Cambodia and Vietnam discuss collaborative Funan Techo Canal Project, addressing economic dynamics and environmental concerns

Central to the talks was the $1.7 billion Funan Techo Canal project in Cambodia, which aims to create a 180-kilometre artificial canal connecting the country’s southwest seaports to the Mekong River.

The two-day visit by Cambodian Prime Minister Hun Manet to Hanoi on December 11 marked a significant diplomatic encounter with his Vietnamese counterpart, Prime Minister Pham Minh Chinh. The discussions covered various aspects, including defence, border affairs, trade, and education, resulting in the signing of cooperation agreements in science and trade.

Central to the talks was the $1.7 billion Funan Techo Canal project in Cambodia, which aims to create a 180-kilometre artificial canal connecting the country’s southwest seaports to the Mekong River.

This initiative, a priority for Hun Manet’s government, is expected to streamline the transport of goods and reduce dependency on Vietnamese ports. However, during the discussions, Prime Minister Chinh expressed concerns about potential environmental impacts on Vietnam’s downstream water flow from Cambodia to Vietnam.

Hun Manet sought to reassure Chinh, citing preliminary studies indicating minimal environmental impacts on Vietnam. Despite the assurances, Chinh’s concerns were viewed negatively by some Cambodian commentators, who speculated that Vietnam might be uncomfortable with Cambodia’s independent pursuit of major infrastructure projects. Some even suggested a link to concerns about China leveraging the canal for military purposes in the region.

Contrary to these speculations, Vietnam’s primary concern appears to be economic. The canal project could impact downstream environmental conditions in Vietnam’s Mekong Delta, affecting fisheries and agriculture. Additionally, the canal would reduce Cambodia’s reliance on Vietnamese ports for maritime transportation, altering the economic dynamics between the two nations. Currently, Phnom Penh relies on Vietnam’s ports for garment exports and raw material imports, creating economic interdependence between the two countries.

The completion of the Funan Techo Canal would mark a significant shift, allowing Cambodia to transport goods independently between its crucial ports, Sihanoukville and Phnom Penh. This move, often referred to by Prime Minister Hun Manet as “breathing through our own nose,” would diminish Vietnam’s economic gains and influence in the transportation sector. The concerns expressed by Prime Minister Chinh highlight the intricate economic considerations and shifting dynamics underlying the regional infrastructure projects.