20 October 2018
Aung San Suu Kyi agreed to set up a special commission to look into the Myitsone project last year but so far there has been little progress. Photo: Reuters
Aung San Suu Kyi agreed to set up a special commission to look into the Myitsone project last year but so far there has been little progress. Photo: Reuters

How China can break the Myitsone stalemate with Myanmar

Yesterday, I discussed the various reasons behind the “sudden death” of the Myitsone hydroelectric power station project in Myanmar.

In fact, apart from hostile public opinion, bad press and the backpedalling of the former military regime over the terms of the agreement of the project, local non-governmental organizations in Myanmar have also played an indispensable part in striking down the project.

These non-governmental organizations include conservation and environmental protection groups that we are so familiar with, and more importantly, groups that are closely associated with ethnic minorities and separatist movements, among which is the Kachin Independence Organization (KIO).

Nominally, the KIO is just a civilian organization in Myanmar. However, in reality, the semi-militant group is in fact the de facto governing body of the Kachin state where Myitsone is located.

After almost 30 years of continuous but unsuccessful war of independence, the Kachin Independence Army, the military wing of the KIO, concluded a truce with the former Burmese military regime in 1994, under which the state of Kachin would become an autonomous region and sphere of influence of the KIO.

Twenty-three years on, Kachin remains a semi-independent political entity within Myanmar.

The KIO has been firmly against the hydroelectric power station project and played a pivotal role in successfully mobilizing public opinion against it, mainly for fear that the central government in Naypyidaw may use the project as an excuse to interfere in the internal affairs of Kachin.

Over the past several years, Beijing made several attempts to save the project. For example, in 2011 the State Power Investment Corp. of China published an environmental assessment report over the proposed power station in Myitsone, concluding that the project would be beneficial to the local population.

However, to counter that, non-governmental organizations in Myanmar also compiled their own environmental assessment report that suggested exactly the opposite, thereby resulting in a stalemate between supporters and skeptics of the project up until now.

Last year, when Aung San Suu Kyi was on an official visit to Beijing, the Chinese government urged her to make a final decision promptly over the project in Myitsone. She agreed to set up a special commission to look into it. Yet, so far, no progress has been made.

As the stalemate continues, one possibility is that China might demand that Myanmar pay damages for breach of contract. However, public opinion in Myanmar is unlikely to favor this option given the continued appreciation of the renminbi and depreciation of the Burmese kyat in recent years.

Another possibility is that Beijing might take the dispute to an international tribunal. However, I believe Beijing would not resort to this unless all the other options have run out, because that might risk damaging its bilateral relations with Naypyidaw.

Then there is a third possibility, which I believe is the most feasible option for Beijing: it could agree to shelve the Myitsone project in exchange for approval by Myanmar of other more strategically valuable projects such as the proposed special economic region in Kyaukpyu.

This article appeared in the Hong Kong Economic Journal on March 29

Translation by Alan Lee

[Chinese version 中文版]

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Associate professor and director of Global Studies Programme, Faculty of Social Science, at the Chinese University of Hong Kong; Lead Writer (Global) at the Hong Kong Economic Journal

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