BurmaNet News, January 29-31, 2005

[Editor]

January 29-31, 2005, Issue # 2646


INSIDE BURMA
AFP: Myanmar rebels warn junta: resume peace talks or fight
Irrawaddy: Junta’s new feelers to KNU
AFP: Media shows Myanmar top brass intact, deflating coup rumours
Xinhua: Myanmar PM calls for keeping national solidarity alive

DRUGS
SHAN: Cousin Bao: A profile

BUSINESS
Xinhua: Roundup: Myanmar strives for increasing export
SHAN: Wa freighters ply the Salween

REGIONAL
AFP: Malaysia's massive crackdown on migrants sparks rights fears
AFP: Presumed death toll in Asian tsunamis passes 286,000

OPINION / OTHER
Bangkok Post: Inside the Burmese junta; Power struggle increases uncertainty

_____________________________________
INSIDE BURMA

January 31, Agence France Presse
Myanmar rebels warn junta: resume peace talks or fight

Mae Sot: Myanmar's largest ethnic rebel group said Monday it was prepared
to renew its war against the ruling military if Yangon does not resume
stalled peace talks.

Karen National Union (KNU) army commander Mutu demanded a resumption of
talks that were cancelled last October after the sudden ousting of prime
minister Khin Nyunt, who was vital in bringing several other ethnic groups
under the junta umbrella.

"If Myanmar wants peace, a timeframe should be set up for the next round
of talks. They should not buy another year of time," Mutu, who goes by one
name, told reporters along the border near Thailand's Ta Song Yang
district.

"If they don't to want to carry on negotiating and want to fight, we are
ready," he added.

Mutu, who replaced the ailing General Bo Mya as the head of the KNU's
military wing last December, was speaking at a commemoration of the KNU
taking up arms more than 50 years ago. Bo Mya was at the ceremony in a
wheelchair.

The KNU is the largest of a handful of rebel groups still resisting
Yangon's rule, and the junta estimates it has 7,000 members.

In August the two sides reached a "gentleman's agreement" to extend an
open-ended ceasefire agreed to in December 2003.

Former premier Khin Nyunt was seen as responsible for persuading 17 ethnic
groups opposed to the military regime to sign ceasefire agreements.

His removal sparked concerns that the military would take a tougher stance
against ethnic groups who make up about a third of Myanmar's 50 million
population.

KNU secretary general Pado Mahn Shah said the rebels understood there were
tensions in Myanmar, which is adapting to new prime minister Soe Win, but
that should not rule out establishing a timeframe for talks.

He said the junta should also consider releasing political prisoners
including national opposition leader Aung San Suu Kyi and allowing her to
attend a national convention to draft a new constitution set to resume
February 17.

_____________________________________

January 31, Irrawaddy
Junta’s new feelers to KNU - Shah Paung

The Burmese military government has sent the Karen National Union, or KNU,
a message stating that they are now prepared to resume ceasefire talks,
said a top KNU leader today.

Foreign secretary of the Karen National Union, or KNU, David Taw said that
they received the letter on January 15. The letter, dated January 11, was
carried by ceasefire broker Hkun Myat, a Kachin.

According to David Taw, the letter also asked that a date be set for the
talks, and requested the names of potential delegates from the Karen side.

The KNU has replied to the Rangoon government, saying that they will let
them know the requested information after the group’s top leaders meet in
the next two or three days.

KNU President Saw Ba Thin Sein did not mention the cease-fire talks during
today’s address, which marked the 56th anniversary of Karen Revolution
Day.

During the second round of talks in January 2004, the KNU and Burma Army
agreed to a “gentleman's ceasefire.” At the time, the KNU delegation was
led by prominent leader Gen Bo Mya, now in poor health.

Despite the cease-fire, clashes between the KNU and the Burma Army have
continued. On January 10 of this year, fighting between the Burma Army and
KNU Battalion 201 broke out in Kalaw Waw camp during celebrations for the
Karen New Year. Col Ner Dah Mya, a son of Gen Bo Mya, commands battalion
201.

_____________________________________

January 29, Agence France Presse
Media shows Myanmar top brass intact, deflating coup rumours

Yangon: Myamar's top three generals were pictured smiling together in
state media Saturday, in what observers said was a calculated attempt to
quash rumours of a coup or struggle at the pinnacle of power.

Suspicion had swelled that political tension was once again boiling over
in the secretive state just three months after the ouster of Prime
Minister Khin Nyunt.

Last week Lieutenant Colonel Bo Win Tun, the personal assistant to Myanmar
number two Deputy Senior General Maung Aye, died under mysterious
circumstances and was given a military funeral.

Rumours swirled that he may have been assassinated, killed himself or died
protecting Maung Aye, sparking talk of a power struggle resurfacing in
Yangon.

Western diplomats had noted the recent disappearance from public view of
new Prime Minister General Soe Win, which led to reports he may have been
placed under house arrest or fled the city.

Saturday's state-run New Light of Myanmar and other newspapers published
several photographs from the previous day depicting junta leader Senior
General Than Shwe with Maung Aye and Soe Win.

All three were shown, together in some photographs, wearing military
uniforms and attending an annual student ceremony in Yangon.

They were also pictured in traditional Burmese dress greeting the students
at a banquet.

"This is a calculated effort to show things are in order and it's an
indication that these rumours are pretty much quashed," one observer in
Yangon told AFP.

Myanmar Foreign Minister Nyan Win, visiting the Thai island Phuket for a
tsunami meeting, also reportedly dismissed speculation about the top
brass.

"Prime Minister Soe Win is still in office and fine. He is not under house
arrest like Khin Nyunt," the Nation newspaper quoted him as saying.

On Friday Thai Prime Minister Thaksin Shinawatra told reporters "there has
been some form of tension in Myanmar." He said he did not believe a coup
had taken place but offered no details as to what may have happened.

_____________________________________

January 31, Xinhua News Agency
Myanmar PM calls for keeping national solidarity alive

Yangon: Myanmar Prime Minister Lieut. Gen. Soe Win has called on his
country's youth to keep national solidarity and the union spirit alive
among people and actively take part in rural and national development
tasks.

Soe Win made the appeal at a dinner here on Sunday in honor of the
trainees of the University for Development of National Races, the official
newspaper New Light of Myanmar reported Monday.

It is Soe Win's first public speech days after rumors about the government
leadership emerged.

He said that the university was opened with seven objectives, including
strengthening the union spirit among the national races of the union;
preserving and understanding their culture and good traditions; and
upholding the causes of non-disintegration of the union,
non-disintegration of the national solidarity and ensuring the
perpetuation of the sovereignty of the state.

He also urged active participation in their respective roles for the
success of the government's seven-point political roadmap to democracy,
under which the adjourning session since last July of the country's
national convention to draw up a new state constitution has been set to
resume on Feb. 17.

The political roadmap was outlined as the country was undergoing a
national referendum on draft of the constitution through the national
convention, holding a general election to produce parliament
representatives and forming a new democratic government.
_____________________________________
DRUGS

January 31, Bangkok Post
Today's Burma funded by drugs

Thailand and the United States have taken legal steps against the biggest,
richest druglords in Asia. A US federal court accepted a case against
eight leaders and drug peddlers with the United Wa State Army for making,
smuggling and selling opium, heroin and amphetamines. Thailand, which
already has criminal cases against several of the Wa, took a direct and
active interest in the US case. This case is not just a symbol but an
important milestone in a crucial battle. The single reason these
dangerous, long-term drug traffickers continue to run drug cartels for
profit is because of the protection of the Burmese dictatorship.

The indictment was announced at parallel news conferences in New York
district by the US attorney Roslynn Mauskopf and in Bangkok by deputy
national police chief Pol Gen Priewpan Damapong. Both had senior drug
officials by their side. The two big names on the indictment were Wei
Hsueh Lung and Pao Yu Hsiang. Mr Wei is by far the more notorious. He was
arrested in Thailand in November 1988 on charges involving 680kg of
heroin, but jumped bail. Mr Pao is the lesser known but more infamous of
the leaders. In Burma, Mr Pao is not just a drug trafficker for the
government and Wa army commander; he is one of the country's top
businessmen and investors.

Mr Pao recently estimated he is the owner outright or is a member of the
board of directors of 43 large Burmese companies. They include many firms
under the umbrella of the large and influential May Flower Group, which
includes Burma's third largest bank. He is the head of Yangon Airlines,
one of two domestic airlines in Burma. According to recent visitors to the
Wa region, Mr Pao has an estimated 20,000 men under military arms, has
taken over and industrialised the jade mines once controlled by Shan and
national Chinese groups, and is the overseer of all Wa drug-growing and
manufacturing, which is to say all important drug trafficking in Burma.

According to Mr Pao, the decision to eradicate opium growing and heroin
trafficking this year _ the current harvest is to be the last _ was easy
from a financial viewpoint. He made ``only $5 million [192 million baht]''
from opiate sales last year, just a relative drop in his still growing
business empire. Much of this empire is considered legal and, in some
circles, even respectable. Mr Pao and his partners frequently dine and do
business deals with not just the government but other businessmen from
abroad, including from Thailand.

In this, Mr Pao and the other accused and indicted Wa leaders are
following past precedent. The original opium warlord, Lo Hsing-han, is one
of the biggest businessmen in Burma. He recently opened an entire port in
Rangoon, the rough equivalent of a Chon Buri province mafia gangster chief
building a rival port to Laem Chabang on the eastern seaboard. Mr Lo's
successor as opiate trafficker, the heroin king Khun Sa, also has been
turned into a supposedly respectable businessman, based in Rangoon and as
safe as Mr Lo from the many foreign warrants for his arrest, including in
Thailand.

All of this happens, of course, thanks to the government of Burma. For the
past 43 years, military dictators have nurtured close relations with drug
traffickers, and encouraged them to grow, make and smuggle opium, heroin
and methamphetamines to the world. The Golden Triangle of old has long
shrunk to just one country. As Mr Lo, Khun Sa and then the Wa built and
ran vicious drug cartels, the Rangoon regimes from Ne Win's in 1962 to
Than Shwe's today have profited from the drug trade.

A notation after each name in the drug indictment is telling: ``Residence
Burma''. Anyone or any government doing deals with Rangoon should realise
that most local investment in that country is laundered drug money. Some
five-star hotels, many finance houses and a large percentage of all
tourist facilities are built by money from druglords. It is unacceptable
that Burma should protect some of the world's top drug traffickers just
because they pass some of their profits through the generals.

_____________________________________

January 31, Shan Herald Agency for News
Cousin Bao: A profile – Hawkeye

He has been little known outside the country until he was named by a New
York court announcement on 24 January as one of the eight senior Wa
leaders being indicted on charges of importing heroin and methamphetamine
into the United States.

According to a source who claims to have known him since 1979, Bao
Huaqiang (Pao Hua Chiang), about 55, is a paternal cousin to the Wa
president Bao Youxiang (Pao Yu Hsiang). "He speaks Wa, Shan and Chinese,"
said the source, "although he looks and speaks more Chinese than Wa."

Bao was a company commander in the Communist Party of Burma's 4048th
Battalion back then. In 2001-2003, he became the mayor of Manghseng. He
has been serving as Commander of Monghpen (First Headquarters Security
Regiment), one of the UN's target alternative development townships, since
the removal of his other cousin, Bao Youhua (Pao Yu Hua), following
charges on multiple offenses, including drug addiction, wanton killings
and unauthorized setting up of refineries. (Druglord gets the chop, 16
January 2004)

Others indicted by the New York court are Bao Youri (Pao Yuyi), Bao
Youliang (Pao Yu Liang), Wei Xuelong (Wei Hsueh Lung), Wei Hsueh Kang (Wei
Xuegaing) and Wei Xueying (Wei Hsueh Ying).

Bao Huaqiang also doubles as deputy to Wei Xuelong, "Minister of Trade",
according to a Wa source on the border.

_____________________________________
BUSINESS

January 31, Xinhua
Roundup: Myanmar strives for increasing export

Yangon: Myanmar is making more efforts to lift its export of agricultural
products of beans and pulses, timber products of sculpture and furniture
as well as natural gas.

In a bid to expand the export market of beans and pulses, the country has
reached during this year memorandums of understanding with four
Singaporean companies to export over 36,000 tons of the agricultural
crops.

The 8.6 million US dollars export value of the beans and pulses from the
Cooperative Import and Export Enterprise to the four Singaporean companies
alone stands about six times the total of the previous year.

The enterprise initiated 1.29 million US dollars worth of contracts with
foreign companies for the export of the country's beans and pulses in
2004.

For the export market expansion, traders are urged to seek direct export
of beans and pulses to India, which stands as the country's main export
market, and growers are being advised to cultivate more marketable items
of the crops and transform them into value-added ones.

With keeping India as the main export market, merchants are also urged to
expand such market to Japan and South Korea with better quality of the
exporting crops.

According to the authorities, Japan has exempted the import tariff of such
items of beans and pulses as Matpe and Pedesein with up to 50,000 tons.
Myanmar stands the second with 12 percent, while China takes the first
with 83 percent in the Japanese market.

Myanmar remains as the second largest exporter of beans and pulses in the
world after Canada with 15 varieties of the agricultural products,
including the most popular items of black grams, green beans and pigeons,
also exported to Indonesia, Malaysia and Singapore in addition to India,
Japan and South Korea.

According to official statistics, in the fiscal year 2003-04, Myanmar
produced 3.46 million tons of beans and pulses, exporting over 1 million
tons with over 300 million dollars earning and registering an annual
increase over the previous years.

The export earning through beans and pulses accounts for about 9 percent
of the country's total.

As part of its bid to penetrate the international market, Myanmar is to
export 900 tons of value-added wood products such as sculpture and
furniture to China within two years. The export products worth of 360,000
US dollars include 600 tons of sculpture and 300 tons of furniture
manufactured by five cooperatives in the country's Mandalay and Sagaing
divisions.

Meanwhile, Myanmar has agreed in principle with three European countries
-- France, Italy and Germany on the direct export of such value-added
timber products on a long-term basis without transiting through India,
Thailand and Malaysia where logs were processed with value added.

Myanmar exported over 200,000 cubic tons (283,000 cubic meters) of teak
every year mainly to India, Thailand, Japan and Malaysia, of which India
was the biggest buyer.

Official figures indicate that the country earned about 377 million US
dollars through timber export in 2003-04, accounting for 15 percent of the
total export value.

Besides, in a bid to raise its natural gas export, Myanmar stepped up
cooperation with a number of foreign countries in gas exploration and
exploitation in 2004, reaching several contracts with them bilaterally and
multi-laterally in the aspects.

With the increase of gas supply to Thailand last year, Myanmar has also
planned to export gas to India from deposits at block A-1 and A-3 off the
Rakhine coast and channels are being sought to lay a transnational
pipeline to pump the Myanmar exporting gas to India via Bangladesh.

Myanmar produced 9.9 BCM of gas and 7.16 million barrels of crude oil in
the fiscal year 2003-04. Gas export during the year went to 5.66 BCM,
earning nearly 600 million dollars.

According to official figures, Myanmar's foreign trade in the first half
(April-September) of 2004-05 dropped slightly by 0.84 percent to 2.12
billion US dollars. While the import went down by 6.45 percent to 1
billion dollars, the export went up 4.78 percent to 1.12 billion dollars.

With rich resources in agriculture, forestry and oil and gas and its
continued exploitation, the potential of export in the respective sectors
remains expanding, traders believed.

_____________________________________

January 31, Shan Herald Agency for News
Wa freighters ply the Salween

For two years in a row, Wa cargo vessels had been traversing the Salween
to pick up teak from downstream for export into China in exchange for
machinery and dry goods greatly in demand in southern Shan State,
according to several sources.

Also among the incoming cargo docked at Kunhing township's Wan Ing
village, just 10 miles north of the Takaw Bridge, were Chinese-made
motorcycles. The boats then loaded teak logs waiting at the landing, 20-23
tons each, and labored back to when they started, the Ta Weun Nawng Ferry,
roughly between Pangyang on the east bank and Monghsu on the west bank,
about 100 miles up stream.

"The Salween is navigable only during the monsoons, 6-7 months, April -
October", said an officer from the ceasefire group, Shan State Army
"North". "But during the two years, 2003-2004, they had been able to help
make short work of the teak forest in Kenglom (south of Kunhing - Takaw
road)."

As a result, the once teak-green area is left barren in most places. No
more than 10-15% of the forest remains, estimates a 10-wheel truck driver.
One of the logging companies that had won concession in the township is
Law Hsinghan's Asia World.

The "shipping company" is said to be jointly owned by a Chinese
businessman and Ta Hsarm, Commander of the United Wa State Army's 418th
Division, who was implicated in the 354 kg heroin haul in April 2002,
according to New Era, June 2002 issue.

Sources however are not sure whether the business will resume this year.
"Things have changed," said a trader visiting Chiangmai. "For one thing,
the area is almost denuded of trees. For another, the relations between
Panghsang and Rangoon have become somewhat delicate since Gen Khin Nyunt's
departure (in October 2004)".

_____________________________________
REGIONAL

January 30, Agence France Presse
Malaysia's massive crackdown on migrants sparks rights fears

Kuala Lumpur: Half-a-million police and civilian volunteers will begin
hunting down hundreds of thousands of illegal immigrants in Malaysia on
Tuesday in a campaign which has caused widespread concern among human
rights groups.

Raiding parties will arrest illegal workers and the factory managers,
restaurant owners and householders employing them, with most facing jail
terms and whipping, Immigration Department enforcement director Ishak
Mohamed warned.

The raiding teams, which include more than 200 armed civilians, will have
the power to break down doors in their hunt for up to 800,000 illegal
migrants believed to be still in the country after 400,000 left during an
amnesty over the past three months, he said.

Most of the illegal migrants are from neighbouring Indonesia, but others
are from the Philippines, Myanmar, Bangladesh, India and Sri Lanka, drawn
to relatively prosperous Malaysia by jobs in the construction, plantation
and service industries.

Rights groups, including Amnesty International and Human Rights Watch,
have strongly criticised the government's plan to deploy hundreds of
thousands of members of volunteer neighbourhood security groups in the
sweep.

The members of the People's Volunteer Corps, an organisation of uniformed
part-timers who have some policing powers, will receive cash rewards for
each migrant arrested, an economic incentive that Human Rights Watch
worries could lead to "vigilantism".

The rights group Voice of the Malaysian People (SUARAM) urged the
government to halt the crackdown amid concerns that asylum seekers and
girls trafficked into Malaysia for forced prostitution would be detained
together with illegal immigrants.

"There is high potential for human rights abuses to occur through such
mass-scale operations," it warned at the weekend in a memorandum endorsed
by 39 other non-governmental organisations.

The United Nations High Commissioner for Refugees (UNHCR) office in
Malaysia deployed mobile teams ahead of the crackdown in an urgent effort
to register refugees hiding in the jungles on the fringes of Malaysian
cities where many work illegally.

It is feared that asylum seekers from military-ruled Myanmar and the
strife-torn Indonesian province of Aceh will be swept up along with the
illegal migrants, Volker Turk, head of the UNHCR in Malaysia, told AFP.

Reacting to the concerns, Home Minister Azmi Khalid said all those
involved in the nationwide crackdown had been given clear directives to
avoid excessive use of force and guidelines to prevent claims of abuse or
maltreatment.

Once captured, illegal immigrants can be jailed for up to two years, fined
up to 10,000 ringgit (2,600 dollars) and given six strokes with a cane.

Employers also face up to a year in jail and fines of up to 50,000 ringgit
for each illegal worker, with those hiring more than five also liable to
whipping.

Malaysia has long sought to cut its reliance on foreign workers, most of
whom are engaged in low-paying non-skilled jobs. A previous crackdown in
2002 saw nearly half a million people repatriated during a four-month
amnesty period.

However, this caused a severe labour shortage in the construction and
plantation sectors, and the government later had to fast-track approvals
for recruiting foreign workers for certain industries, while thousands
simply made their way back illegally.

The latest sweep has been preceded by warnings that the government plans
to tighten rules for hiring foreign labour as it presses to transform the
economy from labour-intensive to capital-intensive.

Human Resources Minister Fong Chan Onn has said Malaysia needs one million
foreign workers but has 1.2 million registered with the ministry,
excluding illegal immigrants.

The cabinet wanted to plug the loopholes that cause the oversupply because
it undermined the "locals first" policy, with some employers preferring to
hire foreign workers because they could pay them less, he said.

_____________________________________

January 31, Agence France Presse
Presumed death toll in Asian tsunamis passes 286,000

Jakarta: The number of people presumed dead in last month's Asian tsunamis
rose to more than 286,000 Monday, with Indonesian authorities announcing a
further increase in the number of dead and missing.

Indonesia was hardest-hit by the December 26 quake and tsunamis, with a
total 232,945 people listed as dead or missing, the health ministry said.

Thailand's toll edged up slightly to 5,393 confirmed dead. A further 3,071
people were listed as missing, more than 1,000 of them foreigners.

The toll in Sri Lanka, which was second hardest hit by the catastrophe,
stood at 30,957, according to the Centre for National Operations.

The number of people listed as missing was 5,637, but many were expected
to be among those never formally identified, hurriedly buried and included
in the confirmed death toll.

In neighbouring India, the official death toll has reached 10,744 with
5,669 still reported missing and feared dead.

Myanmar has said 61 people were killed in the tsunamis, against an
estimated 90 deaths according to the United Nations.

At least 82 people were killed and another 26 were missing in the Maldives.

Sixty-eight people were dead in Malaysia, most of them in Penang,
according to police, while Bangladesh reported two deaths.

Fatalities also occurred on the east coast of Africa where 298 people were
declared dead in Somalia, 10 in Tanzania and one in Kenya.

The US Geological Survey said the earthquake west of the Indonesian island
of Sumatra measured 9.0 on the Richter scale, making it the largest quake
worldwide in four decades.

Death toll

Indonesia: 232,945

Sri Lanka: 30,957

India: 16,413

Thailand: 5,393

Maldives: 82

Malaysia: 68

Myanmar: 61

Bangladesh: 2

Somalia: 298

Tanzania: 10

Kenya: 1

Total: 286,230

* The figures include 127,774 listed as missing in Indonesia and 5,669 in
India

In addition, 3,071 people are listed as missing in Thailand and 5,637 in
Sri Lanka but not included in the toll because of likely double counting.

_____________________________________
OPINION / OTHER

January 31, Bangkok Post
Inside the Burmese junta; Power struggle increases uncertainty - Larry Jagan

War appears to have broken out between the junta's top generals with there
being talk of mental instability

Rangoon is rife with rumours and speculation of coups and gun battles
within the country's secretive military leadership. These rumours have
been fuelled by the mysterious and unexplained death over a week ago of
Lieutenant-Colonel Bo Win Tun, the personal assistant to the country's
second most powerful general, Maung Aye.

The streets of the capital city though are comparatively calm. There is
little evidence of extra security, except around the notorious Insein
prison. But this apparent atmosphere of normality belies the reality _ a
bitter power struggle is taking place between Burma's top generals.

Burma's top two military leaders Senior General Than Shwe and the number
two, Vice Senior General Maung Aye, are locked in a struggle for control.
``It's a struggle for supremacy,'' according to an Asian diplomat based in
Rangoon.

In recent months, Gen Maung Aye appears to have been upset because he was
being sidelined and overshadowed by Gen Than Shwe's protege,
Lieutenant-General Soe Win. Lt-Gen Soe Win was recently appointed prime
minister to replace General Khin Nyunt, who was purged last October
largely because of his opposition to Gen Than Shwe's hardline views.

Gen Maung Aye has persistently accused Lt-Gen Soe Win of being
incompetent, said a Burmese businessman.

There may also have been a disagreement between the two over how to deal
with Burma's ethnic groups, especially those which have ceasefire
agreements with Rangoon. With the National Convention drafting the new
constitution about to resume, there is increasing pressure on the groups
to surrender their arms. Gen Maung Aye is keen to have this done as soon
as possible.

But the prime minister's greatest fault in Gen Maung Aye's eyes was most
likely to be his unbending loyalty to the senior general.

Lt-Gen Soe Win's promotion to prime minister was always seen as a stop-gap
measure. ``Soe Win was a buffer and scapegoat from the start,'' said a
senior Southeast Asian diplomat who closely follows the Burmese political
scene. The new prime minister recently confided to a close family friend
that he was powerless.

Lt-Gen Soe Win has already been told he has been sacked as prime minister,
according to reliable military sources. The problem is that the two top
generals cannot agree on who should replace him.

Over the last four months, there have been several major shake-ups of the
cabinet. These were mainly aimed at purging ministers who were close to
the former intelligence chief and prime minister Gen Khin Nyunt.

Most of them have been allowed to retire quietly, including the former
foreign minister, Win Aung. But two other Khin Nyunt confidants were less
fortunate, according to Burmese officials in Rangoon. Former home minister
Tin Hlaing is in Insein facing charges, while former labour minister Tin
Winn is under house arrest.

But more cabinet changes are imminent, a senior Burmese foreign ministry
official, Than Tun, told journalists in Phuket last week when he was there
for an international tsunami meeting. Diplomats in Rangoon believe a new
prime minister and cabinet are likely to be announced within the next few
weeks.

Changes to the ruling State Peace and Development Council, or SPDC, and
the powerful regional commanders are also in the pipeline, according to
Burmese government officials. All these changes will almost certainly see
more of Gen Maung Aye's people replacing Than Shwe loyalists, but
maintaining a fine balance of power.

``The present delay means that the two top men cannot agree on who should
get the key positions,'' said a Southeast Asian diplomat who has dealt
with Burma's leaders for years.

Diplomats in Rangoon believe that Gen Maung Aye is not anxious to have a
high profile battle with the country's top leader. But angered by Gen Than
Shwe's self-appointment as a Burmese monarch and his Ne Win policies _
adopted from the former Burmese dictator _ Gen Maung Aye is anxious to
reduce the senior general's influence.

``Maung Aye does not want Than Shwe to feel openly threatened, he does not
want to confront him outright, but he does want to clip his powerbase,''
said a senior Asian diplomat with strong ties to the Burmese junta.

Burma's military leaders of course have been quick to deny any suggestion
of attempted coups or a power struggle in Rangoon. ``It's all just
rumours; everything there is fine,'' Foreign Minister Nyan Win told
journalists on Friday in Phuket.

The speculation of a possible coup has been fuelled by the apparent
absence of the top generals from the official media. This led to rumours
that Gen Maung Aye had been killed in a fatal shootout amongst the top
brass and that Prime Minister Soe Win was under house arrest.

To counter these reports, Burma's state-controlled television and
newspapers began at the weekend to show the top military leaders,
including Gen Maung Aye and Lt-Gen Soe Win, attending official functions.
``They were shown in unusual circumstances and it was broadcast to dispel
the rumours,'' a Western diplomat in Rangoon said.

Burma's top military leader is a master at political intrigue and
counter-intelligence. He studied psychological warfare in depth as a
junior officer in the Burmese army. It will not be the first time the
generals have taken pains to publicly show unity when there is a major
internal battle going on.

There is also increasing concern within the ranks of the army over the
future of the country. The start of the mass trials of the former military
intelligence officers has caused disquiet within the military,
particularly in the navy and air force. More than 300 former soldiers and
civilians are on trial in courts especially formed inside Insein prison
accused of economic crimes and corruption. Most are expected to be
sentenced to more than 30 years jail.

``It's a form of cannibalism, the army is eating its own flesh,'' a
retired Burmese military officer said about the witch-hunt that is being
conducted against the former military intelligence chief and his soldiers.

Anything to do with Gen Khin Nyunt has been purged. Photographs, posters
and billboards showing him have been taken down. The spire in the famous
Shwedagon temple in Rangoon, which Gen Khin Nyunt had covered in gold, has
been boarded up. The authorities have also scoured the civil service and
sacked anyone who got his post as a result of a recommendation from a
military intelligence officer.

This has all contributed to a growing resentment within military and
government. Many are convinced it is all a pretext to destroy Gen Khin
Nyunt and his men. ``All we are doing is putting innocent people in
jail,'' a policeman investigating one the Gen Khin Nyunt's senior generals
recently confided to friends.

The fear is Gen Than Shwe may be losing his grip. Some military men are
beginning to wonder whether he is mentally unstable. Comparisons are being
drawn with the former military leader General Saw Maung, who had a mental
breakdown and was removed by the triumvirate of Gen Than Shwe, Gen Maung
Aye and Gen Khun Nyunt in 1992.

The longer the battle between Burma's two top generals is unresolved, the
greater the uncertainty about the country's future.

Diplomats in the region are wary about the outcome. ``If Gen Maung Aye is
fully in control, it will be a severe setback for the ethnic groups and
the international community,'' said a senior Asean diplomat responsible
for policy towards Burma.

The fear is Gen Maung Aye would be even more isolationist, chauvinistic
and xenophobic than the senior general.