Behind Myanmar’s suspended dam (3)

In a region scarred by violent conflict and rife with distrust of China, the investment risks are plain. Qin Hui concludes his three-part analysis of the fate of the Myitsone dam.

Members of the Kachin Independence Organisation (KIO) and many other Kachins – including former communists – are confused or angry about China’s role in the region’s history. The Myitsone dam is just a flashpoint for those feelings.

The sentiment I heard repeatedly can be summed up as follows: “Of course we would like to be independent, but we know that goal is too ambitious. We would also be willing to be a part of India or China. If China hadn’t handed us to Myanmar when the borders were drawn up, then we wouldn’t have this problem. But we’re in Myanmar, so we just want the government to implement the Panglong Agreement, treat us properly and let us self-govern.

“We accepted the conditions of Khin Nyunt [a more moderate government leader] and signed a peace deal, and that wasn’t easy to stick to. Then the government purged Khin Nyunt and repressed us further. We looked to China to mediate, but China just moved closer to the military government, and even gave them the weapons to fight us. In 2009, the junta defeated the Kokang and forced [NDA-K chairman] Zahkung Tingying to come over to their side, and now they’re on the offensive against the KIO – it looks like they’ve decided to beat us next.

“China is refusing to accept Kachin refugees from the fighting. But why? [author’s note: as I understand it, China has actually accepted many refugees. But, as the UN does not have access, conditions are worse than in the UN-funded and NGO-run camps near Myitkyina].

“Apart from at Myitsone, which is sacred, we don’t object to the idea of China coming here to build dams. We’re opposed to the dam, not to China, and we would object to any country building a dam at Myitsone in the same way.

“At the same time, Chinese companies have worked with the military government, building dams on our land, flooding our territory and driving our people from their homes, without heeding our wishes. And with every dam, the government sends in soldiers for ‘protection’. The construction leads to conflict: it doesn’t just create environment problems, but changes local political conditions. Is that what China means by ‘not interfering in internal affairs’? 

“To be honest, we would accept any help offered at the moment, including from the west. But we don’t have any major strategic resources, so who is going to risk offending a powerful China for the sake of the weak Kachin? Many westerners still see us as remnants of the communists or as drug dealers. We would like to be close to the west, but can we be?

“We know the consequences of offending China, and so although we have objections to what China is doing, we won’t cause offence. We just want the Chinese and Burmese governments to leave room for us in their deals, rather than backing us into a corner.”

I left Kachin state with two clear impressions. First, the people who cooperated most closely with China in the past (former Burmese Communist Party members, for example) are the fiercest critics of China today. They commonly feel that China cannot be trusted and that the Kachin should seek western support.

Second, levels of support for the KIO among the Kachin are higher than ever. There used to be many political factions within the Kachin group, but now the elements close to the military government, such as the NDA-K, are being marginalised.

An NDA-K veteran told me that, in the past, fighting within Kachin state was localised. But in the latest conflict, which broke out last June, resistance has been fiercer than ever. Fighting has stretched west from the traditional conflict zones on the Chinese border to the Hukawng Valley and Sumprabum; and south to Namhkan and Nantun in the north of Shan state, beyond the fringes of Kachin state. The hostilities are more intense than they were during the Communist rebellion and the KIA is active in many areas previously untouched by the resistance.

But the Kachin tragedy is this: unless the entire country transforms, there will be no solution to their problems. And if there is no solution to the Kachin’s problems, then what hope is there for investment in large-scale projects in this region?

Clearly, in the north of Myanmar, and particularly in places like Kachin state, China cannot invest without involving itself in these internal matters. China has been a participant and interested party in this region ever since the second world war, only backing off for a period during the late 1980s and early 1990s. By that point, the Chinese had stopped providing support to the Burmese communists and cut all links with the militias into which the communist forces evolved, while relations with the military government had normalised, but were not particularly close.

The government and the militias at the time also had a fairly calm relationship. The three players were not at war, but neither were relations between any two parties very close. China’s influence over Myanmar was at a historical low.

This state of affairs did not last long. First, the military dictatorship did a terrible job of governing the country, particularly after the purge of the relative moderate Khin Nyunt. Ethnic reconciliation and democratic reforms were rolled back and conflict worsened, both between the government and the people and between the army and the militias.

Also, the militias had established strong links with China over the decades, and it was not easy simply to cut themselves off. Still not recognised by the military government, the militias had no choice but to look to border trade with China as a source of revenue. The militias benefited indirectly from the globalisation of China’s economy: they needed independent income sources and – in order to improve their global image – these had to be sources outside the drug trade. More importantly, the militias believed that shared interests with China would force the Chinese to get involved if conflict broke out with the Burmese army. 

At the same time, relations between the Chinese and Burmese governments have become increasingly warm, for economic and geopolitical reasons. China needs resources and markets, while Myanmar needs investment and technology. China needs a route to the Indian Ocean, while Myanmar needs to end its isolation. There are also ideological reasons: joint resistance to the so-called “peaceful evolution” of the west.

These three factors have led to a quick friendship between the two nations, a strategic partnership in which large state-owned monopolies have played an essential role. And the enthusiasm of the Burmese government for Chinese investment, particularly by those state-owned giants, also stems from the same “internal” considerations of the militias – they are both trying to play the “China card” against their opponents.

While it may be politically correct not to “interfere in internal matters”, the realities make it hard to do in practice. This is particularly the case in conflict-affected areas such as those controlled by the militias. No matter what it does here, China will always be offending someone.

There is no doubt that China’s strategic investments in Myanmar affect its neighbour’s internal affairs, nor that the conflicts in Myanmar impact China due to these economic ties. When the Burmese army attacked the Kokang region, many Chinese merchants lost their investments. Militias have also obstructed, even paralysed, a number of Chinese construction projects.

In these cases, Chinese internet users – often using nationalist Chinese rhetoric – have consistently called for China to intervene. But most of the Chinese investing in militia areas are individual merchants, while Myanmar’s military-backed government is working with huge state-owned companies. Those different preferences to an extent reflect different interest groups and classes within China.

Everyone knows about the Burmese military dictatorship, but the country’s history as a British colony is too often forgotten. Myanmar has been more influenced by “western thought” than by Chinese. Between 1948 and 1962, Myanmar was a multi-party democracy and the Burmese are no strangers to voting. But the weakness of this democracy, which failed to solve many social issues, stirred hopes for stronger rulers. And so came Ne Win’s coup and the “Burmese socialism” of the military dictatorship. But Ne Win failed to bring prosperity, instead turning Burma from south-east Asia’s richest nation into its poorest. Resentment and nostalgia for the democratic era became widespread.

The 1988 democracy movement brought down Ne Win’s government. Aung San Suu Kyi’s National League for Democracy won a stunning 82% of all seats in the 1990 general election, while the “government party” failed to even make third place, with a mere 2% of the vote. But to protect its interests, the military refused to hand over power. Democracy was suppressed, while the national anthem, flag and constitution were all changed and “Burmese socialism” abandoned. Even Ne Win was arrested.

The military government had no ideology or symbols around which to rally the people, and became a historical rarity: a government relying solely on military power to retain its privileged position.

Against this background, how can Chinese investments, particularly major strategic investments, ever be safe?

Part one: opposition from all sides

Part two: a history of Chinese involvement

Qin Hui is a professor of history at Tsinghua University.

This is an edited version of an article that first appeared in The Economic Observer.

Translated by Roddy Flagg

Homepage image from racole.