China's new infrastructure corridor through Myanmar faces risks of further conflicts and environmental degradation

Author: Nicolas Lo, China Dialogue, Published on: 29 October 2019

“Trouble for Belt and Road in Myanmar”, 21 October 2019

China’s new infrastructure corridor through Myanmar crosses war-torn regions, risking further conflict and environmental degradation

… Myanmar and China signed an agreement to establish the China-Myanmar Economic Corridor (CMEC), as part of China’s Belt and Road global infrastructure initiative… that corridor is mired in conflict between the Myanmar military and ethnic armed groups…

If China wants the CMEC to succeed, its companies need to regain the public’s trust in Myanmar and show that “win-win” scenarios are not mere words… Development benefits need to be distributed equitably across the population…

One of the most prominent CMEC projects in the pipeline is the Muse to Mandalay railway… A feasibility study completed by China Railway Eryuan Engineering has been submitted to the Myanmar government, but environmental and social impact assessments remain incomplete…

Though the Myanmar government’s negotiating stance and conditions focus on financial and fiscal sustainability, many of the glaring issues with Chinese investments in Myanmar concern the socio-economic and environmental impacts of large-scale development projects on already marginalised groups. China’s state-owned enterprises (SOEs) have already encountered strong resistance to their resource extraction and energy infrastructure projects.

The most infamous Chinese investment project in Myanmar is the Myitsone dam... The mega-dam was suspended unilaterally in 2011 by Myanmar’s then-president, Thein Sein, and attempts to revive the Myitsone dam as part of the CMEC were met with nationwide protests and rallies in early 2019.

Protests have also arisen along the 770km pipelines that carry oil and gas from Kyaukphyu in conflict-ridden Rakhine state to Kunming, the capital of Yunnan. Communities along the route are demanding fair compensation from the Chinese SOEs for the negative impact on their livelihoods due to loss of land.

In light of these grievances, Chinese SOEs are trying to demonstrate the tangible benefits of Myanmar’s participation in the BRI. In the years since the twin pipelines’ construction, the Southeast Asia Gas Pipeline Co. (majority-owned by China National Petroleum Corp.) has donated US$25 million for the construction of schools, clinics and water supply systems for rural communities along the pipeline route.

At the Second Belt and Road Forum in Beijing in April, China agreed to provide a one billion yuan (US$144 million) grant to the Myanmar government for improving livelihoods, conducting feasibility studies for major projects, and delivering humanitarian assistance for the tens of thousands of people in northern Myanmar internally displaced by civil war.

But aid grants and corporate social responsibility will not dislodge the roots of unrest in Myanmar, which are intertwined with the Myanmar military’s long-running wars in ethnic minority states.

In order to promote socio-economic and environmental sustainability in Myanmar’s border regions, China’s new development plans need to take into account the political legacies of decades of civil war…

A long history of engagement between Chinese financing and ethnic armed groups on the border has fuelled the unregulated extraction of natural resources – in logging, mining and plantations…

… natural resource extraction has been carried out by the ethnic armed groups and private Chinese investors…

… The massive volume of investment capital from China also heightens the risks of environmental degradation. Without more stringent regulations, the CMEC’s planned road and rail upgrades threaten both rural livelihoods and biodiverse ecosystems.

Myanmar’s rapid deforestation rate is a result of increased traffic through previously remote regions…

Deforestation is also driven by the conversion of forests into plantations for agricultural commodities like bananas and rubber, backed by private Chinese investment…

These rapidly expanding plantations grow tissue culture bananas, and the clonal genetic material and monoculture production require constant applications of chemical fertilisers and pesticides. These chemicals have poisoned local communities’ water supplies and aquatic ecosystems.

As tissue culture banana cultivation depletes the soil’s fertility, agri-business owners constantly need to acquire more land for production. Some Chinese-backed plantations are now found on land used by Kachin farmers until they were displaced by fighting between the Kachin Independence Army and Myanmar’s military…

CMEC planners and corporations must consider the ripple effects of the new projects on both society and the environment…

A green BRI will need more than economic investment alone… Chinese investment capital thus far has facilitated the degradation of the border region’s ecologically and culturally diverse landscapes. A broader and more inclusive coalition of stakeholders, particularly grassroots civil society groups that are most attuned to the needs of local communities, must be involved in development planning and decision-making processes for Myanmar’s border regions.

[Also referred to China Communications Construction Co.]

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Related companies: China Communications Construction Company Limited (CCCC) China National Petroleum Corporation (CNPC) China Railway Group (CREC) (part of China Railway Engineering)