$3.6 billion Myanmar dam project suspended after demonstrations

A controversial $3.6 billion dam project in Myanmar has been suspended today after weeks of protests backed by political figurehead Aung San Suu Kyi. Myanmar is one of the most repressive countries in the world and this will be seen as a great embarrassment to the totalitarian regime. President Thein Sein has said that the government had to act “according to the desire of the people”. It is considered a massive change in government policy after the past 50 years of reclusive government.

The Myitsone dam project, led by a Chinese team, is to have destroyed 63 villages and displaced 12,000 people from their homes along the Irrawaddy River, as well as causing considerable environmental damage. The project would have flooded 766km² of land, creating a giant reservoir the size of Singapore. Energy produced from the dam would have been mostly exported to china, to provide for the growing energy need in the country.

Unfortunately for the environment, the region is a biodiversity hotspot, with development potentially destroying part of the Mizoram-Manipur-Kachin rainforests. The project could also potentially cause earthquakes in the region. On a positive note, it would decrease the need for further fossil fuel based projects.

Chinaare likely to reply quickly and apply pressure on the Myanmar government. Myanmar has few sources of investment due to their political situation. Other investors include Thailand and South Korea, but China is a key commercial partner and it will not want to lose this investment avenue.