What Myanmar Should Do About the Myitsone Dam

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What Myanmar Should Do About the Myitsone Dam

Cancelling and continuing the Chinese project both have consequences. Is there a third option?

What Myanmar Should Do About the Myitsone Dam

A village relocated for the Myitsone Dam project.

Credit: Flickr/ Rebecca W

The issue of the Myitsone dam has been a thorny one. The Chinese project not only bears upon Myanmar’s foreign relations, economic development, and peace process with ethnic armed groups; it also has garnered widespread attention domestically and internationally as a bellwether issue by which the new government’s policy orientation and resolve might be judged, rightfully or wrongfully. It is thus crucial that the issue be approached and resolved quickly and decisively.

The obvious choices are to permit the project’s resumption, to cancel it outright, or to allow it to proceed with some slew of conditions or modifications. The issue of the dam has been polarizing, with the first two, more rigid options garnering the loudest advocates. Either of these choices, however, would result in high costs for the other side. The issue needn’t be zero-sum, however, and a compromise is necessary. Indeed, the best option would be to continue with a revised version of the project, with strict conditions that address the political, economic, cultural, and environmental concerns that have been raised by all legitimate stakeholders—especially the residents in the would-be dam’s vicinity.

Those wishing for cancellation do so for several reasons. First, it would concede the cultural and spiritual importance imbued at Myitsone, where the Ayeyarwady River is formed. This location thus holds meaning not only for Kachin living in its vicinity, but also for Bamar across the country. Also, due to the size of the hypothetical flood zone, cancellation would mitigate the agitation that many local residents have endured and would further endure from being uprooted and poorly compensated, not to mention saving the temples and other sites of historical, cultural, and religious value that would be submerged by the dam’s flooding. Plus, because of the site’s proximity to a fault line in Sagaing Region, the dam would be vulnerable to earthquakes, raising the risk of a disastrous collapse; scrubbing the project would eliminate this risk. Annulling the project would further eliminate concerns over the dam’s distribution of economic benefits, as many fear that these would accrue disproportionately to the Chinese.

There similarly are political reservations with regard to China. One is that permitting the project would allow Myanmar to fall too much under China’s sway, especially due to the latter’s increased economic leverage. Even if untrue, these perceptions among the Chinese, citizens of Myanmar, and others could further beget bolder attempts by China and Chinese firms to dominate Myanmar economically or politically, as well as inflame anti-Chinese sentiments and popular unrest domestically. Scrapping the dam project, though, would sensitize Chinese policymakers and businesspeople more to popular, environmental, and political factors in Myanmar when considering investments. Cancelling the project would also be seen as both evidence of democratic accountability and signaling a geopolitical step away from China—thus offering resassurance to the West. Such a decision would be met with domestic acclaim and increase the government’s popularity and trustworthiness among ethnic minority groups, with whom the central government is still pursuing a fragile peace process.

Rejecting the dam project, however, would mean sacrificing the benefits of its completion. Even if the dam’s completion is of greater immediate economic benefit to China, the dam nonetheless would contribute significantly to Myanmar’s economic development in the long term. Further, as neighboring and heavily interconnected economies, both China and Myanmar have mutual interest in each other’s economic progress and prosperity. A booming China—as a market, exporter, and source of investment for Myanmar—is very much in Myanmar’s own interest. Moreover, the increased supply and lower cost of electricity would also catalyze development in other forms within the vicinity, as well as in the country as whole. Furthermore, to cancel the project would inevitably be to incur legal challenge from and damage payments to China Power Investment (CPI) Corporation, the Chinese firm that has taken on the project. Finally, such an incident would undoubtedly complicate diplomatic relations with China, as well as business relations with Chinese firms that would otherwise be eager to invest in Myanmar.

The recommendation herein is to permit the project, but with substantial conditions, effectively to reconcile and to amalgamate most of the benefits that would otherwise be associated with either of the two “extreme” decisions. This might mean, as many already suggest, revising the project to involve two dams farther up in the Mali and N’Mai Rivers, rather than one in the Ayeyarwady near their confluence. This would abate the cultural and spiritual costs, even more so if the specific sites are chosen to minimize any impact on populated areas and sites of religious, cultural, or historical import. This could also serve as a hedge against a major earthquake, distributing the risk between two structures instead of one.

Demands should also be made upon CPI to address and to sterilize the dams’ environmental impact—for example, by including a mechanism whereby river sediments obstructed and caught by the dams would be reintroduced downstream. CPI could also be asked to furnish stronger proof of earthquake resistance, and to increase compensation packages to affected locals. CPI might find such conditions objectionable, given the sunk costs that have already been incurred, but this wouldn’t be altogether bad. The benefits of the project would ultimately still be too large to ignore, but the costs of changing location would, again, encourage more discretion from CPI and other Chinese investors in the future.

In addition to lowering the social and environmental costs, such a revised project would allow Myanmar to reap the long-term developmental benefits of the dam(s), to push more of the costs onto CPI without seriously damaging the relationship and jeopardizing future Chinese investment, to impel Western and other investors to be more competitive with their own investments and incentives, and to minimize any loss of diplomatic capital with China.

Ultimately, even if the dam project were to be canceled entirely, similar proposals would arise in the future. What then? The underlying problems would not go away with the Myitsone dam. It would be impossible and unreasonable for Myanmar to forswear any form of economic development involving social or environmental disruption. Likewise, the PRC’s existence as a long-term neighbor and potential partner must be accepted, unless Myanmar finds it suitable to engage outright in balancing behavior. The Myitsone issue is an opportunity to set the tone with regards to Chinese and other foreign direct investment, an opportunity that Myanmar’s new government must not let pass by.

Jared MacDonald is a master’s student at Johns Hopkins School for Advanced International Studies.