Fighting has broken out between the Kachin Independence Army (KIA) and government forces in northern Myanmar near the Chinese border.  Myanmar state media is reporting that the government decided to act after the KIA attacked first and refused to withdraw form an area near a hydropower plant.

The fighting is centred in Kachin State, not far from where the Datang Corporation, a Chinese state owned enterprise (SOE), is building a hydroelectric plant on the Taping river.  It has been claimed by the corporation that 90% of the energy produced will go to Chinese companies across the border.

While Myanmar’s state media is reporting that the government’s intentions are “to protect its members and an important hydropower project of the nation”, this outbreak of fighting breaks a 1994 ceasefire with the KIA which allowed it to keep its  arms.  Analysts have claimed that the government in Naypyidaw is determined to assert its authority over the rebellious state whose militias have battled the regime for decades and have lately resisted pressure to incorporate their fighters into a state-run border security force.

It is also likely that Naypyidaw is under pressure from China, its major ally, to secure the region and protect its investment.  When the fighting broke out, approximately 200 Chinese engineers and other workers were swiftly repatriated across the border.

China has extensive and increasing hydropower investments in Myanmar and they are an increasing source of instability.  For the government, they are a welcome source of revenue.  The Burma River Network, for example, has claimed that China’s investments in Kachin State is worth $3.6bn and will result in annual power sales of $500m.

For those forced to live in their shadow, however, they create resentment as they see little of the revenue created, are displaced to make way for projects and have to live with the environmental consequences.  In addition to the fighting in Kachin State, both Shan State and Karenni State have seen recent fighting, prompted by dam construction, reports the Burma Rivers Network.

The Irrawaddy, an independent Burmese newspaper based in Thailand, has reported that representatives from the Kachin Independence Organization (KIO), the political wing of the Kachin independence movement, met with representatives of the Kachin Consultative Committee, a group of Kachin loyal to the central government, to discuss the possibility of a ceasefire on Friday 17^th June.

The KCC representatives stated that the government wishes to call a ceasefire.  This assertion was rejected by the KIO because, it claimed, of the delegates’ inability to produce any form of evidence to confirm the intentions of the government.

With the KIO claiming that as many as 10,000 Kachins are now fleeing from the fighting, including some 200 who have crossed the border into China, no immediate prospect of a ceasefire, and a central government that remains unsympathetic to the claims of various ethnic groups for greater autonomy, far less independence, the prospects for reconciliation seem slight.