Lancang-Mekong Cooperation’s Institutional Design

LuGuangsheng

The year 2021 marks the fifth anniversary of the Lancang-Mekong Cooperation （LMC）. Over the past five years， substantial progress has been made within the LMC framework， making it one of the most dynamic international institutions in the region. The LMCs strong vitality and the potential it unleashes for regional development are attributed to its forward-looking， scientific and result-oriented institutional design.

Features of LMCs Institutional Design

The LMC， a newly-established regional arrangement， has some distinctive features in its institutional design.

First， it is oriented towards building a community with a shared future. The Mekong River region is known for being “congested” with multiple regional arrangements， among which the Greater Mekong Subregion （GMS） economic cooperation program and the Mekong River Commission （MRC） have the greatest influence. The former aims at greater regional economic integration， while the latter focuses on better water resources management and sustainable development in the region. Thus， their institutional designs prioritize functional and technical cooperation， and their supporting cooperation mechanisms are designed for addressing specific issues. At the first LMC Leaders Meeting， building a Lancang-Mekong community with a shared future was identified as the LMCs goal， distinguishing the LMC from others from its inception. The LMC has in its institutional design not only specific mechanisms to realize phased targets like functional cooperation and regional integration in particular fields， but also necessary mechanisms to build a community with shared interests， shared responsibility and shared future. A cooperation structure featuring leaders guidance， all-round cooperation and broad participation has thus taken shape.

Second， the cooperation framework covers multiple areas. Taking building a community with a shared future among Lancang-Mekong countries as the overarching goal， the LMC is cross-sectoral and multidimensional in nature. A 3+5+X cooperation framework has been laid out， with political security， economic and sustainable development， and social and cultural progress as three major pillars， and connectivity， production capacity， cross-border economy， water resources， agriculture and poverty reduction as its cooperation priorities. What is worth mentioning is that though the 3+5+X framework shares some cooperation areas with the existing regional arrangements， it is by no means their “substitute” but an “upgraded” version that strives to build a community with a ?shared future.

Third， it is a joint undertaking championed by major countries in the region. Prior to the LMC， regional cooperation arrangements have been mostly led or even quietly dominated by major powers outside the region like the US and Japan who leverage their strength in international organizations such as the Asian Development Bank. These arrangements have thus become platforms at the service of those countries， and the corresponding institutional design and mechanisms also reflect their preferences. The LMC by contrast is initiated and promoted by China， and distinguishes itself from others in at least two aspects. Firstly， China is an upstream Mekong country and belongs to this region. Secondly， China is a “pioneer” rather than a “dominant force”. It actively participates in the LMC as a major responsible country with no intention to seek “institutional hegemony” as major powers outside the region do. Upholding the principle of mutual consultation， joint contribution and shared benefits， the six LMC countries share responsibilities， consult each other and share the benefits.

Logic of LMCs Institutional Design and Effects

Despite being a newly-established regional format， the LMC is considerably mature due to its well-considered and sound institutional design which not only follows the general laws for the development of international arrangements， but also takes into account the history and realities of the region. Specifically， the LMC institutional design has the following three features.

First， it is committed to optimal distribution of multiple interests. Generally speaking， LMC countries have shared interests in non-traditional security and economic development， while their interests diverge from one another on the water issue. In light of these diverse and dynamic interests， the LMC focuses primarily on security and economic development while also covering other issues， in an effort to help address or at least avoid intensifying regional countries differences in those issues. The 3+5+X cooperation framework pursues optimal distribution of multiple interests and allows LMC countries more leeway when it comes to distribution of interests. As it is not confined to any single sector or field such as the water issue， this framework is unlikely to reach an impasse due to diverging interests over a particular issue.

Second， it adopts soft constraints under a centralized system. A relatively centralized institutional design can improve the efficiency and execution of international arrangements. However， such arrangements often lack flexibility and are subject to impacts brought by changing domestic interests of the principal participating countries. Brexit is the latest case in point. Drawing on past experience， the LMC， oriented towards the building of a community with a shared future， has in its institutional design a high-level operational commission supplemented by functional bodies including a council， a joint committee， and the secretariat. This institutional setup allows quite centralized power. At the same time， taking into account the regional realities， the LMC at this stage is more of a mechanism for deliberations and coordination that has introduced few mandatory directives but soft constraints expressed in the form of “common aspirations”. This not only ensures the smooth operation of the mechanism up till now， but also leaves room for a higher degree of institutionalization in the future.

Third， it follows a dynamic and inclusive process in establishing regional norms. In establishing norms， the LMC countries draw reference from general international norms and also bear in mind the specific regional realities. The LMC countries let the norms of regional cooperation to follow a natural course based on the successful experience of other international arrangements as well as general laws of the establishment and evolution of norms. What it means is that these norms， instead of being pre-determined， take shape on the basis of the history and realities of the region and the vision for a community with a shared future. For instance， the LMC spirit and ASEAN norms are important inspirations for the LMC norms， which make the LMC highly inclusive and open.

The LMC institutional design has proven productive.

First， the LMC can by and large balance shared regional interests and national interests. To achieve optimal distribution of multiple interests， the LMC works to expand common interests while accommodating divergent interests of participating countries according to the compensation principle. Take the exploitation and utilization of water resources for example. The LMC offers multiple options for sustainable development. For countries whose water interests are undermined， their gains from cooperation in other areas outweigh their loss in water resources. This motivates countries to think beyond the water issue and remain committed to the LMC. In turn， closer cooperation in other areas can also boost water cooperation and help resolve the water issue. LMCs experience on the distribution of water interests shows that， on the condition that distribution of interests is balanced on the whole， it is easier for relevant countries to accept negotiations with different interests bundled together. In this way， all sides can enjoy the benefits of expanded cooperation while accommodating their existing concerns.

Second， the LMC serves as a key platform to resolve regional issues through consultation. A relatively centralized institutional setup makes the LMC a robust and efficient deliberative platform that addresses common problems facing the LMC countries in a timely and effective manner. In the wake of the COVID-19 outbreak in early 2020， the LMC countries compared notes with each other at the first opportunity at the LMC Foreign Ministers Meeting， and identified the need to fight the pandemic in the spirit of solidarity and cooperation. As a result， Lancang-Mekong countries were well-prepared for the first wave of COVID-19， laying a solid foundation for the ultimate victory of the region.

Last but not least， the LMC and other international arrangements reinforce each other. The LMC is no “substitute” for other regional arrangements or disruption to ASEAN， but an upgraded version of existing cooperation mechanisms and a complement to the ASEAN Community. China， a key champion of the LMC， has noted that it will continue to promote greater synergy between the LMC and other mechanisms like the Greater Mekong Sub-regional Economic Cooperation （GMSEC）， Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy （ACMECS） and the Mekong River Commission. The Regional Investment Framework of the GMSEC introduced in 2018 has more than 200 key projects， one third of which are directly or indirectly related to China. In October 2020， the Ministry of Water Resources of China and the Mekong River Commission signed the agreement on provision of hydrological information， delivering on the commitments made at the Third LMC Leaders Meeting. With building a community with a shared future among Lancang-Mekong countries as its goal， the LMC is an example of truly open regionalism that reinforces other regional arrangements. Thanks to the LMC， the region is witnessing greater competition and cooperation among different arrangements and institutions， which avoids both the negative impact brought by institutional competition and low efficiency arising from competition deficiency， and boosts regional prosperity.

Inspirations from LMCs Institutional Design

The LMCs progress has verified the effectiveness of its institutional design， and its initial success can shed some light on future regional arrangements.

First， coordinating interests for greater development. When countries overemphasize their own interests in a particular field in engaging in international cooperation， problems often occur. The LMCs success story shows that development covers a wide range of areas not limited to material or economic growth. Cooperation mechanisms aiming at comprehensive development and greater common interests can advance sustainable development and solve problems hand in hand without coming to an impasse due to differences over a particular sector or field.

Second， advancing institutionalization in a step-by-step manner. The level of institutionalization is a yardstick for assessing international arrangements， while the political hierarchy and institutional structure are important criteria for the level of institutionalization. The LMCs experience shows that， in advancing institutionalization of international arrangements， we should combine “consistent” with “dynamic” and start with low-hanging fruits first. “Consistent” means establishing a high-standard institutional and operational structure， and laying the foundation for further institutionalization. “Dynamic” means a dynamic process of promoting institutionalization in accordance with the timing and actual conditions. Institutionalization may be achieved with one go or with some twists and turns depending on the circumstances. Starting with low-hanging fruits means advancing institutionalization in a phased manner， starting with less politically sensitive areas and then moving on to more sensitive fields depending on the willingness of participating countries.

Third， boosting regional cooperation through polycentric governance. Regional institutions and arrangements， born out of regional governance， are public goods primarily to address common problems facing the region. The LMCs experience shows that regional arrangements under the principle of extensive consultation， joint contribution and shared benefits boast strong vitality. The polycentric governance model guided by the principle of common but differentiated responsibilities gives participating countries a sense of ownership and belonging. It also adds dynamism to regional arrangements， making these arrangements like “double-engine fighter jets” that do not malfunction due to the failure of any “single engine”.

That being said， there is still room for LMC optimization specified as follows. Firstly， participating countries should refocus on opportunities presented by provision of hydrological information to strengthen water cooperation and beyond. Secondly， participating countries should take a differentiated approach to development. Within the 3+5+X cooperation framework， the level of institutionalization across different fields may vary from one another as appropriate. LMC countries can explore entities with greater binding effect in such fields as health， education and environmental protection. Thirdly， participating countries should seek greater synergy among regional arrangements， as there is great potential for complementarity between the LMC and other international arrangements in the region. To this end， LMC countries can start with concrete projects where these arrangements have common ground while downplaying institutional differences to reduce resistance at the initial stage.

With the joint efforts of the six countries， the region has maintained a sound momentum on balance， and the LMC has become one of the most dynamic regional arrangements， serving as a model for multilateral cooperation mechanisms and arrangements in other regions. The vitality of the LMC comes from its sound institutional design and， more importantly， its original aspiration to build a community with a shared future among Lancang-Mekong countries， and contribute to the building of a community with a shared future with neighbors and even for mankind.

Lu Guangsheng is Director of Institute of International Relations， Director and Professor of Center for the Study of Chinas Neighboring Diplomacy in Yunnan University