The unresolved status of the presently-suspended Myitsone Dam project in Myanmar’s Kachin state has the potential to derail Beijing-Yangon bilateral relations. How did this come to be? And more importantly, what are the implications of fallout?

The project, which involved the construction of six dams on the Irrawaddy River, is a joint venture financed by the China Power Investment Corporation (CPI), Chinese state run Company, and Asia World, a Myanmarese enterprise. Hydroelectric energy generated following the construction of the dams was to be shared by Myanmar and China. However, in 2011, the Myanmarese government, led by incumbent President Thein Sein, suspended the project, citing public opposition to the project as the cause.

Why is the Myanmarese citizenry opposing the project?
The Myitsone Dam is located in Myanmar’s restive Kachin state. The Kachins, one of the ethnic minorities in the country, but a majority in the aforementioned State, are extremely sceptical about this project for several reasons.  Among their many concerns is the resettlement of numerous villages, including religious and cultural sites, into townships, called ‘model villages’. These model villages were constructed using substandard raw materials, and the allotted farmlands have been deemed infertile. The Kachins also claim that their cultural identity is at risk owing to resettlements and forced migration projects. Consequently, there has been a drop in production, and as a result, income generation, among the locals. The gravity of the situation is such that Kachin women are now opting for prostitution in Myitkyina city to sustain themselves.

Furthermore, the course of the Irrawaddy River will be considerably altered once the dam is constructed. The dam will prevent the river sediment from enriching the agriculturally productive floodplains downstream, affecting the fertility of the Irrawaddy Delta – one of Myanmar’s key rice-producing belts. The local fishing community too will be affected, since the fish cannot swim upstream – which will be the case once the dam becomes functional. 

Additionally, the location of the dam site, which happens to be situated on an earthquake-prone zone near the Sagaing faultline, has raised concerns. If an earthquake were to occur, there would be heavy humanitarian and ecological implications, despite the damn being touted as earthquake proof.

Why did the Myanmarese government suspend the project? What is its real motivation?
While there do exist considerable social, and ecological reasons for suspending the project, there is a another key factor playing a major role in the politics of the region. The end of a seventeen-year ceasefire between the Kachin Independence Organisation (KIO) and Myanmarese army following an offensive launched by the latter on the former, has had an adverse impact on the project. The KIO exploded two pivotal bridges between Kachin state and China, in order to demonstrate their disapproval of the project. The KIO’s apprehensions regarding the project were not just social; it stemmed from the increasing military presence in the region, deployed in the name of protection for the construction site. The resurgence of the conflict could hence be one of the motivations for suspending the project.

Myanmar’s deteriorating relationship with China
The suspension of the Myitsone Dam Project has been central to China’s rising apathy towards Myanmar. Although Beijing demonstrated a friendly attitude towards Naypyidaw – in Myanmarese President Thein Sein’s visit to China in April 2013, as well as during his meeting with Chinese Premier Li Keqiang during the East Asia Summit in October 2013 – a strain in bilateral relations was evident from the fact that both the Chinese President Xi Jinping and Chinese Premier Li Keqiang’s official visits to the member-states of the Association of Southeast Asian Nations (ASEAN) did not include Myanmar –  that happens to be the current chair of the bloc. Furthermore, Myanmar did not feature in the destinations visited by Chinese Foreign Minister Wang Yi either.

Both the suspension of the Myitsone project and the opposition to the Letpadaung copper mine by Myanmarese citizens have led to the fall in China’s enthusiasm with regard to investing in the country. The dramatic 90% drop in Chinese investment in the country in 2012 – when compared to investment statistics from 2011 – stands testimony to Beijing’s diminishing interest in Naypyidaw.

Although China is not satisfied with President Thein Sein’s government, they haven’t given up hope on the ruling Union Solidarity and Development Party (USDP). China has pinned their hopes and efforts on the incumbent USDP Chairman and the Speaker of the Lower House, Shwe Mann – who is incidentally also the USDP candidate in the upcoming 2015 presidential elections. China has also worked on strategies to reach out to the opposition parties of the current government in Myanmar, with a focus on those from the National League for Democracy (NLD) party.

Thus, the 2015 election will define not only the political future of Myanmar, but also the trajectory of the Myanmar-China bilateral.