[Readingroom] News on Burma - 27/7/11
- Burmese Army begin major offensive in Shan State
- Burma army targets ethnic women
- Burmese government wants to limit cease-fire negotiates to KIO
- Govt planning to change exchange rate
- UN chief praises Burma talks, urges more
- Myanmar must consider release of political prisoners
- Myanmar’s Suu Kyi holds rare talks with minister
- Activists warn against foreign investors in Myanmar
- War trumps investment in Myanmar
- Canada opens relations with Burma, sanctions continue
- Burma at a crossroads: an analysis of state structures
- Myanmar currency crunch cripples exporters, risks crisis
- USDP to grant Rangoon residents loans; total 10 billion kyat
- Despite gold price rise globally, Burmese traders can not increase price
- Myanmarese in India displeased with Delhi supplying arms to Burmese military
- War Office sets out ambitious army plan
- Burma Army’s War against Shan: Licence to Rape plus Licence to Commit Genocide?
- Myanmar, Germany to cooperate in upgrading ports, airports
- Myanmar’s Suu Kyi leads memorial march for father
- Journalists warned on exile contacts
- Critical report on China-backed dam smothered
- Gems auction nets $1.5 billion for Myanmar despite US sanctions
- India trying to woo Myanmar from China
- Myanmar invites partners for 18 onshore oil blocks
- At the mercy of Burmese ‘law’, Suu Kyi must play a wise game
Burmese Army begin major offensive in Shan State – Ko Htwe
Irrawaddy: Tue 26 Jul 2011
Burmese government troops have launched a major offensive against the headquarters of the Shan State Army (SSA) in Wan Hai in a bid to dominate a strategically important junction connecting northern and southern Shan State, according to Shan sources.
“They are attacking us in order to militarily dominate the area. They want to use our camp as a base from which they can launch an offensive against the United Wa State Army (UWSA) in the future,” said Maj Sai Hla, a spokesman for the SSA and its political wing, the Shan State Progressive Party.
Wan Hai, located between Kyethi, Monghsu and Mongnaung townships, is an important transport hub in central Shan State. The SSA—a former ceasefire group known until recently as the SSA-North—controls territory in Kyethi and Monghsu townships in southern Shan State and Mongyai and Tangyan townships in the northern part of the state.
According to local residents, the motive for the recent attacks may be commercial as well as military: there are coal mines in Kyethi and the SSA extracts antimony near Wan Hai—both of which the government would like to control.
However, some observers said it was unlikely that the fighting was directly linked to a struggle for control of natural resources.
“It is possible that the government wants to extract natural resources from the area, but I haven’t heard that they have discovered any precious metal there,” said Khuensai Jaiyen, the editor of the Thailand-based Shan Herald Agency for News (SHAN).
The situation in Shan State contrasts with that in Kachin State, where the government is seeking to negotiate an end to hostilities with the Kachin Independence Army (KIA).
“I asked officials why the government has launched continuous attacks on the SSA rather than negotiating, as it is doing with the KIA, and I was told that the government thinks it can easily break the SSA because Wan Hai is not near the border, and because some of the SSA’s brigades have already joined the Border Guard Force (BGF),” said a member of the Shan Nationalities Development Party from Kyethi Township.
Two brigades of the former SSA-North have joined the BGF, which puts troops belonging to former ceasefire militias under Burmese military command, but the strongest, the 3,000-strong Brigade 1, led by Col Pang Fa, refused.
The Burmese regime began pushing 17 different ceasefire groups to join the BGF ahead of last year’s Nov. 7 election, but most refused, including the UWSA, with 30,000 troops, and the 10,000-strong KIA.
The UWSA and the Shan State Army-South, a non-ceasefire armed group, have offered support to the SSA since it resumed hostilities with the Burmese Army.
Htay Aung, a Burmese military researcher, said that the government army would likely concentrate its attacks on the SSA and KIA Brigade 4, which occupy areas between the Burmese Army’s positions and the UWSA, while continuing to negotiate with stronger groups.
“The negotiations will only last for a while, but I don’t think they will bring an end to this civil war. The government cannot attack the UWSA right now because of its strength, so they are going after their weaker allies. But ultimately, these attacks threaten the UWSA, too,” he said.
Burma army targets ethnic women – Nan Paw Gay
Kachin Information Center: Tue 26 Jul 2011
Reports this week from Kachin and Shan States confirm rape is still being used as a tactic by the Burma Army to demoralise and terrorise ethnic communities.
Shirley Seng, a spokeswomen working with the Kachin Women’s Association Thailand, told Karen News that since June 9, Burma army soldiers have raped 32 women.
“No woman is safe from these soldiers. In the last six weeks 32 women and girls in Kachin State have been raped – 13 of those were killed.”
Other ethnic women groups confirm the rapes are not only happening in Kachin but accuse the Burma Army of using sexual violence as a systematic weapon against ethnic people in Mon, Shan, Chin and Karen State.
Charm Tong from the Shan Women’s Action Network says her groups have been documenting the abuse against women for decades and says age is no deterrent…young, old, or pregnant.
Charm Tong describes how earlier this month a Burma army patrol from Light Infantry Battalion 513 robbed a Shan village and raped four women and girls.
“The youngest, Nang Mon, 12, was raped in front of her mother who was beaten when she tried to protect her daughter. Villagers could do nothing. Nang Lord who was due to give birth, was thrown on the ground and raped. Nang Poeng was caught outside the village, beaten, stripped and raped.”
The rape of ethnic women in Burma is well documented by international human rights organizations, regional community groups and the United Nations.
In late May, in a statement to journalists, at the Bangkok based Foreign Correspondents Club of Thailand, the Special Rapporteur on the Situation of Human Rights in Myanmar, Tomas Quintana, highlighted the Burma army’s involvement.
“Systematic militarization contributes to human rights abuses. These abuses include land confiscation, forced labor, internal displacement, extrajudicial killings and sexual violence.”
Charm Tong takes and says foreign investment plays a huge part in the militarization of ethnic regions.
“Northern Shan State is of crucial importance, the [Burma] army is trying to secure the area for major Chinese investments, including hydropower dam sites and transnational gas and oil pipelines. The Burma army now has a quarter of their battalions based there. Where there are pipelines, dams, timber and other natural resources there are well-documented cases of abuse of local people. ”
Charm Tong says foreign governments and investors working in Burma need to speak out about the atrocities.
‘Business as usual means ongoing rape for women and girls in our communities.”
Naw Blooming Night Zan, joint secretary of the Karen Women’s Organisation, in an interview with Karen News said.
“The Burma army uses rape as a weapon against ethnic women. The Burma army tortures ethnic people as if they have a licence to do so and they are never held responsible for their actions. They have a new government, but it is only a veneer, underneath the surface it is still the same policies of the military.”
In February 2010, the Karen Women Organisation published a report, Sharp Knives, based on the testimonies of 95 women chiefs. The report explains that women are replacing men as village chiefs because men “are more likely to be killed by the Burma army.”
The report points out that the reason women became chiefs was that “men were reluctant to risk their lives as chiefs, women stepped in to assume leadership in the hope of mitigating abuses.”
The 95 testimonies of the women chiefs in the report proved that were not to be the case – they faced constant threats, systematic abuse and sexual violence from the Burma army.
The testimonies are harrowing. A women chief tells how she was punished by the soldiers for running away when her village was attacked – in retaliation the soldiers gang-raped her 15-year-old daughter.
In February 2007 the Karen Women Organisation released another report, State of Terror, based on 4,000 documented cases of human rights abuses by the Burma army. The report stated that, “rape has been, and continues to be used as a method of torture to intimidate and humiliate the civilian populations, particularly those in ethnic states.”
As in reports by other organisations, KWO found that “many of the rapes are perpetrated by senior military officers or done with their complicity.”
The contents of the report cite cases 57 and 58 were two 23-year-old women were repeatedly raped vaginally and orally by a soldier under the command of Major Pone Tint in Dooplaya District. “If we didn’t do it he would shoot us dead.”
Case 43 – “After raping her they killed her by shooting into her vagina, no action was taken [against the rapist].”
The Women’s League of Burma in a 2006 paper titled, War Crimes in Burma, reported that the Burma army was targeting women for rape and various forms of sexual violence.
“Rape is being used by the regime’s army as a strategy of war against different ethnic groups, to attack them, humiliate them and demoralize them, in order to establish control over their land and resources.”
Charm Tong says there is too much evidence for Asean, the UN and the international community to keep ignoring that Burma’s human rights abuses are linked to development projects.
“Asean and the UN Security Council’s inaction are letting the rapes and crimes against the Burmese people go on and on. They need to do something like they have in many other places like Libya, Bosnia and African countries.
Burmese government wants to limit cease-fire negotiates to KIO
Mizzima News: Tue 26 Jul 2011
Chiang Mai– The KIO, a member of the United Nationalities Federal Council (UNFC), an ethnic group alliance, has offered to stop fighting if the government will start negotiations for a nationwide cease-fire, but Burmese authorities said no deal in a recent e-mail, according to La Nang, a spokesman for the Kachin Independence Organization (KIO).
“They said that they would negotiate cease-fire in Kachin State first. Then in accordance with the example of Kachin State, they would try to achieve a cease-fire in other states,” La Nang said.
The UNFC comprises the Karen National Union, New Mon State Party, Chin National Front, Kachin Independence Organization and Karenni National Progressive Party.
According to sources close to Naypyitaw, there have been no discussions about the recent clashes in Kachin, Karen and Shan states.
Meanwhile, rumours are circulating that MP Hkyet Hting Nan of the Unity and Democracy Party of Kachin State (UDPKS) and MP Hka Mai Tang of the ruling Union Solidarity and Development Party are talking to leaders from the Kachin Culture Group in Kachin State to work as mediators to negotiate a cease-fire with the KIO. However, MP Hkyet Hting Nan denied the rumour.
“It’s not true. But, I met with Hka Mai Tang recently three or four times. But we met just to exchange presents,” Hkyet Hting Nan said. He said he visited war refugees in Waimaw Township on Tuesday and donated food.
He said that the UDPKS party has donated rice, cooking oil, salt, mosquito nets and stationery to refugees with a total value of 2.5 million kyat (about US$ 3,000).
Govt planning to change exchange rate
Irrawaddy: Tue 26 Jul 2011
Rangoon — Burma’s Finance and Revenue Minister Hla Tun has told the country’s business leaders that the new government will change the official exchange rate of the national currency, which is currently set at around six kyat to the dollar.
“In the case of trading and exchanging foreign currencies, we are discussing ways to identify a a stable exchange rate that can positively affect the country,” Hla Tun reportedly said at a ministry meeting in Naypyidaw on Friday.
According to a high-ranking member of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) who spoke on condition of anonymity, the government also sought the views of businessmen on the subject of changing the official exchange rate.
He added that the government routinely calls leading businessmen when it wants advice on economic issues, but doesn’t always follow through with implementing recommended changes.
The exchange rate has been a major source of concern for Burma’s business community in recent months, as the kyat continues to climb against the US dollar in the unofficial exchange market, where the dollar now fetches just 790 kyat, compared with more than 1,000 kyat at the start of the year.
A seafood exporter said that the new exchange rate should be set at around 900-1,000 kyat to the dollar.
“Whenever there is a meeting or workshop, sea and marine products exporters propose an increase in the value of foreign currencies. If the current exchange rate doesn’t change, there won’t be any improvement for our industry,” he said.
Although the official exchange rate looks set to change, the fate of the country’s Foreign Exchange Certificate (FEC) remains unclear, as do regulations governing foreign currency holdings, said a member of the UMFCCI’s Central Executive Committee.
“We don’t know what will happen to the FEC and the holding of foreign currency, but we heard that if the government changes the exchange rate, private banks will be allowed to exchange and trade currencies,” he said.
A local economic analyst said that the country’s economy will improve if the government further reduces taxes after changing the official exchange rate.
In response to the impact of the rising kyat, the government recently moved to cut export taxes from 10 to 7 percent, but with little effect, according to businessmen.
The government should also control the foreign exchange black market and other illegal businesses, said the economic analyst. Action should be taken against officials who take bribes and ignore illegal businesses, he added.
UN chief praises Burma talks, urges more
Agence France Presse: Tue 26 Jul 2011
UN Secretary General Ban Ki-moon on Monday praised Burma’s talks with opposition icon Aung San Suu Kyi and voiced hope that the government would take further steps including freeing prisoners.
Ban “welcomes” the talks between Suu Kyi and Labour Minister Aung Kyi and “encourages such contacts and dialogue,” a UN statement said.
“In line with the international community’s expectations and Myanmar’s [Burma] national interest, the secretary-general hopes such efforts will continue with a view to building mutual understanding through genuine dialogue,” it said.
“He also calls upon the government of Myanmar to consider early action on the release of political prisoners in that country,” it said. Human rights groups say some 2,000 political prisoners remain in jail.
Suu Kyi, a Nobel Peace Prize winner, was freed in November after spending most of the previous two decades under house arrest. The talks Monday with Aung Kyi were the first since Burma formed a new government following elections.
Most Western nations and the opposition were sharply critical of the election, viewing the polls as a charade by military leaders to stay in power while officially handing power to civilians.
Plans for the meeting with Suu Kyi emerged on Saturday, the same day that US Secretary of State Hillary Clinton urged Burma’s rulers to have “meaningful and inclusive dialogue” with the opposition.
In Washington, State Department spokeswoman Victoria Nuland reiterated Clinton’s call for Burma to meet with Suu Kyi in a way “where she can have influence on the future of her country.”
“I can’t speak to this specific meeting, but those are the steps that we want to see. And we want to make sure, also, that the Burmese government is taking great care with her security,” Nuland said.
Suu Kyi’s National League for Democracy won 1990 elections but was never allowed to take power. She avoided making public speeches during a recent four-day tour outside of the commercial capital Rangon during which plain-clothes police trailed her but did not hinder her movements.
Myanmar must consider release of political prisoners
United Nations: Tue 26 Jul 2011
Ban calls on Myanmar to consider ‘early action’ on release of political prisoners
New York- Secretary-General Ban Ki-moon today welcomed a meeting between Nobel Peace Prize winner Aung San Suu Kyi and a Myanmar Government minister, and urged the Government to consider release of political prisoners, according to a statement issued by a spokesperson.
“The Secretary-General welcomes the meeting today in Yangon between Daw Aung San Suu Kyi and Minister for Social Welfare U Aung Kyi,” it said. “He notes that the parties have expressed satisfaction at their positive talks and their intention to cooperate further on matters beneficial to the people of Myanmar.”
“In line with the international community’s expectations and Myanmar’s national interest, the Secretary-General hopes such efforts will continue with a view to building mutual understanding through genuine dialogue. He also calls upon the Government of Myanmar to consider early action on the release of political prisoners in that country,” it said.
Vijay Nambiar, the Secretary-General’s Special Adviser for Myanmar, visited the country earlier in the year, spoke with Government officials, met with Ms. Suu Kyi and reported to the security council that although he welcomed some recent releases of political prisoners, he “reiterated the UN’s call for the urgent release of all political prisoners,” a UN spokesperson said at the time.
While the initial sentence reductions and resulting release of some political prisoners is a small step in the right direction, it has been short of expectation and is insufficient, he said.
Last month Ms. Suu Kyi called on the United Nations International Labour Organization (ILO) to expand its activities in Myanmar and help promote social justice there.
In a video message to the International Labour Conference of the ILO in Geneva she said: “In its attempt to eliminate forced labour and the recruitment of child soldiers, the ILO has inevitably been drawn into work related to rule of law, prisoners of conscience and freedom of association.”
Ms. Suu Kyi, an opposition leader put under house arrest for almost 15 years, was released on 13 November last year.
* For more details go to UN News Centre at http://www.un.org/news
Myanmar’s Suu Kyi holds rare talks with minister – Aung Hla Tun
Reuters: Mon 25 Jul 2011
Yangon – Myanmar opposition leader Aung San Suu Kyi held a rare meeting with a government minister on Monday, raising the prospect of a thaw in relations between the Nobel Peace laureate and the country’s new military-backed leadership.
Suu Kyi, who was only told of the meeting on Sunday, talked for just over an hour with Labour Minister Aung Kyi in what was the first known contact between the 66-year-old and a member of the new, nominally civilian government.
In a joint statement, both parties said they were positive and satisfied with the meeting, in which they had discussed issues that would be of benefit to Myanmar’s people.
Suu Kyi, the figurehead of the fight against military dictatorship in Myanmar, already knew Aung Kyi, having met him on nine occasions since 2007 while she was in detention and he was a minister liaising between her and the junta.
Aung Kyi dismissed suggestions those meetings were a waste of time and said he hoped for further dialogue with Suu Kyi.
“There were some benefits from previous meetings and we expect better results from these talks,” he told reporters.
“You can say this meeting is the first step of a series of things on which we intend to cooperate further.”
“Discussions were focussed on possibilities for cooperating in the interests of the people,” he said. “This included the rule of law and overcoming disunity, and matters that will benefit the public.”
Diplomats welcomed the meeting but said a lot hinged on the two parties ensuring talks did not break down.
“We hope to see some good results out of this,” said an Asian diplomat. “Otherwise, the situation will be back to square one.”
SIGNS OF PROGRESS
A new government took office in April, ending 49 years of direct military rule over the former British colony. Since her release from seven years of house arrest last November, Suu Kyi has made repeated calls for dialogue with the new rulers.
Nyan Win, a spokesman for the National League for Democracy (NLD), Suu Kyi’s active but officially disbanded party, said the political climate had changed and the government’s invitation to Suu Kyi indicated some progress.
Suu Kyi has been careful not to antagonise the government since her release and did not criticise a November 7 election regarded at home and abroad as a sham that ensured the same regime stayed in power behind a veneer of democracy.
The government and military appear to have backed off from their tough stance towards Suu Kyi, occasionally criticising her in state-run media but allowing her freedom to travel and meet with diplomats, journalists and supporters.
Analysts say the government knows any move against Suu Kyi would upset the international community and rule out the possibility of sanctions being lifted in the near future.
Dialogue with Suu Kyi could be an attempt by Myanmar’s reclusive leaders, many of them former military officers, to show foreign governments they are ready to engage.
But as is normal in Myanmar, no one quite seems sure.
“The timing of is very interesting,” said one European diplomat. “Why did they decide to meet her at this time?”
Christopher Roberts, a Southeast Asia specialist at Australian National University, said the meeting was probably more than a publicity stunt.
“It comes as part of a collective pattern of behaviour by the government that has potential for incremental improvements,” he said.
“Myanmar is trying to build a system and image of a real government and I think it wants to normalise things. Not only have its leaders met U.S., Australian and U.N. representatives, they’ve allowed them to meet Suu Kyi, too.
“It will do these things, as long as they don’t undermine security or stability,” Roberts added.
(Writing and additional reporting by Martin Petty; Editing by Sugita Katyal)
Activists warn against foreign investors in Myanmar
Agence France Presse: Mon 25 Jul 2011
Environmental groups called on Monday for an end to foreign investment in projects exploiting Myanmar’s natural resources, accusing such activities of sparking conflict in ethnic minority areas.
While foreign direct investment has “skyrocketed”, for example through large dams financed by neighbouring China, India and Thailand, there are no decent frameworks to protect Myanmar’s environment and communities, they said.
This investment is “concentrated in energy and extractive sectors and often results in militarization and displacement,” said a new report from the Burma Environmental Working Group (BEWG), a network of activist organisations.
“Control over natural resources is a major cause of conflict in ethnic areas, where the majority of Burma’s resources remain,” the report said, using the former name of Myanmar.
Heavy fighting between the rebel ethnic Kachin and Myanmar’s state army took place last month in the far north of the country around a dam financed by China, with authorities saying they acted to defend the plant from attacks.
“The renewed war in Kachin state is an example of what Burma can continue to expect as foreign direct investment increases,” said Paul Sein Twa of the BEWG.
The group’s report said an estimated 48 hydropower projects were currently being planned, constructed or already existed on Myanmar’s rivers.
But up to 90 percent of the power they generate is destined for other countries, “instead of supplying local populations who face serious ongoing energy shortages”.
The activists called for new and existing investment in sectors that exploit the environment to cease, until the new measures are brought in to ensure sustainable development and multi-ethnic participation.
The new government under President Thein Sein “is failing to make progress on that front,” said Paul Sein Twa.
Myanmar’s military junta handed power to a nominally-civilian administration earlier this year after elections in November, which the army’s political proxies won by a landslide amid allegations of cheating.
The country has been plagued by decades of civil war with armed ethnic minority militias since independence in 1948.
War trumps investment in Myanmar – Simon Roughneen
Asia Times: Mon 25 Jul 2011
Bangkok – Myanmar’s longest-standing ethnic minority militia, the Karen National Liberation Army (KNLA), has forced a halt to the construction of a key roadway link to the US$8 billion Dawei port and industrial estate mega-project. The blockage comes amid recently intensified fighting between government forces and insurgent groups in areas scheduled for massive foreign investment initiatives.
The Thai-financed Dawei project, which is scheduled to begin groundbreaking in 2012 and take four years to complete, aims to jump-start Myanmar’s moribund industrial sector through better integration with Thailand’s more developed economy and infrastructure. It also aims to leverage into fast growing trade and investment enabled by the recently enacted China-Association of Southeast Asian Nations (ASEAN) free trade agreement and to which Thailand has major regional hub ambitions.
According to Karen News, an ethnic media group which first broke the story last week, an unnamed KNLA commander said that Karen villagers have been adversely affected by the 160-kilometer road which will run from Tavoy on Myanmar’s west coast to the Thai border through Kanchanaburi province where it will link to Thailand’s existing road network. Myanmar has some of the region’s poorest road infrastructure.
Asked by Asia Times Online about the stand-off between the KNLA and Italian-Thai Development Company, the Thailand-based conglomerate that won the right to develop the 250-square-kilometer Tavoy project, Karen National Union (KNU) secretary-general Naw Zipporah Sein would only confirm that negotiations have been taking place since July 16 but would not elaborate on details. The KNU is the political party linked to the KNLA.
Saw Ehan, a journalist with Karen News (www.karennews.org), told Asia Times Online that at least 2,000 households comprised of ethnic Burman and Karen families have been told that they will have to leave their homes to make way for the now-contentious roadway. “Villagers are awaiting compensation for this and have been told they have to move. But they do not when they have to go or where they will go,” he said. “Some people are excited by the roadway but these are not the people being forced to move out.”
A Bangkok-based spokesperson for Ital-Thai Development told Asia Times Online on Monday that the company is currently “doing a survey of the area around the project, to determine who the affected people are” and said that compensation arrangements would be implemented once the survey is complete. The spokesperson also played down the apparent stand-off between the company and KNLA, saying that ITD believes that “everything will go head as planned”.
Land around the highway has apparently been sold by the Myanmar government to private investors close to the country’s military-dominated political elite. As the newly elected government moves to reform the economy, including through privatization of state-held assets, land rights are a legally nebulous area.
The news of the KNLA’s blockage of road works marks the latest controversy surrounding major foreign investment projects in Myanmar, which formally ended decades of military rule in March by inaugurating a nominally civilian government. Prime Minister Thein Sein’s “civilian” administration is dominated by former military officials.
Prior to that transition, on January 20, 2011, the Myanmar government enacted a China-style “Dawei Special Economic Zone” law. The law promises tax breaks for investing companies, fast-tracking of work and trade permits, and a pledge from the Myanmar authorities not to nationalize any industry or project established in the Dawei SEZ. Consulting firm Baker & McKenzie wrote that the law “seeks to encourage increased foreign investment to the country by offering a series of incentives and promises of stability”.
Political stability in Myanmar’s ethnic regions is far from assured, with fighting between the Tatmadaw, the name for the country’s armed forces, and various ethnic militias intensifying since the country’s parliamentary election on November 7, 2010. Many Karen-populated areas close to the Thailand-Myanmar border are also heavily mined, and the Myanmar army and KNLA clash regularly in the area close to the new highway, according to Karen researchers. It is a situation complicated by intra-Karen rivalries, with some Karen fighters working and fighting alongside the Tatmadaw.
Foreign investment-linked fighting is not confined to Karen regions, however. In Myanmar’s northern Kachin state, the Tatmadaw has been battling the Kachin Independence Army (KIA) since June 9, breaking the terms of a 1994 ceasefire. Casualty numbers are unknown but Kachin diaspora groups in Thailand say that 16,000 people have recently been displaced by the fighting in Kachin and in northern Shan state.
Myanmar’s government has repeatedly demanded that the country’s armed ethnic militias merge with the Tatmadaw under a so-called Border Guard Force. However, almost all of the country’s more powerful non-state armed groups have rejected the proposal. The Myanmar government has argued in support of the program that ethnic groups’ political aspirations can be addressed via new mechanisms created as part of the country’s transition from military rule, including the establishment of regional parliaments.
The fighting in Kachin territory has been complicated by China-backed investment projects, including the proposed dam and hydropower plant near Myitsone as well as eight other Chinese-funded dams in the region. All told there are 25 “mega-dam” projects in place or being planned for Myanmar’s ethnic minority borderlands, according to the Burma Environmental Working Group. The watchdog group claims that 90% of the electricity generated will be sold abroad, earning the Myanmar government an estimated US$4 billion per annum.
A 2,800 kilometer-long oil and gas pipeline corridor is being built from Myanmar’s western coast to China’s southern Yunnan province that is designed to cut through Kachin State territory. The pipelines will enable China to pipe gas from Myanmar’s offshore Shwe Gas Field while a Chinese-built port on Myanmar’s west coast will serve as a drop-off point for some of China’s oil and gas shipments coming from Africa and the Middle East.
Some analysts doubt whether the recent upsurge in fighting inside Myanmar is being driven solely by the border guard issue. Some of the heaviest fighting in Karen State in recent years took place near the border town of Myawaddy on the day of last year’s parliamentary elections. The upsurge in fighting came just five days after Italian-Thai Development and Myanmar’s central government signed the multi-billion dollar Dawei deal. Over 30,000 refugees fled into Thailand as a consequence, though most of these were swiftly repatriated by Thai authorities.
Naw La, a researcher with the Kachin Development Networking Group, an advocacy group, says some of his family members have been driven from their homes during the recent Tatmadaw-KIA fighting. Speaking at a press conference in Bangkok on Monday, he said that “the KIO sent letters to China and to the Naypyidaw government, objecting to [the] Myitsone [dam] and saying that if the dam is not stopped then civil war will ensue”. He said that the KIO is opposed to the dam as “most of the electricity will be sold to China with no benefit for local people, and local people were not consulted at all during the planning of this project”.
The government’s heavy-handed approach to establishing security in commercially-important ethnic minority regions could yet undermine several big ticket foreign investments. Italian-Thai Development and Naypyidaw are hopeful that investors from Thailand and elsewhere will establish facilities at Dawei, although recent signals from some of Thailand’s corporate heavy-hitters, including energy giant PTT, have been cautious due to security concerns.
PTT company advisor Chainoi Puankosoom was quoted in the Bangkok Post on June 26 saying that “investment risks are normal but I think the private sector needs some kind of guarantee that their investments in Dawei are secure.”
* Simon Roughneen is a foreign correspondent. His website is www.simonroughneen.com.
Canada opens relations with Burma, sanctions continue
The Canadian Press: Mon 25 Jul 2011
Toronto — Canada has begun a strategic engagement with Myanmar that includes an exchange of ambassadors, but Ottawa has no plans to lift the economic sanctions imposed against the country anytime soon, Foreign Affairs Minister John Baird said Saturday.
Baird, speaking from Bali, Indonesia, where he attended a regional security forum this week, said the “limited engagement” was focused exclusively on human rights.
He said he raised the issue during a meeting with Myanmar’s foreign minister in Bali and that he had urged the government to release thousands of political prisoners from jail.
Canada imposed economic sanctions against Myanmar, also known as Burma, in 2007 because of its complete disregard for human rights.
Myanmar held elections late last year, officially handing power to a civilian administration after a half-century of military rule.
Pro-democracy leader Aung San Suu Kyi was released from house arrest. But many see the changes as cosmetic and believe the army will continue to hold sway.
“I underlined the significance concern that the government of Canada and Canadians have with Aung San Suu Kyi’s ability to be mobile in the country and highlighted the ongoing concerns about her safety and her security,” Baird said.
The minister also held talks with his Australian and New Zealand counterparts.
The three foreign ministers reaffirmed the long-standing relations between their countries and committed to enhanced co-operation across the full range of international challenges.
“I raised the human rights situations in Burma and North Korea with my counterparts,” Baird said.
“We also looked at human smuggling and illegal migration and reaffirmed that we remain committed to combatting these and other abuses of our respective immigration systems.”
Burma at a crossroads: an analysis of state structures – Min Zin
Irrawaddy: Mon 25 Jul 2011
It has been more than 100 days since President Thein Sein’s new government took office in Burma after a widely criticized “sham” election in November 2010. Many Burma analysts and opposition activists alike have examined the work of a new government by questioning whether the recent changes in Burma demonstrate the beginnings of a process of genuine democratic transition, or whether this is merely “old wine in a new bottle.”
Unfortunately, the question in itself is wrong and misleading. The changes that are likely to take place under the Thein Sein government represent neither democratic transition nor recorked wine.
I have consistently argued since 2008 on the pages of The Irrawaddy that the new constitution and the 2010 elections will not change incompatible goals and relations between military and civilian forces, broadly speaking state-society relations.
As result, the post-2010 regime will not change any salience of the issues including political prisoners, ethnic conflicts, and other rights violations that the country has been facing and which have earned it pariah status. However, I argued that November’s election will contribute to changes in the format of governance—the transformation of the one-dimensional military junta into a hybrid form of government that includes both political and military elements. Regardless of who pulls the strings, this could lead to either a serious internal split or the utter inefficiency of the ruling body.
In brief, my argument noted that even after the elections, the state-society relations would remain more or less the same, but the intra-state relations or state structure could be changed. Now we can engage more in nuanced analysis of the part that I presume changing since the real situation on ground has begun unfolding.
First of all, it is remarkable that Snr-Gen Than Shwe managed to establish a pre-mortem succession arrangement by installing potential rivals as his heirs apparent in different institutional settings. Than Shwe put Thein Sein in the presidential seat but checked the move by installing Tin Aung Myint Oo as a vice president. In parliament, he positioned Shwe Mann, who had widely been speculated to become the first president of a hybrid government, as the chair of the Lower House.
Those who were second-tier in the lineup but reputed as hardliners, such as Htay Oo, Aung Thaung and Maung Oo, have been assigned to lead the military-backed Union Solidarity and Development Party (USDP), the ruling party.
Than Shwe left his commander-in-chief position to Min Aung Hlaing, who is very junior compared with the current leaders of the USDP-led government, but is known as disrespectful of his seniors whenever he has a chance of holding an ascendant position.
In brief, Than Shwe put them in stalemate against one another, and at the same time weakened the overall governance capacity so that these heirs apparent could not unite on the same ground and unsettle his days in retirement. This careful arrangement of inter-institutions and personality rivalries effectively undermines the possible consolidation of a new government’s power.
The generals-turned-civilian leaders, who used to live under the vertical command structure, appear to be clueless that who is now in the driver seat. It is still unclear where the real locus of power in this new arrangement lies. No one so far dares to cross the boundary of others, despite the increasing attempts at jostling and even trespassing.
Second, if governance could be defined in its minimalistic understanding as the tools, strategies and relationships used by governments to help govern, the pivotal focus for analysis would be the state institutions. Therefore, it is necessary to examine the formal as well as the informal strategies and relationships that the new government in Naypyidaw is likely to employ.
In institutional terms, we await to see what office (or who in an initial period) evolves into the dominant mechanism (or figure) to address the challenges of governance—whether it be the administrative body led by Thein Sein who apparently tends to rely on technocrats, or the legislative body led by Shwe Mann, or the USDP led by Htay Oo et al, or even the emergence of a new autocrat, for instance Tin Aung Myint Oo.
As the country is undergoing a political transition, we can’t of course expect democratic check and balance in its state structure formations. One institution, either formal or informal, will turn out to be the dominant instrument in governing the country. Meanwhile, unless there is uncontrollable popular uprising or serious split within the ruling body, the military may remain in the background.
If the generals-turned-civilian leaders in the new government manage to appoint a new military chief every two or four years, it will further preempt another potential military dictator to take root in a military power base. Meanwhile, the most pressing challenge for the current ruling elites is to settle institutional (in some incidents personality) rivalries between different state structures. The observers must carefully detect which institution will come to dominate or all will end up in inefficient impasse—or even fall apart.
Although the inner workings of these institutional and personality rivalries remain a matter of black box, some educated guesses could be made to construct a possible scenario.
Careful analysis of biographical records shows that Thein Sein has always been an administrative person, not a decision-maker. He served as Colonel General Staff (now called Brigadier General of the General Staff at the Ministry of Defense) in 1992, a very powerful position in the army because the Brig-Gen’s general staff oversees and coordinates the whole operation of the military establishment.
As an administrative officer, Thein Sein is known as a good listener and reportedly good at facilitating and coordinating policy. But he has never been an effective decision-maker. In his career, Thein Sein only took commander positions when he didn’t have to engage any hard-fought battles. For instance, he was the commanding officer of Infantry Battalion 89 in Chin State in the late 1980s; of Military Operation Command MOC 4 near Rangoon in mid-1990s; and of the newly formed Triangle Regional Military Command in 1996.
This professional record is clearly in contrast with the experience of his closest threat, Tin Aung Myint Oo, who checkmates him in administration. Tin Aung Myint Oo is known as a “fighter” in the army. Tin Aung Myint Oo served a deputy commander of Battalion 11 Infantry of LID 88 headed by Than Shwe in 1981-83, and later on won the Thiha Thura medal in combat against Communist rebels in the 1988.
Tin Aung Myint Oo became commanding officer of No 111 Light Infantry Battalion under LID 33, and of the Tactical Operations Command under the Northern Military Command in 1992. In 1995, he was a brigadier general with the Military Operation Command-1 based in Northern Shan State. Battle-hardened Tin Aung Myint Oo became commander of the Northeast Military Region in Lashio in 1997 before being promoted to Quartermaster General in 2001.
Military insiders observe that Tin Aung Myint Oo is decisive, micro-managing, rude and corrupt. He is a “jungle man, not a gentleman,” says defector ex-Maj Aung Lynn Htut.
Reports coming out of Naypyidaw confirm that the rivalries and tensions within administrative apparatus are worsening over time.
As mentioned above, Than Shwe appeared to design such an administrative set-up in order to preempt unified successors, and consequently it weakens the governance. It is not likely that we will see any political breakthrough—either with the opposition led by Aung San Suu Kyi or with ethnic resistance groups—under such governance constraints. It seems that a breakthrough will take place only if Suu Kyi and the ethnic ceasefire groups agree to make game-changing concessions such as the former accepting the 2008 constitution, and the latter accepting the junta’s Border Guard Force arrangement. However, this scenario is currently unthinkable.
It doesn’t mean that the observers should ignore the intentions of some leading members of the current leadership. President Thein Sein gave a noteworthy inaugural speech, in which he emphasized “good governance,” the fight against corruption, promotion of “democratic practices, not only among parliamentary representatives, but also among the people,” and the rule of law.
Likewise, Thura Shwe Mann, the speaker of the house at the Pyithu Hluttaw, the Lower House of Burma’s Parliament, gave a jaw-dropping speech to lawmakers, business people and even the media. He repeatedly noted the phrase, “No one is above the law,” and that “people’s power reigns in the parliament as it is formed with the people’s representatives,” invoking clause 228 of the constitution to elevate the role of parliament above the government.
Was it all too good to be true? In fact, the rhetoric of these speeches, which might reflect their genuine intents, are so far nothing more than a process of scoring points to promote their own institutions.
For instance, Maung Oo of the USDP emphasized in his speeches that power has been transferred from the State Peace and Development Council to the USDP, not to parliament, and the USDP will rule the country for at least 50 more years.
The rhetoric, therefore, mainly demonstrates the attempts of each group to consolidate their power bases and institutions.
So long as the struggle over the location of power is unresolved, the policy outcomes remain unstable and reversible (such as the recent decentralization experiment being revoked). Enthusiastic observers should step back and check the facts, instead of taking speeches at face value.
If the new regime’s institutional rivalry and power struggles turn out to be prolonged and result in inefficient governance or a split, the military’s renewed intervention or even a popular revolt should not be ruled out.
However, if the regime manages to entrust an institution (such as the technocrats or parliament or the USDP) to run the show, we will see a consolidation of power. It means that the regime will be able start the real process of much-needed institution-building in Burma.
This institution-building, however, must be understood in the context of state-building rather than democratization. As a result, one visible progress may be seen in more dynamic economic rationality because the rule of law—at least as far as business transactions are concerned—will be introduced.
It may help diversify the sources of the country’s revenue by promoting manufacturing industries, instead of almost total concentration on the natural resource extraction sector.
If stability and confidence in governance grow, an incremental progress in the direction of media and political liberalization may ensue, but the resolution of several critical issues, including the release of leading political prisoners (such as Khun Htun Oo, Min Ko Naing, Zarganar and U Gambira), and the peaceful settlement of ceasefire challenges, will not necessarily be guaranteed.
In summary, the recent changes in Burma do not support the argument that there is “no change at all” nor the optimism that “the beginning of a process of democratization” is dawning.
Recent events demonstrate that the structure of state has changed, and serious institutional rivalry is taking place within the new regime to compete for and seize the locus of power.
If this power struggle is settled successfully, an institution-building process will begin in Burma, and economic rationality will likely reign. If not, we will see one of the following: splits or purges, inefficient government, the emergence of another autocrat, military intervention or a popular uprising. Worse still, these scenarios are not mutually exclusive to one another.
* Min Zin is a Burmese journalist living in exile.
Myanmar currency crunch cripples exporters, risks crisis
CNBC: Fri 22 Jul 2011
Promises of economic development and pro-business reforms from Myanmar’s new civilian government ring hollow for entrepreneur Tin Maung, a fisheries exporter whose once-thriving firm is now on the brink of bankruptcy.
Myanmar’s kyat currency has appreciated 20 percent in the past year, more than any other Asian currency that Reuters monitors daily, squeezing traders and exporters like Tin Muang, who are struggling to break even as inflation pushes up costs and the new government does nothing to tame the currency’s rise.
The strong kyat and high food and fuel prices are a major test for the four-month-old government, not just economically, but politically, and analysts warn its failure to tackle bread and-butter issues may anger the public and lead to its downfall.
The biggest and bloodiest uprisings against military rule, in 1988 and 2007 were sparked by discontent over soaring inflation and fuel prices respectively, and former government officials say more of the same could be on the way.
“It’s a political time bomb for the government,” said a retired senior government official. “It was livelihood issues, not a thirst for democracy that pushed people onto the street before and things couldn’t be worse now.”
Dollars are pouring into Myanmar’s fragile and largely opaque economy, with foreign investors keen to tap its vast resources and visiting traders buying up gemstones. But most of that money ends up lining the pockets of cronies of the military dictators who controlled the country for decades.
The government’s inaction over the kyat’s strength and rising food costs is alarming exporters, farmers and employees earning dollar-pegged salaries. Businesses are closing, salaries are cut and jobs are being lost as production costs rise.
Exporters who hoped for better times are hurting badly, with the kyat currently trading at around 785 to the dollar on the black market — which covers nearly all transactions — compared with more than 1,000 a year ago.
“We’re in a real dilemma. We’re fighting a losing battle because of the soaring costs,” said Tin Muang, 42, who reckons more than 20 farms and processing plants in the fisheries sector alone have closed in recent months.
“We’ve had to sell all we were breeding in the local market at low prices. It will have a very negative impact on our traditional export market.”
The government has made no public acknowledgement of its currency crisis and its cut in export tax from 10 to 7 percent, effective this month, is a measure seen as too little, too late.
“I don’t think the government is much interested in the worsening situation with the kyat,” said a retired commerce ministry official, who requested anonymity.
“They seem complacent and focused on the huge proceeds from gems emporiums and foreign investment.”
Private economists point to the dollar’s weakness as the main driver of the kyat’s appreciation but say many other factors have come into play, including increased inflows from timber and energy exports, mainly to China and Thailand, which is boosting demand for kyat.
Gems such as jade, rubies and sapphires worth $5.7 billion were sold at three emporiums in the past eight months alone.
Dollar inflows also increased with the repatriation of funds held offshore by wealthy Burmese to buy up state assets and property in a mass pre-election sell-off last year.
Sean Turnell, an expert on Myanmar’s economy at Australia’s Macquarie University, said another major contributor to the kyat’s strength was sales of illicit opium and methamphetamine, of which Myanmar is one of the world’s biggest producers.
Drug money was converted into kyat to pay opium growers and workers in illegal drug factories, he said. The rest was laundered through banks and businesses or put into Myanmar’s booming real estate market, with transactions paid in kyat.
The lack of reliable data or transparency in Myanmar’s economy and banking system allows Burmese tycoons — many of whom are targeted by Western sanctions due to their alliances with former junta leaders — to continue to boost their wealth.
Economists see no signs that policy makers with a history of fiscal mismanagement will take any action to intervene in the currency.
“In other countries, the central banks normally intervene, but we can’t expect this sort of thing to happen here,” said Maw Than, a retired rector of Yangon’s Institute of Economics.
“Unless effective measures are taken immediately, it will have widespread negative impacts on the economy.”
Myanmar’s government wants to boost exports but that is being inhibited by the kyat’s appreciation.
Rice shipments, for example, dropped by almost two-thirds in 2010 despite increased production of the grain, mostly because the strength of the currency made it uncompetitive.
One exporter said 25 percent broken rice fetched $390 per tonne, but after tax and transaction fees his income was just $2 dollars per tonne higher than the local price, so exporters in various sectors were selling off stocks on local wholesale markets to try to keep their businesses afloat.
“It’s already had a grave impact on us, from the primary producers and exporters to consumers,” said Hla Maung Shwe, a prominent businessmen and vice-chairman of the Myanmar Federation of Chambers of Commerce.
“The more we sell, the more we lose.”
Foreign direct investment in Indonesia surged 21 percent in the second quarter of 2011 from a year earlier, as strong commodity prices attracted investors into the mining sector in the world’s top exporter of thermal coal and tin.
Direct and portfolio investment has quickened into Southeast Asia’s largest economy in recent months, though analysts warn the country needs to overhaul and expand its infrastructure in coming years to keep attracting firms and to overcome the sprawling archipelago’s Achilles’ heel — inflation.
For now things look rosy: FDI totals $9.6 billion so far this year, on track for its highest ever in 2011, while foreign investment in government bonds and the stock market are both at records.
“I’m very bullish,” said Gita Wirjawan, the country’s investment chief and a former investment banker. “Traditionally, investment quickens in the third quarter.”
Worries over eurozone and U.S. debt and slower growth in China mean Indonesia is now seen as a relative safe haven, though that could change once the West recovers or if runaway inflation returns to erode a rupiah at seven-year highs .
FDI from April to June was 43.1 trillion rupiah ($5 billion), spread across the country. In a quarter when gold [XAU= 1602.59 14.69 (+0.93%) ] and tin prices hit records , mining led the way with $1.5 billion, followed by chemicals, machinery, electronics and transport.
“FDI will continue coming because of strong economic fundamentals and the appreciating rupiah…the main concern with long-term investment is poor infrastructure conditions and inflation,” said Eric Sugandi, economist at Standard Chartered in Jakarta.
While inflation is within the central bank’s 4-6 percent target now, economists say inflationary pressures will pick up again and lead to interest rate rises by mid-2012 that could slow growth.
Poor infrastructure, from roads to ports, means higher distribution costs that create both a structural inflation problem and cut into companies’ profit margins. Previous bouts of high inflation have led to investor outflows.
The government is relying on private investors for two-thirds of its $15 billion infrastructure needs, though Japan, China and India have all made big commitments this year.
Yet progress on the ground in its traffic-logged cities and overwhelmed ports remains to be seen, while corruption is rife.
“This is still Indonesia. Everyone wants something for nothing,” said the Australian manager of a road building firm.
Roads Not Supplied
Infrastructure is seen as an investment opportunity if the government can speed up land acquisition in the next year, with many investors forced to build their own roads, rail and ports.
Wirjawan did not mention specific firms, though in recent months officials and executives have said Coal India, Procter & Gamble [PG 64.32 -0.17 (-0.26%) ] and Hyundai Motor are planning investments, while dozens of others from Google [GOOG 609.73 2.74 (+0.45%) ] to Peabody Energy [BTU 61.21 -0.01 (-0.02%) ] are eyeing the country.
Neighbouring Singapore, a home for many Indonesian tycoons, was the top foreign investor in Q2, followed by former colonial ruler the Netherlands and then the United States, underlining growing interest from Western investors who in recent years lagged Asian firms because of worries over corruption.
South Korea and India are expected to be leading investors in the future, the investment agency said, with LG Electronics eyeing expansion to tap consumer demand from an emerging middle class in the world’s fourth largest population.
India’s state-run National Aluminium Co Ltd (NALCO) is in talks to invest in an aluminium smelter, the investment agency said on Thursday, joining other Indian firms looking to buy coal mines and develop power or cement plants.
The investment board is targeting 156 trillion rupiah of FDI this year. Last year foreign investment into Indonesia reached a record 148 trillion rupiah.
Analysts say the country ticks along at 6 percent annual economic growth despite the government and shabby bureaucracy .
Fitch Ratings said in March it could lift Indonesia’s sovereign rating to investment grade within 12 months, though weak infrastructure was the key risk to any upgrade.
“A lack of infrastructure remains one of the biggest constraints to boosting Indonesia’s growth potential. Significant improvements to the regulatory framework are needed to support infrastructure spending and public-private projects,” said Milan Zavadjil, the IMF’s representative in Indonesia, adding it had to overcome inflation from cutting fuel subsidies.
Still, compared to much of the world, Indonesia’s financial situation looks strong, with a budget deficit seen at 2.1 percent of GDP this year, and record foreign currency reserves of about $120 billion to stabilise the rupiah currency in the event of any sudden fund outflows.
Economists say this could happen once a global economic recovery leads Western countries to start normalising rates.
“We see fears from investors from the end of the low interest rate era in countries such as the United States, Europe, and Japan. Once the Fed increases its benchmark… a large sudden reversal might occur in the Asia region,” said Juniman, an economist at Bank International Indonesia in Jakarta.
“Another risk is the threat from a sovereign debt default in Europe and that it could spread to the U.S. That will cause global economic instability and the world will fall into recession, eventually. FDI would stop, to wait and see.”
USDP to grant Rangoon residents loans; total 10 billion kyat
Mizzima News: Fri 22 Jul 2011
Rangoon– A Rangoon Region Union Solidarity and Development Party (USDP) official said that the USDP would grant loans, totaling 10 billion kyat, to people in Rangoon Region. To qualify for a loan, a person must be a USDP member.
The party will grant a total of 7 billion kyat as small loans and a total of 3 billion kyat as agricultural loans to farmers at a 2 per cent interest rate. Profits would be used in health care services for the public, said Aung Thein Lin, a Lower House MP from South Okkalapa Township and a former Rangoon Mayor.
A canvasser from the Shwepyitha Township USDP said, “He [Aung Thein Lin] said that the party granted money to the township, and people need to be grateful to the party.”
A resident in North Okkalapa Township said, “We got a 30,000 kyat loan. To get a loan, we didn’t need to sign over our possessions. But we had to join the party.”
Aung Thein Lin also said the USDP would open charity clinics and a charity maternity clinic in Rangoon. The USDP is the government-supported party which holds a majority of seats in Parliament.
Despite gold price rise globally, Burmese traders can not increase price – Te Te
Mizzima News: Fri 22 Jul 2011
New Delhi– An order by the Burmese government is preventing gold traders from speculating despite record high prices on the global market, gold merchants in Rangoon said.
Previously, the gold price in Burma depended on the price fluctuations in the global market.
However, in early July the gold price on the global market was US$1,480 per ounce (1 ounce= 1.76 ticals); on July 19, the price reached a record high of US$1,602. Since then, the Burmese government has forbidden gold merchants from speculating on gold prices.
The current gold price in Burma, 662,500 kyat (about US$ 828) per tical (about 16 grams), is 10,000 kyat lower than the price on the global market. If the Burmese government had not forbidden gold merchants from speculating, the gold price could reach 680,000 kyat per tical, according to estimates by gold merchants in Rangoon. Now, despite the stable price, gold trading is sluggish, according to sources.
“Earlier when the price in the global market was increased, the price in the local market was increased too. Now the merchants can not increase,” said a gold shop owner from Shwebontha Road in Pabedon Township. “To control the price, the authorities do not allow ‘laypakkar’ [‘Laypakkar’ is a method for speculation in which gold brokers and merchants estimate the possible fluctuation of local gold prices based on the possible fluctuations in the gold price in the global market and then buy gold b
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