Dam-induced development and environmental and social sustainability: the Bakun industrialization strategy revisited

Journal of Economic Issues, March, 2005 by Choy Yee Keong

Malaysia changed rapidly from an agriculturally based economy in the 1960s to an industrially oriented nation in the 1990s. Its rapid industrial development momentum is further intensified under the Malaysian Third Outline Perspective Plan (OPP3) 2001-2010 a long-term development plan which aims to develop Malaysia into a fully industrialized country by 2020 (EPU 2001a). This long-term vision of growth is often known as "Vision 2020." Unmistakably, one of the main conditions for achieving this vision of growth is the increasing availability of energy, particularly the supply of electricity to spur its industrialization process. As claimed by the Ministry of Resource and Planning, for instance, "[w]ith industrialization as our national vision, we must have sufficient energy to realize our plans" (Sarawak Forest Department, undated). It is in this setting that the government has ventured into developing one of the largest dams in the world the Bakun Dam.

The dam, which will cost about $2.5 billion, is in the state of Sarawak in Malaysia (see figure 1). It has an installed capacity of 2,400 megawatts (MW) and a life cycle between thirty and fifty years. The dam measures 205 meters (m) high, 740 m long, and 560 m wide. It is the largest dam in Southeast Asia. The impoundment of water behind the dam will completely submerge 69,640 hectares of tropical forest ecosystem an area larger than the size of Singapore. The project also requires a forced displacement of the entire indigenous population, consisting of some 10,000 inhabitants who have been living in the Bakun interior for 450 years.

[FIGURE 1 OMITTED]

Although the dam-induced industrialization policy (called here the Bakun strategy) represents an aggressive strategy to spur Sarawak's economy to a higher stage of development, notes of concern have often been sounded over its inability to take into consideration the biophysical constraints governing its growth process. (1) It is also contended that the strategy has failed to consider the social impacts and external environmental effects arising from its compositional shift toward the development of energy- and pollution-intensive industries. Motivated by these concerns, this article seeks to analyze the dynamic implications of the links between the growth process and environmental/ social sustainability in order to assess to what extent the Bakun strategy represents a sustainable mode of development. This article is also written with the view of providing a fruitful source of comparative insights into the management of socio-economic and environment relations. By drawing inferences from the World Bank Industrial Pollution Projection System (IPPS) pertaining to the relationships between sectoral composition of industries and industrial pollution, it illustrates the existing constraints and real potential in achieving development which is socially and environmentally sustainable.

Environmental sustainability as used here refers to two dimensions of sustainability: ecological sustainability and environmental quality. Ecological sustainability relates specifically to the resilience of an ecosystem. Resilience is defined as the ability of an ecosystem to absorb or adapt to shocks and stresses when disturbed and to reconfigure itself without significant decline in its crucial functions in relation to the social and ecological systems (Holling 1973, 1978). It is an index of the "integrity" or "health" of an ecosystem (Perrings 1997, xviii). Basically, Crawford Holling's sustainability requires natural resources to be exploited in such a way that it does not disturb the resilience of a system as a whole. It recognizes that extinction of some species is permitted so long as the ecosystem when disturbed is able retain its organizational structure or resilient feature. It also places great emphasis on protecting critical natural capitals from stress and shock, which, if left unchecked, would result in the loss of ability of the ecological system to function efficiently. Critical natural capitals refer to natural assets providing essential ecological or life-support functions. Consequently, protecting the resilience of these capitals is important in any strategy of sustainable development (Perrings 1997, xix).

Insofar as environmental quality is concerned, it is associated with the external environmental effects arising from the promotion of pollution-intensive industries under the Bakun policy, which may affect the capacity of the biosphere to provide essential environmental substances such as clean air and water. Social sustainability in the present context refers to development that promotes social interaction, cultural enrichment, and equal opportunities for access to resources, including clean air and water as well as income flows (see below). Particularly, from the Bakun indigenous communities' perspective, it concerns safeguarding the right of the local inhabitants to gain access to Bakun natural resources. It is noteworthy that the right to access to land and forest is of paramount importance in sustaining the socio-economic existence and cultural identity of indigenous people in the Bakun region (see, for example, Hong 1987; IDEAL 1999; Choy 2003, 2004a, and 2004b).