The Burmese government suspended construction of the Myitsone Dam after a rare public outcry over the project. The move is being hailed as a victory for democracy leader Aung San Suu Kyi and efforts to reform the country.
President Thein Sein ordered a halt to the construction of the Chinese-backed hydropower project, which would have cost $3.6 billion, AFP reports.
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"We have to respect the will of the people as our government is elected by the people," he said to parliament in the capital Naypyidaw. "We have a responsibility to solve the worries of the people so we will stop construction of the Myitsone Dam during our current government."
Both the protests and attempt by the government to listen to the will of its people are rare in Burma, a rogue nation that is also called Myanmar.
"This is President Thein Sein showing he can exercise his executive power and that he can stand up against China," Aung Zaw, editor of the Irrawaddy magazine, told Reuters.
Hardliners with ties to China backed the project, while environmentalists feared the dam on the Irrawaddy River would displace at least 10,000 people and damage an area rich in biodiversity.