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Foreign NGOs accused of instigating opposition against Myitsone dam
2017-05-03
The Myanmar Times
“If you want to get rich, you have to build roads first,” Chinese leader Xi Jinping told delegates after the signing ceremony of Asian Infrastructure Investment Bank (AIIB) in 2014, citing a Chinese saying.
The One Belt One Road initiative (OBOR) – Beijing’s grand design to connect China and Eurasia with roads and railways and other transport infrastructures – passes through Myanmar and the Indian subcontinent, linking the country up with South Asia, Kunming and the rest of the ASEAN. Myanmar’s participation is crucial in Beijing’s ambitious plan.
During the time of Western sanctions, China had long been the patron of the then-military regime, offering investment and support for the isolated country. The Chinese diasporas in Myanmar are also actively engaged in businesses and often act as a bridge for Chinese firms to enter the market. But the warm relationship has strained recently as tensions emerged between Beijing and Nay Pyi Taw on several controversial infrastructure projects, and as Myanmar opens up to the rest of the world and seeks a more balanced diplomatic strategy. Despite the changes, China is an increasingly important partner for the NLD-led government, who needs Chinese support to stabilise their common border and military conflicts with armed ethnic groups.
In an exclusive interview with The Myanmar Times, Wong Kyin Pyu sat down at Kowloon Shangri-La in Hong Kong to share his thoughts on the Belt and Road, Sino-Myanmar economic relations and Chinese investments in the country. Mr Wong is the executive vice president of Hong Kong-based Maritime Silk Road Society, and chair of the Hong Kong Myanmar Overseas Chinese Association.
Foreign NGOs instigated public opposition against Myitsone dam
Back in 2015, Mr Wong said that several Sino-Myanmar projects were “called off or dishonoured” by the government under U Thein Sein without the consent of contract partners or Chinese state-owned enterprises. Mr Wong accused foreign NGOs of supporting and sponsoring anti-government parades regarding those controversial projects, namely the Myitsone dam and the Rakhine-Kunming railway project.
At Shangri-La, he repeated his view that “US, Japan and Singapore NGOs” were responsible for “instigating public opposition against the Myitsone dam” without naming any organisations.
“By shelving the [Myitsone dam] project, U Thein Sein in a way showed to the West and its allies that Myanmar could say ‘No’ to their giant neighbour, China, which resulted in the subsequent visits from Hillary Clinton and President Obama, and the lifting of all sanctions against Myanmar,” he said, noting that no sitting American president had ever visited Myanmar in the past since its 1948 independence. In 2016, then-President Obama lifted most, but not all, of the US economic sanctions imposed on Myanmar, marking the culmination of years of rapprochement that the Obama administration fostered. Most notably, though, section 312 of the Patriot Act has remained in force.
“However, U Thein Sein had eventually paid a dear price for this. The lack of trust between the two neighbouring countries emerged. The powerful then-vice president Thiha Thura Tin Aung Myint Oo, who helped sign the Myitsone deal, resigned. Consequently, investments from China dropped heavily, despite U Thein Sein’s compensation efforts towards China.
“Those efforts include building a replica of Shwedagon Pagoda with jewels and precious stones at the crown of the Pagoda in Bai Ma Shi, Luo Yang, China, entirely at Myanmar’s own cost, declaring Myanmar as one of the first supporters for China’s OBOR and taking an active part in the celebration of the 70th anniversary of Victory of War of Resistance against Japanese Aggression in Beijing,” he said.
The government and other sources told Reuters in early April that China had stopped pushing hard for the 6000-megawatt project to go ahead, and instead, “wants a face-saving solution” that would allow it to advance its other interests if the dam is cancelled. Mr Wong echoed this view.
“China should no longer pursue the project as we had better not open old wounds. We could negotiate with the current Myanmar government and replace the Myitsone project with other more viable, as well as more profitable, smaller dam projects.”
Belt and Road’s viability for the private sector
China’s leader Xi Jinping initiated China’s framework for the One Belt One Road initiative (OBOR) in 2013. Three years have passed since, yet many in the business community are still cautious about the risks and motives.
Developments are also slow in coming – the AIIB has only funded one project in Myanmar so far. But Mr Wong is optimistic that more substance will be realised this year. He sees OBOR as “the biggest business opportunity given to Myanmar over the century” and will boost the country’s “infrastructure development, technology advancement and cross-border trading”. Myanmar’s strategic importance to China is due to its stake at the Bangladesh, China, India and Myanmar Economic Corridor (BCIM), which will open up the western part of China.
Recently, China has shifted its tone towards the Myitsone dam and is no longer pushing hard on the project. Photo - ShutterstockRecently, China has shifted its tone towards the Myitsone dam and is no longer pushing hard on the project. Photo - Shutterstock
He is hopeful that concrete developments will take place this year, such as the Kyaukpyu SEZ deep-water port project, “which is now mainly backed up by CITIC, one of the biggest state-owned groups in China”.
“There are also ongoing Sino-Myanmar development projects in Kyaukpyu including the Kyaukpyu-Kunming railway, oil pipeline and natural gas pipeline terminal, which are also crucial in the big picture of the OBOR,” he explained.
Tom Miller, an analyst at Gavekal Dragonomics, a research company, says that Chinese officials privately expect to lose 80 percent of their investments in Pakistan, 50pc in Myanmar, and 30pc in Central Asia. It is hard to imagine investments on projects with such a low return percentage were driven by commercial logic. According to Mr Wong, the infrastructure and technology sectors need initial financial support from financially powerful investing countries, but the business opportunities for the private sector lie elsewhere.
“These [infrastructure and technology] investments mainly serve for the greater good of the developing countries under the OBOR framework. Personally, I don’t think these estimates should be a direct concern for private sector as they are mainly referring to national level infrastructural projects, which usually serve a political purpose.
“There are still a lot of business opportunities commercially viable for private sector investment such as real estate development, banking services, cross border trading, e-commerce and so on. Private Sectors should see this as a valuable opportunity to expand its business network from its local reach to greater Asia,” he said, adding that the private sector should only take part in commercially viable projects after due diligence and deliberations.
The private sector should “work hand-in-hand with the local overseas Chinese entrepreneurs”, which would solve the issue of red tape and local bureaucratic complications.
“The private sector is interested in taking part in OBOR as they can find some ways to get financing from the AIIB and enjoy the preferential treatment policies in the Sino-ASEAN free trade zones,” he said.
The Chinese government made political decisions on its state-financing projects abroad, such as the railroad financing in Tanzania and huge investments in Pakistan and Malaysia. Those projects helped China cement its ties with the Muslim world.
“One could notice that Islamic fundamentalists or radical Muslims seldom attack or give troubles to China. Even the Muslim-majority Xinjiang province is relatively peaceful most of the time.
“The same applies to Myanmar and Central Asia while the Chinese government is in fact losing a very high percentage of its investments over there,” he concluded.
In fact, there might be other strategic factors in play apart from appeasing the Muslim community. According to the Financial Times, China’s $46-billion plan to finance an economic corridor through Pakistan, connecting the port of Gwadar to north-west China, is motivated partly by the demand for an alternative route for oil and gas imports from the Middle East to avoid rising tensions in the South China Sea. The BCIM corridor together with the oil pipelines could be understood in a similar context as well.
Looking ahead in Sino-Myanmar economic relations
A common complaint from the private sector is that the NLD-led government’s economic policies are too little, too late and too vague. For Mr Wong, however, the new administration presents an opportunity for Myanmar and China to wipe the plate clean and start everything afresh.
“The ex-military government was quite deeply involved in the economy, which in turn created barriers to foreign investments, which included land-grabs, poorly enforced employment standards, rampant child labour and an economy dominated by cronies of the former military regime and companies under the control of the Ministry of Defence.
“The new NLD-led government has not made much progress in terms of economic policies since they took over the office. Myanmar Foreign Investment Law has not been changed … and new policies that were officially introduced last year seemed only to be general directives rather than pragmatic measures,” he said. Given these reasons, local businesses generally find it easier to work with the previous government as everyone was familiar with the bureaucratic practices then.
The NLD-led government supports a more transparent economic framework, economic reforms and liberalisation. These are conducive to attracting more Chinese investments as more information is available to investors and the country has retained its close ties with China.
There are many major challenges for Sino-Myanmar economic relations, according to Mr Wong, including the country’s slow progress of the national peace process and “immature social consciousness”.
“Interference from international NGOs and domestic civil society organisations, and its [Myanmar’s] close relationship with Japan and the influence of some Western countries remain the biggest challenges for maintaining a strong Sino-Myanmar economic relationship,” he said, adding that despite the challenges, there are regular high-level contacts between the two neighbours and both have promoted bilateral trade relations.
“Myanmar has ports in the Bay of Bengal which – if they were to be made more accessible – could offer China substantially shorter shipping routes to the Middle East and the West.
“But due to the fierce opposition and pressure from Singapore [Myanmar’s close ASEAN ally], Japan [a potential investor and donor] and the US, Myanmar shelved Myitsone dam and scrapped the high speed rail project from Kyaukphyu to Kunming,” he remarked. Those factors risk derailing Myanmar’s economic development.
Given the extensive border trade and geographical proximity with Kunming, Myanmar could develop its shipping industry.
“The Yunnan capital would be able to use Myanmar’s existing ports to transport goods to Africa and the Middle East.”
“China is still the largest trading partner and biggest investor of Myanmar ... For instance, the completion of the Sino-Myanmar oil and gas pipelines fully reflects the reciprocal nature of the project for the two countries,” said Mr Wong, who sees Myanmar political changes and its improved ties with Western countries as a challenge to China. Despite those obstacles, Sino-Myanmar relations will not diminish owing to China’s economic strengths.
“In the future, China and Myanmar’s cooperation will definitely continue to strengthen in the political, economic, and social fields,” he summed up his thoughts.
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