China's Dam Problem With Myanmar

China's Dam Problem With Myanmar

China is a big fan of dams. Indeed, over the last 50 years, the country has
constructed more dams than all other countries combined. But there is one
dam that China never managed to get built: the Myitsone Dam in Myanmar. And
Chinese leaders can't seem to let it go.

The Myitsone Dam was to stand at the headwaters of the Irrawaddy River,
Myanmar's lifeline. It was designed as a hydroelectric power project, which
would generate energy for export to China, at a time when Myanmar's economy
depended on its giant neighbor. Ruled by a brutal military junta, Myanmar
faced crippling United States-led sanctions and broad international
isolation.

Where others saw human-rights violations, China saw an opportunity to
advance its own strategic and resource interests. When the Myitsone Dam
project was introduced, China was also establishing a foothold in Myanmar's
Kyaukpyu port on the Bay of Bengal, from which it would build energy
pipelines to southern China.

A stronger presence in Myanmar's Irrawaddy, which flows from near the
Chinese border to the Andaman Sea, promised to provide China with a shorter,
cheaper trade route to Europe. As an added benefit, the Myitsone project -
and, more broadly, China's relationship with Myanmar - would advance China's
ambition of challenging India's advantage around the Indian Ocean.

Everything seemed to be going according to plan. But in 2011, just two years
after the $3.6 billion project got underway, Myanmar's government suddenly
suspended the dam's construction - a slap in the face to China. Moving
toward democratic reform, President Thein Sein's government was eager to
cast off the view of Myanmar as a Chinese client state.

Sein got what he wanted. Myanmar's reversal on the Myitsone Dam became a
watershed moment for the country's democratic transition. It helped to bring
an end to Myanmar's international isolation, and an easing of the
long-standing Western sanctions that made Myanmar so dependent on China in
the first place. In 2012, Barack Obama became the first US president ever to
visit Myanmar.

Last year, Myanmar elected its first civilian-led government. The National
League for Democracy, led by the former political prisoner Aung San Suu Kyi,
won the election in a landslide. Though Suu Kyi was blocked from running for
the presidency directly, she is the most powerful figure in Myanmar's
ten-month-old government.

Alongside all of this democratic progress, however, Myanmar's relations with
China cooled considerably. After work on the Myitsone Dam halted, several
other dam and energy projects were also put on hold, though Chinese firms
did manage to complete multibillion-dollar oil and gas pipelines from
Myanmar's western coast to southern China in 2013-2014.

But China has not given up on the Myitsone project. Indeed, President Xi
Jinping seems to be trying to seize the opening created by Suu Kyi's efforts
to defuse bilateral tensions - her first diplomatic trip since the election
was to Beijing - to pressure her to reverse Sein's decision.

China has warned that if Myanmar fails to resume the Myitsone project, it
will be liable to pay $800 million to China. Hong Liang, China's ambassador
to Myanmar, declared three months ago that Myanmar should be paying $50
million in interest alone for each year the project is suspended. But if the
project were completed, Hong continued, Myanmar could reap high returns by
exporting much of the electricity to China.

The threats have not fallen on deaf ears. Before her visit to Beijing, Suu
Kyi tasked a 20-member commission to review proposed and existing hydropower
projects along the Irawaddy, including the suspended Myitsone deal.

But Suu Kyi, who disparaged the dam project when she led the opposition to
the junta, remains unlikely to restart the Myitsone project. As much as she
wants China off her back - an objective that surely drove the decision to
launch the commission - actually agreeing to resume work on the deeply
unpopular Myitsone Dam would be too politically compromising to consider.

In fact, within Myanmar, the Myitsone project is widely regarded as a yet
another neo-colonial policy, designed to expand China's influence over
smaller countries, while feeding its own resource greed, regardless of local
conditions or needs. And there is plenty of evidence to support this reading
- beginning with China's demand for most of the electricity, even as much of
Myanmar suffers from long daily power outages.

Moreover, the construction that did take place had serious consequences for
the people of Myanmar. By flooding a large swath of land, the project
displaced many subsistence farmers and fishermen, fueling a popular backlash
that contributed to the end of a 17-year ceasefire between the Kachin
Independence Army and government forces. (Ironically, as part of its effort
to get Suu Kyi on their side, the Chinese are now seeking to mediate peace
talks between the government and the rebels, who, it has long been believed,
receive arms from China.)

Chinese pressure to revive the Myitsone project is reviving anti-Chinese
sentiment in Myanmar. Indeed, while Suu Kyi was in Beijing, anti-Chinese
protests flared anew back home. At a time when Myanmar is being wooed by all
major powers and eager international investors, there is no incentive for
the government - much less the public - to ignore the environmental and
human costs of China's projects.

It is time for China to recognize that the decision to end the Myitsone
project will not be reversed. It can hope that Suu Kyi's commission makes
some face-saving recommendations, such as paying compensation to China or
making new deals for smaller, more environmentally friendly power plants.
But, with Suu Kyi committed to a neutral foreign policy, China's days of
sucking resources from Myanmar, without any regard for the environmental or
human costs, are over.

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Ref:
https://www.project-syndicate.org/commentary/china-myanmar-myitsone-dam-by-b
rahma-chellaney-2016-09

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com