"Hydropower development in Myanmar has potentially wide-ranging impacts. Hydropower development in Myanmar is taking place in the context of sustained and rapid economic growth over approximately the last two decades. This has been driven predominantly by growth in the industrial sector, although growth in the agricultural and service sectors has also been important. Extractive and natural-resourced based industries have been an important component of this growth with natural gas, minerals and timber comprising the lion’s share of exports. The economics baseline develops a broad strategic picture of relevant economic sectors, highlights development and environmental issues, identifies interactions with hydropower development and potential cumulative impacts of hydropower and other economic development. Based upon consultations throughout potentially hydropower affected areas of the country, five economic sectors were identified as having important linkages with hydropower that the SEA should investigate, these were i) the Power sector; ii) Agriculture; iii) Forestry; iv) Mining; and, v)Transportation. Power sector - Hydropower has significant direct economic benefits. It represents an important part of grid-based electricity generation, accounting for around 3.5 GW of installed capacity and 72% of grid-based electricity generation in 2014. The value of the electricity generated per year is best estimated in terms of the value of alternative supply of electricity, which would make the approximately 6,920 GWh generated by hydropower in 2014 worth USD 735 million.1 Agriculture - agriculture has expended relatively rapidly since the 1990s with significant increases in land under cultivation, irrigable area and cropping intensity. The use of agricultural inputs has also grown rapidly with increases in the use of agricultural chemicals and mechanisation in particular. These changes have led to significant increases in agricultural productivity over the last two decades. However, in recent years value-added growth in the sector has been low. Significant interactions between hydropower and agriculture include: • Reduced nutrient transport; • Reduced deltaic stability; • Increased erosion downstream of HP plants; • Unseasonal changes in water flow or availability; • Loss of riverbank gardens associated with changes in flow regime and/or sedimentation; • Loss of agricultural land in area inundated by HP plants with a reservoir; • Loss of access to land in watershed protection area; • Reduced flooding of plants managed for flood reduction; • Increased water availability for irrigation if plants managed for multiple use; • Improved electricity supply; • Deforestation and knock-on consequences for other sectors (such as flooding, erosion and soil degradation) and biodiversity loss; • Increased pollution from agricultural run-off compounding reservoir water-quality issues; and, • Increased soil degradation, erosion and sedimentation caused by agricultural practices. Forestry - forestry represents a relatively small and declining share of GDP. Although value-added has grown considerably since the early 2000s, in recent years production in the sector has declined, in part due to policies banning the export of raw timber. Illegally exported timber, not accounted for in official statistics, is typically smuggled across the border to China, remains important. The key development and environmental issue associated with the forest sector is deforestation and unsustainable use of timber resources. Important interactions with hydropower development were identified as: • Clearance of forest from inundation areas and transmission line corridors; • Deforestation through better access to forests, through road and other infrastructure, including during the plant construction period; and • Increased watershed erosion due to deforestation and sedimentation in reservoir..."