 Cutting Edge and today the edge cuts in Bang Prabang, which is what the capital or a big city in Laos, and that's where Marco Mangelsdorf is learning about energy and life in the world and Southeast Asia. Hi Marco. So nice to talk to you at great distance this way Well indeed and sub ID from Luang Prabang, which is a town of about 50,000 remarkably close in population to my hometown of Hilo right along the Mekong River in northern Laos before the Mekong continues its its epic journey all the way down past Saigon and into the Mekong River Delta emptying off into the East Sea. So great pleasure to be with you. Yes, but why? Why are you there? It sounds pretty remote to me Let me say it again one Prabang. I get that right Luang with an L Luang Prabang, which translates from the Lao language into Big Buddha Okay So why? That's a great question and two reasons the biggest one being you know, I was a big fan I am a big fan of one Anthony Bourdain. You've heard of Anthony I'm also a big fan of Anthony Bourdain. Yes, and you know what you remind me of him actually Marco Well, that's pretty mean incredible August company my friend Jay, I really appreciate that and and you know, he was someone who To me was who was living his dream and living very authentically and He did a couple of pieces on Laos one most recently back in 2016 I believe it was and I was so captivated by it and he visited Luang Prabang along with the capital I believe VN 10 and I was so taken by it I just was drawn to come and see here myself. So Bourdain was a big part of that and In Barack Obama's last year in his presidency He visited a number of countries in this region including Vietnam and and Laos He was the first president in fact ever visit Laos and he visited Luang Prabang With his entourage went on a tour met with some locals had a had a fresh coconut Water ready for him by one of the street vendors and I Thought well if it's good enough for Tony Bourdain and good enough for Barack Obama Then I'm sure Luang Prabang would be good enough for me. So those are the immediate reasons that drew me here The reason I've come now again for a longer period is I am researching a new university course that I am Seeking to put together looking at energy security politics and the environment along the Mekong which is Proving to be incredibly rich undertaking and very very Interesting so that's a long answer to your short question. Okay, great But let me let me go a step further and ask what have you learned about the Mekong? What have you learned about energy? Well, what are the profundities that have presented to you that have been presented to you? Oh Gosh, how many hours do we have Jay? I'd say I'm visiting all five all five countries in what's called the sub Mekong or lower Mekong region, which is Laos Cambodia, Myanmar, Vietnam and Thailand. I'll be going to Myanmar in a few days for a handful of days meeting people there What I'm learning so far I'm focusing on Laos first and that is that the importance of the Mekong to the people of this country both in terms of power production because there are many dams in the works that will go either on the Mekong or on tributary rivers feeding into the Mekong and these dams are allowing so far allows to be a producer of surplus power Which sells to its neighbors principally Vietnam and Thailand with some going to China that allows allows to use Exported hydro power to be its principal source of export earnings So they are a landlocked country. They do not have oil. They do not have net gas They do not have they have timber and some minerals, but in terms of Commodities that they're able to sell to to their neighbors. It's the world market. They're rather limited, but hydro is one of those Exportables so to speak exportable value values that they have and the challenge is Building hydro plants and not essentially destroying Communities by having to relocate them, which they're already doing in fact But also the fact that hydro dams. These are not run of the river. These are these are dam dams Hydro dams have a significant impact Can't have a significant impact on those Millions and millions and I'm talking 60 million people who who sustenance and livelihood Depend on the Mekong whether it's fishing the consumption of protein and and their overall Lifestyle for for generations has been built around the Mekong So I'd say the number one takeaway is that this river being one of the great rivers of the world is truly Alive and and yet it is being threatened by drought threatened by dams threatened by politics Between the countries that share the Mekong, you know as it starts this epic journey in the High altitudes of southern China and then continues over 2,000 miles Like I said and emptying into the east sea off of Vietnam Well, let's let's talk about some of those let's drill down on some of that Laos is landlocked you said and my recollections that Laos has probably The lowest population in the area, I mean Vietnam has a substantial population Thailand has a substantial population Maybe Cambodia not so much but Laos is only what what less than 10 million am I right? Good guess my friends about seven seven million seven million That's not a lot of people and and then you wonder, you know with an economy that that came from You know an undeveloped country how they could afford to build dams Along the river and and the answer to me I would guess is that China and the one belt one road program has helped them do that China has financed and engineered those dams. Am I right? You're close. Jay. You're close. It's not just the Chinese. It's also the ties because they use or consume a fair amount of Lao hydropower energy and more and more so the Vietnamese and I just read recently in the local press here that Vietnam is projecting the strong possibility of power shortages this year and You know Vietnam FYI They are population of last year was about 96 million 96 million they have a very robust population growth. They're the largest in the region followed by Thailand which is close to 70 so Again, not just the Chinese but the the ties have I think deals for hydro the Vietnamese have as well, so That's where a lot of the politics corruption play in in terms of who who's getting paid off to approve these projects and what's going to be the the benefit sharing of of these projects that are in in many instances largely financed by countries or companies outside of Laos so You know for decades to come there will be a shared revenue stream between two or more countries for these hydro projects and You know what what kind of leverage does this does Laos have because it is one of the poor countries in the region In fact, I read that More people are under the poverty line here than any other state in the region except except for Myanmar Myanmar is the is the has the highest percentage of people in poverty, but Another unfortunate distinction is Laos is the worst when it comes to child mortality Children dying under the age of five. They are the have the highest child mortality That must lead to health in general then health care must be at a lower standard than their neighbors now Well poverty Alleviation which of course, you know addresses health care, of course Especially for for younger people poverty alleviation is a very high priority of the the the monopoly in control communist party here Which has been a single party in control since the the path that Laos succeeded in Beating the Americans back in 75, which is quite the bad year for us, you know in retrospect in terms of South Vietnam falling to the north and so forth. So Yeah, it's a very high priority here and there's a tremendous amount of money I don't have a gross figure for you But the European nations the Swiss the Swedes the French amongst others the Germans the Japanese To some extent the Americans continue to pump hundreds of millions of dollars of Grant and aid essentially development money into this country there just think their presence is very clear You know one thing that's raised by all this discussion is how well they can negotiate on their own behalf I mean if they have control of the Mekong as it flows through Laos then They they should be able to negotiate good power purchase agreements with Everyone who has the benefit of the the hydro power, but is that so are they are they sophisticated in that regard? Are they do they see their bargaining position? Do they bargain for you know good results economically? Well, I mean one good result is that the electrification of the country is in the high 90s Contrast that with let's say both Cambodia and Myanmar have somewhere Somewhere under between 35 to 40 percent of people in both those countries do not have access to grid electricity So one of the benefits certainly to to the people of Laos has been a high degree of electrification electricity here is not Super cheap nor is it super expensive? But you know you're talking about a per capita GDP here last year of about 2,400 bucks Okay, that comes out of $200 or so per month. I mean you have people working in restaurants here people coming in from the the Outlying provinces and rural area who are making a hundred some of bucks a month So you know to your question to what extent who has the leverage in the relationship here? Is it equal or is it imbalanced and my impression so far is that these Foreign companies Thai Chinese Vietnamese are doing quite well Doing these projects in fact a colleague of mine who I'm in a VN Tien Just this past week noted that from his perspective The the money is made by the developers even prior to throwing the switch and creating power Installing that power. It's made through through financing. It's made through Perhaps less than shady kickbacks along the way So again to your question. I think it is an open question as to what extent Laos has has the same amount of leverage over its negotiating partner than the other party does I mean, you know, it's like Africa If you have the resources there are a number of people who always want to exploit the resources And if you don't have a strong government with you know a strong officials who can you know who negotiate with people Then you wind up being the wrong end of the exploitation. How how is the government doing in Laos? What is what kind of a government is it and how does it function? How well does it function and where is it going? Well, there are five countries in the world Jay that have monopoly control ruling communist parties one people's Republic of China Cuba Democratic Republic of People's Democratic Republic of North Korea DPRK Vietnam that's for and Laos so only five countries in the world are ruled by Dominant control or monopoly control communist parties and Laos is one of them the Communist Party has been in power here since 1975 45 years there is no political competition, you know, my overall vibe is that it's not repressive Obviously repressive per se, but both the people in the media and also folks who are politically inclined Practice a degree a degree of self-censorship, which is not uncommon to this country self-censorship in terms of Lines you don't cross and and things you stay away from there is no discussion in the press about Free and fair elections in this country that is not likely to happen anytime in the foreseeable future but this come the from what I can tell the the Communist Party here is pragmatic and they they do seek to improve the conditions of its people and are focused on poverty alleviation are open to accepting money from from Western developed countries and and the Japanese as well and see see the path ahead as Improving their economic state and bringing more investment money into the country whether it's from hydro projects or You know FYI tourism went up 14% last year 14% which if you do the math And if that continues that's going to lead to a doubling of tourists coming here in five years So there are some who believe that That will be a good thing because tourism will spread money across the economy or so it goes But then again, you and I both know that You know in our beautiful state of Hawaii Being so dependent the economy being so dependent on tourism is not all all passion fruit and pineapples and Papayas in the morning, right? Well, you know that that takes me to a subject We really absolutely need to discuss and that's the coronavirus which is shaking the whole world up right now on a daily basis in fact, you know news news is on a 24-hour cycle and there are places you can find Right now how many people have died how many people are infected what countries how many people in you know in every country in the world global maps if you will and You know, certainly that affects travel it affects the notion of travel. It certainly Supports your your point that you travel Makes you vulnerable to the vagaries of tourism and the like so how how is How is tourism and how is it being affected by? the news about coronavirus As far as I know, there's not a single case yet That's been diagnosed in terms of the coronavirus here in this country that said I Just in the past hours, I think the list of countries that there are effectively Seeking to evacuate their nationals from Wuhan, which is the epicenter there Clues the Americans the Japanese the ties the British the French and you know when other countries see See these countries like us and others who are who are taking their Evacuating their citizens. I gotta believe there's gonna be you know, a larger stampede for the door There there are no shortage of tourists or Chinese tourists here in Laos Here in Luang Prabang, it's been the Chinese Lunar New Year over the past handful of days and and there are plenty of SUVs that have these blue Chinese license plates I'm seeing, you know, no shortage of people walking around in in masks But nothing to the extent of what you see in in other parts of the world or China where virtually everybody's wearing a mask So I think there's a fair amount of trepidation. I mean the the ability for If there were to be probably not if but when there are cases diagnosed to be in general Luang Prabang or Savannah cat or other parts of Laos Will there be folks what were the medical personnel have these hazmat? Biosuits to be able to put on day in day out. I think you know the further out you get from the so-called modern technology the less Less ability that the local health infrastructure has most likely to deal with a type of Threat like this. So yeah, it's kind of scary I'm supposed to be back on my way back in March for a week in Shanghai My beloved Shanghai, but I'm you know for good reason giving that serious Reconsideration depending on how things play out. I mean if I can't go to Shanghai Disney, I mean what's life about, right? Well, it's closed right now. So I've got no trip So but you know the problem is that you travel around you have to go through an airport in different countries will have different reactions to coronavirus and different ways of Isolating it and so who knows what what things will be like in March either well in I guess in Laos you want to think about that but also Turning to the United States and stopping anywhere along the way in Hong Kong or Taiwan or Korea wherever your plane will stop There'll be issues in travel in general. Don't you think Marcus? Well thermal scanners seem to be the rage these days Jay at airports and The airport here in Luang Prabang, which was built and not too long ago by by the Chinese Chinese investment money I would be shocked to pieces if there were Any scanners thermal scanners in that restaurant. I don't even know if they have them at the main airport And being chan the capital so, you know, I don't know you he probably traveled or traveled a fair amount of developing world I mean, it's a different ballgame in terms of Leaving and and entering the country when it comes to scrutiny and and devices like that so Well, of course it's dynamic and it's gonna change me right now There's a shortage of masks and gowns in China and the Chinese government here to tell us Trying to find contractors who can build them and sell them right away In fact, the Chinese government is building a couple of hospitals from the ground up With an expectation of completion in a week or less You know and the Chinese can do that but query can the Chinese Chinese Effectively stop the the contagion. That's that's not clear but if there's a shortage of You know masks and gowns and who knows what else you need to treat a population that's been infected in China There's going to be the same shortage or worse in all the countries in Southeast Asia They don't have the manufacturing capability that China has and and that takes me to well, you know a question about how How close is Laos to China? Is it contiguous? Can you drive your blue license plate car right over the border? Is it is it a shared border? Do you have to go through some of the country to get to Laos? Well, you can indeed Jay. There is the northern boundary of Laos but up against the southern boundary of the People's Republic of China and there is a a Railway that's been under construction for several years. It's supposed to open at the end of next year That would connect Kunming which is the capital of Yunnan province other in Yunnan province With V and Tien and this is a very big deal will be a very big deal because it will allow for both goods finished goods from China to come into Laos as well as people over time. So yeah, they share a border and The these folks in Yunnan more and more of them like to come and And spend time here. They buy villas along the river and there's more and more of a Chinese presence And I mentioned that tourism went up 14% last year overall here and it went up 26% For Chinese nationals. So you do the math for for 26% and that will double in about three years Doubling of Chinese coming into Laos. So You know that this the small country limited resources That is dependent or kind of smushed between bigger countries that have a lot more Resources and a lot more leverage In many of these negotiations. So, you know, they've got their work cut out for them to to not Effectively kind of be carved up or carved out Of their neighbors who who have a lot more in their bank accounts, so to speak than the Party in the government and and businesses have here. Yeah, well, that's likely to have the same effect as it has in Hawaii where you have You know richer people coming down and using your place So maybe abusing it as a sort of getaway place and buying expensive properties and spending money and the like That that may have a, you know a negative effect on the way the way Laos works over time I guess it would be of some concern. Is there any pushback on having all those Chinese come? And especially some some people are probably happy that the China closed the border You know They'd like a rest from all the all the onslaught There is I Want to be careful here, but there is certainly kind of an undercurrent of antipathy amongst many of the locals towards Towards the Chinese for for a number of reasons. I mean, there's kind of a Feeling of resignation that the Chinese do bring money and they do bring investment And that's needed But at the same time there is Like I said, so somewhat of an antipathy towards Towards the the deep pocket of Chinese and It's not just in Laos, but In Vietnam as well You know, they fought a border war in 1979 that killed people on both sides And there's a dispute over the what the Chinese call the South China Sea in the so-called lane dashed line What the Vietnamese call their EC So it was kind of interesting is the different relationships that these ruling communist parties have the relationship between the Laos Communist Party And and Beijing is very close the relationship between the the de facto communist party in Hanoi and and and Beijing is decidedly a lot more tepid and and more kind of fraught the relationship between The nationalist monopoly control party in Cambodia of Hun Sen has been there for decades is also very close So whereas the relationship between the the military back government in Thailand in Beijing is more wary So that's why the the region J is just so fascinating in terms of the the different dynamics that play the different The different ethnicities the different issues. They're challenging that they're that they're Uh negotiating over sometimes fighting over and you know as I've been talking about for decades energy Is is being one of the main drivers of our society of economies around the world more and more energy is E focal point that that has my interest and will continue to have my interest But let me ask you one more geopolitical question. I think we've talked about this before We have a couple of processes working and and uh, you know, one could prevail Maybe the other would prevail one is that China would have more and more influence throughout southeast asia um, you know economically And in terms of development the one belt one road projects and all that and the other the other process is that southeast asia begins to Come together and be a region that's somehow united Geographically and maybe although the cultures are different maybe by some common denominator in the cultures Some wish to come together and be a you know a region that works together And so you have two competing You know directions as I see it anyway, and as we discussed before i'm always interested in knowing whether you think And especially on this trip southeast asia will come together and be more than just a loose confederation It'll become uh, you know like a like an eu But he was a little trouble right now But like an eu type of group which we have special trading arrangements special economic connections special travel Is this possible will it ever become Kind of closer than it is now My friend jay that is a subject for a graduate level seminar discussion that I cannot address adequately and in in a soundbite, but i'll do my best Uh There are both Cross boundary cleavages that push the countries apart and also reasons for them to work together my focus Uh, both kind of symbolically and tangibly is to look at the macong river As a as a way or as a a focus of attention and where the parties the five macong country sub macong countries Have to communicate have to get along have to negotiate in good faith The the the the life and well-being and the fate of this river where you have 60 million People at least 60 million people who do who depend on this river for their sustenance and their livelihood So i'm seeing this play out in real time in terms of how it's a common denominator the river the macong is a common denominator And uh, this is this show is called marco on the macong on the marvelous Majestic macong if you will Um, and I think uh, you you've touched on something in the sense that energy brings people together It brings economies together and maybe somehow uh laos is more important than only seven million people laos At the headwaters of the macong, uh, maybe as time goes by laos will play a role in that Anyway, we're out of time So i have to leave you now, but i look forward to our next discussion two weeks hence right marco Indeed and we will speak uh, when we speak next I will be in the capital of the socialist republic of vietnam aka hanoi I could hardly wait no kidding. Thank you marco. This has really been enlightening as always aloha. Thank you very much. Bye. Take care