Regional Environmental Technical Assistance 5771 Poverty Reduction & Environmental Management in Remote Greater

Mekong Subregion Watersheds Project (Phase I)

Introduction to Key Social Issues

Regional Report

By

John V. Dennis, Jr.

Social Anthropologist

TABLE OF CONTENTS

Abbreviations 3

1. Introduction 4

1.1 The Need to Balance the GMS Development Process 4

Table 1.1 1994 Summary of Indicated Budgets for 36 proposed GMS projects. 5

1.2 Objectives of RETA 5771 5

2. Poverty in the GMS Countries 7

2.1 Growth and Equity 7

Table 2.1. GNP per capita and Growth of Gross Domestic 8

Table 2.2 Distribution of income/consumption in the GMS (Finland as reference) 8

2.2 Poverty: definitions and measurement 10

Table 2.3 Poverty line data in GMS 11

2.3 Trends in Poverty and Inequality 11

Table 2.4. Development and Poverty Indicators for the Six GMS Countries 12

3. Poverty Reduction Strategies 13

3.1 Economic Growth as an Engine of Poverty Reduction 13

3.2 Economic Risk and the Risk of Future Poverty 13

Figure 3.1 Gross International Reserves per Capita in 1997 13

3.3 Better Health and Education as Pathways to Reduce Poverty 15

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Abbreviations

3.4 Progressive Income Tax, Other Transfers, and Safety Nets 15

3.5 Autonomous Areas as a Means to Protect and Build Equity in the National Development Process

15

4. Ethnic Diversity and Minority Populations in the Context of Increasing GMS Integration

16

Figure 4.1 Number of Living Languages in Mekong Countries. 17

Table 4.2 Causes of Language Loss 18

4.1 Autonomous Areas. 18

4.2 Social Solidarity and Conservation of Indigenous Languages 19

5. Demographics and Delivery of Health Services 19

5.1 Differing rates of demographic transition in the GMS 19

Table 5.1 Average Annual Population Growth in Asia, 1980-95 and 1995-2010. 21

Figure 5.1 Changes in Population Growth Rates within GMS countries. 21

5.2 Health Care in the GMS Countries. 24

Table 5.2 Health Indicators in GMS Countries sorted by Public Spending as % of GDP 25

Table 5.3 Total health expenditures with countries ranked by GDP per capita 25

Figure 5.2 Health Expenditures as % of GDP 26

Figure 5.3. HIV-1 Sero-prevalence per 100 Adults in the GMS countries in 1994 27

6. Education Policy 29

6.1 Introduction 29

Table 6.1 Effects of population growth and rural modernization on family size and needs for child labor

30

Figure 6.1 Percent GDP Spent on Education in 1992 in 3 GMS Countries 31

Figure 6.2. Access to Education: Percent of Relevant Age Group Attending 31

6.2 Gender and Access to Education 32

Table 6.2 Access to Primary Education in the GMS Countries 32

Table 6.3 Access to Secondary Education in the GMS Countries 33

7 Recommendations and Conclusions 34

7.1 The Need for Involvement in Existing Zones of Investment and Extraction 34

7.2 The Use of Environmental Bonding to Prevent Private Sector Abuse of Resources 34

7.3 a Prototype of the Sort of Project to Evolve from RETA 5771 35

7.4 Devolution of More Governing Authority to the Local Level 37

7.5 Supporting the Interests of Remote Upland Areas and of Ethnic Minority Communities 37

7.5.1 Support of minority languages 37

7.5.2 Support for Co-Management of Natural Resources by Local Communities and the State

38

7.5.3 Firewalled Zones: an area-specific development strategy for remote upland areas 39

7.6 The Need to Respect Traditional Residence Patterns 41

7.7 The Need to Prevent RETA 5771 from Becoming Simply a Costly Window Dressing Exercise for Big Ticket Infrastucture Projects

42

8. References Cited 44

ADB Asian Development Bank

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1. Introduction

This paper presents an overview of the social issues pertaining to poverty reduction and environmental management in remote watersheds in the Greater Mekong Sub-region (GMS). It serves as an introduction to a set of six country reports that address social issues in each of the six Mekong Basin countries. All seven reports describe government policies and social conditions as they pertain to rural development in the GMS countries. Each paper also presents some draft recommendations. It is hoped that the participants in the Phase I Final Workshop on 9-10 June 1999 will have the opportunity to discuss these recommendations--initially in small groups--during the course of the workshop.

While it is unlikely that all participants in the Final Workshop will agree with the recommendations as drafted, it is hoped that they will form the basis for meaningful discussions and the framework for a set of guidelines on how ADB funding should be applied in remote upland watersheds of the GMS countries. Perhaps these can be further developed into a set of what might be called, "ADB’s Socio-environmental Guidelines for Development within Remote Watersheds of the GMS."

Gender issues are covered in separate papers written by Ms. Leena Kirjavainen.

1.1 The Need to Balance the GMS Development Process

Balanced growth that confers benefits on all sectors and classes of a society in an equitable manner is a worthy development objective. People-centered development is the main development objective of the ADB and of the other development banks. Nonetheless, it remains difficult to balance commitments to costly infrastructure projects with those that are more difficult to implement, especially in the social services-related sectors such as health and education. There is often a complicated array of NGOs and International Organizations assisting national governments in these areas.

ASEAN Association of Southeast Asian Nations, whose members are Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Thailand, and Vietnam

FDI Foreign Direct Investment

GEF Global Environment Facility of the World Bank, UNEP, and UNDP

GMS Greater Mekong Sub-Region, refers to the six Mekong riparian countries: Cambodia, China, Lao PDR, Myanmar, Thailand, and Vietnam

GNP Gross National Product

GOT Government of Thailand

HDI UNDP’s Human Development Index

HPI UNDP’s Human Poverty Index

HPAEs High Performance Asian Economies; 8 economies studied by the World Bank in 1993: Japan, South Korea, Taiwan, Hong Kong, Singapore, Malaysia, Thailand, and Indonesia.

kg kilogram

n.d. no date provided

NGO non-governmental organization

PPP Purchasing Power Parity

RETA Regional Environmental and Technical Assistance

SFE State Forestry Enterprise

SIDA Swedish International Development Agency

SOE State-Owned Enterprise

TFP Total Factor Productivity

UNDP United Nations Development Programme

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The First Conference of representatives of the Greater Mekong Sub-region was held at ADB offices in Manila in October 1992. A Third Conference was held in March 1994 in Hanoi and "marked the transition from consultation and background studies to feasibility assessments and implementation"(ADB,1994,p.viii).

The proceedings of this Third Conference, Economic Cooperation in the Greater Mekong Subregion: Toward Implementation, contain, in the course of about 400 pages, descriptions of proposed commitments to six development sectors. Of 78 project descriptions in the report, 36 include estimated project costs and 29 of these, or 81 percent, were in the transportation sector. As shown in Table 1.1 below, 99.9 percent of the indicated budget of $12.6 billion was devoted to this sector, with an average budget of about $434 million per project. The remaining indicated budget of $12,780,000, was spread over seven projects in four other investment sectors for an average budget of $1.8 million per project.

Table 1.1 1994 Summary of Indicated Budgets for 36 proposed GMS projects.

Source: ADB, 1994.

Strong national and regional infrastructure projects are critical to enabling market-oriented economies to function efficiently and for the comparative advantages of trade to function. Nonetheless, the experience in the transition economies in the past decade has shown that regulatory frameworks, stable systems of resource tenure, accountability, transparency, and freedom of expression are all essential parts of the "checks and balances" needed to keep economic development sustainable and equitable.

Maintenance of existing forest cover within remote upland Mekong watersheds is an important development objective. The sustainability of lowland agriculture, lowland water supplies, immense biodiversity resources, and, indeed, long-standing weather patterns may all hinge on the protection of upland forest resources at or above their existing levels. As conversion of forest to agricultural land has been correlated with decreasing distance to roads in Thailand and elsewhere in the tropics (Cropper et al., February,1997;Chomitz et al.,1995), it is proposed that the timing and the amount of funding to the various development sectors be carefully coordinated in order to conserve the remaining forest resources. In other words, it is no longer acceptable development practice for the Development Banks to fund large transport and other infrastructure projects and assume that other stakeholders in the development process will adequately address social issues such as resource tenure, poverty, education, health, and human rights

A key premise of this paper is that resource tenure rights of remote upland communities must be defined and enabled well in advance of any transport, hydropower, or other large infrastructure projects being implemented in these watersheds.

1.2 Objectives of RETA 5771

The TOR of the Poverty Reduction and Environmental Management Project in Remote Watersheds of the GMS suggest that after watersheds are selected in about three of the GMS countries, a concerted effort will be made in Phase Two of the project to design investment projects that address both poverty reduction and environmental management in these watersheds. This paper provides an overview to key social trends and issues that are discussed in more detail in the country papers and which need to be addressed in Phase 2 of the project.

Investment No. of no. of costed sector budgets for % of total % of projects

Sector projects projects costed projects budget costed

transport 33 29 $12,598,250,000 99.90% 88%

environment 11 2 $6,000,000 0.05% 18%

trade/investment 8 0 $0 0.00% 0%

human resource dev. 11 2 $5,350,000 0.04% 18%

energy 10 2 $1,365,000 0.01% 20%

tourism 5 1 $65,000 0.00% 20%

total 78 36 $12,611,030,000 100.00%

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Five subject areas are addressed here and in the country papers:

� poverty reduction strategies � policies relating to ethnic minorities � health policy and demographic change � education policy � environment policy.

Five of the six GMS countries are referred to as "economies in transition". There is no single widely accepted approach as to how economic development in "transition economies" should be managed. The downturn in the High Performance Asian Economies (HPAEs) triggered by the devaluation of the Thai Baht in July 1997 has raised considerable interest in how best to strategize the recovery of these economies. (e.g., Jomo,1998;Krugman,1999).

The creation of trade regions with suddenly reduced barriers to trade can trigger increased pressures on agriculture and other natural resources and on vulnerable indigenous communities. New trade agreements and erosion or outright loss of traditional land tenure rights can result in the loss of the "social contract" that protected environmental sustainability at the local level. These losses can in turn result in the long-term impoverishment of vulnerable communities and in some cases decades or even generations of poverty and dependency (e.g., Navarrete et al.,1994;Broad and Cavanagh, 1995).

In the case of Mexico, the constitution was revised in 1991 to make it possible for corporations to buy roughly 100 million hectares of campesino farmlands that had been communally owned since the revolution of 1917. The North American Free Trade Agreement (NAFTA) trade agreement a few years later set up the conditions that encouraged foreign corporations to purchase these lands for corporate agricultural enterprises. As a result, a large segment of the campesino population that previously had been farm operators with good access to communal lands was now down-graded to the status of agricultural laborers (Navarrete et al.,1994).

It is critical that institutional and human capacity to implement environmental, social and resource tenure safeguards be created, field-tested, and proven to be robust and well-implemented well in advance of forceful increases in regional integration brought about for example by the implementation of regional transportation projects or the implementation of any large project that will attract workers from long distances.

Within the GMS countries, the rapid spread of the AIDS epidemic and the rapid and on-going loss of forest cover with its attendant prospects of adverse climate change suggest that the socio-environmental costs of enhanced regional integration and rapid transition to a market-driven economy could be very high for the poor and for indigenous communities in general unless institutions such as the ADB assist in promoting rigorous social safeguards.

The term "firewall" is used in this set of papers to refer to a framework for rural development that lets in beneficial forms of development while filtering out projects and changes that are likely to have adverse impacts on local communities and other local stakeholders and on the sustainability of the regional environment and climate.

2. Poverty in the GMS Countries

2.1. Growth and Equity

The economist Simon Kuznets hypothesized that as economies develop there is initially a growth-equity trade-off. As per-capita incomes rise, inequality initially rises as well. In theory, at some intermediate level of income, inequality begins to fall as incomes reach income levels characteristic of a developed country. This pattern may have occurred in the Nordic countries, which have highly progressive national income tax systems. The Gini coefficient, a measure of inequality defined in Box 2.1 below, is a low 25 for Finland, but a high 40.1 for the United States and a high 36 for Switzerland. The GMS countries may want to assume that without strongly progressive systems of income tax, inequality will become high and remain high.

Data presented in Tables 2.1 and 2.2 for the GMS countries seem to support this hypothesis. Of the six GMS countries, Thailand has the highest nominal GNP per capita at $2,800, followed by China having $860. Thailand also has the highest Gini Index of 46.2, again followed by China with an index of 41.5. Finland, with a much higher GNP per capita ($24,080) than any of the GMS countries, has slower average annual GDP growth and, with a Gini Index of 25, has less economic inequality than the four GMS countries for which Gini

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coefficients have been calculated. Thus, for the GMS countries, income inequality is low at low levels of income, and increases as pre capita income increases. The challenge for the GMS countries is to reverse the trend toward greater inequality as income increases; that is, to achieve development with equity.

Individual countries tend to have their own national definitions of poverty, complicating comparisons of poverty levels between countries. Purchasing power parities (PPPs) and an international definition of poverty help facilitate meaningful comparisons between countries. PPPs are used to correct the fact that when exchange rates are used to convert prices in different countries to a single currency, substantial differences in relative prices are not accounted for. PPPs measure the relative purchasing power of different currencies over equivalent goods and services. This enables more meaningful comparisons of consumption across countries. PPPs provide a consistent and meaningful approach to how the structure of consumption changes with the level of development. For example, poor income groups may spend about a third of their income on food and relatively little on health care. As wealth increases, the percentage spent on food tends to decrease and the percentage spent on health care increases.

Kuznet’s hypothesis might lead to the conclusion that increasing inequality is predetermined over a range of income levels, that it will self-correct over time, and will naturally diminish in mature market-based economies. Such a conclusion is not correct. The governments of the preponderance of market-based economies have over the last half-century progressively put in place large, over-arching regulatory systems and social safety nets. These tend to include progressive systems of taxation, social security, health insurance, unemployment benefits, pension plans, and the increasing use of zoning laws to require land and property owners to conform to environmental standards.

Table 2.1 GNP per capita and Growth of Gross Domestic Product

Country GNP per capita 1997

PPP GNP per capita 1997

Average Annual GDP growth

1980-1990 1990-1997

Finland $24,080 $18,980 3.3 1.1

Thailand $2,800 $6,590 7.6 7.5

East Asia and Pacific Low and Middle Income Countries

$970 $3,560 7.8 9.9

China $860 $3,570 10.2 11.9

Lao PDR $400 $1,290 3.7 6.7

Myanmar 0.6 5.7 (1990-95)

Vietnam $320 $1,670 4.6 8.6

Cambodia $300 --- 6.2

Source: World Bank. 1998. 1998-99 World Development Report; 1997 World Development Indicators. Washington, DC.

Table 2.2 Distribution of income/consumption in the GMS (Finland as reference)

Country Survey Year

Gini Index

Lowest 10%

Lowest 20%

Second 20%

Third 20%

Fourth 20%

Highest 20%

Highest 10%

Thailand 1992 46.2 2.5 5.6 8.7 13.0 20.0 52.7 37.1

China* 1995 41.5 2.2 5.5 9.8 14.9 22.3 47.5 30.9

Vietnam 1993 35.7 3.5 7.8 11.4 15.4 21.4 44.0 29.0

Lao PDR 1992 30.4 4.2 9.6 12.9 16.3 21.0 40.2 26.4

Finland 1991 25.6 4.2 10.0 14.2 17.6 22.3 35.8 21.6

Source: World Bank. 1998. World Development Report 1998/99. Washington, DC. *not including Hong Kong There are no data available for Cambodia or Myanmar.

Box 2.1. Inequality and Poverty Comparisons: Definitions and Concepts

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Nonetheless, increases in inequality have become a trend in many developed countries at the close of the 20th

century. In 1994, The Economist acknowledged that "it is no coincidence that the biggest increases in income inequalities have occurred in economies ... where free-market economic policies have been pursued most zealously" and that "it is a combination of lightly regulated labor markets and global economic forces that has done much more ... to favor the rich over the poor." Again, the challenge to the GMS countries is to make the transition to free-market economies without increasing inequality and poverty.

Of the four GMS countries for which data are available, Lao PDR has the most equal distribution of income and Thailand the least equal as measured by the Gini Index. In comparison, distribution of income was somewhat more equal in Finland than in Lao PDR. However, it should be noted that these distribution indicators are not strictly comparable between countries, because the underlying household surveys may differ in method and in the type of data collected.

2.2. Poverty: definitions and measurement

As poverty itself is a relative term, defined differently not only between countries, but often also within countries (by different ethnic groups, for example), we offer a discussion of definitions and methods used to measure it. National poverty lines are a useful means for governments and aid agencies to track and target households categorized as living below a poverty line.

Gini coefficient. A shorthand summary of the relative degree of inequality. The coefficient varies from 0 (perfect equality) to 1 (perfect inequality). Gini coefficients of between 0.5 to 0.7 are typically considered representative of "high" inequality, while coefficients between 0.3 to 0.4 are considered egalitarian.

Head count index. The proportion of a population for whom consumption (or any other measure of living standard) is less than the poverty line. Suppose x people are poor, or have consumption under the established poverty line, in a population of size n. The head count index is thus

H = = the proportion of total population defined as poor

Poverty gap index. The aggregate deficit of the poor relative to the poverty line. Provides an indication of the depth of poverty. Let consumption totals of the poor be arranged in ascending order, the consumption of the poorest labeled y1, the next poorest y2, and so on, with consumption by the least poor labeled yq, which is by definition no greater than the poverty line z. The poverty gap index is thus:

PG = = mean proportionate poverty gap across the whole population

Poverty severity index. Similar to the poverty gap, the severity index is an additive measure of the severity of poverty, in which the poverty gaps of the poor are weighted by those poverty gaps in assessing aggregate poverty. The poverty severity index is:

P2 = = mean of squared proportionate poverty gaps

None of the indices defined above is better than any another, as each measures different aspects of poverty. There are pros and cons to the use of each index. Policy makers and development practitioners must be aware of exactly what each index is measuring when making inferences regarding the situation of poverty and the progress of poverty alleviation activities.

Sources: Ravallion, Martin. 1992. Poverty Comparisons. A Guide to Concepts and Methods. LSMS Working Paper Number 88, p. 35-39. World Bank. Washington, D.C.

Sadoulet, Elisabeth and Alain de Janvry. 1995. Quantitative Development Policy Analysis, p. 22. Johns Hopkins University Press. Baltimore.

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International poverty lines represent an attempt to hold the real value of the poverty line constant between countries, allowing for comparison of poverty levels across countries or regions. The standards developed and used by the World Bank of US$1 a day and US$2 a day are measured in 1985 international prices and adjusted to local currency using purchasing power parity (PPP) conversion factors. PPP conversion factors are used because they take into account the local prices of goods and services that are not traded internationally. Expenditure data is considered to be a better measure of welfare than income. Thus, the World Bank only uses income data to construct poverty lines when expenditure data is not available. Information on poverty line data for selected GMS countries is presented in Table 2.3.

Poverty gap at $1 a day and Poverty gap at $2 a day are calculated as the average difference between the poverty line and actual income or consumption for all poor households, expressed as a percentage of the poverty line. This measure reflects the depth of poverty as well as its prevalence. Thus, in Table 2.3. 22.2% of the population of China was found to live below the $1 a day poverty line in 1995 and the poverty gap was calculated to be 6.9%. In other words, the average income of this group was $0.931 a day. Similarly, the average daily income of the 57.8% of the population living below the $2 a day poverty line was 0.759 * $2 or $1.518 a day.

In 1992, 23.5% of the population of Thailand lived beneath the $2 a day poverty line with an average income of 0.932 * $2 or $1.864 a day. Thus, for the four GMS countries for which poverty data was available, Thailand had the least poverty.

The data in Table 2.3 suggest that of the GMS countries, Thailand has the smallest percentage of its population living below the international poverty line. Although China reports a smaller percentage of its population living under its national poverty line, the data for the international poverty line of $1 a day indicate that Thailand has a smaller percentage order of magnitude than China living below this poverty line.

2.3. Trends in Poverty and Inequality

During the second half of the 1980s and until the float, and subsequent devaluation of the Thai Baht in July 1997, China, Lao PDR, Thailand, and Vietnam all enjoyed rapid economic growth, whereas Cambodia and Myanmar had less robust growth due to political instability. Table 2.4. provides development and poverty indicators for the six GMS countries. Government emphasis on the delivery of social services helps to explain why China, Thailand, and Vietnam have higher Human Development Index scores than the other GMS countries. According to the Human Poverty Index rank, Thailand and China score relatively well among the developing countries, Vietnam and Myanmar are in the mid-range, while Lao PDR and Cambodia are located towards the poor end of the range.

Table 2.3 Poverty line data in GMS

Country Population below National Poverty Line %

International Poverty Lines

Survey Year

Rural Urban National Survey Year

Population below $1 a day %

Poverty Gap at $1 a day %

Population below $2 a day %

Poverty gap at $2 a day %

Cambodia

China* 1994 11.8 <2 8.4 1995 22.2 6.9 57.8 24.1

Lao PDR 1993 53.0 24.0 46.1

Myanmar

Thailand 1990 18.0

1992 15.5 10.2 13.1 1992 <2 23.5 6.8

Vietnam 1993 57.2 25.9 50.9

*not including Hong Kong Source: World Bank. 1998. World Development Report 1998/99. Washington, DC.

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3. Poverty Reduction Strategies

3.1 Economic Growth as an Engine of Poverty Reduction

Economic growth, particularly when coupled with population planning , is an effective means of reducing the proportion of national populations living in poverty. John Maynard Keynes, in 1936, published the theory that government expenditures have multiplier effects within the national economy that increase employment and wealth creation in the private sector. At the same time, improvement in technology ensures that the productivity of labor also increases. One side effect of rapid market-driven economic growth is that the spread of incomes within the society tends to increase i.e., inequality increases. As will be discussed, other strategies are needed to limit inequality, particularly when economic growth is rapid.

In view of the regional economic crisis that began in July 1997, it is clear that all the GMS governments must have a clear understanding of what caused the crisis if robust economic growth is to be regained and maintained in future. In 1995, Paul Krugman, an economist at the Massachusetts Institute of Technology, popularized the view that the Asian economic "miracle" was not due to total factor productivity (TFP) growth but rather to intensive use of inputs, i.e. a high growth rate of capital due to the high rates of investment in Asia and a high rate of growth of labor inputs given the increased labor participation rates in the region. This view was very controversial since it implied that very little TFP growth had occurred in Asia. If true, it also suggested that the very high rates of Asian growth were not sustainable in the long run given the expected fall in the rate of growth of employment and the expected reduction of investment rates. By 1996, the Government of Singapore had launched a campaign to increase Total Factor Productivity. Investments in an educated work force and in technology are generally central to this process.

Table 2.4. Development and Poverty Indicators for the Six GMS Countries

Country HPI, rank*

Human Poverty Index, (HPI) %

HPI, rank* Human Development Index, Value

HDI Rank** Real GDP per capita PPP$, 1995

Population 1995 (millions)

Cambodia 39.9 52 0.422 140 1,110 10

China 17.1 16 0.650 106 2,935 1200

Lao PDR 39.4 49 0.465 136 2,571 5

Myanmar 27.5 36 0.481 131 1,130 45

Thailand 11.9 11 0.838 59 7,742 58

Vietnam 26.1 31 0.560 122 1,236 73

*Out of 77 developing countries ranked, Trinidad & Tobago is 1 and Niger is 77. **Out of 174 industrial and developing countries ranked; Canada is 1 and Sierra Leone is 174. Source: UNDP. 1998. 1998 Human Development Index. Oxford University Press, Oxford & New York.

Box 2.2 Human Development and Poverty Indices

The Human Development Index (HDI) measures the overall achievements in a country in three basic dimensions of human development—longevity, knowledge and a decent standard of living. It is measured by life expectancy, educational attainment (adult literacy and combined primary, secondary and tertiary enrolment) and adjusted income.

Human Poverty Index (HPI) While the HDI measures overall progress in a country in achieving human development, the human poverty index (HPI) reflects the distribution of progress and measures the backlog of deprivations that still exists.

Box 2.3 Purchasing power parity(PPP$)

The purchasing power of a country’s currency: the number of units of that currency required to purchase the same or similar representative basket of goods and services that a US Dollar would buy in the United States. In a country where the cost of living is relatively low, income figures are adjusted upwards.

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In 1997, the economic crisis in Asia, even if originally triggered by large currency depreciations, appeared to indirectly confirm Krugman's views on the weakness of the Asian economic model and the fragility of the Asian Miracle. Roubini (1999) argues that in the long-run, the Asian region may be successful in maintaining high rates of growth of output and consumption only if it will become more efficient in increasing the productivity of resources used instead of just mobilizing these resources at faster rates. Krugman’s (1999) current perspective is that the global economy is at risk of falling into a long-lasting depression.

3.2 Economic Risk and the Risk of Future Poverty

The relative soundness of fiscal policy at the national level may in the long-term have considerable impact on poverty levels within a country. In the years following the devaluation of the Thai baht in July 1997, poverty levels have increased significantly in both Thailand and Vietnam. Figure 3.1 below indicates that in 1997 Thailand had very significant international reserves per capita compared to the other GMS countries.

Figure 3.1 Gross International Reserves per Capita in 1997

Source: World Bank. 1998. 1998/99 World Development Report. World Bank, Washington, D.C.

On the other hand, it would appear from the data on external debt as a percent of GNP that as of 1996 the Vietnamese economy had more than twice the debt burden of any of the other GMS economies.

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3.2 Better Health and Education as Pathways to Reduce Poverty.

Healthy, literate people are more productive than unhealthy, illiterate people are. Provision of improved health and education services in poor areas with the GMS should be a highly cost-effective approach to poverty reduction.

3.4 Progressive Income Tax, Other Transfers, and Safety Nets.

A whole array of means is available to governments to transfer wealth from wealthier sectors of society to poorer ones. The development banks provide assistance in structuring these interventions so that they do not dampen incentives to invest in the private sector. Many of these strategies are described in the country reports. The important ones are, subsidized health and education services, unemployment benefits, national pension plans, food for work, and rural credit projects including women-based rural banking.

3.5 Autonomous Areas as a Means to Protect and Build Equity in the National Development Process

Traditional resource exploitation in montane Southeast Asia and the rights of traditional communities to these resources have rarely received adequate recognition from the GMS governments. On the contrary, GMS governments, with the exception of China, have been inclined to sever the traditional bonds between upland communities and their traditional natural resource base. Relocations of minority communities from one area to another have sometimes had the effect of severing a spiritual bond between a community and forest resources. The inability to reestablish those bonds at a new location may result in rapid degradation of forest resources at the new settlement location.

The autonomous area approach as used in the Yunnan province and other regions of China appears to provide the legal basis for a dramatic break-through in watershed management in the region. The autonomous area concept would be strengthened to include ownership rights to all natural resources within the area. Using the co-management model that has been successful at Kakadu National Park in Australia (Hill and Press, 1994), autonomous area governing boards would, as these resources were exploited, enter into revenue-sharing agreements with national and other levels of government as appropriate. Residents of autonomous areas would retain veto rights over development projects except in cases involving national security interests.

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In the environmental and natural resources sector, the need to enhance productivity could be achieved through a number of measures:

� striving for zero-growth rates for all populations living in upland ecosystems and reduce growth in national population at a rate compatible with maintaining adequate national social safety nets;

� maintaining or establishing autonomous areas for ethnic groups that desire to maintain traditional homeland areas and preventing the sale or loss of traditional lands to outsiders;

� using a watershed approach and adopting a co-management approach to the management of natural resources; the local partner in the co-management team could be a county, prefecture, district or province, or it could be a group of villages, a particular ethnic group living in a localized area, or a coalition of ethnic groups living in the same area. The objective of co-management is to re-establish a robust balance between natural forests in the uplands and lowland agroecosystems;

� implementing firewall safeguards in remote upland areas.

4. Ethnic Diversity and Minority Populations in the Context of Increasing GMS Integration

Ethnic diversity within the GMS countries is an immense cultural resource, but at the same time presents significant challenges to national and regional integration. The ADB predicts that the combined population of the GMS will increase by about 50% or 350 million by the year 2020. "Combined with rural/urban shifts, this will add more than 100 million to the subregion's major cities and towns" (http://www.adb.org/ Work/GMS/hrd1.asp).

The Mekong basin with its myriad of remote tributary watersheds, has, over a period of several thousand years, been an incredible incubator of cultural and linguistic diversity and of agroecosystem biodiversity. It is very difficult to place a value on these resources or to say precisely what their functions or potentials are, now and in the future. However, it is clear that language is the most precious human resource. The linguist, R.M.W. Dixon, has written,

"Each language has a different phonological, morphological, syntactic, and semantic organization from every other. …By examining the ways meanings are organized in some little-known language, the linguist may….evolve some new mode of thinking that could help to deal with problems in the modern world (Dixon,1997, p.116)…Every language encapsulates the world-view of its speakers—how they think, what they value, what they believe in, how they classify the world around them, how they order their lives. Once a language dies, a part of human culture is lost, forever(p.144).

Seen from the perspective of a minority speaker, we understand that:

Each language still spoken is fundamental to the personal, social, and—a key word in the discourse of indigenous peoples—spiritual identity of its speakers. They know that without these languages they would be less than they are, and they are engaged in the most urgent struggles to protect their linguistic heritage (Zepeda and Hill, 1991,p.135).

Yunnan province, which contains much of the headwaters of the Mekong, is the most ethnographically diverse province in China. Similarly, the headwaters of the Se San river, a Mekong tributary, lie within Kontum and Gialai, the two provinces of Vietnam that have the highest proportion of minorities. In Cambodia, the Se San flows through Ratanankiri and Stung Treng provinces, two of the most ethnographically diverse areas in that country.

In northern Thailand, both language and crop diversity flourished for centuries in the many narrow valleys. Figure 2.1 below shows the immense number of living languages in each of the GMS countries.

Figure 4.1 Number of Living Languages in Mekong Countries.

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This immense diversity of language is by no means spread evenly across the landscape or through the national populations. As shown in Table 2.1 below, ethnic minorities make up about 10 percent of the population of the GMS countries, ranging from about 46% in Lao PDR to only 1.3% in Thailand.

It is also known that many of these indigenous languages are dying or endangered. Languages spoken by language groups that number less than 10,000 speakers are often considered by linguists to be "highly endangered." Probably 75 percent or more of the languages spoken in the GMS today will no longer be spoken in the year 2100. We do not fully understand what is required for a language to survive. Table 2.2 below lists some of the causes of language loss.

On the Nakai Plateau in central Lao PDR, it is reported that certain households of hunter gatherers died within a year of being invited to settle at an existing village belonging to another ethnic group (Chamberlin et

Table 4.1 Ethnic minority populations within the GMS.

Country Year of census

Total Ethnic Popul.

Total Population Million Ethnic as % of total

Cambodia 1995 442699 » 11 4%

Lao PDR 1992 28.3 45.7%

Myanmar 1992 32.6%

Thailand 1990 646,310 » 50 1.3%

Vietnam 18%

China 1995 108 mil 9%

Yunnan 1997? 40.9 33%

Total GMS 20.6 mil. 196 10.5%

Source: various.

Table 4.2 Causes of Language Loss

1) population loss Ethnic groups die off due to disease or murder.

2) forced language loss A dominant group forbids a minority group from speaking its language in some or all situations

3)voluntary language switching A language is sometimes abandoned by choice of its speakers, typically to speak a prestige language instead

4) involuntary language switching In bilingual environments, the less dominant language sometimes falls from use; children stop learning it.

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al.,1996). there are some languages with relatively few speakers that may soon be extinct.

Stalin, who after all was a Georgian nationalist who began his career as a linguist, understood that an effective means of weakening an ethnic group was to move them to an area where another language was dominant. Many of the six GMS governments maintain to this day policies of moving ethnic minorities out of their present locations and into new locations for a variety of reasons. For many minority groups, language loss may hasten a loss of community solidarity and usher in a long-term mentality of dependency.

Minority communities by definition live somewhere along the continuum between full integration and autonomy within the nation state. Sino-Thai business families in Bangkok epitomize the advantages of integration. Forming the dominant business group within a $170 billion economy, many are immensely wealthy. Although Chinese-language schools were made illegal in Thailand in the 1950s, Sino-Thais have excelled within the Thai education system and intermarriage with ethnic Thais is the norm. Many Sino-Thais do not speak Chinese and most are indistinguishable from ethnic Thais except for being somewhat lighter skinned and having longer surnames.

4.1. Autonomous Areas

At the autonomy end of the spectrum, the project’s ethnolinguist has described a De-Ang minority community residing within a De-Ang autonomous county in Luxi Prefecture of Yunnan Province as presenting:

In this example in Yunnan, it is not clear whether the "autonomous county" that the De-Ang lived in had in some way acted as an impediment to the entry of economic development or whether the De-Ang were by nature less entrepreneurial and less inclined to become involved within the larger market economy than their Dai neighbors.

Despite the negative cast to the De-Ang example cited above, it is important to understand that the Government of China has used the "autonomous areas" concept as a fundamental means to promote the welfare of ethnic minorities and their representation within the political process. Autonomous areas constitute about 65% of China. By preserving the concept of "ethnic homelands," many otherwise vulnerable ethnic minorities have been able to maintain their language, culture, and way of life.

It would be appropriate for Phase II researchers to determine whether the ADB could promote "autonomous areas" as an effective means of targeting affirmative action types of lending and economic development to the poorer sectors of rural society within the GMS and to prevent urban elites from gaining control of key resources within these areas. Our perception was that the autonomous area concept has great utility, but that it has not yet been well incorporated into poverty reduction strategies in the GMS.

4.2 Social Solidarity and Conservation of Indigenous Languages

Social solidarity is a measure of the cohesiveness of a community and the extent of its internal control, its ability to make and implement decisions about its affairs. Robust communities with strong solidarity are more capable at managing their resources and are less likely to fall into poverty and dependency. Having a unique mother tongue and culture, strong resource tenure, and long-term residence in a particular area are three attributes that help to create community solidarity. It has long been known to linguists and others that effective ways of reducing community solidarity are a) to relocate the community to another area unfamiliar to it, b) to prohibit the use of the community’s mother tongue or to prohibit its use in the school system.

An invaluable component of the national heritage of each of the GMS countries is the diversity of language and culture found in each. Together with the landscape, this is what makes each country unique. Roughly half of the languages enumerated in Figure 2.1 in each of the countries are at great risk of being lost within the next 25-50 years.

the surprising picture of a dislocated, poor, and rather dispirited community, compared to their fast developing neighbours in this quite prosperous part of Yunnan (Diffloth, October 1998).

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One of the most effective strategies of poverty reduction in remote watersheds in the GMS would be to strengthen community solidarity. Experience with small language groups has shown that establishing initial literacy in the mother tongue is an effective step for establishing literacy in the national language and indeed has many advantages to requiring that minority children only gain literacy in the national language when at the primary school level it is a language with which they have little or no familiarity.

5. Demographics and Delivery of Health Services

5.1 Differing rates of demographic transition in the GMS

Demographic transition theory (Notestein,1953; Davis,1963) basically argues that with improvements in living standards, a pattern occurs whereby mortality declines first, to be followed, after a lag period, by a decline in fertility. Urbanization, education, and rising expectations all influence the perception that smaller family sizes are better. Innovative family planning programs in northern Thailand in the 1970s demonstrated that, in fact, minority women in upland communities were eager to adopt smaller family size due to perceived land scarcity and the burden of raising many children even without the improvements in living standards. Greater birth spacing itself was perceived to be an improvement in living standards (Pardthaisong,1978). While it remained important to deliver family planning awareness and services in the context of good primary health care, there was no longer theoretical justification for Ministries of Health to wait for improvements in living standards before implementing broad-based programs delivering family planning awareness and services.

Following World War II, population growth accelerated globally due to declines in mortality enabled by a post-war generation of antibiotics and vaccines. During the 1950s and 1960s, governments began to experience difficulties providing adequate health, education, and other services to the rapidly growing number of young people. Thailand announced a population policy in 1970 and China somewhat later. The governments of the other four GMS countries have not had population policies that produced similarly rapid reductions in population growth.

A review of demographic trends in the region (Hull, 1996) indicates that transition from high to lower rates of fertility and mortality in the Asian region has been slower than was projected in the late 1980s. China, Hong Kong, Singapore, Thailand and Republic of Korea have witnessed dramatic declines in fertility. Indonesia Philippines, Mongolia, and Vietnam have experienced slower declines. Furthermore, there has been a virtual lack of decline in Cambodia and Lao PDR. See Table 2.1 below.

Figure 2.1 below is based on data from the 1998/99 World Development Report and shows comparisons within somewhat different and narrower time periods. This figure indicates that there may be some slight increase in

Table 5.1 Average Annual Population Growth in Asia, 1980-95 and 1995-2010

Country Average Annual Growth Rate

1980-1995 1995-2010

Cambodia 2.9 2.0

China 1.3 0.8

Indonesia 1.8 1.3

DR Korea 1.8 1.3

Republic of Korea 1.1 0.8

Lao PDR 2.8 2.8

Myanmar 1.9 1.6

Singapore 1.8 1.0

Thailand 1.5 0.7

Vietnam 2.1 1.6

East Asia and Pacific 1.5 1.0

Source: World Bank. 1997. 1997 World Development Indicators. Washington, DC, p. 35-36.

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population growth in Lao PDR between the two time periods. On the other hand, it suggests that population growth rates have remained steady in Vietnam within the 1980-1997 time period rather than dropping significantly as suggested in Table 2.1 above. And it shows Thailand still a considerable distance from the 0.7 average growth rate predicted in Table 2.1 above.

Figure 5.1 Changes in Population Growth Rates within GMS countries.

Source: World Bank. 1998. 1998/99 World Development Report. Washington, DC; Table 3, Population and Labor Force *Myanmar is not included in the 1998/99 World Development Report.

The prospects and nature of economic development in remote upland watersheds of GMS countries need to be understood within the context of the demographics of each country and of the larger region as a whole. Migration has been an effective means of tying rural hinterlands to urban areas and thus an effective means of poverty reduction. But in many cases, the intense concentration of population within primate cities has lead to the generation of urban ills such as congestion of urban traffic, slums and pollution of air and water.

In China, "informal urbanization" or "urbanization from below" has been occurring within the countryside and is reducing the kinds of migration that tends to create primate cities. It is estimated that China has a "floating population" of about 80 million people, that is, temporary migrants to the cities who are not official residents.

In contrast to this movement of temporary migrants to the cities, there has been the in situ transformation of formerly agricultural populations into quasi-urban ones. This trend has been driven largely by the development of township and village enterprises (TVEs), a term would be better translated as "rural enterprises" because it does not include enterprises in towns. One study in Southeast China suggests that the creation of TVEs has become much more significant in terms of creating non-farm employment opportunities than has migration to cities. No negative valuation seems to have yet been put on "reduction of farmland caused by in situ urbanization." Nonetheless, this emerging Chinese phenomenon merits study for its applicability within the other GMS countries.

Necessary conditions for such a phenomenon to take place may include a) high rural literacy rates, b) some tradition of entrepreneurial activity within rural society, c) good connectivity between rural areas and urban markets, and d) good access to credit by would-be entrepreneurs. Within many of the other GMS countries, the Hmong minority in Thailand are an example of an upland community that has a tradition of mobility and entrepreneurial activity and one with moderate to good literacy among men. Upland communities without a history of mobility and trading or literacy and upland areas lacking good road connectivity to the lowlands would likely require intensive targeting of development investments before in situ urbanization could be a desirable and viable development option.

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Urbanization of a population occurs by migration, natural increase, and reclassification of rural areas to urban. Concentration of population in urban areas will continue to be an integral part of what is expected to be a sustainable economic development process. Table 2.2 below shows levels of urbanization within the GMS countries in 1994 and the projected levels for 2005 and 2010. Urbanization in China is projected to change from 29.4% in 1994 to 43.0% in 2010. About a third of the Lao populated is projected to live in cities by 2010 compared to 27.4% in both Thailand and Vietnam. This seems like an odd outcome in so far as Laos currently has a far lower population density and has very little in terms of an industrial base within its cities compared to Thailand and Vietnam. Perhaps the Lao urbanization is expected to be driven by a larger urban-rural gap in capacity to generate employment and wealth.

Vietnam’s growth in urbanization is expected to be similar to that of Thailand, but with natural increase of population playing a larger role.

The governments of the remaining three GMS countries have been unable or unwilling to reign in exceptionally high fertility rates. When combined with medium to poor economic growth rates, it is expected that rapid urbanization in these three countries is likely to lead to a degradation of the quality of urban life and result in what would be unsustainable growth.

Seasonal rural-to-urban migration is an important means in both China and Thailand for rural households to diversify their risk by giving them access to another economic niche. In this way, seasonal migration helps to alleviate rural poverty and authorities should keep this in mind before implementing policies to restrict population mobility. Short-term mobility in the form of seasonal migration has been a successful adaptive strategy in Thailand. This phenomenon is perhaps best epitomized by men from Northeast Thailand who work as cab drivers or construction workers in the cities, but to their villages to assist during the rice planting and harvesting seasons. Once Thailand’s economy recovers it is likely to be transformed from being a net labor exporter to becoming a net labor importer. There are already about 1 million immigrant workers in Thailand, mostly from Lao PDR and Myanmar.

Socioeconomic evidence suggests that governments that have implemented well-funded family planning programs have been able to dramatically improve the quality of life of their citizens. Governments that have retained the "peasant mentality" that sees rapid population growth as positive, have increasingly found they lacked the capacity to deliver an improved standard of living to their rural populations. In this respect, it should be noted that China’s "liberal" policy of allowing ethnic minorities to have more than one child per family may be having the unintended effect of creating population pressure on the rural natural resource base.

5.2 Health Care in the GMS Countries

Health standards vary significantly within the GMS and greater integration within the region holds the promise of an overall raising of living standards. At the same time, freer movement of people within the region--one of the objectives of the GMS development strategy recommended by the ADB--will almost certainly raise the rate

Table 5.2. Projected urbanization in the GMS countries, 1994-2010, sorted by total fertility rate

Country Level of urbanization 1994 %

Annual growth rate %

Urban population 1994 (000s)

Level of urbanization 2005 %

Level of urbanization 2010 %

Total fertility rate 1990-95

Growth in per capita GNP,1985-1994

ESCAP 37.0 2.90 1,230,163 n.a. n.a. 2.6 n.a.

China 29.4 3.99 355,597 38.8 43.0 1.95 7.8

Thailand 19.7 2.49 11,487 24.3 27.4 2.10 8.6

Vietnam 20.5 3.10 14,980 24.4 27.4 3.87 n.a.

Myanmar 25.8 3.27 11,774 31.4 35.4 4.16 n.a.

Cambodia 20.1 6.23 1,999 27.8 31.6 5.25 n.a.

Lao PDR 21.1 6.08 999 28.8 32.6 6.69 n.a.

Source: Skeldon, 1998, p.7.

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of transmission of certain pernicious diseases such as AIDS. And greater economic integration raises the possibility of economic volatility spreading through the region. If remote watersheds do not participate directly in the benefits of economic integration, communities may not be able to afford the health services that new or upgraded transport corridors link them to.

Research has shown that roughly a country’s per capita income, the distribution of income, the extent of women’s education, the level of ethnic fragmentation, and the predominant religion can explain 95 percent of cross-national variation in child mortality. Non-Muslim countries have on average lower infant mortality rates than Muslim countries. Surprisingly, there is not a strong correlation between the amount of public spending on health and national infant mortality rates (Filmer and Pritchett,1997). The authors suggest, among other things, that public monies are often spent on "expensive, but ineffective curative services." Non-health characteristics of societies with particularly good health status at relatively low income levels such as China, Costa Rica, Sri Lanka, and Kerala State in India are related more to high education levels of women, good nutrition, and more equal income distribution. Myanmar and China were among the highest-scoring developing countries when child mortality rates were regressed on income, whereas Lao PDR was among the poorest scoring countries (Filmer and Pritchett, 1997, pp.16-17).

However, health gains have recently eroded in China due to changes in government financing of the health sector, the shift to a more market-oriented economy, and a shift of focus toward more non-communicable diseases and injuries, the prevention of which has not been a traditional part of China’s public health programs (Hossain,1997).

As can be seen in Table 2.3 below, the government of China spends more than the other GMS countries on health (as a percent of GDP) and has the lowest infant mortality rate and the best access to clean water of the six countries. Vietnam spends about half as much on its health sector as a percentage of GDP and yet has a lower maternal mortality rate. On the other hand, the two countries within the group which spend the least public funds on health care, Myanmar and Cambodia, have, with Lao PDR, the highest infant and maternal mortality rates and the lowest access to clean water.

Table 5.3 Health Indicators in GMS Countries sorted by Public Spending as % of GDP

Public spending%of GDP

Access to clean water

Infant Mortality Rate per 1000 live births

Total Fertility Rate Births Per Woman

Maternal mortality per 100,000 births

1990-95 1995 1980 1996 1980 1996 1990-96

China* 2.1 90 42 33 2.5 1.9 115

East Asia & Pacific

1.7 84 56 39 3.1 2.2

Thailand 1.4 81 49 34 0.6 1.8 200

Lao PDR 1.3 39 127 101 6.7 5.7 650

Vietnam 1.1 36 57 40 5 3 105

Cambodia 0.7 13 201 105 4.7 4.6 900

Myanmar* 0.5 39 83 5.1 3.4 518

Source: World Bank. 1998. 1998-99 World Development Report. *Does not include Hong Kong. '**Myanmar data is from the 1997 World Development Report.

Table 2.4. Total health expenditures with countries ranked by GDP per capita

Country 1992 GDP per capita (USD)

Expenditures as a % of GDP

Expenditures per capita (USD)

Public Expenditures as a % of the total

Vietnam 170 7.4 12 16.2

Nepal 170 4.5 7 48.9

Bangladesh 220 3.2 7 43.8

India 310 6.0 21 21.7

Pakistan 420 3.4 12 52.9

Sri Lanka 540 3.7 18 48.6

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Figure 5.2 Health Expenditures as % of GDP

Source: World Bank. 1997. 1997 World Development Indicators. Washington, DC. Pp.74-76.

Education effect on health status. A study of three Asian-Pacific countries found that under-five mortality rates dropped from 119 to 70 to 39 per 1000 live births as mother’s education went from no schooling to primary education to secondary education respectively. Those are changes of 41 and 44 percent, respectively (Pritchett and Filmer, 1997).

Ethnolinguistic fractionalization. Analysis of health data has shown that developing countries with higher levels of ethnic diversity tend to have poorer performance of their health sectors as indicated by child mortality statistics. Ethnolinguistic fractionalization is defined as the probability that any two members of the national society are not from the same ethnolinguistic group. For example, moving from a relatively homogenous society like Costa Rica (0.07 probability) to Bolivia (0.70 probability) is associated with a rise in mortality of 40% (Pritchett and Filmer, 1997). In many instances, minority groups have living standards lower than those of the majority group. In such situations, the larger the disadvantaged group, the higher the rate of "ethnic fractionalization" and the higher the rate of child mortality.

In Figure 2.2 above, health projects by NGOs account for the high proportion of "private" to public health expenditures. Nonetheless the performance of the health sector in Cambodia lags behind the other GMS countries.

Indonesia 670 2.0 12 35.0

Philippines 770 2.0 12 35.0

Papua New Guinea

950 4.4 36 63.6

Thailand 1,840 5.0 73 22.0

Malaysia 2,790 3.0 67 43.3

Korea, Rep. Of 6,790 6.6 377 40.9

Source: Table presented in Gertler and Litvak, 1998.

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Opium production in remote upland watersheds, injectable drug use (IDU), and related trafficking in drugs and sale of women into prostitution seems to account for the reportedly high level of AIDS infection in remote upland areas of Myanmar. In effect, upland-lowland linkages do not always improve the quality of life of upland communities.

Figure 2.3 below shows reported HIV-1 sero-prevalance data for the six GMS countries.

Figure 5.3. HIV-1 Sero-prevalence per 100 Adults in the GMS countries in 1994

Source: World Bank. 1997. 1997 World Development Indicators. Washington, DC. Pp. 82-84.

The estimated HIV prevalence in 15-to-49-year-old populations is estimated to be up to 2 to 3 percent in Cambodia, Myanmar, and Thailand (http://www.hsph.harvard.edu/digest/ symposium2.html). Epidemics associated with injecting drug use have, in many situations, led to explosive outbreaks in the IDU population and through their sexual partners to others (e.g., in the late 1980s in Thailand, Myanmar, the Yunnan province of China, Vietnam, and Malaysia). The prevalence of HIV infection in IDUs in these areas reached staggering levels with prevalence reaching 50 to 90 percent within a few months. In Asia, HIV epidemics associated with commercial sex and those involving IDUs do not appear to fuel each other significantly. These epidemics appear to emerge and evolve almost independently from each other, as exemplified by the two concurrent HIV epidemics in Thailand, which were caused by two different subtypes of HIV, with minimum crossover. From a regional perspective, the magnitude and short-term trends of HIV epidemics are largely dependent on the extent of ongoing epidemics in a few countries: Cambodia, India, Thailand, Myanmar and, because of their population size, Indonesia and China (http://www.hsph.harvard.edu/digest/ symposium2.html).

Preventing further spread of HIV. The analysis of HIV epidemic trends in the region becomes more meaningful when a focus is placed on populations whose cultural and social affinity and networks transcend geopolitical borders. A new geography of HIV/AIDS in the region then emerges that helps recognize the foci of intense HIV spread. These include the larger "Golden Triangle," which includes Northern Thailand, eastern Myanmar, and parts of Yunnan in China. Another focus is the Mekong delta area in Cambodia and southern Vietnam. To gain better understanding of the dynamics of HIV epidemics, factors of affinity between populations as well as mobility patterns must be explored and mapped.

Construction workers on large infrastructure projects and the prostitutes that they attract to the construction site are probably the most significant vectors along which HIV spreads to communities in remote watersheds. The Nam Theun Hinboun dam project in central Lao PDR, funded in part by ADB, was sometimes referred to by outside observers in Lao PDR as the "10-kilometer brothel" during the construction phase in 1994-98. Busloads of prostitutes from three countries reportedly timed their visits to an estimated 2,000 workers to

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coincide with the monthly payday.

Despite repeated attempts, the UNAIDS office in Vientiane reportedly failed to get ADB or the contractors to implement any form of AIDS awareness training or provisions for prevention of STDs at the site (conversation between John Dennis and Anthony Lisle, Country Programme Adviser, UNAIDS, 11 April 98 in Vientiane). The failure of the Bank to ensure that a rigorous AIDS prevention campaign was implemented at this $260 million construction site does not bode well for the Bank's proposed $12 billion commitment to the transportation sector in the GMS.

The same lapse of responsibility at 36 Bank-funded transport projects stretching the length and breadth of the GMS could have a catastrophic kindling effect on the already virulent and devastating AIDS epidemic in the region. Primary victims of such a rekindled epidemic would likely include women of remote minority communities and their newborn children. Many of these remote communities are as yet unable to participate in complete programs for child immunizations. The possibility of AIDS victims in these remote communities receiving the cocktail of drugs needed to control the AIDS virus must be regarded as slim to non-existent. Harsh as it may sound, a large transport or dam project in a remote area without an aggressive, thoroughly field-tested, and effective program to prevent the spread of STDs is the modern day moral equivalent of colonial settlers passing out small pox infected blankets to the North American Indians. Remote, large infrastructure projects without effective programs to control STDs should not and must not be allowed to happen.

It is essential that the GMS countries reinforce their prevention and care efforts in order to enhance their response to the existing HIV/AIDS challenge. In addition, they should make every effort to collect and analyze the information needed to assess and monitor the evolving potential for even larger-scale HIV epidemics. With this in mind, the ADB approved a technical assistance of US$150,000 in September 1997 to finance and implement Phase I of a GMS AIDS project. This was completed with the identification of 17 priority projects and the formulation of a work plan (http://www.adb.org/Work/GMS/ pp_hrd4.asp). In the interests of transparency and participatory assessment of future projects, it is recommended that the ADB put full documentation of such priority projects on its Web page and invite comment from local, national, regional, and global stakeholders. Meaningful participation from local and national stakeholders would be more likely if the ADB Web page included copies of documentation on the projects in the national and major local languages. Not even short descriptions in English of these 17 priority AIDS projects were available to Phase 1 of RETA 5771.

6. Education Policy

6.1 Introduction

The development of modern education systems to serve rural communities in the GMS has occurred as the result of a combination of push and pull factors. On the "push" side is the basic perception by GMS governments that higher literacy and skill levels among the rural population is essential to national progress. On the "pull" side is the perception by rural communities that adult literacy and better-educated children are both assets that they increasingly need to draw on for personal and community well being. In addition, there is the "demographic imperative": all other factors being equal, governments with slowly-growing populations will be better able to enhance the quality and depth of their education services than will the government of a rapidly-growing population.

The design of policy instruments to expand educational opportunities for the poor depends on understanding the determinants of school enrollment. Parents (or students) can be expected to invest in education as long as the return from an additional year in school is greater than the private costs associated with that additional year. There is also the case of the heads of poor households who may perceive and desire the benefits of additional education for their children but simply lack the disposable income to cover the private costs of attending school which often include clothes, school supplies, and some fees.

The conventional wisdom has been that farming families in traditional societies had high labor requirements and therefore were apt to have many children and to keep those children--girls more than boys--from school altogether or during peak labor periods such as transplanting and harvesting of rice so as to complement the household labor requirements.

Although this stereotype might have applied to children of secondary school age and higher, it in fact never provided an adequate explanation for why primary age children were kept from school. In traditional agricultural societies, children of primary school age usually did not assist with either transplanting or harvesting, but rather

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had chores such as carrying water (particularly girls) and tending water buffaloes and scaring birds from rice fields in the week or two before harvest (particularly boys). Water-carrying is a routine activity that can be readily scheduled on either side of attending a local school, whereas jobs such as looking after pasturing livestock and scaring birds might be expected to conflict somewhat more with school attendance. The fact that girls tended to have lower access to primary school than boys do seems to have been related to a prejudice that girls had less need for literacy than their brothers rather than any practical need to keep girls home to work. Malnutrition-related illness and inability to pay for shoes, school uniforms, or other school-related expenses were also likely to keep children in poor families from attending school.

Table 6.1 below shows how rural modernization and the "end of the land frontier" both led to smaller family size and reduced need for children to provide farm labor.

This means that public policy instruments aimed at raising enrollment among the poor must seek to lower the costs and raise the benefits of education. The private costs of schooling refers to all expenses such as fees, books, transportation costs, and the opportunity cost of time spent in school rather than working. Government subsidies can lower these costs while at the same time government investment in teacher training and school infrastructure will raise both the quality and availability of education. Reducing the distance that students must travel to get to school reduces costs in time and transport.

Figure 6.1 Percent GDP Spent on Education in 1992 in 3 GMS Countries

Table 6.1 Effects of population growth and rural modernization on family size and needs for child labor

Change Impact A Impact B Impact C

End of land frontier Average farm size shrinks; Farm land no longer readily divisible to many children

Shrinking farm size motivates farmers to have fewer children

Teenage children more apt to seek off-farm employment and to perceive need for more education

Rural Electrification Households begin to install water pumps and piped water systems in homes.

Water carrying by girls and women is greatly reduced.

Electric light in homes provides children with better conditions for reading and doing school homework.

Replacement of animal traction by tractors

Plowing and harrowing of farm land becomes much more rapid; enhanced capacity to grow more crops per year increases family wealth

Dramatic reduction in farm labor needs when draft animals are sold off for good. Looking after draft animals, a major task for young boys, is eliminated.

Need to purchase fuel and spare parts further encourages farmers to produce for the market and to seek supplementary off-farm income

Primary health care services improve in rural areas and availability of family planning services increases greatly

Farm households opt for smaller families as land size shrinks, literacy increases, infant mortality drops, and requirements for "child labor" drop to zero.

The perception that some children must seek off-farm labor and that the additional education needed is costly also motivates the decision to have fewer children.

Source: unpublished findings of fieldwork in northern Thailand by John Dennis.

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Figure 6.2. Access to Education: Percent of Relevant Age Group Attending

6.2 Gender and Access to Education

Over the 14-year period, 1980-1993, access to education in terms of gender at the primary and secondary levels increased significantly in the GMS countries as well as in the East Asian and Pacific low and middle income countries as a whole. By 1993, 50% of the secondary students were girls in Thailand, compared to 44 percent in China, 39 percent in Lao PDR and 37 percent in Cambodia. At the primary school level, 49% of students were girls in Thailand and all other GMS countries for which there are data reported numbers in the 43-48 percent range. Myanmar, Thailand, and Vietnam all had high percentages of female teachers, whereas Cambodia, Lao PDR, and China all had percentages in the 30 percent range sometime during the time period.

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7. Recommendations and Conclusions

Participation in an 18-month, six-country project focussed on poor, difficult-to-reach areas is a very humbling experience. The immensity of language and cultural diversity, the paucity of socioeconomic studies about many of the resident communities and their agroecosystems, infrequent exposure to national consultants, and the difficulties of traveling to even a few sites in each of the countries renders the study process difficult in the best of circumstances. More than one national representative proposed that a significant portion of project budget be reallocated to "small action research projects" in target watersheds. However, the case for field testing of mini-development initiatives as a means of helping to identify "what works" was ruled out as outside the time frame and scope of the project. We sensed the frustration of some national representatives that so much project money would be spent on a study process driven by international consultants and that was largely outside of their control. In this sense, the host countries have good grounds for asking that the design of Phase II be redesigned to involve more stewardship by national institutions. The ideal is that the national stakeholders come to have ownership in regional projects that seek to place the interests of the Basin as a whole above those of individual member countries.

Host country representatives asked not only "Which of our watersheds best fit your selection criteria?" but also "Which portions of qualifying watersheds are not already spoken for due to existing protected area, hydropower, logging concession, or rural development projects?" At the level of provincial and prefectural administrations, there was little awareness that ADB-funded poverty reduction and environmental management

Table 6.2 Access to Primary Education in the GMS Countries

% Female Teachers % Female Pupils

1980 1993 1980 1993

Cambodia NA 36 NA 45

China 37 46 45 47

Lao PDR 30 42 45 43

Myanmar 54 66 48 48

Thailand 49 Na 48 49

Vietnam 65 Na 47 NA

East Asia* 41 46 45 47

*East Asia and Pacific low and middle income countries NA = not available

Source: World Bank. 1998. 1997 World Development Indicators. P. 70-72

Table 6.3 Access to Secondary Education in the GMS Countries

% Female Teachers % Female Pupils

1980 1993 1980 1993

Cambodia Na Na Na 37

China 25 33 40 44

Lao PDR 26 39 38 39

Myanmar 61 Na 45 Na

Thailand 57 Na 46 50

Vietnam 58 Na 47 Na

East Asia* 28 35 40 44

*East Asia and Pacific low and middle income countries /Na = not available

Source: World Bank. 1998. 1997 World Development Indicators. P. 70-72

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projects could co-exist or indeed might be most needed in areas where bilateral or multi-lateral donor commitments or private sector commitments had already been made. And yet it stands to reason that badly-managed logging concessions are far more likely to be in need of supplementary environmental training and oversight than a remote forested watershed that supports some poor communities that practice slash and burn agriculture.

7.1 The Need for Involvement in Existing Zones of Investment and Extraction

Recommendation:

More dialogue with host governments may be needed to propose that projects identified and funded as the result of a regional, RETA process do not need to be stand-alone, on-their-own-turf type of development initiatives, but indeed may more appropriately be synergy-building projects that are "layered into" areas and regions that are already "crucibles of new resource extraction," new "transport corridors," new "agribusiness zones" or otherwise subject to the impacts of new development. Similar to the criteria for Global Environment Facility (GEF) projects, RETA projects might be needed to cover "incremental costs" that are not being met through the existing development process.

7.2 The Use of Environmental Bonding to Prevent Private Sector Abuse of Resources

Recommendation:

Environmental Bonding, a legislative initiative first developed in New Zealand to ensure that mining and timber companies paid for any environmental damage they might cause, is greatly needed in the GMS countries. A requirement that a logging firm put, say, US$10 million into an escrow account prior to the granting of a logging concession will help to select for companies that have the technical know-how, financial capacity, and political will to log in an environmentally sustainable manner. If the harvesting methods [and benefits to local communities] spelled out in the bond agreement are violated, the national government, watershed management authority, or GMS Bond Fund authority has the right to put the concession-holder on notice that the bond will be tapped if the violations are not halted and any damage or assets lost not quickly remediated by the concession holder. Ideally, the environmental bond concept should be broadened [brackets above] to include revenue-sharing payments to local communities or a community-controlled proxy institution for remediation of adverse social impacts on local communities.

7.3 a Prototype of the Sort of Project to Evolve from RETA 5771

Recommendation:

While Phase One of RETA 5771 was not intended to identify watershed-specific project proposals, it is nonetheless appropriate to propose to the host countries and the Phase Two team a prototype project that would entrain the kinds of regional synergies that the designers of regional trade and resource management groupings may envision, but which are nonetheless not market-driven.

The GMS Forest Cover Management Trust Fund and Bond Fund Consortium.

Modeled in part on the highly successful, GEF-supported Bhutan Trust Fund, the GMS countries would each pledge to maintain a critical minimum area and quality of forest cover within their respective areas of the Mekong Basin. Commercial logging operations, hydropower projects over 1 MW, large mining projects, large highway projects and other large projects in any part of the GMS would be required to post environmental and social protection bonds into the bond fund which could be invested offshore by the Bond Fund managers on a principal-protected note basis.

These same projects would also be required to commit to long-term revenue-sharing agreements that would be paid into a GMS Trust Fund. Projects failing to make agreed-upon revenue-sharing payments would put their country’s Bond Fund holdings at risk. As an incentive to reaching consensus a certain percentage of Trust Fund payments, say 30 percent, might be restricted to use within the payee country’s Mekong Basin area.

Remote sensing technology supplemented by ground survey assessments would be used to monitor the area and quality of each GMS country’s forest cover within the GMS. Carrot and stick incentives would be created on a consensus basis that would reward GMS countries and communities to the extent that they maintained

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threshold forest area and quality and moved above it and would penalize them for drops below these thresholds.

Once this system of regional incentives for maintaining healthy forest cover within the GMS was fully functional, it could possibly be amplified to include "maintenance of minimum critical flow in Mekong tributaries" thresholds. Perhaps this extremely sensitive issue should best be dealt with in a separate Trust Fund/Bond Fund consortium. In principal, historical water yield data would be used to benchmark the amount of water which each country had contributed to the Mekong mainstream flow in early periods of good forest cover and prior to most hydropower projects. Similar to a putative global greenhouse gas emissions agreement, it is proposed that each GMS member country would be required to make payments to a GMS trust fund in proportion to which its annual water contributions to the mainstream Mekong had fallen below the historical average figure. Similarly, those countries that maintained, came closest to meeting, or improved over the historical annual water contributions would qualify for annual disbursements of annual earnings from the Trust Fund.

Under this system, countries which diverted waters out of the Mekong basin, reduced dry season water yields due to deforestation, or reduced annual yields due to diversion to irrigation or other local consumption, would be required to make compensatory payments to the Trust Fund. More complicated would be the case of a hydropower project which helped to enhance dry season stream flows but which also appeared to cause significant deterioration of downstream fish production and to the availability of stream flow for wet season irrigation.

Caveat: The above prototype project is described in bold, broad-brush outline as the sort of project which a regional grouping over countries could strive to achieve to protect its collective natural resource base, to protect intergenerational equity, and to protect and enhance the equity of marginal social groups. While countries like Australia are already using remote sensing imagery to routinely calculate farm taxes on certain crops, it admittedly is "pushing the envelope" of what might be feasible in the Mekong Basin in the near term. The removal of funds from local areas and storing them in large regional funds arguably may make these funds more vulnerable to capture and misuse by national elites. Local control over natural resources is also an important objective that should not be undermined. That said, a powerful Trust Fund mechanism may be one of the few means available to peacefully persuade national governments to put the interests of the GMS community as a whole above those of their own nation state. One assumption is that each GMS country has the capacity to respond to carrot and stick incentives and, in this case, improve protection of forest cover. It could be argued that this sort of Trust Fund Mechanism would reward wealthy GMS members that had created the capacity to maintain forest cover and punish poorer GMS members that literally lacked the resources to protect forest cover.

Conversely, it will be difficult to convince a wealthy GMS member to pay a significant annual fee or fine for water diversions out of the Mekong Basin and other forms of "in-country water consumption in the absence of a) a definitive hydrological model of the entire basin, and b) ecological studies that convincingly demonstrate that losses of water inputs upstream have cumulative negative downstream impacts on riverine fish productivity, salinity intrusion, off-shore diatom production, and so forth.

7.4 Devolution of More Governing Authority to the Local Level

It is recommended that the GMS member governments study the various ways to strengthen community-level control over natural resources. Traditional community institutions for management of forests and fisheries earlier in this century may still have some components relevant today and that could be incorporated in new management strategies. At the same time, Thailand’s new Tambol Councils and the use of autonomous areas in Yunnan are interesting State-given models that merit further study and possible use elsewhere in the Basin. Such local forms of government may be suitable for upgrading to the status of loan partners with direct relationships with the ADB or with GMS Trust and Bond Funds.

7.5 Supporting the Interests of Remote Upland Areas and of Ethnic Minority Communities

With world attention frequently focussed on ethnic conflicts in areas like Kosovo, Chechnya, and Chiapas, Mexico, concerted programming to protect ethnic cultures and identify may at first blush seem counter to the valid government objectives of national integration and national solidarity. Yet, experience has shown that the ideal solution is to empower minority groups to integrate from a position of strength and on terms that are truly beneficial to both their financial interests and to the maintenance of a distinct ethnic identity, which over time is likely to become more melded to the national whole if treated justly and well-nurtured.

7.5.1 Support of minority languages

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The support of minority languages is central to protecting the national cultural heritage and to harmonious relations between ethnic groups. Singapore, a model of both economic success and national integration, took in the 1960s what at the time was a novel approach to language. The languages of all four national ethnic groups were given equal status as national languages. Civil servants were required to become fluent in at least two of the national languages. The school system promoted multi-lingualism. There has been a virtual absence of ethnic conflict in Singapore since the implementation of that broad-minded policy.

Recommendation: With this sort of success in mind and the experience of China, which has promoted the use of minority languages since the 1950s, it is proposed that the GMS countries as a whole promote the study, awareness, and use of minority languages in ways that will encourage their use now and in the future.

Some steps for doing so might include the following:

a. Identify priority languages in the GMS in each of the six countries including languages for which there are less than 10,000 speakers for which scripts and sketch grammars do not yet exist.

b. Fund language awareness campaigns within hydropower watersheds in all six countries aimed at assisting indigenous communities understand the risks posed to their language and culture. These campaigns need not be resource intensive and should be integrated into existing educational service agencies. Communities should be assisted in identifying steps they can take to strengthen their language and where training and other assistance may be obtained. Funding should be for a 10-year period.

c. In the initial phase, develop a written script and a sketch grammar for each priority language This would likely require the employment of a full-time linguist for at least 2-3 years for each language; the areas where minority languages are spoken should also be opened up to other linguistic researchers.

d. Development by linguists and educational experts of educational material based on the written script and the sketch grammar

e. Strengthening of existing schools and establishment of new schools within the language community to promote the teaching of the vernacular language as well as the national language

The use of a mother tongue by the next generation is all about whether young people feel confident and proud to speak their own language or whether they learn or feel that there is some social stigma attached to belonging to their ethnic group and that there are social and economic advantages in shifting to the national language or some other language even for use within the home.

Experience has shown that the sending of minority students away to live at boarding schools where instruction is in a mainstream language and where the values of mainstream groups tend to be given more weight than the values of their home culture is a formula for language abandonment and loss. The most crucial factor in language loss is the failure in the language link from parents to children [ALII,1997]. At some stage a language loses its "critical mass" as a language. It ceases to be the main vehicle of communication. In the final stages of loss, only a handful of elderly speakers remain and the language as a fully spoken living language will die with these people [ALII,1997].

7.5.2 Support for Co-Management of Natural Resources by Local Communities and the State

Kakadu National Park in northern Australia is a well-known example of "co-management" between indigenous communities and the State Government where the two parties came together to manage a huge area that is mostly natural habitat with very few communities. Both natural biodiversity in the park and the cultural heritage of the indigenous communities living in their traditional homeland are being preserved with professionally-managed ecotourism paying for most of the bill. Indigenous people fill about 15 seats on the 18-seat management board of Kakadu NP. Each major linguistic group has a seat. A commercial uranium mine is allowed to continue its operation in a piece of land within the park without interference from the Kakadu NP authority.

Central to the highly successful Kakadu NP example are some key points:

� the homeland of the indigenous communities belongs to them but is inalienable, they can not sell any of the land to non-residents; sale of uranium ore is of course a significant exception to the principal of "local control" suggesting that flexibility may be crucial to achieving a viable local situation.

� the indigenous people are allowed and even encouraged to maintain their traditional languages, beliefs, and lifestyles within their homeland;

� the State, the Park Authority, the mining company, and the indigenous communities all benefit from the successful management of natural resources that is profitable for all stakeholders.

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Recommendation: It is recommended that relevant national culture, education, and resource management officials in the GMS as well as community leaders be taken on study tours to observe examples of co-management of natural resources at places like Kakadu NP and elsewhere.

7.5.3 Firewalled Zones: an area-specific development strategy for remote upland areas

The "firewall" analogy is drawn from both the automobile and from computer networks. It is an appropriate analogy in that the firewall rarely interferes with the function of the machine or system that it works to protect. For almost a hundred years, the firewall in the automobile has protected passengers from the noise, exhaust, and heat in the engine compartment, while not interfering with the transmission of power from the engine to the wheels. Similarly, firewalls in corporate computer networks let in most or all legitimate communication of information, but are quite effective at keeping out unauthorized users. These firewalls are not perfect, but automobile travel and business communications would be much riskier and difficult without them.

"Development Firewalls" are filters of outside development factors and should not be confused with absolute barriers to outside technology and investment which have tended to be linked to xenophobic extremism. In the GMS remote upper watershed context, a development firewall zone would serve to filter out large development projects such as new roads, hydropower projects, plantation forests, and large protected areas until national planners had demonstrated national and local commitment on most or all of seven areas related to the planning of development program. A stakeholder-approved plan addressing these seven issues would need to be in place prior to the launching of large development projects in any area defined as a "development firewall zone:"

1. Resource Tenure. The resource tenure traditions and current use patterns and conflicts would need to be described in some detail. Future resource entitlements would need to be carefully planned, negotiated, and mapped. A preliminary land use plan would need to be developed. Without this process, poorly educated indigenous communities are likely to slip into permanent impoverishment once they lose their traditional access to natural resources. The ADB should proactively require that a prerequisite for ADB involvement in remote areas would be for appropriate legal structures to be set up to prevent these communities from losing their traditional homelands. This often means vesting tenure or usufruct rights in the community as a whole and making it impossible to sell or otherwise transfer these rights to others outside the community.

2. Participatory Planning. All indigenous communities have to been carefully consulted concerning the types of education, health practices, cultural lifestyles, and livelihood strategies that they wish to develop or maintain into the foreseeable future. They would also be asked what areas they would like to be defined as "firewalled development areas."

3. Enabling Legislation. Appropriate national enabling legislation and social contracts should exist to allow each indigenous culture to remain viable if this is the desire of the majority of an ethnic community.

4. Strong Local Government. Representation of the firewalled area within local government should be robust and local government itself should be effective in defending local socioeconomic interests. (In cases where local government is not to be particularly effective, donor and loan agencies might take a more active role in requiring that appropriate revenue-sharing agreements be in place)

1. Financial Framework. A financial framework has to be created to ensure that sufficient revenues derived from existing resource utilization within a firewalled development will be reinvested in a way that ensures a sustainable flow of present and future income to stakeholders resident in the firewalled area. The operating principle is that an administrative district is entitled to a fair share of the revenue derived from resource extraction whether this be mined ore, timber, hydropower, or some other natural resource. Similarly, ecotourism businesses which market an areas scenic amenities should be required to engage in revenue-sharing in a way that builds incentives among local communities to protect these resources. GMS-wide standards for revenue-sharing agreements might be developed and applied uniformly across the region.

2. Health and Education. National governments should be willing to implement at least minimum standards of health and education services within the firewalled areas. For example, girls should have equal access to educational opportunities and women of reproductive age should have informed access to reproductive services.

3. Indigenous Languages. Legislation or social contracts should exist allowing indigenous languages to be used at the primary school level and resources found to enable the development of scripts and grammars for languages whose speakers desire for these to be developed. Governments should be discouraged from consolidating villages, particularly when more than one language group may be involved. Support for language awareness, bilingualism, and teaching material in the language of the indigenous group are critical in maintaining cultural and community cohesion.

4. In-Migration. Mechanisms for strictly controlling in-migration to the firewalled area have to be developed,

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tested, funded, implemented, and found to be effective by both local communities and implementing authorities.

It is proposed here that only after the above "safety net" or firewall had been established could a remote upland area be permitted to be accessible to large scale development projects such as new roads, hydropower, or protected area establishment. This is, of course, an ambitious approach to protecting the interests of local people. Undoubtedly, it would be difficult for many development areas to conform to this "ideal list" or to get all six GMS states to agree to all of the firewall conditions. We discuss below some strategies that might help overcome these obstacles.

One possibility would be for ADB loans to projects in firewall areas or deemed likely to affect firewall areas to lower the price of the loan in correspondence to the extent to which the "ideal list" of firewall conditions had been met. As conditions could change over time, there might also be a means to adjust the price of the loan, similar to an adjustable mortgage, as conditions changed over the life of the loan. For example, the interest rate changed on the loan might drop in 25 basis point increments as each of the nine or so firewall criteria were met. One problem with this approach is that ADB loans to most GMS countries are already "highly concessionary" and so there may not be much scope to lower interest rates much lower.

A study needs to be carried out on the "autonomous areas" in Yunnan and on the former autonomous areas in Vietnam to determine what about their character a) led to their elimination in Vietnam and b) might need revision in China to better enable these areas to compete for scarce development funding.

In southern Lao PDR, there is a diverse array of Mon-Khmer indigenous language groups including the Brao/Lave, Cheng, Harlak/Alak, Heuny/Nya Hoen, Jru’, Katang, Kate, Kayong, Ngkriang, Oy, Sedang, Sapuar, Saveung, Sok, Suai-2, Tahang, Tarieng, and Yaeh (Diffloth, 1997). Most of these groups have throughout their history settled beside fast-flowing rivers or creeks in forested upland areas and have relied on slash and burn agriculture for their subsistence rice production. Most are animist societies and believe that the spirits of their ancestors reside in particular forested areas. Contrary to the stereotype which portrays slash and burn agricultural societies as migratory societies that shift from locale to locale over-time (so what is one more government-facilitated move?), villages of many of these groups have relatively fixed residence in a "homeland" area. However, the location of slash and burn fields moves about within a 5-km radius from a village.

7.6 The Need to Respect Traditional Residence Patterns

Recommendation:

As a working principal, the ADB should encourage GMS members to allow traditional residence patterns to remain in place. While it is true that the "mixing" of language groups in new settlements will accelerate language loss by the non-dominant group(s), the stripping of language and cultural traits from many traditional communities has been more often found to be associated with increased dependency, impoverishment, and substance abuse than it has with successful integration into the dominant community.

Secondly, the consolidation of small settlements into larger communities is often associated with increased environmental degradation at the larger site and with the "latecomer syndrome" whereby late arrivals to the new community never regain their former level of access to land, irrigation water, firewood, and other natural resources.

Particularly in instances where population density appears to have exceeded the "carrying capacity" of local agroecosystems, local investment projects might be considered which diversify incomes away from traditional agriculture. Small livestock, fish ponds, handicrafts, high-value cash crops, non-timber forest products, eco-tourism trekking, seasonal off-farm labor, women-based rural credit, and hydroponics are all options that may merit investment support within the village of traditional residence.

Hydropower projects or simply reports of hydropower studies have led to provincial authorities in Attapeu and Champassak provinces to undertake "whole watershed relocations" which seemed designed to break-up historical ethnic homelands of Heuny/Nya Hoen, Lavae, Tariang, and Harlak/Alak peoples and to free up the resources in those watersheds for exploitation by more aggressive, market-oriented interests or for incorporation into protected areas interests (Dennis,1998; Dennis,1997).

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7.7 The Need to Prevent RETA 5771 from Becoming Simply a Costly Window Dressing Exercise for Big Ticket Infrastructure Projects.

The Development Banks in the 1990s must necessarily state that all projects they fund are "people-centered" and "highly participatory" in both their design and implementation. As made clear at the beginning of this paper, any regional bank which indicates in an early planning document that as much as 99 percent of future resources lent to support the regional integration of six countries will likely go to the "steel and concrete" transportation sector will have great difficulty in making a credible case that the overall loan strategy is either "people-centered" or "highly participatory." Perhaps 30 percent allocations to transport, health, and education, respectively, within the GMS portfolio would constitute a convincing case.

The GMS East-West Transport Corridor Project, if approved and funded, will result in the construction of a bridge across the Mekong River and a 293 km highway running from Mukthahan in NE Thailand, across the Lao province of Savannakhet and on to the Vietnamese coast. In an early briefing of the Phase One RETA 5771 team, the ADB project officer cited the East-West Transport Corridor Project both as a high priority project and as an example of the need to take a regional perspective on project prioritization. He argued that the value of an enhanced transport link between Thailand and Vietnam was sufficient to justify the investment even if the advantages of the project to Lao PDR remained open to question (Briefing by Mr. Rajendran, July/August 1998.)

As it turns out, the East-West Transport Corridor Project does not fall within any of the three priority watersheds identified for further study in Lao PDR by Phase 2 of RETA 5771. Any social and environmental impact assessment for this Transport Corridor project is occurring independent of RETA 5771.

Recommendation:

The ADB should put detailed documentation regarding all possible ADB-supported projects within the GMS on its Web page so that relevant project teams such as RETA 5771 and all relevant stakeholders may have more opportunity to assess these projects.

In Thailand, however, the Mae Kok watershed is the single watershed identified by the Government of Thailand (GOT) as their priority watershed for studies under RETA 5771. Under the GOT’s existing plans for the Kok-Ing-Nan Water Transfer Scheme, a significant portion of the Kok water supply to the Mekong River would be diverted to Thailand’s Chao Phraya Watershed which drains into the Gulf of Thailand. Cumulative downstream effects of such a transfer scheme on fishery resources in the Lower Mekong Basin have not yet been quantified. Conceivably, any future ADB-funded activity in the Kok Basin inspired by RETA 5771 might be somehow construed as ADB having placed its imprimatur on the controversial Kok-Ing-Nan Water Transfer Scheme.

Recommendation:

The RETA 5771 and the ADB should abstain from any involvement in the Kok Basin unless the GOT is willing to pledge that the plans for the Kok-Ing-Nan Water Transfer Scheme will be put before GMS representatives for review and possible amendment or veto.

In closing this paper I would like to take the opportunity to offer my profuse thanks to the government officials, local leaders and others who were so generous with their time and assistance during my project-related travels in Cambodia, Lao PDR, Thailand, Vietnam, and Yunnan. I would like to apologize for any omission or unintended misrepresentation of ideas which they may have shared with me. While I am grateful for the generous access which was given to me, I take full responsibility for all of the findings, ideas and recommendations in this paper and my country papers on Cambodia, China, Lao PDR, Thailand, and Vietnam.

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