EP88: Why the Funan Techo Canal Matters with Dr. Brian Eyler
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Welcome to Straight Talk Southeast Asia. This is a podcast that covers current developments in the region, particular countries, domestic politics, as well as regional issues. We look in depth at what is happening, why it might be happening. We speak to analysts, academics from the region, based in the region, and to better understand what's happening and what might be the projections of what's happening ahead. We're now in our second season.

I'm Bridget Welsh. I'm a political analyst and academic who's worked on Southeast Asia for many decades. I was raised here, I'm living here, and very importantly, I care about what's happening in the region. Thanks for joining me.

Welcome to Straight Talk Southeast Asia. You're here with Bridget Welsh and Zach Abouza. This is episode 20 of the year here in season three. Thanks, as always, for tuning in to our conversations about Southeast Asia, the region that we care so much about, but also the region where there is a lot to talk about. Today's episode focuses on a canal in Cambodia. We're joined by Brian Eiler, who is the director of the Energy, Water and Sustainability Program at the Stimson Center.

And he talks about a very interesting intersection between national security, the environment, and regional relationships with neighbors, a discussion of trans-water diplomacy.

I think you'll find it very interesting because there's not enough conversations about what's happening among different countries within the region of Southeast Asia and the sets of challenges that multilateral organizations play within Southeast Asia around the important river of the Mekong.

Also in the region this week are three important stories. The first story I want to talk about has been a report by the United Nations and multiple other reports by other organizations associated with Myanmar about the real deficit associated with humanitarian aid and reaching the victims of the March 28th earthquake. We're now a month over the earthquake.

And the first thing to put on the table for anyone who's following Myanmar is to acknowledge and recognize that there has never been a ceasefire by the junta. In fact, they've been engaged in multiple attacks. The NUG government came out with a statement about 280 airstrikes between March 28th and the end of April, killing 276 people and injuring 456 more.

The United Nations came up with a figure of 271, not too far behind. And this really emphasizes that there's continued violence, destabilization that is impacting the recovery from the earthquake, preventing humanitarian aid from reaching the people that need it. People have regularly spoke about the weaponization of the disaster, and this is something that is very much on the cards.

We have a situation where we have very significant shortcomings in basic needs. There were 3,800 people killed, more than 55,000 homes destroyed. We see a real concern about the rise of outbreak of disease. The World Health Organization said there were over 450,000 people requiring critical health services, but less than 34,000 of those have been reached so far.

Growing concern at least nine of the 20 townships most at risk for cholera. This is something in need of attention. This is why I emphasize this is one of the most important stories of the week.

Not to be left out, however, has been more positive news in Myanmar, and that is the United States has sanctioned Chit Tu or Sa Chit Tu, who is head of the current National Army and the border guard forces. He's been sanctioned along with two of his sons for being linked to cyber scams and facilitating money laundering, human trafficking.

and tremendous aspects of criminal activity as part of the transnational crime that we found on the southern border of Myanmar. This is an important step. The headquarters of Shrikoko gained international attention and sanctions, and that is a step towards helping to stop some of the criminality that is existing within Southeast Asia.

I would, however, note the Trump administration closed down the transnational crime office that the government had in the United States. So this sends a mixed signal for the issues of dealing with criminals and transnational crime globally. We also see an interesting development in Malaysia, where Anwar Ibrahim's party, Catalan, is now facing a leadership challenge for the deputy contest. The incumbent, Rafizi Ramli, is now being challenged by Anwar's daughter, Nurul Iza Anwar.

Why this matters is that it affects the issues of secession. One of the challenges in Malaysian politics is people always ask, after Anwar Hu, PKR being such an important party in Malaysia, whoever is leading that party will play an important role as a potential future prime minister for Malaysia.

The second thing is to see how the agenda of Rafa Masi gains traction or not. We've seen that Rafizi Ramli has been in government. His performance in the economic ministry has contributed in part to why many of people associated in his political camp within the party didn't do as well. Now the question will be to see whether or not there is a shakeup and whether or not he stays in Kavita or not.

A third factor has to do with whether or not there'll be stability and polarization within the party.

PQR as a party has had very strong personality-based contests. This contest, while it involves performance and reform agenda, it also involves strong political networks. This may have the power to divide the party and prevent a cohesion and undermine Anwar's government in its ability to assure stability, but also to assure a

a direction, clear focus on governance and deliverables. While Anwar's relationship with other parties like UMNO and in Sarawak will assure that he will continue to hold on a majority, when he has problems within his own party and the divisions within that become so divisive, then this impacts his standing within Malaysian politics.

As we close the conversation here, the Philippine polls for the midterm elections are ongoing. As we go to press on this week's episode, next week we'll be focusing on what the results mean for the Philippines and for the region. Thanks as always for listening in here to Straight Talk. So why don't we start first with what the Funantacho Canal is?

The Funan-Techo Canal is an ambitious project built inside of Cambodia's territory that will link the Mekong River to the Gulf of Thailand. So it's a canal in total about 180 kilometers long. There are two sections to it, one that connects the Mekong mainstream to the Basak River,

Ground has already been broken on that. The Cambodians are going to invest in that, apparently. And then there's a much longer stretch that runs from the Basak River, which is a mainstream channel to Mekong, to the Gulf of Thailand. Recently, an agreement suggests that a Chinese entity, a state-owned enterprise, will construct and own and operate that canal. So they're going to own, and it's like a build-up and transfer type deal?

It's my understanding that this would be a BOT project or a build, operate, and transfer project with a 60-year lease or potentially longer.

What is the justification for this canal? Because they have Sihanoukville. They have a brand new Chinese-funded highway that goes from Phnom Penh down to the port. You have all of this factory estates along that highway. It seems like this is a project without a real problem to justify it.

From what I understand, the utilities of the canal are changing. The original notification documents to the Mekong River Commission suggested that this canal is only to be used for navigation purposes. But the most recent documents suggest that there will be other uses of the canal, such as for the expansion of irrigation into southern Cambodia that will support industrial-scale agriculture.

Perhaps the likes of what happens in Vietnam's Delta or something like that. The Cambodians have long wished that they could have robust agricultural activity like the Vietnamese in the Delta. And that requires an engineered landscape or a waterscape that can send water from the Mekong across the land and irrigate it for agricultural use.

So I think that's one of the new uses. This is concerning because it will take water away from Vietnam's Mekong Delta. And rightly, the Vietnamese should be concerned and press for more transparency and actual following of protocols related to the 1995 Mekong Agreement.

I was in Phnom Penh just a few weeks ago and met with a very senior government official who made the case that this canal was absolutely in Cambodia's national interest. And he, A, said that Cambodia could not rely on

the Mekong River using Saigon New Ports, which is a Vietnamese military-owned company that has a terminal that links Phnom Penh to the larger Saigon via port system. The second thing that he told me is that this canal would use significantly less water than people such as yourself are warning.

With the latter point, if the canal were only used for navigation purposes, it would use very little water from Mekong's system. But now the newest documents suggest irrigation expansion, and you need more water to do that. So the Cambodians have to come clear with their intended use of water and make that known.

If there are security contingencies or conflicts that break out in the region and Cambodia and Vietnam choose different sides or one remains neutral and one does not,

or there is a blockage in the Straits of Malacca or Taiwan conflict, sure, there would be a water outlet to the Gulf of Taiwan for the Cambodians to conduct a form of commerce. But is it worth building what has been described as a $1.7 billion project all in to adjust and expect for a contingency of that nature? Is the...

return on investment really there because otherwise, I still think, one, due to the low draft of the canal that doesn't enable many kinds of ships to use the canal for commerce, and then two, the orientation of the port, Cambodia's ships will still need to go around Kham Nga Peninsula, around the Mekong Delta. Even if the canal is there, I think that Cambodian commercial interests will continue to utilize the Vung Tau port in Vietnam.

particularly for Pacific-bound goods. Hope you're enjoying listening to this episode. If you want to find out more about previous episodes, you can reach this on the website, straighttalksoutheastasia.com. The link should also be available in the show notes. If you want to contribute to the production costs of the podcast, you can hit the link, buy me a coffee. Every little penny counts. All that money will not go to me, but go to the producers who are helping me to put the show together. Thanks for listening.

The Cambodians are really trying to make the case that stuff will be able to be shipped directly from Sihanoukville. Are you going to see a rise in the capacity of that port to support this?

That's another head-scratcher because the outlet of the canal is near Kep, which is something like 60 kilometers from Seenockville. So to connect to the Seenockville Deepwater Port, they're going to have to do an intercoastal highway. You can't take the river barges along the coast. Maybe there's some transshipment mode at the Kep Port that takes the goods to the Seenockville Port, but this all sounds very complicated to me.

especially when there's a highway and a railway that connects Phnom Penh to San Rafael. Maybe we could shift to the environmental costs of this. The Mekong is already under strain due to the Chinese and Lao dams. Could you speak to the overall health of the Mekong right now?

The Mekong's productivity in terms of fisheries and agriculture is driven by the annual flood pulse. And the largest floods are seasonal inundation. And floods here have a very positive connotation, positive value.

Most flooding happens in Cambodia and Vietnam. The Thonmaysap Lake expands its flood zone five times the normal size of the lake during the wet season. The Mekong Delta goes from a dry landscape in a dry season to a wet waterscape in the wet season. And again, it's driven by the intensity of precipitation that creates this peak of flooding during the wet season. That makes the Mekong the world's largest inland fishery for a single body of water.

as well as an incredibly robust agricultural production zone for Vietnam and Cambodia. Vietnam is one of the world's top rice exporters. Thailand too, and a lot of that Thai rice comes from Thailand's portion of the Mekong. But that peak is coming down. Both dams and a lack of rain at different times of the wet season are pulling that peak down. And that directly translates into less fish and less agricultural production.

The canal will have an effect, one, during the dry season if water is taken out of the Mekong upstream from Vietnam in Cambodia and used for irrigation purposes. It's not going to go to Vietnam. Vietnam needs that water for its own irrigation purposes. And this is why the 1995 Mekong Agreement says that any diversion project from the Mekong mainstream for dry season irrigation needs to have an international agreement

built around it. And that means the four MRC member countries, Thailand, Cambodia, Laos, and Vietnam, all must agree to the nature of this project. Nothing like this has ever been tried before in the Mekong. And it's not going to be tried because the Cambodians won't admit that this is a mainstream project. And this is getting the rest of the member countries, it's ruffling their tail feathers.

in extreme ways. And recently, the Mekong River Commission pushed back on the Cambodian government when the new revamp project was announced, saying that you've only given us very basic information about the old project. Now there's a new project. We need more information in the simple description of what was said.

But the other environmental impact is that floods tend to make the Mekong floodplain very wide. It's wet and wide. So the river is 50 or 60 kilometers wide at Cambodia's border with Vietnam during the wet season. And all that water is just moving downstream. It doesn't go back into the mainstream. It goes down through the floodplain. And a canal is going to bisect or cut across that floodplain and ruin the floodplain connectivity organically.

or the ability of the floods to move from Cambodia into Vietnam. This is an understudied effect. One reason why it's understudied is we don't know how high the levees are going to be for the canal or whether the design of the canal has flood mitigation built into it to allow the floods to pass through.

And real quick, the Cambodians say the floods will pass through. But again, they haven't clarified the height of the levees. If the levees are high, there's no way the floods can pass through. And that's going to cause sideways flooding along the length of the canal. That's going to require a lot more maintenance of the canal than what the Cambodians are envisioning now. You're going to get backflow because the floods can't clear. And then everything downstream of the canal will be drier.

This is what needs to be studied in my mind. And so far, no one's looking at those effects. Some of the irrigation plants with this new proposal of the Cambodians should impact their rice production. But overall, what is the impact on food security in the region?

Are we going to see a decline, less water coming down, less silt into the Mekong Delta, more saltwater intrusion? How does this canal compound the food security seen already? Yeah, in the dry season,

More salinity intrusion will creep into Vietnam's Mekong Delta because less water is coming down through the system. And there's a proportional relationship. It could be small, it could be large, depending on the amount of water the canal uses for irrigation.

I would say that the effect to Vietnam's rice production, agricultural production, it's a zero sum with what happens in Cambodia. So whatever Cambodia gets out of it, Vietnam's going to lose. It's a one-for-one water take. And again, studies will be able to confirm what that loss will be. If it's a large amount of water used for irrigation, then the impact will be large in Vietnam. If it's not, it'll be minimal.

This is a perfect case for transboundary water diplomacy. The Vietnamese are extremely talented and experienced at managing canals and lock systems and water gates and sluice gates. Cambodia is not.

China, on the other hand, builds large canal infrastructure projects, but not in active floodplains. And China doesn't value flooding like Cambodia and Vietnam does. So I really think there's a role here for Vietnam. I don't think the project is necessarily the wrong thing for Cambodia. I just think that they're going about it in the wrong way. And it's messing up 30 years of transboundary water diplomacy in the Mekong. Are there security implications to the canal?

There could be. Anyone would be able to access the interior of Cambodia with smaller groundwater navy boats once the canal is built. They wouldn't have to go through Vietnam. That could be a Chinese ally with Coast Guard cutters at the Ream Naval Base being able to go up and patrol up to the Laos border or even into some of the tributaries of the Mekong.

It could be a foreign invader. It opens up a lot of different options. Obviously, it gives Cambodia an outlet for its brown water navy to the sea, but it changes the defense posture and chessboard within the region. And this is why the Thai military is concerned, the Vietnamese military is concerned, the American military is concerned about this. The Vietnamese now speak about being surrounded by the Chinese from four directions. They're taking this very seriously.

Overall, what does it mean for regional diplomacy? I think it's an opportunity for regional diplomacy. I've said it for a long time that the Cambodians of all the Mekong countries actually, one, care the most about conserving the Mekong and its bounty because that bounty guarantees their food security. The Cambodian civilization is built on the concept. None of the other Mekong countries have that type of historical existential tie.

Therefore, the Cambodians have been the greatest champions of the 1995 Mekong Agreement. They're the ones who oppose the upstream dams. They're the ones who push the Lao government to act better when the Lao government is acting poorly and not following the Mekong Agreement. Now there's a case where Cambodians are following the bad practices of the other members. And this is a really egregious example.

If countries and the member countries were having a virtuous cycle of following the Mekong agreement, then the river at its bounty would be better protected. But we're in this vicious circle right now where countries are acting worse and they're encouraging each other to act worse and worse because they're not policing each other well.

Final thoughts. This has been a pet project of Prime Minister Hun Manet. It's very much tied to him. Do you see any chance that this could be reversed? For about eight months, I thought that the project would likely be canceled because the Chinese developer, the original state-owned enterprise that was interested in the project,

that did the original project design walked away from the project. And they walked away, from what I understand, because of this multi-use or multi-utility, multi-function nature of the project. The project changed. It was there, it was a navigation project, various Cambodian interests, including Prime Minister Hon Manette and his father, former Prime Minister Hun Sen, thought of all these other ways to make the canal work for Cambodia. So there was a drift in the design.

The Chinese company didn't know how to determine the return of investment.

From what I understand, this new design is apparently better understood, so much so that an investor is willing to pony up resources for it and a developer has emerged to build it. I would say that without more effective diplomacy, the canal will be built, again in this egregious manner that can undo the 30 years of transboundary water cooperation. It still can be built. Do it with the international agreement.

I think it is actually a project that the countries could gather around and come to an agreement on. That's really up to the countries to take those steps. I don't see the Mekong River Commission stepping in or even Vietnam raising its hand high enough to say, hey, there's some red flags here. Let's take another look at this.

We've been speaking to Brian Eiler, who is the director of the Southeast Asia program at the Stimson Center, where he runs the Mekong Monitoring Program, which provides some of the most important information we have on the flows of the river, which has helped policy planners throughout the region. Thank you for your time. Thanks, Zach. Thank you for listening to the episode. Subscribe to the show on your favorite podcast listening app.

If you'd like to keep up to date on current Southeast Asian political affairs, just keep following. This is Bridget Welsh, and I look forward to connecting to you in the next episode. Straight Talk Southeast Asia is produced by Norman Chellam, a.k.a. Norm, and you can find him at thatsthenorm.com. Thanks so much for listening. ♪