Recently, several U.S. companies announced new projects to be launched in the coming months in Myanmar. While these new endeavors suggest a growing interest by businesses looking to enter this new market, the risks to these and other companies in the region is a continuing impediment to long-lasting business stability that must be heeded.
Cummins, a U.S. based manufacturer of heavy equipment secured a contract from Irrawaddy Green Towers (IGT) to supply a mix of solar and battery hybrid and diesel generator power solutions for more than 750 cell-tower sites in Myanmar. “IGT will roll out the cell-tower sites during the next 12 months as part of a contract with Telenor Myanmar to build and operate them nationwide. Two-thirds of the sites will be off the country’s primitive power grid and located in remote locations. Poor road infrastructure in some regions is another challenge as refueling and maintenance of diesel generators can significantly add to tower network operating costs,” according to Recharge.
In addition, under an agreement between U.S.-based ACO Investment Group and the Ministry of Electric Power, two 150-megawatt solar plants are due to be built by 2016, most likely in the Myingyan and Meiktila districts, near Mandalay.
This news reflects the critical need for infrastructure development that has long been lacking in Myanmar. Until the telecommunication, electrical and transportation infrastructures have been developed, the Myanmar economy will continue to face challenges as the Thein Sein government seeks to liberalize and open up the Myanmar economy.
There is also renewed hope that the many ethnic conflicts that have plagued the country for more than 60 years finally may be coming to an end. “Myanmar’s efforts to secure its first-ever nationwide ceasefire agreement (NCA) appears to be nearing fruition, as the fifth round of negotiations between the government’s Union Peace Working Committee and the National Ceasefire Coordination Team (NCCT) representing 16 ethnic armed groups drew to a close in Yangon in mid-August.” (See: The Nation Sept. 9, 2014) While many hurdles remain, all sides to the conflict are hopeful.
But with all of this new development in the country’s infrastructure and the general optimism within the country that ethnic conflict is close to ending, there remains a significant range of human rights concerns that business will face as they enter the market.
At the top of the list is what will the central government do with regard to land rights of people impacted by these infrastructure development projects? This is not a trivial question, particularly when large swaths of land will be repurposed for infrastructure development. Will traditional property rights of local populations be respected as these projects begin? Will local residents be compensated for any losses that they incur from the development? In the case of the solar power arrays, significant land areas will be utilized for the panels and right-of-ways to accommodate the transmission lines will necessitate incursions into communities, agricultural areas and property of cultural value.
When power is generated, will the local communities that sacrificed land for the development share in the power distribution? While is it premature to say one way or another if power will be provided to local communities when these projects go online, the central government does not have a strong record in this area.
With regard to the cell tower development around the country, the human rights risks are less clear but potentially pose even greater long-term harms to local populations. Will the privacy of people using cell phones be protected from government eavesdropping? Should ethnic tensions rise again, will the government use the cell technology to track its opponents or worse, will cell towers be shut down prior to military intervention as a means of cutting off communication to its opponents? These are all real problems that must be addressed as these infrastructure projects move forward. While these companies may dismiss these risks as problems that the government must address, absolving them of any liability, history has shown that corporate complicity, whether knowing or inadvertent, remains a serious problem that all businesses must face in the 21st century.