Myanmar’s Generals Grapple with Escalating Energy Crisis and Fragile Hold on Authority
Myanmar’s ruling State Administration Council (SAC) faces a daunting challenge as its natural gas reserves, a crucial revenue source, are projected to decline sharply. Amid an escalating fuel crisis, SAC leader Senior General Min Aung Hlaing has reportedly stockpiled diesel imports to sustain military operations, exacerbating electricity shortages. Some gas stations in Yangon are depleted, and long lines persist, raising concerns about the nation’s energy security.
The SAC’s reliance on gas exports, particularly to China and Thailand, previously sustained Myanmar’s economy. However, since the military coup in February 2021, investor flight and a tax boycott have led to a significant contraction in state finances, threatening the SAC’s ability to operate and procure weapons. Major players like Woodside and Total, investing in offshore gas reserves, have exited, compounding the economic downturn.
The World Bank predicts a drastic decline in gas production, estimating it to be less than one-fifth of 2022 levels by 2030. The output of key gas fields, including Shwe and Yadana, is expected to decline rapidly between 2025 and 2030, impacting exports and domestic consumption. The SAC’s attempt to address energy challenges by constructing dams has faced setbacks, with halted work and allegations of armed violence impeding progress.
China has emerged as a key player in Myanmar’s energy landscape, increasing electricity imports through medium voltage lines. Monthly power imports from China quadrupled from 74GWh to 170GWh in the first half of 2023 compared to 2022. While discussions about a transmission line to import 1,000 MW from China’s Yunnan region to Shan State have been ongoing, progress has been limited.
The SAC’s economic woes and energy crisis risk undermining its legitimacy, especially with a nearly 20% post-coup economic contraction. The looming gas production decline and challenges in alternative energy sources necessitate urgent action to prevent further power outages and opposition to military rule. As Myanmar navigates this critical juncture, its leaders must explore sustainable solutions to safeguard the nation’s energy security and economic stability.