The challenge of natural resource governance in Myanmar

9 Dec

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By PISA Program Assistant, Dr. Miriam Grinberg

In the lead-up to Myanmar Ambassador Aung Lynn’s visit to the Elliott School of International Affairs on Monday, December 12, PISA will provide critical background information on the country through our blog. Stay tuned for two more posts on Myanmar as part of our ongoing series, Legacies of the Cold War in Asia and Climate Change and Sea Level Rise in Asia.

The visit of Myanmar’s First State Counsellor Aung San Suu Kyi to the U.S. in September 2016 was hailed as a milestone in the two countries’ relations, and a sign of how far Myanmar has come since Suu Kyi was a political prisoner. It also came at a challenging point in the country’s history, as it faces not only the difficulty of achieving a permanent peace, but also developing in a sustainable and equitable way. Ranked 148 out of 188 in the 2015 UN Human Development Index and 147 out of 167 in Transparency International’s 2015 Corruption Perceptions Index, it is clear that the central government of Myanmar has a long way to go towards ensuring a higher standard of living for its citizens.

One of the means by which it hopes to do so is through the country’s rich natural resource reserves, which include gems, minerals, timber, oil, and natural gas. National gas revenues, for example, already contribute massively to the economy, with $4 billion worth exported in 2014 alone. In fact, the control over and sale of these resources to China and Thailand, among others, enabled Myanmar’s former military government to rule the country with an iron grip from 1962 until 2010. The central government still relies on these resources as its primary means by which to attract foreign investment – over 74% of FDI in Myanmar has come through mining, oil, or gas since 1974 – and collects around 99% of revenues before transferring them on to state governments.

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Unfortunately, citizens living near these reserves have received little of the profits made from them over the years while experiencing negative impacts on their daily lives as a result of the extraction process. For example, jade mine conditions in Kachin State are dangerous and unsanitary, and around the mines, drug use is high and prostitution widespread. Moreover, jade, teak, and other resources are largely located in conflict-prone areas where independent armed groups exploit them, thus causing them to clash with the central government. Combat has often spilled over into local communities, resulting in displacement and heightening ethnic tensions.

Finding a system of revenue sharing which more equally benefits all stakeholders in the country – not just government officials and armed combatants – has thus occupied the thoughts of Myanmar’s leadership in the post-military regime era. One example of this was in 2011, when President Thein Sein announced that the development of the Chinese-financed Myitstone Dam on the Irrawaddy River would be suspended. This move was influenced by public opinion, which regarded the dam as a flood hazard (with the potential of flooding 700 square miles around it) and as largely profiting China (as it was predicted to consume 70% of the dam’s profits and 90% of its electricity). Since then, the country has passed an Environmental Conservation Law in 2012 which includes guidance for development, and has been a member of the Extractive Industries Transparency Initiative since 2014.

The Natural Resource Governance Institute, however, remarks that “almost no information is available on the management of the extractive sector” in Myanmar, citing the lack of a freedom of information law and no requirement for environmental and social impact assessments among its factors contributing to their judgment. Concerns have also been raised that the country has not come up with clear mechanisms for conflict resolution over land-use. Furthermore, given ever-increasing FDI from China and others on dams and other natural resource-related projects, there are worries that the “Hydrocarbons and Mining Trumps Everything” mentality will continue to take precedence over more environmentally-sustainable policies.

While illegal exports and land-use conflicts remain a challenge towards ensuring that revenues from Myanmar’s natural resources reach its population, it is still critical that  revenues currently gained are reinvested in social development if the country is to successfully re-emerge as an influential – and independent – player in the region. UNICEF, for example, estimates that one teacher per grade in a Burmese primary school is equal to “8 days, 8 hours, and 31 minutes of the 2012 government revenue from natural gas exports“; that funding 6.76 million vaccines for Burmese children is equal to 0.87% of revenue from two new gas projects; and that a 500 Kyat ($0.38) per day universal benefit for every child under five is equal to “just over one quarter of Myanmar’s 2010 sales from jade and gems auctions.”

Given such potential benefits – among many others – it is high time to refocus on quality-of-life issues for the Burmese people while taking into consideration the health of the environment that sustains them.

RSVP for Ambassador Lynn’s address on 12/12, “The New Myanmar,” HERE.

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2 Responses to “The challenge of natural resource governance in Myanmar”

Trackbacks/Pingbacks

  1. Legacies of the Cold War in Asia: Myanmar | PISAspeak - December 15, 2016

    […] information on the country through our blog. Previously, we discussed the country’s challenges in natural resource governance. Stay tuned for one more post on Myanmar as part of our ongoing series, Climate Change and Sea […]

  2. Climate Change and Sea Level Rise in Asia: Myanmar | PISAspeak - December 29, 2016

    […] background information on the country through our blog. Previously, we discussed the country’s challenges in natural resource governance and the continued consequences of the Cold War. This post concludes the series with a focus on the […]

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