Myanmar in the dark over hydropower for Asia

by Thin Lei Win | @thinink | Thomson Reuters Foundation
Tuesday, 24 July 2012 10:51 GMT
Myanmar, among Asia's poorest nations, is selling natural gas to Thailand and exporting hydroelectric power to China, yet 74 percent of its 60 million people have no access to electricity

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BANGKOK (AlertNet) - On a hot, humid evening in late May, hundreds of people holding candles gathered in the city of Mandalay to protest over power cuts, in the largest demonstration since Myanmar’s army crushed the monk-led “Saffron Revolution” nearly five years ago.

The protests spread quickly to Yangon as six-hour daily blackouts hit Myanmar’s commercial centre, even though it is better served than the rest of the country.

“China, give back our electricity,” appealed one demonstrator’s placard, while another warned in English, “Thailand, India, especially China. Don’t steal our electrical source.”

The protestors questioned why Myanmar, among Asia's poorest nations, is selling natural gas to Thailand and exporting hydroelectric power to China while its own people live in darkness.

Myanmar has abundant energy resources, yet 74 percent of its 60 million people have no access to electricity, giving it one of the lowest domestic energy consumption rates in the region, according to a recent report by the Asian Development Bank.

Meanwhile, natural gas coming from, or passing through, Myanmar accounts for about 30 percent of Thailand's energy consumption. And by the end of August 2011, China had imported almost 5 billion kilowatt-hours of electricity from two hydropower stations in Myanmar, according to a Chinese government report.

Participants in the recent protests were particularly angry about plans to build several dozen hydropower dams on Myanmar’s rivers, fearing they could wreck livelihoods and food security.

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“The rivers are critically important for Burma - culturally, religiously, economically,” said Sean Turnell, an expert on Myanmar at Australia's Macquarie University, referring to the country by its former name.

“An awful lot of people get their living from these rivers, either explicitly or implicitly. They're absolutely central to economic life in Burma,” he told AlertNet.

Local press splashed pictures of the demonstrations on their front pages and penned editorials questioning a series of billion-dollar energy deals, testing the waters after a reformist government took power in March 2011 ending half a century of authoritarian military rule.

ASIA’S NEW EL DORADO

The current government has pledged to promote “people-centred development”. But the protests -  which ended relatively peacefully after two weeks - highlight the unpopularity of the hydropower projects, most of which were agreed by the previous regime with its biggest ally, China.

Chinese firms are expected to build and run 33 of the 45 or so hydropower plants scheduled for Myanmar, with Thailand and India holding stakes in the rest. Almost all the power generated would be exported to those countries. 

With a land area the size of England and France combined and rich in natural resources, Myanmar is shedding its reputation as a pariah state and fast becoming Asia’s latest El Dorado.

Now that most international sanctions have been suspended and a foreign investment law is on the horizon, investors are jostling to make up for lost time.

But there is growing resentment among ordinary Burmese that their country’s natural resources –in this case, its rivers - could be harnessed, and possibly damaged, to boost development elsewhere.

Burmese environmental activist Maw Htun Aung said the hydopower schemes would change the flow of rivers, destroy fisheries and harm agriculture, which employs 75 percent of the population. Few local jobs would be created as Myanmar has little expertise in building and maintaining large dams, he added.

“To push on with these projects without really understanding the costs is like a blind (person) not being afraid of ghosts,” he said.

There are signs the goverment may be starting to open its eyes. In September, President Thein Sein suspended the Chinese-led Myitsone dam, Myanmar's largest hydropower project, after weeks of rare public outrage. Located at the source of the Irrawaddy River in northern Myanmar, the dam would flood an area roughly as large as Singapore.

And in a June speech on reforms, the president acknowledged the protests over energy, and hinted at moving beyond reliance on dams for electricity.

CANDLES IN THE SHADOW OF DAMS

Large dams are the wrong solution for Myanmar’s energy needs, argues Grace Mang, China programme director for the environmental group International Rivers.

“The Myitsone dam won’t power Kachin communities but growth in Southern China,” Mang told AlertNet. “Many people in Burma are still using candles, and they need decentralised energy because grid infrastructure is quite expensive for a developing country.”

The Asian Development Bank says Myanmar has vast renewable energy resources, but they have yet to be utilised to provide domestic power.

International Rivers has been able to verify progress on only 20 hydro projects in the past 18 months, suggesting some agreements could lapse. But Chinese companies are unlikely to walk away at the first sign of trouble because the potential profits are too big, Mang said.

Most of the dams are due to be built in areas that are home to ethnic groups and could cause decades-old conflicts to flare, she said, pointing to renewed fighting between the military and the rebel Kachin Independence Army (KIA) in northern Myanmar near the Chinese-backed Dapein dams

According to the Burma Rivers Network, the army sent in troops to secure the dam sites, inflaming tensions with the KIA. Clashes erupted in June 2011, and an estimated 75,000 people have since been displaced.

RESOURCE CURSE?

The urgency and secrecy shrouding energy deals in Myanmar is fuelling concerns it will suffer the resource curse that afflicts many developing countries where elites get rich on natural resource exploitation while the vast majority stay poor.

“There's a very real danger and, in fact, one could argue that a resource curse is already in play in Burma, particularly with respect to the flows of natural gas,” said Macquarie University’s Turnell.

“It's a particularly big issue for Burma because it's got immense water resources compared to other countries in Southeast Asia,” he added.

Maw Htun Aung said the government is neglecting other areas of the economy, including manufacturing, agriculture and fisheries.

“It is focusing on easy money from natural resource exploitation instead,” he said.

The country’s natural assets, including its water, are being sold off in a “fire sale”, he added.

“What's scary is that we're not building these dams one by one but simultaneously. If they all turn out to be bad, future generations will have to bear the burden for decades,” he warned.  

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