The Economist - USA (2020-05-16)

12 Leaders The EconomistMay 16th 2020

2

R

ivers flowdownhill, which in much of Asia means they

start on the Tibetan plateau before cascading away to the

east, west and south. Those steep descents provide the ideal set-

ting for hydropower projects. And since Tibet is part of China,

Chinese engineers have been making the most of that potential.

They have built big dams not only on rivers like the Yellow and

the Yangzi, which flow across China to the Pacific, but also on

others, like the Brahmaputra and the Mekong, which pass

through several more countries on their way to the sea.

China has every right to do so. Countries lucky enough to con-

trol the sources of big rivers often make use of the water for hy-

dropower or irrigation before it sloshes away across a border.

Their neighbours downstream, however, are

naturally twitchy. If the countries nearest the

source suck up too much of the flow, or even

simply stop silt flowing down or fish swimming

up by building dams, the consequences in the

lower reaches of the river can be grim: parched

crops, collapsed fisheries, salty farmland. In the

best cases, the various riparian countries sign

treaties setting out how much water each will

guarantee to the next. In the worst, bickering over the flow is a

source of constant tension and recrimination.

Tension and recrimination have been the order of the day for

China and its neighbours, alas. In part, this is because a river like

the Mekong does not contain enough water to go round. China

has already built 11 dams across the main river (never mind its

tributaries) and has plans for eight more; the downstream states

have built two and are contemplating seven more. Last year, dur-

ing a drought, the river ran so low that Cambodia had to turn off a

big hydropower plant (see Asia section). Even when rainfall is

normal, the altered flow and diminished siltation are causing

saltwater to intrude into the Mekong delta, which is the bread-

basket of Vietnam, and depleting the fish stocks that provide the

only protein for millions of poor Cambodians.

China has long resisted any formal commitment to curb its

construction of dams or to guarantee downstream countries a

minimum allocation of water. It will not even join the Mekong

River Commission, a body intended to help riparian countries

resolve water-sharing disputes. The problem is not just that Chi-

na gets huffy about anything that could be construed as foreign

interference in its “internal affairs”. The country’s leaders are

also mesmerised by big engineering projects and seldom show

much concern for the people displaced or disadvantaged by

them, even when the victims are their fellow citizens. So keen is

China on big dams, in fact, that it is helping

Pakistan build several on the Indus—a river too

small and remote in its Chinese reaches to be

worth damming—and is trying to persuade

Myanmar to build a huge barrage across the Irra-

waddy, whose tributaries flow through China

for just a tantalising couple of kilometres.

But even if China’s rulers cannot overcome

their engineering fetish, they could do plenty

more to reassure their neighbours. Sharing data on water levels

routinely, without interruption, would be a good start. During a

row over a poorly demarcated section of their shared border in

2017, China stopped providing India with information about the

flow of the Brahmaputra that is used to provide flood warnings to

villagers downstream. It took a summit of the two countries’

leaders to get the information flowing again. By the same token,

downstream countries would love to know when Chinese hydro-

power plants plan to retain or discharge water, to allow farmers

and fishermen in the lower reaches time to prepare. And it would

not hurt China to undertake to alleviate droughts when it can.

That would send a flood of gratitude flowing uphill. 7

Water torture

China should tell its neighbours what it is doing on the rivers they share

Hydropower in Asia

ing less on restaurants, cinemas and travel, and spending more

on deliveries, home-improvement and video-streaming. Em-

ployees may, reasonably, demand higher wages to perform some

jobs, such as construction or butchering, which involve working

elbow-to-elbow with others all day. And industries starved of

immigrant labour because of border controls may have to entice

in more locals. Four in ten American jobs lost in the pandemic

will not return, according to one estimate based on surveys, his-

torical patterns and stockmarket signals. Three in ten gross job

losses have already been offset by new hiring.

The necessary adjustments will not take place while the state

pays workers to wait for their old jobs to return—often on better

money than they got before. In America roughly three-quarters

of recipients of unemployment insurance are receiving more

than they did in work. That blunts the incentive to seek new jobs.

And yet cutting support abruptly would leave legions of unem-

ployed workers fending for themselves in brutal conditions, es-

pecially in America with its thin welfare system.

Governments thus face a difficult balancing act: withdraw

support too readily, and many people will suffer; withdraw it too

late, and the economy will ossify. To find the right path, the most

lavish support should be maintained only in industries which

the government is forcibly keeping closed. Once shops, restau-

rants and cinemas are allowed to open, the market must decide if

they have a future. These signals should not be ignored for long.

Schemes should also encourage flexibility. Idled workers

should be allowed to return to their companies part-time, as

Britain this week pledged. America should make more use of

work-sharing schemes, already in place in about half of the

states, which, as in Europe, provide benefits on the basis of lost

hours of work, not just lost jobs. This should be paired with un-

employment insurance, though neither scheme should pay so

much that it discourages seeking full-time work.

Finally, governments should help people find new jobs. That

means boosting support for training, tearing down barriers to

opportunity such as unnecessary licensing rules, and cutting

payroll taxes to encourage hiring. As in normal times, govern-

ments must not stand in the way of economic change. They

should instead grease its wheels—while offering a helping hand

to those who are left behind. 7