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The NLD should start 2017 by scrapping the Myitsone dam

Julian Kirchherr and Matthew J. Walton

The beginning of the year is always a time of prediction and thus peak season for pundits. Twelve months ago, many pundits on Myanmar predicted the National League for Democracy-led government would, once it assumed power, quickly scrap the controversial Myitsone dam project.

Three reasons were provided for this prediction.

First, the NLD-backed government would not dare to resume a project that would stand at the headwater of the Ayeyarwady River, widely recognised as Myanmar’s cultural birthplace and lifeline.

Second, the NLD government would not dare to resume a project that would mainly power China (in exchange for a mere US$17 billion paid over 50 years), while half the people in Myanmar still lack access to electricity.

Third, the NLD government would not dare to resume a project that had emerged as the major symbol of Myanmar’s political change, as hard evidence that the government had finally started listening to its people.

Pundits were even more certain that the project would be scrapped when fighting flared up again in August and September last year in Kachin State (the Myitsone dam site is located only 37 kilometres away from Myitkyina, the capital of Kachin State). After all, it is common sense that major infrastructure must not be pursued in an area of civil violence.

An estimated 85 percent of people in Myanmar oppose the Myitsone dam, according to a recent poll by the Yangon School of Political Science (YSPS). Indeed, we cannot think of a single infrastructure project worldwide which faces a more sweeping opposition.

Nevertheless, the Myitsone project is still in limbo and it does not look as if any final decision will be undertaken soon. President U Htin Kyaw formed a commission in August 2016 to evaluate all proposed hydropower projects on the Ayeyarwady River. An initial assessment report was submitted in November, but more analyses are allegedly needed for definitive recommendations.

Those who defend the project frequently point out that any contract signed must be served. Yet contracts can be terminated prematurely. China Power Investment Corporation (CPIC), the main dam developer, claims to have spent 800 million on the project already. Decision-makers in Myanmar could scrutinise this claim and then reimburse CPIC for the costs that have already occurred.

Admittedly, this reimbursement would be costly – roughly 5pc of the government’s’ annual budget. However, it is also possible that the government would be able to negotiate a reduced settlement since CPIC is keen not to attract any more negative attention to itself via the project.

Those who defend the project also frequently argue that a cancellation of the Myitsone dam would make it impossible to construct any further dams in Myanmar. This is plainly false. A decision on the Myitsone dam is not a decision on Myanmar’s future energy mix. Indeed, many activists we interviewed explained that while they specifically oppose the Myitsone project, they are not against hydropower dams per se.

For instance, we interviewed multiple activists in Kachin State and several argued that dam projects upstream of the Myitsone could be carried out, with the proper reviews and consultations. CPIC is already the main developer for these projects and could continue to take a central role in them. Those worried that Chinese developers may violate various international environmental and social safeguards could be conciliated if CPIC is teamed up with reputable developers from Europe or the Americas.

Less than a year into its term, the NLD-backed government is facing increasing criticism from its constituents. Some wonder if the government is really putting the interests of the people of Myanmar first. Some even question whether the NLD is doing business any differently than its predecessor. Cancelling the Myitsone dam would constructively respond to this mounting criticism and possibly provide new momentum and goodwill for the government.

Most importantly, at a time when the prospects for peace and national reconciliation look bleaker than they have in years, the announcement to officially axe the Myitsone dam could help to get the all-important peace process back on track. The Shan State legislature has recently labelled the Northern Alliance-Burma, a coalition of the Kachin and their allies, as a “terrorist” organisation. The scrapping of the Myitsone dam – demanded by the Kachin first and for almost a decade now – would give particular recognition to their grievances and would thus help to rebuild bridges burnt via this antagonistic labelling.

The arguments against the Myitsone project remain pervasive and convincing. It is long past time for decision-makers in Myanmar to cancel the project. It will be financially costly, but the momentum and goodwill gathered via its cancellation will be more valuable. The NDL-led government would start this year on the right track if it cancelled the Myitsone dam as its first major action in 2017.

Julian Kirchherr is an assistant professor for Sustainable Business and Innovation Studies at Utrecht University. Matthew J. Walton is the Aung San Suu Kyi Senior Research Fellow at the University of Oxford. Both authors have carried out field research in Myanmar over multiple years.