The Mytsone Dam: Myanmar’s NLD Dilemma

Myanmar’s National League for Democracy (NLD), led by Aung San Suu Kyi, is about to face a tough policy test: whether to restart or permanently halt the construction of the Myitsone Dam, a major irritant in Sino-Burmese relations.

Agreed between China Power International (CPI) and the now-departed junta in the early 2000s, the project was meant to be the centerpiece in a cascade of seven dams on the N’Mai Hka and Mali Hka, the two streams that converge to form the Irrawaddy in Kachin State. Construction began in 2009 and was halted two years later when former President Thein Sein decided that the project would be suspended for as long as his administration remained in power.

The ball has now been passed to the new leaders of Myanmar, who will have a hard time deciding what to do with the behemoth, projected as the 15th b iggest hydroelectric dam in the world, 1,310 meters long and 140 meters tall. The project is still extremely controversial. NGOs and local organizations have long pointed out that the dam would be a blow to the Irrawaddy’s ecosystem and lamented that little is known about the details of the deal.

An Environmental Impact Report compiled by Chinese and Burmese experts in 2009 - financed by China Power itself, then ignored – found that the dam would cause “very serious social and environmental problems not only upstream of dams but also to very far downstream to the coastal delta.” Adverse consequences included “severe negative impacts on regionally significant and globally outstanding three ecoregions, one center of world plant diversity; severe impacts on key biodiversity areas and conservation corridors of Myanmar”. The research was conducted in 2009, but it became public only in 2011, two years after construction work began.

Social problems have also been significant. At least 5,000 farmers have been displaced, leaving their homes and fields in exchange for what they called substandard housing on sterile land in a nearby resettlement area. Compensation was poor, in many cases amounting to only US$80 per family.

The dam was marketed as an important development project thanks to its projected installed capacity of 6,000 megawatts. But 90 percent of the electricity produced was to be shipped straight to China’s Yunnan province, while in Myitkyina, the regional capital of Kachin State and the closest urban center to the dam, power shortages remain a common occurrence.

There is thus a strong political element attached to the Myitsone project, relating to how Myanmese citizens perceive Chinese influence in their country, an influence that has long been growing, since the bloody crackdown on pro-democracy protesters in 1988, when Myanmar was progressively isolated from most of the international community. From the end of the 1980s to the 2010 election that began to end the junta’s influence, China remained the country’s chief foreign investor, chief arms provider and a major trading partner.

Chinese money and support may have helped the former regime to stay afloat, but it also produced adverse reactions among the public, reinforcing fears that Beijing was taking over the country. The result is widespread anti-Chinese feelings among Burmese citizens, who see the Myitsone as an excellent example of collusion between the regime and China’s business elite, arguably why the Thein Sein government felt compelled to suspend the construction of the dam five years ago. It was the best way to show that the new administration was serious about reforms.

“Halting the construction was a political decision,” said Du Jifeng, a Myanmar expert at the Chinese Academy of Social Sciences (CASS). “Of course issues existed, but they were not so grave that a big project like this needed to be halted. It was mainly because Myanmar felt it couldn’t solely rely on China following the democratic reforms. It needed to shift to other countries. Myitsone is a symbol, because people in Myanmar feel the strongest about this project.”

In recent years, Beijing has tried to improve its position and show that a change of regime would not hamper bilateral cooperation.

“We hope and believe that the Myanmar side will maintain a consistent stance on the China-Myanmar relationship and be committed to advancing friendly ties, no matter how its domestic situation changes,” said Xi Jinping during a meeting with Aung San Suu Kyi in June 2015. The very encounter was exceptional, for Chinese leaders are not in the habit of inviting opposition leaders to meet their President. In April, Suu Kyi, by then Foreign Minister, also met her Chinese counterpart in Naypyidaw in what she described as a visit to “honor” the new administration.

Restarting the project would be the best way to reassure Beijing that such diplomatic efforts have not been in vain and that the current opening to other countries will not damage Chinese interests. According to Zha Daojiong, an expert in non-traditional security at Peking University, international businesspeople from outside the People’s Republic will also keep an eye on Naypyidaw’s decision. “Other foreign investors have an interest in how the Myanmar government handles the eventual fate of it, and understandably so, as the credibility of the government as a sovereign actor in handling international investment is on the line,” he said.

Doing so, however, would mean angering a significant part of the population who sees China as a bullying neighbor bent on extracting as much as possible from a weaker partner. “We want it stopped completely,” Dawng Hka, a spokesperson for the Kachin Independence Organization (KIO), one for the country’s most powerful insurgent groups, told Asia Sentinel. “We will reject the restart. I do not think we should take military action, but we will organize with local people.”

So far the NLD has played for time and dodged the problem. After meeting her Chinese counterpart in April, Suu Kyi said the Myitsone Dam had not been mentioned chiefly because she was not familiar with the contract’s details.

Du Jifeng said bickering is likely in the coming months.

“I do not think it is possible to restart the project within a year or two,” he said, adding that the Burmese authorities may ask for changes to the original project. “The Burmese government has not decided on the future of this project, Probably more compensation and better conservation, also in terms of human rights and environmental impact.”