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China just turned on its first Myanmar gas pipeline—which won’t do much good for Myanmar

The new natural gas pipeline from Myanmar to China, which made its first delivery Monday, is finally paying off for China after years of planning and billions of dollars in investment. But ordinary Burmese aren’t likely to see much benefit.

The pipeline will soon be transporting about 12 billion cubic meters of gas—about 6% of China’s gas consumption—800km across the entire width of Myanmar and into the southern Chinese province of Yunnan. Chinese cash will flow in the other direction; At least $1.8 billion annually will go to the state-owned Myanmar Oil and Gas Enterprise, which runs the pipeline project alongside China National Petroleum Corporation and other investors. But the ultimate destination of the company’s money is a mystery, Reuters reported in June. For all the reform efforts of the last few years, Myanmar still ranks near the bottom of global corruption rankings and has a long way to go in corporate transparency.

Aside from official corruption, there are several other complaints about the impact of the pipeline on Burmese people. First is that countries like China and Thailand, which imports about 15% of Myanmar’s gas supply, are extracting a resource Myanmar desperately needs at home. As a result, China and Thailand are able to keep their lights on, whereas Myanmar is not. Now that Myanmar is undergoing rapid reform and attracting outside investment, maintaining a reliable electricity supply is becoming ever more important.

Another gripe from environmentalists is that the costs of the project have been borne by locals whose land has been taken. The Irrawaddy reports that compensation for private land now occupied by the pipeline is still poor: “Some compensation has been withheld by the township or district officials but the farmers do not know how to—or dare not—complain about this,” said one man whose land was used for the pipeline. Other locals are concerned about the safety of the pipeline, citing damage during the testing phase.

A local activist group, the Shwe Gas Movement, wrote in a report in 2011 that the Shwe offshore fields tapped by the project “could be used to spur economic and social development in one of the world’s least developed nations. Instead it will be piped across the country to China, fueling abuses and conflict along its path.”

Optimists argue Myanmar’s population could eventually benefit, if local projects funded by Chinese companies intent on winning support for this pipeline and other projects pan out. China National Petroleum donated $12.5 million to the construction of dozens of schools, medical clinics and other projects, after backlash disrupted a Chinese-funded hydropower dam project worth $3.7 billion.

But leading Burmese politicians, such as serving president Thein Sein and famous opposition politician Aung San Suu Kyi, worry that rural Burmese still wouldn’t benefit because social projects are often operated by corrupt former military cronies. Meanwhile, the government is salivating over a slew of exploration contracts that are up for grabs.

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