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Is Myanmar-China relation entering a tricky phase?

Myanmar’s recent decision to suspend the construction of the Chinese-aided Irrawaddy Myitsone hydroelectric dam project in Kachin State comes as a pleasant surprise, whatever be the reasons behind the Myanmar decision.

However, the moot point is, whether the three-decade old relationship carefully nurtured by both sides is entering a new tricky phase?

China’s immediate reaction to the announcement by the Myanmar President Thein Sein was tinged with irritability in the midst of polite bureaucratic wordings.   It would indicate China was not probably consulted before Myanmar President went public with the decision.  This is clearly a case of proverbial Chinese loss of face.

However, the very title of the opinion piece – “Dam project stumbled over PR failures” – in the semi-official Global Times by Zha Diajiong, is probably indicative of the official line that would be adopted to come to terms with the situation. Zha lamented: “It shows us once again that Chinese enterprises need to improve their skill at managing international political risks when running infrastructure projects in neighboring countries. Work on the dam began five years ago. How could the project be set up at that time if it didn’t meet the basic principle of mutual benefit?”

Is it only the PR failure of the state-owned China Power Investment (CPI) Corporation, which is jointly financing the $ 3.6 billion project with Burmese partners, responsible for this embarrassing situation? After all the Myanmar Ministry of Electric Power No.1 and Asia World – Myanmar-owned conglomerate – are also involved in financing the project. It is difficult to digest the situation could have been saved with better PR. There are much bigger issues involved.

First is the strong adverse reaction from within Myanmar to the project. The Myitsone dam is the largest of the six dams proposed under the Confluence Region Hydropower Project (CRC) to exploit the hydroelectric potential of Mayhka, Malihkha and Irrawaddy rivers. Chinese have been closely involved with the Burmese since 2005 in the conception, design, and planning of the CRC. Around 12,000 Chinese workers are at present involved in the construction work on the 4100 Megawatt Myitsone hydroelectric project going on below the confluence of Mayhka and Malihka tributaries since last year.

Opposition to the CRC had been brewing for sometime among environmentalists and conservationists. It gained momentum when Myitsone project was taken up as it was expected to inundate 766 sq km of rain forest area including 42 villages, displacing 10,000 ethnic Kachins. This has caused concern not only among Kachins, but also among environmentalists and conservationists. Environmentalists argue the impounding of the river would change the hydrological profile of the river and restrict the flow of sediments that enrich the rice growing Irrawaddy delta regions. Conservationists say flooding of large swath of sensitive rain forest region could irreversibly change the ecological profile. Even within the government some concerns have been expressed about the environmental impact of the dam. However, the government had insisted the project was undertaken only after studying all aspects.  However, political opposition, and journalists continued to voice their opposition.

President Thein Sein had taken a conciliatory line to establish the democratic credentials of the ‘civilian government,’ which has a military pedigree, ever since he became President in March. He had  been trying to bring back the opposition into political mainstream, particularly the Aung San Suu Kyi-led National League for Democracy (NLD). Although officially it has ceased to be political party, government representative Aung Kyi has met with Suu Kyi three times to discuss the terms for NLD to stage a comeback as a recognized political party. That would mean NLD’s acceptance of the 2008 Constitution legitimizing the role for army in government. NLD’s return is important for Thein Sein (and the military junta manipulating the government) as  NLD – its most fierce opponent – would cease to be a political loose cannon. This would increase the chances of ending the international sanction regime and help the regime spruce up its international and internal standing.

The cancellation of the Myitsone project had offered an invaluable opportunity to President Thein to show how people sensitive the government is. The wording of his letter to Parliament on September 30 indicates this. He said, “Our government, being elected by the people, has to take great consideration of public opinion. Accordingly, we have an obligation to respond to the public concern with seriousness. Therefore, we will suspend the Myitsone project during the term of our government.” It is difficult to believe this ‘people sensitivity’ from a government that still keeps over 2000 people as political prisoners.

Kachin organisations have been petitioning both the Chinese and Myanmar governments for cancelling the project. They fear it would bring in the military and whole lot of bureaucracy into their ethnic homeland.  Kachin leaders in exile aver the dam would submerge historical temples, churches and heritage sites affecting the Kachin cultural identity. But more importantly recently Kachin Independence Army (KIA), fighting for an independent Kachin State, has opposed the dam construction. KIA been confronting the Myanmar army after it refused to subjugate itself under the Myanmar army by mustering its cadres as Border Force as per provisions of the 2008 Constitution. In April there had been a few explosions in the CPC project site suspected to be carried out by insurgents.

This has created a tricky situation for the army because KIA claims it is in alliance with other other powerful insurgency groups including the Myanmar National Democratic Alliance Army (MNDAA) operating along the Chinese border, and the United Wa State Army (UWSA) in the northeastern Shan State, who have also refused to convert their forces into Border Force. Though individually these insurgency groups are not in their prime, collectively they could pose a formidable threat to the civilian government. The army is in no mood to allow any of these groups a free run;. This was evident when it launched operations against the 4 KIA Brigade and overrun their strongholds. So ideally, it would help the civilian government to improve its acceptance among ethnic minority, and Kachins in particular, if it suspends the Myitsone project, the main focal point of Kachin peoples’ immediate concern.

But the Chinese columnist Zha Diajiong, has glossed over these complexities behind the  situation probably because discussing  Myanmar’s botched democracy  is never a favoured topic of Chinese media. So he has taken a more favoured line. He says: “In North Africa and Europe, many large dams have been demolished and abandoned due to the aging dam structure and the expensive maintenance fees. The public has also come to a new recognition of dams’ environmental impact. So the dam construction in the Indo-China Peninsula bucks international trends. There are many sensitive issues around dams, including the ecological impact and the treatment of displaced people. The ecological changes along the Mekong River, especially the tropical rain forest, influence climate change worldwide. Regional governments, international organizations and NGOs all have their own opinions as to how to protect the rivers’ water resources.”

This would indirectly indicate the CPC did not undergo the ecological and conservation vetting before it was taken up. This is in direct contradiction of Lu Qizhou, President of China Power Investment Corporation, who has said the project had undergone thorough environmental vetting by both China and Myanmar before it was agreed upon.

Of course, columnist Zha Diajiong, had to acknowledge that the Chinese need to be more sensitive to these issues. He says: “European and American transnational enterprises are involved in hydropower and water conservancy projects in this region, and it is common practice for them to assess the environmental and social impact of projects. Chinese enterprises need to start taking steps to deal with accusations by raising their risk and impact assessment standards to international levels.”

Perhaps Chinese also hope to retrieve the project at a future date. As Lu Qizhou, President of China Power Investment Corporation said, “If the suspension means stopping construction, it will cause a series of legal problems.” This is probably the reason why President Thein in his announcement said “we will suspend the Myitsone project during the term of our government” rather than stating he was giving up the project.

The Myanmar-China relations are multi-faceted and deep-rooted to be shaken up by a single decision unfavourable to China. The Chinese would probably not to allow the suspension of the project to affect this close relationship, particularly as many strategic projects like the rail and pipeline link from Yunnan with Myanmar coast are still in incubation. We can expect the Chinese to negotiate a face saving formula to arrive at a win-win situation rather than allow it to upset the apple cart of China-Myanmar relations.  China has invested in Myanmar politically and economically for both strategic security reasons as well as energy and mineral resources. And Mynamar needs China not only for economic support but also to hold its hands to survive any internal and international forays that could destabilize its cosy set up and upset its nascent experiment with democracy. Having said this, China-Myanmar relations would appear to have entered a new, if not tricky, phase.

(Col R Hariharan, a retired Military Intelligence specialist on South Asia, is associated with the Chennai Centre for China Studies and the South Asia Analysis Group. E-Mail:

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