There's something weird happening in Myanmar, or the country formerly known as Burma. In a surprise move, the Burmese government decided to halt the construction of the controversial Myitsone dam on the Irrawaddy River that would have flooded an area slightly bigger than Singapore.
The decision is surprising due to several factors. First, the Myanmar government had declared its intent to keep continuing the building of the dam regardless of popular opposition. The government had no reason to care about public opinion. It derived its mandate from the result of the 2010 election, which many observers declared as a sham because what the election did was give a "democratic mask" to military rule. By any standard, the election was not free and the results were skewed to the party that was backed by the military. It was the same old wine in a new bottle, though there are indications that there are attempts within the junta to reform itself.
Second, due to its human rights abuses, the Myanmar government is completely isolated, with China the only major power willing to deal and trade with it. China itself has many interests in Myanmar, ranging from exploiting its natural resources to finding alternative trade routes from raw-material rich Africa that would bypass the Malacca Strait, a very critical trade route that's easy to control by bordering states, making it unreliable for China.
Not surprisingly, China has spent billions of dollars building Myanmar's infrastructure and is currently in the process of building a trans-Myanmar oil and gas pipeline that will connect the Bay of Bengal to Kunming.
The pipeline project, however, is not done yet thanks to resistance from the disgruntled population who resented the project due to the Myanmar government's use of forced labor and land confiscation. To add more headaches, in May, Hsipaw (no. 12 in the map) became the center of fighting between Burmese troops and the rebellious Shan State Army, leading to further delays.
At a glance, this should be the time when the government of Myanmar did it best to minimize its friction with China in order to ensure that the money keeps flowing from Beijing. Thus the news of the cancellation was a surprise and Beijing did not hide its displeasure toward what it saw as a betrayal.
Analyzing what's going on inside Myanmar is a very difficult job, since the government is very secretive, thereby preventing the out-flow of sensitive information. Still, there are a few indicators that might tell us what's going on.
First, it seems that there is growing discontent behind the scene, especially within the military circle, that Myanmar may be too close to China. The fact that there are many serious problems with the dam makes it easy for these dissenters to put the pro-China camp on the spot and claim that the "best" action is simply to cancel the project to maintain the unity of the junta.
Second, there's also Myanmar's ambition to become the chair of ASEAN in 2014. While the position in essence is ceremonial and ASEAN itself has very limited influence due to its loose grouping, the position can bestow international legitimacy to the regime. Up until now, the ASEAN countries have hesitated in giving Myanmar the position as a chair because they fear a negative reaction from the United States, Japan, and other Western powers, all of which provide a good sum of financial and technical aid to the association.
The dam, in essence, is a good issue to sacrifice. It is unpopular, making ditching it a good idea. It shows that Myanmar is not completely beholden to China, and most importantly, may allow Myanmar to capture the chairmanship of ASEAN that the regime covets.
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