In 2009, Myanmar agreed on the huge dam project with Chinese contractors; in 2011, it was suspended. As the new government must decide its future, it is closely watched by both Chinese and international investors.

In 2009, after years of talks, most of the $3.6 billion Myitsone Dam project was to be covered by the China Power Investment Corp. in a joint venture with Myanmar’s Ministry of Electric Power. Myanmar was expected to get 10% of the electricity garnered, own the project after a 50-year period and earn $54 billion via tax payment, power and shares.

But criticism ensued. Economically and socially, initial estimates were challenged for underestimation of adverse impacts. Historically, the Irrawaddy is seen as Myanmar’s civilizational birthplace. Geopolitically, the dam is located in the unstable northern Kachin, where clashes between the government and local separatists remain common. Internationally, foreign governments, including the US embassy, have funded some anti-dam activists, as disclosed by Wikileaks.

In fall 2011, the then-president Thein Sein suspensed the project. Recently, Aung San Suu Kyi, the leader of the National League for Democracy (NLD), won a huge parliamentary majority. What will the new government do?

Myanmar’s long emergence

In China, observers believe the dam project was stopped and the Chinese companies targeted unfairly. Indeed, while China has been portrayed as the exclusive partner of the old military government, Japan provided the country with $2.2 billion in foreign aid and reparations until the 1990s.

The close relations were due to General New Win who had been trained by the Japanese in 1940. While half of Myanmar’s foreign aid came from Tokyo, Ne Win’s widespread persecution of ethnic Chinese moved from discrimination to mass violence. After the 1988 military coup, General Saw Maung took over but Ne Win had influence on the military into the 1990s. This long ‘inconvenient history’ is often downplayed in the West.

As the new military rulers consolidated power, Japan was swept by its economic troubles. It was then that Chinese firms filled the vacuum investing in hydropower dams, mining projects, oil and gas.

By the early 2010s, Myanmar’s reforms led Washington to relax curbs on foreign aid to Myanmar, the relations were normalized and Brussels followed in the footprints. As Western investment drives took off, some late entrants began to compete for projects that China had already been scheduled to manage.

Need for cooperation

After the recent visit of Foreign Minister Wang Yi, Suu Kyi said she had not read the contract for the Myitsone project but characterized the bilateral relations with China as “very important politically as well as socially and economically.”

In the past five years, Myanmar has tripled its expenditure on electricity supply. Yet, only one third of 53 million people live with electricity. Today, two-thirds of the total comes from hydropower, 29% from gas, and less than 1% from wind, solar and biomass. Full access will take until 2030.

While most people in Myanmar would prefer uncontroversial electricity resources, all expect accelerated development. Unlike the US, China is a large investor in Myanmar. In turn, Chinese firms have learned lessons of their own about local responsiveness and community relations.

Indeed, there is reason for cautious optimism. While Aung San Suu Kyi cannot ignore the legal weight of contracts, she has the mandate to come up with out-of-the box solutions, which could prove pragmatic and balanced. In another contested case –the Chinese-Myanmar Letpadaung copper mine – she did not recommend project cancellation but revised terms. That allowed construction but reduced adverse impact locally.

Myanmar has a great interest in China’s development experience and pioneering efforts, including the One Road One Belt Initiative, the Asian Infrastructure Investment Bank and the New BRICS Development Bank.

Historically, China and Myanmar have gained a lot from sustained economic cooperation. Today, the need for mutual collaboration is greater than ever before.

Source of documents：China.org