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Will China Merrily Row Its Boat on Myanmar’s Stream? – Prospects of Restarting Myitsone Dam Project

C3S Paper No. 0046/2016

Courtesy: Myanmar Business Today  (Vol 4 Issue 13) 

China expressed its desire on March 17 to restart the suspended Myitsone Dam Project in Myanmar, saying the contract was still valid. The statement has come a few days after the announcement of Myanmar’s new president-elect U Htin Kyaw. He is a close aide of Aung San Suu Kyi and a member of the ruling National League for Democracy (NLD) party. The Beijing-funded project has been a subject of controversy since its suspension by (outgoing) President Thein Sein in 2011, citing environmental concerns by the local Kachin people. The scale of the hydroelectric project was a massive $3.6 billion, and it was to provide 90 percent of its power to China.

Why are the Kachin opposing the Myitsone project? Why is China keen to restart the controversial scheme? How is China using foreign policy strategies to push its objective for Myitsone dam? Is Beijing’s scheme likely to succeed? What impact will it have vis-à-vis India?

Mother Earth manifested in Myitsone

The delta of the Ayeyarwaddy river, where the dam site is located, supports a population of 3 million people and provides for nearly 60 percent of Myanmar’s rice production. Besides, the Myitsone region holds deep cultural and spiritual significance for the Kachin people.

The impact of the Myitsone project will have far reaching consequences, including displacement to urban areas, subsequent strain on job markets, increased risk of trafficking of women, submersion of historical and cultural sites, adverse impact on livelihoods (fishing, farming, forest-gathering, etc.), increased risk of earthquakes and devastation of the river ecosystem. It is not surprising that the Kachins have vehemently protested against the project. Thein Sein, in a bid to win support ahead of the 2015 elections, bowed to their wishes. Ignoring their demands could ignite fresh violence from the rebel Kachin Independence Army (KIA). However, China remains steadfast on its demands for restarting the dam construction.

Turning water into gold

According to a report “Damming the Irrawaddy” by Burma Campaign, UK, China is eager to restart the Myitsone dam project for the following reasons: China is aggressively pursuing its options for supplying power to the Greater Mekong Subregion (GMS) power grid as well as its own “west-to-east power transmission” program; The program, an important component of China’s “Developing the West” Strategy, aims to transmit cheap electric power from western China to energy-hungry eastern coastal areas; The estimated average electricity production for the Ayeyarwaddy Myitsone Dam will be 16,634 million kilowatt hour (kWh) per year.

It should be noted that China’s electricity consumption will rise to 5.7 trillion kilowatt-hours in 2016. The dependence on Myanmar’s hydroelectric power may also be a reminder that China seeks to cut down coal production, perhaps in lieu of its own environmental concerns. There is an irony in China’s approach, where it is taking measures to safeguard its own environment, while not paying heed to the ecosystems of Myanmar. It shows Beijing’s vigorous belief in pursuing its national interests. One strategy China is employing to push forward its priorities in Myanmar is diplomatic and political maneuvering.

Magnetising Myanmar’s leaders

Xi Jinping appears to have anticipated the change in leadership in Myanmar well before the November 2015 elections. He invited Aung San Suu Kyi, leader of the National League for Democracy (NLD) party of Myanmar, to visit China in 2014. She responded positively by stopping over at Beijing in June 2015. The invitation was a pragmatic move on China’s part. It indicates that Beijing foresaw a future of democracy burgeoning in Myanmar, and opened the door for ‘Mother Suu’ to engage as an ambassador of goodwill between the two countries.

During the meeting Xi Jinping told Suu Kyi that he was confident Myanmar would be “committed to advancing friendly ties, no matter how its domestic situation changes” while Suu Kyi gave an assurance, especially as “neighbours cannot be selected”. This statement indicates that Aung Sang Suu Kyi realises that the November 2015 elections needed to be complemented with China’s support. After all, the rising power is a major source of investment and markets for Myanmar.

Her visit to Beijing also came at a time of heightened tensions along the shared border where the Tatmadaw and ethnic Chinese rebels in Myanmar’s northern region of Kokang were engaged in fierce fighting for several months. China is keen that the conflict does not spill over into its borders from Myanmar, and hopes Suu Kyi will play a reconciliatory role. In fact, China was involved in mediating the disputes between the Thein Sein backed government and the rebel ethnic group armies in Myanmar. One instance involves the brokering of a ceasefire agreement between the Kachin Independence Organization and the Myanmar government in 2013.

Besides, China welcomed the signing of a draft ceasefire agreement between Thein Sein’s government and representatives of 16 armed ethnic groups in March 2015. However, the final agreement was signed by only eight armed group leaders in October 2015, notably absent were the Kachin. Even absent was Aung San Suu Kyi, who had declined an invitation to attend the event. It indicates her doubts in the credibility of the agreement, given that past attempts at ceasefire were muted by subsequent conflict.

Nevertheless China made the right move by inviting Aung San Suu Kyi to the country, given the recent announcement of Aung San Suu Kyi’s appointment as Myanmar’s Foreign Minister. It determines her role as a direct link in diplomatic interaction with China. More significantly, she will also head the energy portfolio, thereby having power to influence the decision on the Myitsone project.

The second and the final part of this article will be published in the next edition of Myanmar Business Today (Vol. 4, Issue 14).

(Asma Masood is a Research Officer with the Chennai Centre for China Studies, India. She can be reached at Twitter: @asmamasood11. Views and opinions expressed in this article are the author’s own and don’t necessarily reflect Myanmar Business Today’s opinion.)

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