China’s relations with some of its Southeast Asian neighbours have soured this year over territorial disputes. But one might have thought that Beijing could at least rely on its friendship with the military-backed government in Burma.
So it was something of a shock to learn in September that the new Burmese president Thein Sein had decided to suspend work on an enormous hydropower project in the north of his country, supposed to supply the Chinese with almost 100 billion kilowatt-hours of much needed electricity annually.
Citing the “ desire of the people” Thein Sein told Burma’s new parliament that he’d halted construction of the $3.6 billion dam at Myitsone for the duration of his five year presidency.
According to the Chinese, the Burmese were ‘dam’ rude too. They left the government in Beijing and the company leading the project, China Power Investment Corp (CPI), to find out about the decision from news reports.
“This suspension was out of the blue,” Lu Qizhou, CPI’s non-plussed Beijing-based Party secretary told the Beijing News earlier this month. “We don’t understand what happened.”
Why shelve the project so abruptly? Some observers say the general election that made Thein Sein president in November last year – the first in more than 20 years in Burma (known also as the Republic of the Union of Myanmar) – has ushered in a period of slightly more open debate. This was unexpected but might mean that members of parliament are now having to recognise a wider range of interest groups than before.
Others say halting work on the dam is an attempt by the regime – still largely made up of generals from the former junta – to ingratiate itself with the US and Europe in the hope that economic sanctions might also be relaxed.
Whatever the reason, Chinese officials (amazingly) failed to see the shutdown coming and the media last week was speculating why.
Of course there were the usual conspiracy theorists railing against the ‘outside forces’ seeking to contain China (see China Ink, page 6).
But it seems more likely that state-owned CPI simply struggled to adjust to Burma’s changing political environment. Protests against the project – which was to be the first of a cascade of seven dams along the two main tributaries of the Irrawaddy river – began almost as soon as it was mooted in 2005.
Back then the will of the local people – especially so the restive Kachins in whose homeland the hydro-project was to be built – mattered little to the Burmese leadership. CPI may have simply assumed that the government would push the project through.
But in recent months, a revived media took up the cause and ordinary Burmese began to see the dam as a symbol of Chinese exploitation of their country. Helpfully for the Burmese regime, the criticism could also be focused on an external target.
The dam at Myitsone alone would have flooded an area the size of Singapore and displaced 15,000 people. But what also angered locals was that 90% of the electricity generated would have gone to China.
In addition, the new government has been making tentative efforts to appease the ethnic Kachins, who have been fighting for their independence for more than 50 years.
Having seemingly lost the support of the Burmese government, in mid-September, CPI then launched a rather clunky public relations campaign. A turgid website was set up to outline the dam’s benefits and refute claims that the project would damage the local ecology. The company also took out full-page ads in local newspapers proclaiming “Yes to corporate social responsibility!
But at the end of September Thein Sein still called a halt.
Investigative magazine Caijing’s final word on the fiasco was as follows: “CPI’s mistake is not the failed resettlement and environmental assessment work involved in the project, but rather relying on unilateral communication with the government without attention to voices from civil society organisations and all government factions”.
One wonders if there is a message for a few state-owned giants in China there too.
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