China-backed projects face opposition throughout 2014

Most of the projects were awarded by the military government and have been subjected to heavy criticism after the quasi-civilian government took office. Lack of codes of conduct, leading to poor environmental and social management, is among the top complaints.

Chinese projects faced heavy public opposition throughout 2014. Recently, the Letpadaungtaung project, one of the largest Chinese projects in Myanmar andoperated by Myanmar Wanbao Mining Copper Co Ltd, faced unrelenting protests by local residents.

Khin Win, a 56 year-old woman residing in a village in the project area, was shot dead during the protest. More protests followed, including one in front of China Embassy in Yangon and another at the Wanbao office in Mandalay. The Myanmar government is also under pressure to investigate and take responsibility for the crackdown.

Though the company stopped the fencing that sparked the latest protest, it plans to restart the job sometime soon to meet its scheduled operating deadline in 2016.

Other Chinese-backed projects have faced a similar fate.

The most famous example is the Myitsone Dam project, part of the Confluence Region Hydropower Project (CRHP), which includes seven dams with a total installed capacity of 20,000 MW.

The CRHP alone accounts for 41 per cent of the total power capacity called for by a 30-year strategic plan. Outlined in 2001, the plan includes 64 hydropower plants and three coal power plants with a combined installed capacity of more than 40,000 MW.

The US$3.6 billion-project is mutually beneficial, Lu Qizhou, president of China Power Investment Corporation, was quoted as saying by Xinhua News Agency.

According to him, when the hydropower stations in the upstream-Ayeyawady basin, including Myitsone Hydropower Station, are completed, Myanmar government will gain economic benefits of $54 billion via taxation, free electricity and shared dividends, accounting for 60 per cent of the total revenue of the projects, far more than CPI's returns on investment during the operation period.

To him, by cancelling the project, Myanmar has lost hundreds of billions US dollars of direct economic benefits, including the chance to get ten percent of the electricity generated, 15 percent of the project shares for land use, and the opportunity to own the entire project after a fifty-year period.

Though the country is attracting investment from investors in more countries, China remains the biggest foreign investor. Its cumulative investment in the country exceeded $14 billion, according to the Directorate of Investment and Company Administration (DICA). China accounted for some 30 per cent of total investments of nearly $50 billion.

Experts said that if Chinese projects are to be cancelled in Myanmar, it will approximately affect 20 per cent of the nation’s foreign income. Yet, thanks to the bright economic outlook, Myanmar is likely to receive more investments from the US, other Western countries, and the Asia-Pacific nations in the years to come, if it can maintain its political stability.

On September 30, 2011, President Thein Sein announced in an address to the parliament that the Myitsone Dam project would be halted during the term of his government. As the Chinese government wants to resume the project in the next government’s term, it may urge the Myanmar government to protect the interests of Chinese businesses in 2015. It is also very possible that China will urge Myanmar to resume the postponed dam project in 2015 as it is crucial to China’s power plan.

If the Chinese projects resume, there is reason to believe the nation’s stability will falter due to the sort of public opposition that has already demonstrated its disruptive potential in Letpadaungtaung.