years the MR has drawn the attention of great powers (such as China, Japan, the US and the European Union), as well as medium powers (such as South Korea, India and Australia). From this engagement emerge two scenarios for the area.
On the one hand, the MR risks becoming a battleground for great powers, and Mekong states risk being passive witnesses to these economic and power struggles. This scenario would be detrimental, as some Mekong states – such as Vietnam – are currently experiencing solid growth rates, and gathering resources and capabilities to pursue autonomous strategies.
On the other hand, the vast amount of funds provided by great powers can be pivotal in further sustaining the region’s development, especially for what concerns the construction of key connectivity and industrial infrastructures. The main risk for Mekong states remains “debt traps” – that is, situations “where a creditor country intentionally lends excessive credit to a smaller debtor country, with the intention of extracting economic or political concessions when the smaller country cannot service the loan”. In sum, the MR is now at the crossroads of great power competition. The area has also become a crucial hotspot for global power dynamics, and its importance is bound to increase in the future: whether and how Mekong states will benefit still remains to be seen.