Dam Nation

COVER STORY

Dam Nation

By DAVID PAQUETTE Irrawaddy Magazine APRIL, 2010 - VOLUME 18 NO.4 

Burma and China prepare to build seven hydroelectric dams in Kachin State that will not provide the people of Burma with jobs, security or even electricity.

Large-scale hydroelectric dams have long been decried for the immense damage they do to the environment and rural communities. Not everyone agrees, however, that the problems associated with mega-dams outweigh their benefits. After all, say pragmatists, dams are a reliable supply of electricity, without which no country can hope to survive in the modern world.

But in Burma, such arguments fall flat. Not only do massive dam-building projects take an especially high toll on people’s lives—besides destroying villages and the environment, they result in intensifying human rights abuses and make diseases such as malaria more prevalent—they also come without a payoff for the general population.

At the end of the day, the electricity they generate—the only benefit the Burmese people can expect to get from them—remains as scarce as ever.

The 55 million people of Burma are among the most power-starved in the world. In Rangoon, many households, offices and workplaces receive no more than three or four hours of electricity a day. Power cuts are frequent and productivity is severely disrupted. Neighborhoods band together to buy generators; families eat dinner and read books at night by kerosene lamps.

Recently, the lack of electricity even resulted in a rare display of public unrest. Last March, students in Moulmein, Burma’s third largest city, took to the streets in protest ahead of their exams. But unlike earlier generations of student activists, they did not demand freedom or democracy—they wanted electricity so they could study.

In a country that is now a key supplier of energy resources to its neighbors, it is no small irony that when Burma’s second largest city, Mandalay, hosted an Association of Southeast Asian Nations (Asean) conference on energy cooperation last July, the electricity department had to purchase 300 MW of electricity from the Chinese border town of Ruili to light up the city.

According to the most recent data from the International Energy Agency, in 2006 the average Burmese consumed just 84 KW of electricity per year—just five percent of the average Chinese or Thai, and 16 percent of the average Indian.

This disparity in energy consumption—a result of a depressed domestic economy that has languished under decades of military mismanagement—has made Burma eminently exploitable by countries straining to meet the energy needs of their own, more vibrant economies. And after two decades as the ruling regime’s primary international backer, China now enjoys a strong lead in the race to claim a lion’s share of Burma’s rich natural resources.

In September 2008, EarthRights International reported that it had identified no fewer than 69 Chinese multinational corporations involved in at least 90 hydropower, mining, and oil and natural gas projects in Burma.

“In pursuit of Burma’s natural resources, China has provided Burma with political support, military armaments and financial support in the form of conditions-free loans,” said the Washington-based environmental watchdog.

Plans were hatched quietly in 2006 between the Burmese Ministry of Electric Power and the state-run China Power Investment Corporation (CPI) to clear the way for seven mega-dams in Kachin State in northern Burma. However, it was not until June 16, 2009, that the Burmese state media reported that the government had signed a Memorandum of Understanding with CPI on the project.

In a leaked memo obtained by The Irrawaddy, CPI confirmed it had met with representatives from the Yunnan Power Grid Company on March 7, 2007, and negotiated a deal whereby “electricity yielding from Myanmar [Burmese] hydropower projects [will] be transmitted back to China via the Yunnan power network.”

In other words, CPI is providing most of the financing for the dam projects, along with a handful of other Chinese investors, while Yunnan Power is building the transmission lines to transfer the electricity to southwestern China. This fits in with China’s West-to-East Power Transmission Policy, a wider initiative that aims to supersede the country’s reliance on coal mining in its industrial east.

But notably absent from these plans is any indication of how the dams will help Burma to address its own energy needs.

In the January issue of China Investment, a state-run magazine, Zhou Jiachong, the director of China International Engineering Consulting Corporation, one of the Chinese state enterprises involved in the Kachin State dam projects, confirmed that companies representing the two governments had made an agreement in 2009 for hydroelectric development along the Irrawaddy River that would have a combined electricity generating capacity of 16,000 megawatts—about two-thirds the entire capacity of neighboring Thailand and more than 10 times Burma’s current supply.

Experts estimate that Burma has a total hydroelectric capacity of 45,000 MW per annum if it is fully realized. However, the people of Burma, who must bear the social and environmental costs associated with mega-dams, will see little, if any, of this energy as long as government policy remains focused on catering to countries that help to keep the Burmese generals in power.

For its part, China’s chief concern is to ensure that it maximizes the return on its investment—something that doesn’t depend on tapping into Burmese demand.

“Myanmar is a smaller country with less population relative to China,” Zhou told China Investment. “Most of the electricity generated cannot be consumed domestically. So for Chinese companies, they have to consider power transmission back to China when developing Myanmar’s hydropower resources.”

Sufficiently certain that their Burmese hydropower projects will pay off, the Chinese companies are moving ahead at full speed. On Feb. 8, China’s People’s Daily reported that feasibility studies had been completed and construction work was ready to begin on the Myitsome Dam, located at the source of the Irrawaddy River. The first phase of the project—the first of seven mega-dams in Kachin State that will cost the Chinese an estimated US $16 billion—will entail flooding an area the size of Singapore.

Now that the projects are ready to proceed, the Burmese regime has made a belated and perfunctory attempt to win public support for its ambitious plans to reshape vast areas of the country’s landscape.

In a front-page report in The New Light of Myanmar on Dec. 31, under a headline, “Country Will Achieve Electricity Sufficiency With Surplus Production Across the Nation in Near Future,” the Ministry of Electric Power (1) detailed in full the potential capacities of Burma’s more than 30 hydroelectric projects, and concluded by announcing the “good news” that “the people will enjoy [an] adequate supply of electricity, and the factories and workshops would use the power round the clock in the near future.”

Although it is possible that some of the output from the dams will indeed be used to meet domestic industrial needs—as in the case of the Shweli I Dam in northern Shan State, another Sino-Burmese joint venture that provides energy to mines and smelters in the country’s north, as well as to China’s Yunnan Province—there is little reason to believe the new dams will be much of a boon to average Burmese consumers.

“I think we can safely assume, based on past practice and what we understand are the arrangements relating to Burma’s export of hydroelectricity now, that the Burmese people will receive near enough to no benefit at all from the dams being constructed in Kachin State,” said economist Sean Turnell of Macquarie University in Australia, a long-time observer of Burma’s economy.

“Indeed, we can be certain that the people in Kachin State will suffer—as their rights and properties are trampled underfoot by both the Burmese regime and Chinese construction crews,” said Turnell, who estimated that more than 80 percent of the electricity produced by the seven dams will be sent straight to China.

“The whole scenario,” he said, “is an extraordinary illustration of the short-sightedness of the regime, [which is] willing to sacrifice Burma’s current and long-term energy needs for quick cash up front.”

With so much at stake, civil society groups in Kachin State are now trying hard to make their voices heard outside Burma—especially in China.

In a report titled “Resisting the Flood,” the Kachin Development Networking Group (KDNG) calls on CPI “to immediately stop construction of the Myitsone Dam and other dams in Kachin State, and to avoid complicity in multiple serious human rights abuses associated with the project.”

Although China is often seen as impervious to such pressure, in April 2004, environmentalists won a rare victory when Chinese Prime Minister Wen Jiaobao called for the suspension of one project to build 13 dams on the Nu (Salween) River because of environmental concerns. The number of dams to be constructed was later reduced to four, but last May this was cut to three, after work on the Liuku Dam was halted pending a more thorough impact assessment.

Despite such positive signs, however, China’s decision-making on such issues remains opaque. Ultimately, economic considerations in China are likely to override other concerns.

According to Peter Bosshard, the policy director of International Rivers Network: “Profit margins in [China’s] home market are notoriously slim and the potential for further growth is limited. Once the companies acquire the latest hydropower technology, they are eager to compete for contracts in more profitable overseas markets.”

Of course, not everyone in Burma is dissatisfied with the hydropower scheme. Without risking much financial investment of their own, the military elite and the profiteers close to them will rake in massive rewards for their part in the sell-off. Revenue from electricity sales from the Myitsone Dam alone is estimated to be at least $558 million per year, according to KDNG.

Ironically, the regime’s reputation for corruption and economic mismanagement may now be the best hope for opponents of the dams, as it could undermine Chinese confidence in the long-term viability of the projects. If greed does get the better of the generals and their cronies, who are now busy making sweetheart deals for future control of Burma’s resources under the guise of privatization, it may close the floodgates on funding and spare the people of Kachin State a deluge of “development” that will only leave them more impoverished than they already are.

Photographed in 2008, the Xiaowan Dam is the fourth in a series of mega-dams on the upper Mekong River financed by China. It began filling its reservoir in October 2009 and will be 292 meters (958 feet) high and cover an area of 190 sq km (73 sq miles) when fully operational in 2012. Critically low water levels downstream on the Mekong During this year's dry season have been reported, attributed in part to China's construction of dams on the river. (Photo: MARCUS Q. RHINELANDER)

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