Myanmar and its Backward Development Process: Trend of Post-Coup Large-Scale Development Projects that Possibly Affect Natural Resources and Environment (EP.1)
More than 8 months after the Myanmar’s military coup d’état on February 1, 2021 overthrowing the elected government, many states in the global community, particularly Western countries such as the European Union (EU) and the United States, have condemned and expressed their disapproval against the coup by withdrawing and banning their investments to pressure the Myanmar military.
The outlook of foreign investment in Myanmar has been slowing down since February 1 when the Myanmar Army seized power from the civilian government provoking immediate negative feelings and uncertainties both inside and outside the country. Myanmar people came out to protest across the country with overwhelming public criticism, including the Civil Disobedience Movement (CDM). The resistance to military rule was likely to continue and escalate in both cities and ethnic state areas. The opposition against the Myanmar Army now covers both political and military dimensions reflecting on an unfavorable situation which might create challenges in doing businesses and investments in Myanmar.
Report of the United Nations Office of the High Commissioner for Human Rights (OHCHR) stated that the Tatmadaw’s conglomerates: Myanmar Economic Corporation (MEC) and Myanmar Economic Holding Limited (MEHL), are the 2 companies allowing the Tatmadaw to possess the great economic benefits of Myanmar. In the past, the military was an independent institution without any control or even inspection by the civilian government, it was also not under Myanmar’s State-owned Economic Enterprises Law. There were the generals elected among themselves control and take care of enormous economic benefits. Both enterprises are related and connected to almost all types of businesses which make it very hard not to use the service or consume, for example, construction; financial and banking; tourism and hotel; food and beverage; hospital; health and beauty; real estate; news and mass communication; distribution and logistics; forest; energy and electricity; mining; gem extraction as well as oil and natural gas businesses with more than 133 both domestic and foreign companies were involved. The said report found that these Tatmadaw’s conglomerates were linked with violence and human rights violation against Myanmar people, their proceeds were also converted into weapons used to persecute ethnic groups in different states.
Looking back on Myanmar’s story at the opening up of the country over a decade ago from 2010 to 2020, Myanmar was very open to foreign investments with the support of several policy and legal tools such as the National Comprehensive Development Plan (NCDP); the Special Economic Zone Law; Foreign and Myanmar Investment Laws.
After opening the country and reforming its politics towards democracy as well as being open to foreign investments, the proportion of inward foreign investment has greatly increased, especially from western countries.
It seems that the investment sectors that generate wealth for the Tatmadaw and its network the most are large-scale development projects and devastating extractive businesses like mining and particularly oil and gas where they now have control over all the state power and its organs. It was reported that the military affiliates are the dominants of the domestic jade and gem mining market, they are also major jade exporters worth tens of billions of dollars to China.
A report of the Justice for Myanmar stated that the oil and gas business plays a big part in generating more than 50% of its revenues and cash flow to the military’s wealth. That is why many sectors in Myanmar, including people; CSOs as well as the National Unity Government (NUG) jointly called on foreign joint venture firms investing and operating in oil and gas business to suspend their projects or at least to withhold their payments to Myanmar’s state-owned enterprises like the Myanmar Oil and Gas Enterprise (MOGE) in order to prevent the Myanmar military or junta from using this income as a support and converting it into a tool for killing people.
Like filling up gas for a car to be able to drive, paying money through taxes and company’s profit-sharing equals refueling both the economic-killing engine and military-killing engine to move forward.
In addition to increasing economic and investment indicators, investing in development projects that include infrastructure and devastating drilling business also has other side effects.
These projects which were labeled with the word “development” such as dam projects; drilling, operating and transporting projects; fossil power plant projects; mining projects and industrial estate projects broadly affect communities and the environment, including the health of people in such project areas and nearby. Many of the projects have got into human rights violations related to the Tatmadaw’s use of power where people in different areas and states are victims of such developments as well as the tightening of political and military boundaries.
These large-scale development projects such as infrastructure projects and destructive businesses bring about a wide range of problems, for example, seizing of people’s and community’s lands and using them as concessions for project developers; forced eviction; loss of land-related livelihoods and economic benefits; environmental and health impacts and etc.
Looking back beyond that, although Myanmar had faced economic sanctions after the 1988 suppression of people and the overturning of the 1990 election results, the military businesses were not too stumble. They were open to investments and running the business with certain countries by setting up holding companies and state-owned enterprises for doing business with both foreign and domestic private companies. After 1990, before the political reform towards the democratic process, the investments related to development projects and destructive drilling businesses have always been the first proportion of the investment funds. It can be said that most of the development projects and devastating drilling businesses that happened have always been the factors that maintained the military’s strength, especially Chinese investments in Myanmar before it officially welcomed foreign investments in 2010.
In 2009, Myanmar and China have agreed to build a 2.5-billion-dollar gas and oil pipeline project from the coast of Arakan State traversing central Myanmar to a refinery in China’s Yunnan province. Along with the pipeline, other infrastructures such as roads and railways have also crossed over the region. Moreover, a Chinese company has got a concession from Tatmadaw to construct a 15th world largest mega-dam in Kachin State which will certainly have a massive impact on the area.
It is obvious that the Myanmar Army has never cared about how much these development projects affect people living in or near the project areas, and this of course includes the impacts on natural resources and the environment too.
As for the response of Western nations and other global organizations towards the Myanmar military, measures have been issued to ban financial support for various projects together with targeted economic sanctions from developed countries. Even so, Myanmar, particularly the military, turned back towards the support of the countries that they considered as allies who did not clearly condemn its coup both in international platforms and on behalf of the country like China; Russia and Thailand. These authoritarian allies seem to wait for the moment of volatility and uncertainty in politics; economic and public health.
In the case of China, it can be seen that Chinese government and business sectors have given great importance to Myanmar as the backbone and major resource. China invested in the infrastructures and public utilities along the Belt and Road Initiative project as well as the China-Myanmar Economic Corridor (CMEC), especially in the Kyaukphyu Special Economic Zone which is one of the three largest and most significant special economic zones of Myanmar. China has lately tried to pressure the Myanmar junta to push forward the infrastructure projects, furthermore, it is now starting to provide assistance.
As for Thailand, immediately after Myanmar’s coup d’état, the government had contacted the Myanmar authorities to negotiate on the implementation of the Dawei Deep Sea Port and Special Economic Zone project in which the concession of the Thai project developer company was previously terminated and on the existing Official Development Assistance (ODA) both financially and academically through relevant agencies.
In regard to constructing a hydropower dam on the Salween River in Karen State which seems to be once again a target of the development after Senior General Min Aung Hlaing as junta leader visited Hpa An, the capital of Karen State. He intended to build the Hat Gyi dam, one of the seven dams on the Salween River, with China as the main investor and the Electricity Generating Authority of Thailand as power purchaser.
It appears that even though the Western countries have blamed the outrageous and inhumane actions of the Myanmar military in cracking down on pro-democracy people, the countries investing in various projects in Myanmar earlier without any clear condemnation of the military’s coup both in practice and in global forums especially China and Thailand are however still trying, even more, to accelerate the remaining projects in parallel with the coup; the warfare and the pro-democracy movements. There are also other crises that happened at the same time such as the COVID-19 pandemic and natural disasters, it is interesting to analyze during this critical and worrisome condition how Myanmar under this new era of military dictatorship will be in terms of development trends and human rights situation, particularly regarding the natural resource and environmental impacts derived from the large-scale development projects which cut off the participation process of local people completely. It is probably not difficult to predict.