How Aung San Suu Kyi is holding China to ransom

Photo: Claude Truong-Ngoc/Wikimedia Commons
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By Dung Phan

When China’s foreign minister became the first foreign dignitary to visit Myanmar after Aung San Suu Kyi was elected, the $3.6 billion Chinese-financed Myitsone Dam project did not sit high on the agenda. Four months later, when Suu Kyi made her first visit outside Southeast Asia to China, it was the hot button in the two countries’ discussion.

The friction between China and Myanmar started when President Thein Sein, in his first year in office, suddenly announced the cancellation of the $3.6 billion deal in September 2011. The suspension of the dam came as a huge shock to China. Other Chinese-back projects, such as a copper mine and a railway linking one province in China with the Bay of Bengal, were also called off.

Myanmar’s former military-backed government and the state-owned China Power Investment Corp, did little preparation for the project, with even less consultation on its social and environmental costs. The announcement, back in 2006, provoked nationalism in Myanmar – 90% of the power generated at the dam would go to China. At the same time, environmentalists complained the dam would displace 10,000 people and flood an area which is larger than Singapore. At its worst, the project could irrevocably change the flow of the Irrawaddy River. Myanmar’s most important waterway.

Dam projects in China’s strategic plan

Despite the halting of the damn on the eve of the country’s National Day in 2011, China welcomed Aung San Suu Kyi with the red-carpet. Yun Sun, a fellow at the Stimson Center in Washington, DC said China hoped “to revise the original plan but proceed with alternatives with equivalent outcomes.” For beneath the controversial dam project lies China’s largely symbolic plan for its relationship with Myanmar.

Thanks to its location close to the Indian Ocean, and extensive mineral deposits, Myanmar offers China a shortcut for nearly 80% of oil imports from the Middle East and Africa. This fact goes some way in explaining China’s massive investment in Myanmar’s roads, bridges, ports and dams. Direct access to Myanmar’s harbours along the Bay of Bengal not only opens the fastest routes, but also makes a substantial part of Chinese foreign trade independent of the time-consuming and potentially risky voyage through the Straits of Malacca.

Analysts say if China fails to revive projects such as Myitsone dam, it would be likely to cast an enormous shadow on Beijing’s ambitious efforts to expand its diplomatic and economic hand in the region.

However, China knows it is not the only regional player with plans to refresh relationships and investments after decades of Myanmar’s corrupt military governments. Immediately after the announcement of Suu Kyi’s visit to China, New Delhi said foreign minister Sushma Swaraj would be making a trip. Meanwhile, Japanese government experts are helping Myanmar’s ministries draw up plans for urban renewal and transportation routes.

Suu Kyi’s pragmatics

The most significant thing about the [recent] trip might well have been the timing and not the modest outcome of the talks,” wrote Sebastian Strangio, an Australian journalist covering the Asia-Pacific. Back in early 2014, Aung San Suu Kyi travelled to China for the first time. She met with Xi Jinping and repeatedly stressed that she welcomes a good relationship with Beijing.

This time, Suu Kyi chose China as the first nation outside Southeast Asia to visit since she became the leader of the National League for Democracy (NLD). It preceded the 21st century Panglong Conference (on 31 August) and her visit to the United Stated (in September). According to Strangio, the decision already “sent a clear message about the priority Myanmar’s new government places.” Just before her visit, a 20-member commission was appointed to review the dam’s suspension and other large-scale hydropower projects. This is a signal to Beijing that she will evaluate the project on its merits.

As the new Panglong Conference opens, Suu Kyi says her major goal is to end 70 years of civil war with ethnic minorities, knowing that cooperation from China will make that process much easier.“I do believe that as a good neighbour China will do everything possible to promote our peace process,” she said at a news conference.

In fact, thanks to Chinese encouragement, three armed groups that had refused to attend the meeting have stated that they were willing to be there on 31 August. Their intention to participate is China’s “gift for her back home” and “a reminder that it wants to make itself Myanmar’s new best friend.”

Superficially, one might question “who is playing whom” as Suu Kyi leverages the Chinese offer for the peace conference. However, it is worth noting that Chinese help will be indispensable to achieve the rapid economic development Suu Kyi’s government is bent on. “Those who voted for her are poor people, and they won’t have any patience with her if she screws up the economy,” said Lin Xixing, a professor at Jinan University in Guangdong Province in southern China.