Episode #187: A Light at the End of the Tunnel
“Most of what was expected, unfortunately, about a year and a half ago, has happened in the energy sector. Myanmar is in a deep energy crisis! [In fact,] there are multiple energy crises now overlapping each other.” So says Guillaume de Langre, who worked for several years in Naypyidaw as an adviser to the Myanmar Ministry of Electricity and Energy (MOEE). He joined an episode last year to discuss the extreme energy shortages that the country was facing, and returns to Insight Myanmar to provide an update about what has transpired since. And alas, none of the news is good!
The negative outlook he delivers emphasizes two important points: one illustrates how ill-suited the present junta has been to meet the country’s needs since assuming power; the other highlights how the current, difficult situation is also partly due to many years of mismanagement and neglect under past military regimes. De Langre explains that the implications of failing to resolve the energy crisis will ultimately hit all sectors, from normal family homes to large factories, and from small businesses to schools to hospitals. He adds that power cuts are already occurring without warning, and which last for days; everything from food to vaccines spoil, while businesses have to close, and surgeries are postponed.
Acknowledging that there were many problems even under the NLD— de Langre points out that only 50% of Burmese had any kind of electricity access, and even those who did might only enjoy a few hours a day— he says “there was a sense of, ‘Things are going to get better. We are on this rising trajectory.’” But there is now no hope that anything will get better anytime soon. In a recent survey, de Langre found that a full 30% of small business owners claimed the power scarcity is a direct threat to their livelihood.
And unfortunately, the bad news doesn’t stop there. As much as 50% of the power grid is fueled by gas that is produced within Myanmar… but which is expected to run out by 2030. “So let me simplify that and make it clear,” he says. “That means that the fuel that is used to produce 50% of the electricity in Myanmar is going to be extinct! It's not being replaced. So the question we have to ask ourselves today is, how does Myanmar go about functioning as an economy, when half of its power supply disappears?! Do you replace it with something else? Do you replace it with other gas resources? Do you import gas from abroad in the form of liquefied natural gas? Do you start producing more gas domestically? Or do you replace that gas power generation with other forms of power such as solar wind or hydropower?” There is no easy answer, and de Langre highlights several contributing factors as to why: exploring new gas fields takes both time and investment, neither of which the regime has at its disposal; importing liquefied gas requires special terminals to be constructed, and although Min Aung Hlaing approved these, no progress has yet been made; previous plans for building massive power plants, along with laying out a number of solar panels, fell through once investor confidence plummeted following the coup. What is more, even amid the imminent scarcity their own country is facing, the military continues to export gas to China and Thailand, and de Langre doesn’t expect them to stop anytime soon given the political advantages that brings.
Of particular concern is the various projects that had been in place before the military took over, but have since been abandoned as foreign investors walked away in the fear of rising instability. “What happens after the coup, is that that trust evaporates,” he explains. However, de Langre is quick to point out this was not an ethical decision, but rather an economic one (an opinion echoed during a recent podcast discussion with Maung Maung, the president of the Confederation of Trade Unions in Myanmar),. “There are plenty of people in the energy sector that are willing to work with the SAC,” de Langre says. “To be clear, the moral questions here are relatively secondary from the point of view of many investors. The question is, can they trust the regime? A lot of a lot of companies, particularly companies in Southeast Asia and East Asia, don't necessarily care as much about the reputational risk as Western companies. What matters the most is their bottom line. And the context that has emerged post-coup is absolutely terrible for their bottom line.”
De Langre points out that not all of the present power cuts are caused by electricity shortages. Some are due the military’s neglect in overseeing routine maintenance, while others result from damage caused by the ongoing conflict. “You have transformers in villages that just spontaneously burn. You have poles that collapse during every rainy season,” he says. In some cases, PDF groups have also targeted power lines that provide connections to weapons facilities and military bases within the national grid; in rarer instances, they've directed their efforts towards substations and transformers, causing broad disruptions to neighboring communities. Nonetheless, de Langre is swift to highlight that these actions are isolated, and do not contribute so much to the overall, shaky state of the country’s power grid. He adds that the military often exaggerates their impact in their ongoing effort to discredit the PDFs (People’s Defense Forces) in as negative a light as possible. This narrative tends to resonate more effectively in urban areas, which have historically had a more reliable power grid, as compared to rural regions where sustained power outages have been a long-standing challenge. That said, de Langre notes that within even the Burmese activist community, this issue has become part of a growing discussion about the ethical boundaries that the democracy movement should adhere to as it continues to resist the regime.
Despite how bad things are trending, de Langre does believe that “it can be partly fixed, thanks to a few key policies. But the likelihood of these policies is low, because it would imply that the Myanmar military has some kind of interest in the development of the power sector in the development of Myanmar's economy. And based on the history of the development of electricity and energy, we can mostly deduce that the military sees energy as a source of rents, and as a source of foreign currency to fund itself to buy weapons and to fund its cronies, but has little interest in developing energy in terms of what most governments do, which is develop energy to produce development to improve the life of most people. That is not part of the agenda!”
In a perfect world, one that imagines a stability that Myanmar currently doesn't enjoy, de Langre would suggest prioritizing solar tenders to attract foreign investment, combining this with wind energy in regions like Rakhine State and the Delta. However, he adds that the intermittent nature of solar power requires additional energy strategies, such as storage and hydroelectricity, to ensure a constant power supply. In other words, he advocates a rapid transition to solar and wind energy while also accounting for long-term energy diversification. “Getting out of this crisis is not going to be a short term issue. It's going to be it's going to require years and years of good policy planning, smart policy planning, and rebuilding all of that lost trust with investors, both Burmese investors and foreign investors, rebuilding that trust, and that will take time.”
Turning back in the cold reality of the present, de Langre is concerned about what he sees coming. He presents one scenario in which the country's electricity supply progressively declines, and the regime begins to prioritize vital areas such as the capital, military bases, industrial centers, and certain cities, while vast regions experience a significant reduction in power. He does think, however, that regional investors could still be attracted if the military can guarantee any degree of stability, which would involve a dramatic (and unlikely) pivot by the current military leaders to permit at least some degree of civil liberties, combined with gradual economic freedoms. While this may just be a fantasy for present-day Myanmar, this is exactly what has been occurring in neighboring Southeast Asian countries for years: they have also been run mostly by military dictatorships, yet did not lose sight of their development needs. For example, de Langre points out that there was more solar and wind capacity added in Vietnam in 2021 than the combined power grid of Myanmar in its entire history! “And when you look at road development, it is the same. When you look at access to clean water, it is the same, that gap with its neighbors is astounding!”
The key difference with Myanmar, de Langre again emphasizes, is that the junta has never shown any degree of commitment to basic infrastructure and development for its people. “For decades, energy in Myanmar was not an issue that the government was involved in, that felt they had a responsibility for. It was something that was effectively just given as a responsibility to village committees, to municipalities, to townships, and to districts.”
De Langre sees this dynamic as being of critical importance in watching how the conflict continues to play out. “The country probably continues in this brutal confrontation between two sides; one side that has no interest in the in the development of the country, and the other that actually wants to change the terms of the social contract of the country dramatically, to include more decentralization, to give more power, in terms of energy to the states and regions, and to the ethnic minorities to actually develop the country. We might just be stuck in that confrontation for a long time, and the economic consequences of that is a gradual decay.”
Amid all this uncertainty, de Langre emphasizes that he sees a silver lining. “There are moments where indeed, it seems that there are no positive ways out. I think in those moments, there is space to reinvent things dramatically, to think about how to not be bound by current constraints and think about what is going to happen. How can we do things dramatically differently when we get a new shot?” He points in particular to the possibility of developing a decentralized power grid that relies more on renewable sources of energy, and notes that bureaucrats in Nay Pyi Daw are already considering this possibility, although they are currently hampered by the prevailing political problems.
de Langre suggests that listeners “consider the impact of this crisis, not only in terms of the political or conflict situation, or in terms of the human rights situation, which are all extremely important aspects of this. But also, the economic aspect of this situation, [which] is not only the coup, it's the decades of military rule in general. There is an economic aspect to the tragedy of Myanmar that is really important… There's also a part of the conversation about Myanmar, not only about the coup, but about the decades of military rule and mismanagement. There's also an economic story there, a story of economic opportunity cost… It is a massive opportunity cost for the development of regional unity and stability! It is a massive opportunity costs for keeping that qualified labor in Myanmar… that’s really critical to the economic freedom of people of households of individuals of businesses.”