Myanmar’s Energy-Governance as a GMS-member
The Case of Hydropower on the Thanlwin (Salween) River
(a guest commentary by Cordula Meyer Mahnkopf*)
Myanmar, being a member of the Greater Mekong Subregion (GMS), is a net exporter of energy to its neighbors like China who get the lion‘s share of the country’s generated power. Energy production has so far been more harmful than helpful especially to people who live close to the production-sites. Plans from 2011, making the Thanlwin River a source of hydropower, now offer a chance to the NLD-led government to perform good governance. Sorting out the river’s rich wildlife as an economic potential for e.g. eco-tourism, the handling of the current situation could be decisive for new perspectives on a socially and environmentaly conscious development on the Thanlwin instead of following past patterns of dam-building.
Free moving dolphins in the Thanlwin, reclusively wandering tigers in the jungles of the Kayin state as stated by Karen Environmental and Social Action Network (KESAN), huge fishswarms in clear waters – the complex and mostly unstudied wildlife of Eastern Myanmar could vanish before it will be known to the world. Century-long the “lifestream“ for Shan, Karenni and Kayin people, the free-flowing Thanlwin today faces six upcoming dam-projects, which will regulate the river once it is finished. Three out of those six projects are located in the Shan State, namely Kunlon with 1400 MW, due to be completed in 2023, Naungpha with 1000-1200 MW, and very close to Naungpha in Northern Shan State Man Taung, also: Mantone with 200 MW.
Plans related to hydropower as a renewable energy source in the East of the country, consented to in 2011, are the legacy of the Thein Sein government. To a large extent, those plans disregard the potential for an eco-friendly, sustainable development. So far, the dam-building plans on the Thanlwin are neither canceled nor approved by the NLD-led government. But the signed Memoranda of Understanding with Thailand and China (summer 2016) mean that 90% of Mong Ton’s and Hyatgyi’s future energy will go abroad, unbalancing Myanmar’s own energy deficit even more. Even though the International Finance Corporation (IFC) is currently doing a thorough analysis on hydropower, in August Aung San Suu Kyi signaled the Ministry of Electric Power (MOEP) green light to further loan seeking in regard to dam-projects. In doing so, she is alluring protests from many sides, and it is still unclear in which direction things will go. In any case she and her party have to face tough choices, knowing that more than two third of the country’s electricity is generated by hydropower (Ministry of Energy 2013). The OECD/IEA (2016) reports that in 2014 8829 GWh were generated from hydropower in Myanmar. Meanwhile, environmentalists, often simultanously lawyers of ethnic affairs, express their unwillingness about Daw Aung San Suu Kyi’s undecisive but also open position concerning dam-building. Looking at scientific findings about infrastructure projects of these dimension explain why it is so.
Prof. Bent Flyvbjert from Saϊd Business School, University of Oxford, is the leading researcher when it comes to global infrastructure. He states that “dam-building’s benefits are always overestimated, and project costs are always underestimated“. The benefits are seemingly obvious: By exploiting the unbound forces of nature, hydropower counts for a clean, renewable energy, badly needed in underelectrified Myanmar. But what seems to be an asset becomes a loss by disregarding rules of good governance as laid down in the years after the end of the Cold War (1989/90). The reasons are the following:
The burden of dam-building is – and was - being carried by the ethnic people who live close to the dam-sites like the Shwli I (Northern Shan State, finished in 2009). They endure the “clearing“ of the sites with all its consequences: flooding, displacement, vanishing farmland and loss of fisheries without a sufficient compensation.
Militarization is currently taking place around the Hat Gyi dam in Kayin state, with construction costs of 3 billion US $ (Salween Watch Coalition 2016). Those conflicts do not strengthen confidence towards the new government and endanger the fragile peace-process in times of transition.
Practicing early stakeholder involvement by laying out the facts to local people could lower the impact of social consequences and social unrest. Dam-engineering, attentive to any social stress, would be a clear sign of good governance, fulfilling expectations of participation, transparency, accountability, and stability. This is the case in point of the Strategic Environmental Assessment (SEA) broadly observed in the IFC-analysis. But Prof. Flyvbjerg observes that nobody seems to learn from the past, calling already existing dams „dinosaurs“.
Those “dinosaurs“ enable the state of Myanmar to sell energy to its neighbors, especially Thailand and the People’s Republic of China. This energy export is planned as a pillar of Myanmar’s future economy. Thailand and China are like Myanmar members of the Greater Mekong Subregion (GMS), a brainchild of the Asian Development Bank (ADB). In the wake of “global governance“ and “capacity building“, a concept bounding regionalism and transboundary synergy-effects together, the GMS today comprises six countries including the Chinese provinces Yunnan and Guangxi. The regional approach intends to push structurally lagging-behind-markets towards modernization.
After all, in countries like Myanmar, the agricultural sector comprises still 70 % of the economy.
However, in the energy sector Myanmar is potentially an extremely strong player. Being a “net exporter”, it exports far more energy than it imports, with a rate up to 90% (OECD: 2008) energy which is lost to Myanmar’s own energy needs. An example is exactly Shweli I in Shan State close to the Kachin border. This dam was built under the military government and financed by the Huaneng Group, a Chinese Consortium. Shweli I is fully operating since 2009, thereby generating 600 MW of which 90% are being exported to China.
Connecting hydropower to prosperity, the ADB argues hydropower was a “natural resource“ which should balance the “uneven access to energy“ in the GMS-region with its 330 million people. And according to Western views, by creating “Economic Corridors“ across Asia regional markets could be linked to the global economy and vice versa. Energy-architectures like dam-building and deep seaports are part of this transnational scheme. In this situation China acts in two directions. As a member of the Western-born GMS it is obliged not to go competitively with its partners, while in the big picture it is a huge competitor of Western visions, pursuing its “One Belt, One Road Strategy“, and in doing so even offering an alternative to the World Bank with the Asian Infrastructure and Investment Bank (2015).
Concluding, China‘s immediate neighbor Myanmar being under enormous national and international pressures, holds potentially a strong position in Southeast Asia’s energy architecture. Future political actions in this field could become a criterion by which the willingness and capability of good governance of the new government could be measured. Implementing transnational policy goals while having a heavily burdened energy policy at home is an enormous challenge for Myanmar. Will the NLD led by “the Lady” be open to alternative political solutions or will it continue the “dinosaur-path” of former governments?
Natalie FAU et al. Eds. “Transnational Dynamics in Southeast Asia. The Greater Mekong Subregion and Malacca Straits Economic Corridors. Singapore: isas 2014
Bent FLYVBJERG. „Should We Build More Megadams?“ / 21.05.2015: https://www.linkedin.com/pulse/why-more-megadams-bad-idea-bent-flyvbjerg (accessed 22.10.2016)
HEIN KOE SOE. „Activists damn Salween plans“. Frontier Myanmar. 20.10.2016: http://frontiermyanmar.net/en/activists-damn-salween-plans (accessed 22.10.2016)
THE WORLD BANK. „Electricity to Transform Rural Myanmar“:http://www.worldbank.org/en/news/feature/2015/09/16/electricity-to-transform-rural-myanmar (accessed 22.10.2016)
(*Please note: The views, opinions and positions expressed by the author of the article and those providing comments are theirs alone, and do not necessarily reflect the views, opinions or positions of the Heinrich Böll Stiftung Myanmar)