Myanmar buys time with dam block – Asia Times

BANGKOK – China has reacted coolly to Myanmar’s surprise suspension of a controversial US$3.6 billion hydropower dam project it backed in the country’s war-torn Kachin State. Hitherto cautious observers have greeted the stoppage as the first tangible reform move undertaken by the Myanmar’s six-month-old, nominally civilian government led by former general Thein Sein.

According to the government, work on the controversial Myitsone dam will be suspended “according to the desire of the people. The announcement followed an upsurge in popular opposition to the project, where certain members of the old military elite and Aung San Suu Kyi-led political opposition found rare common cause. The project threatened the headwaters of the Irrawaddy River, the cradle of Burmese civilization.

Benedict Rogers of the London-based advocacy group Christian Solidarity Worldwide and author of a 2010 biography on Myanmar’s former military dictator Senior General Than Shwe – a man thought to still wield immense influence from behind the scenes – told Asia Times Online that “this is the first time I can recall that the regime has responded to popular opinion and therefore must be welcomed.”

That approval will not extend to China, which was scheduled to receive an estimated 90% of the estimated 29,400 million kilowatt-hours of electricity which the dam would have generated after its 2019 completion date, according to the People’s Daily, the mouthpiece of the Chinese Communist Party.

After Friday’s announcement, read out in Myanmar’s army-dominated parliament on behalf of President Thein Sein, Beijing’s Foreign Ministry spokesman Hong Lei said that dealings around the megaproject should be “handled appropriately through bilateral friendly consultation.”

China is jointly involved with Myanmar authorities and various Myanmar companies in six other dam projects upstream from the now-suspended Myitsone project. So far there has been no mention of these other projects being affected by the September 30 announcement.

Work is also going ahead as planned with a port and pipelines project scheduled to link the Shwe Gas fields in the Bay of Bengal to Kyaukpyu on Myanmar’s west coast, and onward across Myanmar to Kunming in southwestern China. The project will enable China to send oil and gas imports across Myanmar and steer clear of the US navy-dominated waters further south, notably the Malacca Straits, though which an estimated 80% of global oil supplies are currently shipped.

With all this in mind, Hong Lei’s statement also called on the Myanmar government to protect the interests of Chinese companies in Myanmar. But the surprise announcement has prompted much speculation about the back-story behind the suspension of the project, which Myanmar environmental campaigners say could begin again anytime unless China confirms that it is suspending its involvement in the project. (Thein Sein said the project would be suspended for the term of his government.)

In the days leading up to the suspension, fighting between the Myanmar Army, known as the Tatmadaw, and the Kachin Independence Army (KIA), which has been ongoing since June 9, intensified greatly, according to reports filed by Myanmar exile media groups based in Thailand.

“The government had little choice,” said KIA spokesman Col James Lum Dau, speaking to this correspondent. “Since the fighting started, it has been impossible for any construction materials or supplies to get through from China to Myitsone,” he claimed.

Compared with its often vitriolic responses to recent actions by Vietnam and the Philippines over the disputed South China Sea, Beijing’s response to Myanmar’s Myitsone suspension has been relatively measured and diplomatic. Analysts believe that suggests China may have been forewarned about Thein Sein’s announcement, which is striking a populist note in a country where anti-Chinese sentiment is growing, according to Myanmar economy expert Sean Turnell.

Significantly, the announcement came the day after Myanmar Foreign Minister Wunna Maung Lin met with Derek Mitchell, the newly appointed US envoy to Myanmar, and Kurt Campbell, assistant secretary of state for East Asian and Pacific Affairs. That meeting came after a discussion in New Delhi between Myanmar Commerce Minister Win Myint and Anand Sharma, India’s Commerce and Industry Minister. Campbell is scheduled to visit Asia next week, including a stopover in Myanmar’s neighbor Thailand, as well as in China, where he might be asked awkward questions about the timing of Thein Sein’s announcement last week.

A leaked diplomatic cable sent from the U.S. embassy in Rangoon on Jan 15 2010 points to evidence of direct U.S involvement in the Myitsone issue. “An unusual aspect of this case (referring to the Myitsone Dam) is the role grassroots organizations have played in opposing the dam, which speaks to the growing strength of civil society groups in Kachin State, including recipients of Embassy small grants”, the document stated.

The US is holding out the carrot of relaxed economic and financial sanctions on the Myanmar Government if it undertakes key reforms, including the release of 2,100 political prisoners. India, meanwhile, is hoping to boost its economic links with Myanmar. New Delhi has ceded significant commercial ground to China, as well as other neighbors of Myanmar such as Thailand. Both China and Thailand enjoy trade relations with Myanmar measured at an estimated six to seven times the size of the current $1.5 billion India-Myanmar trade.

The September 30 announcement has already raised questions about the viability of other foreign-invested mega-projects underway in Myanmar. For instance, Thailand’s Italian-Thai Development Co is the lead investor in a multi-billion dollar mega-port facility scheduled to be built on the country’s southwestern coast at Dawei/Tavoy.

As well as a proposed 250 square kilometer industrial zone, the project includes a highway that will link Dawei/Tavoy to Kanchanaburi province in western Thailand, plugging Myanmar’s laggard infrastructure and economy into that of its relatively-advanced neighbor. The port facility is envisioned to give Thai industries what they hope will be a protest- and litigation-free zone to relocate some of their operations after Thai environmental activists and local residents suspended through litigation new investments at the mammoth Map Tha Phut industrial estate in Rayong Province in 2009.

As with the Myitsone Dam, which some analysts have cited as a factor in the intensified fighting between insurgents and government forces further north, the Dawei/Tavoy project has faced stiff opposition from ethnic Karen rebels. In mid-July, the insurgent Karen National Liberation Army/Karen National Union (KNLA/KNU) said that it had forced a halt to the port’s related highway construction in territory where KNLA-Tatmadaw clashes have recently taken place.

That stand-off continues, says KNU Secretary-General Zipporah Sein, who told Asia Times Online that “we welcome the government decision to suspend the Myitsone dam, but want the same to happen in Karen regions, as there has been no consultation with Karen people and no assessment of the impact of this project.”

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