In late September, President Thein Sein suddenly – and surprisingly – ordered the suspension of work on the massive Myitsone dam, close to the Chinese border, planned and financed by Beijing. In so doing, he instantly became a hero at home but was forced to weather significant ire from the Chinese government. Up to 90 percent of the electricity generated from the dam would have been channelled into energy-hungry China.
The USD 3.6 billion project (still in its early stages when called off) would have had as massive impact on the Irrawaddy River, one of the country’s main rivers and watersheds. Situated in northern Kachin state, the dam’s reservoir would have flooded an area the size of Singapore. Environmental-impact studies conducted by activists and even the Burmese government itself clearly revealed the potential environmental dangers the project posed; to make matters worse, the site was near an earthquake fault line. From its inception in 2006, there has been vehement opposition to the project, especially among the Kachin. Campaigners have been running anti-dam campaigns on the Internet, with some anti-dam meetings even taking place in Rangoon. The campaigns struck a note with many nationalists, including businessmen, who feared that if the dam was not stopped it could generate social unrest similar to the anti-Chinese riots of the late 1960s.
When President Thein Sein announced the suspension of the project, Burmese newspapers and social-media sites lit up with praise for the move – and particularly for the president himself. ‘You are Burma’s saviour,’ said one post on Facebook; ‘You have listened to the people and shown your colours,’ rejoiced a blogger. Of course, such eulogising was not mirrored in China. The company building the dam, China Power Investment Corporation, was taken aback; its president, Lu Qizhou, told the Chinese news agency Xinhua that he had been taken completely by surprise by the announcement and threatened legal action. Chinese politicians also entered the fray and demanded that Burma ‘protect Chinese enterprises’ legal and legitimate rights’. Any problem should be resolved through ‘friendly consultation’, said the Chinese Foreign Ministry spokesperson, Hong Lei, the day after the suspension announcement. The move was clearly seen as anything but ‘friendly’.
The relationship between China and Burma has been deep under the military junta. Beijing has invested billions of dollars in its neighbour to bolster its standing, while Naypyidaw has considered China by far its most important ally. The two have found that they have much in common in terms of confronting Western criticism of human-rights abuses. China gave the junta a measure of international protection, and helped the latter sidestep sanctions imposed by Western countries. China is also the biggest supplier of military hardware and ammunition to the Burmese military. ‘There is a special relationship between us, especially between the two armies,’ a former senior Burmese military intelligence officer told this reporter several years ago.
Soon after he suspended construction of the Myitsone dam, President Thein Sein sent Foreign Minister Wunna Maung Lwin to Beijing to explain the move. This seems to have placated China, to some extent. A few weeks later, when the Burmese deputy president, Tin Aung Myint Oo, visited China for an ASEAN-China trade fair, both sides tried to put on a brave face. The deputy president assured his hosts that Burma would continue to cooperate with China in seeking a solution to the issue. Chinese Premier Wen Jiabao also pointed out that several other key Sino-Burmese projects remained in the interest of both countries. Since then there has been a series of meetings to try to work out a compromise. Burma has agreed to pay compensation and, according to senior Burmese government officials, possible alternative sites for the Myitsone dam are being explored. For now, work on the dam has indeed halted, according to both NGO workers based near the site and the Kachin leaders, who led the campaign against the dam.
Slap in the face
The dam had become such a hot topic that politicians in Parliament opposed its construction. It was to pre-empt a parliamentary debate, which could have created more problems with Beijing, that President Thein Sein stepped in and ordered the suspension of the construction through a presidential decree. According to a senior government spokesperson, the president had no alternative but to cancel the project after he listened to the voice of the public.
Although following a reform agenda, President Thein Sein has found the Parliament and the powerful speaker of the lower house – Thura Shwe Mann – to be thorns in his side. Both president and speaker are currently competing to become the liberal-minded face of Burma. The president fears that Mann is becoming too popular and overshadowing him; already the latter is seen as the main leader pushing for the release of political prisoners. President Thein Sein’s decision to suspend the dam thus needs to be seen as part of his strategy to get the upper hand over both Mann and the Parliament.
As for the impact on the bilateral relationship with China, it is doubtful that the Myitsone move will have lasting consequences. Burma is clearly anxious to broaden its support base and not rely so heavily on one ally, no matter how important that neighbour may be. The cancellation is also significant for the symbolism inherent: as a direct and pronounced slap in the face of General Than Shwe, for whom the Myitsone dam had long been a pet project. He had trumpeted the construction at the second-to-last meeting of the old junta – the State Peace and Development Council (SPDC) – saying it was a beacon of Burmese-Chinese relations. In this sense, the halting of construction on the dam may be a sign that the new government is indeed taking its reform agenda seriously.