BurmaNet News, August 26, 2009

[Editor]

August 26, 2009 Issue #3784


INSIDE BURMA
Reuters: Thousands flood into China after Myanmar army standoff
Irrawaddy: Junta warns Buddhist monks online

ON THE BORDER
Mizzima News: Floods from dam near Thai–Burmese border cause concern
Narinjara: Two foreign companies explore gas near disputed waters in
Bangladesh

BUSINESS / TRADE
Xinhua: Senior Chinese legislator vows to boost ties with Myanmar

ASEAN
The Jakarta Post: Rights groups seek to form ASEAN rights court

DRUGS
AP: Myanmar reports major drug bust near Thai border

OPINION / OTHER
New York Times: We can’t afford to ignore Myanmar – Jim Webb
Irrawaddy: Tension in the North – Editorial
Asia Times: On the march to do business in Myanmar – Brian McCartan





____________________________________
INSIDE BURMA

August 26, Reuters
Thousands flood into China after Myanmar army standoff

BANGKOK – Tension between Myanmar government troops and an armed ethnic
group has sparked an exodus of thousands of people into China from
northeastern Myanmar, activists and witnesses said on Wednesday.

Large groups crossed the border on Tuesday from Kokang in Myanmar's Shan
State, said a Reuters witness in Nansan, a town in China's southern Yunnan
province. About 10,000 people have fled Kokang since August 8, China's
Chongqing Evening News reported.

The Washington-based U.S. Campaign for Burma said tensions first flared on
August 8 when the Myanmar army deployed hundreds of troops in Kokang, a
mostly ethnic Chinese region where rebels have observed a two-decade-old
ceasefire with the government.

The rebels issued a statement via the Myanmar Peace and Democracy Front
(MPDF), a newly formed alliance of four ethnic groups, saying the army was
pressuring its fighters to join a border security force under the
government's control ahead of Myanmar's elections planned for 2010.

"Tensions are extremely high," the MPDF said in the statement issued via
the U.S. Campaign for Burma. "With anticipation of resurgence of war, tens
of thousands of ethnic people have fled."

A Nansan shop owner, Xie Feifei, said refugees were being housed by the
local government in disused or half-built homes. He did not know of any
who had been sent back.

"We haven't had anything like this happen for about 10 years," Xie told
Reuters by telephone on Wednesday. "Many people have been coming across
the border but it's fallen off now," Xie added. "I think everyone who
wants to escape has already."

A local government official in Nansan, however, told Reuters that no
refugees had entered the town.

The U.S. Campaign for Burma said the mobilization of troops was a move by
the junta to force ethnic groups to form political parties to contest next
year's election, the first in Myanmar, formerly known as Burma, in 20
years.

Many ethnic groups feel they have nothing to gain from running in the
polls and suspect the junta is trying to neutralize their threat by
bringing rebel fighters into the army under the command of the Yangon
regime.

The MPDF and Chinese media reports said troops had attacked a factory used
by the ethnic groups to service and repair weapons on suspicion it was
being used to produce illicit drugs. They said a standoff ensued,
prompting thousands to flee the area. Myanmar, which has been ruled by the
military since a 1962 coup, is home to more than 100 different ethnic
groups.

Many armed groups observe a ceasefire with the government but several have
resisted. Ethnic insurgencies have continued, in many cases fueled by the
opium trade.

(Reporting by Martin Petty and Chris Buckley in Beijing; Editing by Jason
Szep)

____________________________________

August 26, Irrawaddy
Junta warns Buddhist monks online – Arkar Moe

A military government Web site, “kyaymon” [meaning “the mirror”], which
operates as an online daily newspaper in Burmese, on Wednesday criticized
two well-known Buddhist monks’ organizations and warned that the Burmese
military authorities will take action against them.

The Burmese-language kyaymon Web site claimed that the International
Burmese Monks’ Organization [commonly known as “Sasana Moli”] and the
Sangha League (Myanmar) are trying to launch another monks’ boycott in
Burma similar to the 2007 Saffron Revolution when Buddhist monks were
instrumental in leading anti-government protests.

The Web site claimed that U Nayaka and U Candobhasacara from Sasana Moli,
and U Jotika, U Paramikhanti and Shwe Zin Tun from Sangha League (Myanmar)
are playing leading roles in the movement and that the Burmese public
would not approve of it.

It went on to say that the Burmese government would not tolerate this type
of movement and would take “severe action” against those involved in it.
The Web site urged the public “not to become the monks’ victims.”

The warning comes the day after The Irrawaddy reported that several exiled
monk leaders had said that Buddhist monks across the country were
preparing to stage a third boycott of military personnel and their
families.

A monk from Sangha League (Myanmar) told The Irrawaddy on Wednesday: “It
is clear that the Burmese military junta is afraid of the movements of
Buddhist monks. It also raises the possibility of the authorities planting
fake monks in monasteries and committing violations against our religion.

“Several saffron robe dealers near the Shwedagon Pagoda told our monks
that the military authorities had come and bought about 500 saffron robes
from them on September 21, 2007. They used those robes as disguises to
infiltrate the protests,” he added.

The US-based International Burmese Monks’ Organization was founded in
October 2007 by two revered monks, the late U Kovida and the
Malaysian-born Venerable Pannya Vamsa. It says on its Web site that it
aims to “give voice to the brave people and monks who have been silenced,”
and is “dedicated to peace and freedom in Burma.”

Speaking to The Irrawaddy on Wednesday, one of its leaders, Ashin Sopaka,
said, “This [attack] shows that the Burmese dictators will counterattack
the media with their own media weapons. They always do wrong and they are
constantly breaking the codes of human rights.

“Our monks will surely boycott them if they persist with their religious
abuses. All our monks need to boycott this Burmese dictatorship for the
sake of our religion and in the interest of peace for all people,” he
said.

Burmese monks have boycotted the military regime and their cronies twice
in recent history: the first time in 1990 following the suppression of
Aung San Suu Kyi and her opposition party, the National League for
Democracy, after they had won the last general election by a landslide;
and again in 2007, the so-called “Saffron Revolution,” when monk-led
demonstrations against price hikes in Rangoon turned into a national
uprising.

Ashin Candobhasacara, a secretary of the Sasana Moli, told The Irrawaddy
on Wednesday: “Our International Burmese Monks’ Organization and the
international community have called on the Burmese junta to release all
political prisoners, including monks and nuns.

“Buddha told us that monks have to boycott those who violate religious
principles. There is no doubt that the Burmese dictators have killed and
arrested many monks and nuns, and have raided and destroyed monasteries.

“So, if they do not apologize to the monks for their religious abuses, we
must boycott them according to Buddhist doctrine. We are ready to
sacrifice our lives for Buddhism and peace for all,” he said.

The International Burmese Monks’ Organization issued an announcement on
Monday to mark the second anniversary of the Saffron Movement, saying it
will demonstrate against the Burmese junta by reciting the “Metta Sutta”
(the Buddha’s words of loving-kindness) in front of the G20 Summit in
Pittsburgh and in Union Square in New York on September 24 - 26.

According to official data, there are more than 400,000 monks in Burma,
and its community, the sangha, is considered one of the strongest and most
revered institutions in the country. It has always played an important
role in Burma’s social and political affairs, often in opposition to
oppressive regimes.

____________________________________
ON THE BORDER

August 26, Mizzima News
Floods from dam near Thai–Burmese border cause concern – Usa Pichai

Chiang Mai –The incident of flash floods near the Thai-Burmese border last
week points to the ineffectiveness of the authorities in addition to its
blatant blacking out of information, environmentalists have pointed out.

Witoon Permpongsacharoen, an environmentalist attached to the ‘Towards
Ecological Recovery and Regional Alliance’, a Bangkok based organization
working closely with environmental issues in the region told Mizzima that
the recent flooding from the Srikakarin Dam in the Kanchanaburi Province
bordering Burma, affected several villages in the area.

But information on this was not available from the authorities.

“While compensation is necessary it is important that the Electricity
Generating Authority of Thailand (Egat) and the Petroleum Authority of
Thailand (currently the PTT Public Co. Ltd.) should clarify the facts.
Earlier there had been warnings that the dam was vulnerable to
earthquakes. Besides there was lack of study on the environmental effect
in the area from the construction of the dam,” he said.

“The media seems to have no interest in following up the issue though it
affects so many villagers,” he said.

Witoon pointed out that the planned series of dams to be built on the
Salween River in Burma will also be at risk from earthquakes “even though
the authorities claim that engineering technology could solve this problem
and resist damage from earthquakes, measuring up to seven on the Richter
scale. But who can guarantee whether earthquakes will not be stronger?” he
asked.

The dams has been built on the Srisawat active fault near the Three Pagoda
Pass, both on the Thai– Burma border and is at  risk from earthquakes.

The incident follows an accident during gas transmission from the Bongkot
in the Thai Gulf and Yadana fields in Burma last week. To avoid a power
blackout in western Thailand due to the stoppage, the Electricity
Generating Authority of Thailand (Egat) decided to release water from the
Srinakarin Dam in Kanchanaburi province close to the Burmese border to
generate power, which resulted in flooding large areas and affecting
hundreds of local villagers. There are rumours that the dam has been
damaged by an earthquake.

The cabinet was given the report and has acknowledged the technical
problems. It was informed that eight villages in Muang district had been
affected by floods, along with three resorts, some raft operations and
farmlands. A committee has been set up to investigate the sudden release
of water from the Srinakarin Dam.

Deputy permanent secretary Norkun Sitthiphong will chair the committee,
which has been given seven days to investigate and submit a report.

"The committee will find out why the water had to be released and whether
the decision was appropriate. It must also come up with preventive
measures," he said, denying reports that the floods were caused by an
earthquake.

However, in 2007 the fault line in Burma caused small earthquakes in the
Golden Triangle areas, connecting Laos, Burma and Thailand, when a 6.1
magnitude earthquake occurred about 700 kilometres from Bangkok.

Such tremors were however not dangerous, but has been causing worry about
fault lines near the capital such as the Sakaing fault in the Andaman Sea,
400 kilometres from Bangkok or the Three Pagoda fault zone and the
Srisawat fault in Kanchanaburi, 200 kilometres from Bangkok.

____________________________________

August 26, Narinjara
Two foreign companies explore gas near disputed waters in Bangladesh

Dhaka – Two foreign firms - Conoco Philips and Tullow Bangladesh - will
explore for gas in the deep sea in Bangladesh near disputed waters between
Burma and Bangladesh.

According to an official source, the US company Conoco Philips will be
allowed to explore gas and oil from blocks No. 10 and 11 while Tullow
Bangladesh will explore block No. 5

Blocks 5, 10, and 11 are close to the disputed waters but Bangladesh
authorities are not allowing the companies to explore for gas in the
disputed areas.

A senior officer of Bangladesh said that the two companies can not conduct
exploration in the disputed areas of the selected blocks, adding that, "We
are in talks with our neighbors for resolving the dispute concerning the
areas of blocks selected for Conoco Philips and Tullow Bangladesh."

Tullow submitted its bid for the shallow sea block 5 that is partially
claimed by India. The committee selected Conoco's bid to explore blocks
10, 11, 12 15, 16,17, 20, and 21.

A source said that some of the blocks selected for the Conoco overlap with
those claimed by India and Burma. As a result, the government may select
certain areas of the blocks for exploration that are not controversial.

Although neighboring Burma and India have taken steps to explore potential
hydrocarbon reserves in the Bay of Bengal, Bangladesh has failed to take
commensurate measures due to indecision and neglect of the all-important
issue of demarcating the maritime boundary.

India and Burma's offshore gas blocks overlap an area of five thousand
square kilometers on the eastern edge of the Bangladesh deep-sea zone,
said the source.

Bangladesh has so far not taken any effective measure to explore gas in
the offshore blocks. India and Burma have already done so and found large
deposits.

A government committee selected the companies after evaluating the
technical offers submitted by nine companies from across the world in the
third round of offshore exploration bidding in Bangladesh. Petrobangla was
awarded six bids for offshore exploration in the first round of bidding.

____________________________________
BUSINESS / TRADE

August 26, Xinhua
Senior Chinese legislator vows to boost ties with Myanmar

BEIJING – A senior Chinese legislator said Wednesday that China will
promote social exchanges with Myanmar to boost bilateral ties.

"We attach importance to and support friendly exchanges and cooperation
between social groups and organizations in China and Myanmar, which will
contribute to the development of bilateral ties," said Zhou Tienong, vice
chairman of the Standing Committee of the National People's Congress, in a
meeting with a delegation from a government-supported organization from
Myanmar.

Zhou, also president of the Chinese Association for International
Understanding, briefed the eight-member delegation on China's political
and economic situation, its measures in tackling the global downturn and
pledged to boost economic and trade cooperation with the international
community, including Myanmar.

The delegation from the Union Solidarity and Development Association
(USDA), was headed by U Than Htay, a member of the USDA Central Executive
Committee and Deputy Energy Minister.

China-Myanmar trade hit 2.6 billion U.S. dollars last year, anda Free
Trade Area of China and the Association of Southeast Asian Nations is
expected to be established in 2010.

____________________________________
DRUGS

August 26, Associated Press
Myanmar reports major drug bust near Thai border

YANGON, Myanmar — Police in Myanmar seized more than 100 blocks of heroin
and nearly 3 million methamphetamine tablets near the border with Thailand
in one of the military-ruled country's largest drug seizures, a state-run
newspaper said Wednesday.

An anti-drug squad confiscated two guns and ammunition and arrested four
people in the raid Monday on two houses in the northeastern town of
Tachileik, the Myanma Ahlin newspaper said.

Police seized 104 heroin blocks, including two that weighed 1,540 pounds
(700 kilograms), the newspaper said. It did not give the weight of the
remaining 102 blocks.

The seizure also included 2,926,000 methamphetamine pills and 46 pounds
(21 kilograms) of powdered heroin, it said.

In July, 1,676 pounds (762 kilograms) of heroin and 340,000
methamphetamine pills were seized in the same border town, about 340 miles
(550 kilometers) northeast of the country's largest city, Yangon. At the
time, newspapers called it the biggest single seizure of heroin ever
recorded in Myanmar.

Myanmar, also known as Burma, produced an estimated 410 tons of opium in
2008, enough to make around 40 tons of heroin, according to United Nations
figures. The country is the world's second-largest producer after
Afghanistan, which accounts for 90 percent of world output.

Myanmar is also a major source of methamphetamine. Much of it is
trafficked to neighboring Thailand where abuse of the drug is rampant.

____________________________________
ASEAN

August 26, The Jakarta Post
Rights groups seek to form ASEAN rights court – Ary Hermawan

ASEAN countries must consider forming a regional human rights court if
they are truly committed to protecting the basic rights of their citizens,
a coalition of 70 Asian NGOs said Tuesday.

The Solidarity for Asian People’s Advocacy Task Force on ASEAN and Human
Rights (SAPA-TFAHR) said it had sent an open letter to the high-level
panel tasked with drafting the terms of reference for the ASEAN
Inter-Governmental Commission for Human Rights. The ASEAN panel will
convene in Jakarta from Aug. 26 to 27.

In their letter, the NGOs demanded the regional grouping create a human
rights court similar to the one in Africa and Europe within 10 years.

“Developing a protection mandate and a human rights mechanism may take 100
years, or 10 years, or less. We are saying: let’s set a time frame, the
sooner he better, but it should not be more than 10 years,” said
Indonesian rights activist Rafendi Djamin, who co-signed the open letter
sent to the ASEAN panel.

ASEAN recently approved the terms of reference establishing the first-ever
human rights commission in the region, which has been widely criticized as
being powerless and accused of being no more than “window-dressing” for
the organization that was once dubbed an exclusive club of dictators.

Indonesia has secured commitments from other countries to sign a political
declaration in return for its endorsement of the terms of reference it had
earlier strongly opposed.

The political declaration will provide the rights commission – slated to
be officially established in October - with a mandate to protect human
rights, and will be reviewed every five years.

____________________________________
OPINION / OTHER

August 26, New York Times
We can’t afford to ignore Myanmar – Jim Webb

Washington – EIGHT years ago I visited Myanmar as a private citizen,
traveling freely in the capital city of Yangon and around the countryside.
This lush, breathtakingly beautiful nation was even then showing the
strain of its severance from the outside world. I was a guest of an
American businessman, and I understood the frustration and disappointment
that he and others felt, knowing even then that tighter sanctions would
soon drive them out of the country.

This month I became the first American political leader to visit Myanmar
in 10 years, and the first-ever to meet with its reclusive leader, Senior
Gen. Than Shwe, in the haunting, empty new capital of Naypyidaw. From
there I flew to an even more patched-and-peeled Yangon, where I met with
Daw Aung San Suu Kyi, the opposition leader and Nobel laureate who remains
confined to her home. Among other requests, I asked Than Shwe to free her
and allow her to participate in politics.

Leaving the country on a military plane with John Yettaw — an American who
had been sentenced to seven years of hard labor for immigration offenses,
and whose release I had also requested of Than Shwe — I was struck again
by how badly the Burmese people need outside help. They are so hardened
after decades of civil war and political stalemate that only an
even-handed interlocutor can lift them out of the calcified intransigence
that has damaged their lives and threatened the stability of Southeast
Asia.

For more than 10 years, the United States and the European Union have
employed a policy of ever-tightening economic sanctions against Myanmar,
in part fueled by the military government’s failure to recognize the
results of a 1990 election won by Aung San Suu Kyi’s party. While the
political motivations behind this approach are laudable, the result has
been overwhelmingly counterproductive. The ruling regime has become more
entrenched and at the same time more isolated. The Burmese people have
lost access to the outside world.

Sanctions by Western governments have not been matched by other countries,
particularly Russia and China. Indeed, they have allowed China to
dramatically increase its economic and political influence in Myanmar,
furthering a dangerous strategic imbalance in the region.

According to the nonprofit group EarthRights International, at least 26
Chinese multinational corporations are now involved in more than 62
hydropower, oil, gas and mining projects in Myanmar. This is only the tip
of the iceberg. In March, China and Myanmar signed a $2.9-billion
agreement for the construction of fuel pipelines that will transport
Middle Eastern and African crude oil from Myanmar to China. When
completed, Chinese oil tankers will no longer be required to pass through
the Straits of Malacca, a time-consuming, strategically vital route where
80 percent of China’s imported oil now passes.

If Chinese commercial influence in Myanmar continues to grow, a military
presence could easily follow. Russia is assisting the Myanmar government
on a nuclear research project. None of these projects have improved the
daily life of the average citizen of Myanmar, who has almost no contact
with the outside world and whose per capita income is among the lowest in
Asia.

It would be wrong for the United States to lift sanctions on Myanmar
purely on the basis of economic self-interest, or if such a decision were
seen as a capitulation of our long-held position that Myanmar should
abandon its repressive military system in favor of democratic rule. But it
would be just as bad for us to fold our arms, turn our heads, and pretend
that by failing to do anything about the situation in Myanmar we are
somehow helping to solve it.

So what can and should be done?

First, we must focus on what is possible. The military government in
Myanmar has committed itself to elections in 2010, as part of its
announced “seven steps toward democracy.” Many point out that the
Constitution approved last year in a plebiscite is flawed, since it would
allow the military to largely continue its domination of the government,
and that the approval process itself was questionable. The legislation to
put the Constitution into force has yet to be drafted. The National League
for Democracy, Aung San Suu Kyi’s political party, has not agreed to
participate in next year’s elections.

But there is room for engagement. Many Asian countries — China among them
— do not even allow opposition parties. The National League for Democracy
might consider the advantages of participation as part of a longer-term
political strategy. And the United States could invigorate the debate with
an offer to help assist the electoral process. The Myanmar government’s
answer to such an offer would be revealing.

Second, the United States needs to develop clearly articulated standards
for its relations with the nondemocratic world. Our distinct policies
toward different countries amount to a form of situational ethics that
does not translate well into clear-headed diplomacy. We must talk to
Myanmar’s leaders. This does not mean that we should abandon our
aspirations for a free and open Burmese society, but that our goal will be
achieved only through a different course of action.

The United States refused to talk to the Chinese until 1971, more than 20
years after the Communist takeover, and did not resume full diplomatic
relations until 1979. And yet China, with whom we seem inextricably tied
both as a business partner and a strategic competitor, has no democracy
and has never held a national election.

The Hanoi government agreed to internationally supervised elections for
Vietnam in 1973, as a result of the Paris peace talks; Washington did not
raise this as a precondition to furthering relations. As someone who has
worked hard to build a bridge between Hanoi and America’s strongly
anticommunist Vietnamese community, I believe the greatest factor in
creating a more open society inside Vietnam was the removal of America’s
trade embargo in 1994.

Third, our government leaders should call on China to end its silence
about the situation in Myanmar, and to act responsibly, in keeping with
its role as an ascending world power. Americans should not hold their
collective breaths that China will give up the huge strategic advantage it
has gained as a result of our current policies. But such a gesture from
our government would hold far more sway in world opinion than has the
repeated but predictable condemnation of Myanmar’s military government.

Finally, with respect to reducing sanctions, we should proceed carefully
but immediately. If there is reciprocation from the government of Myanmar
in terms of removing the obstacles that now confront us, there would be
several ways for our two governments to move forward. We could begin with
humanitarian projects. We might also seek cooperation on our long-held
desire to recover the remains of World War II airmen at crash sites in the
country’s north.

Our ultimate goal, as it always has been, should be to encourage Myanmar
to become a responsible member of the world community, and to end the
isolation of its people so that they can live in economic prosperity,
under an open political system.

Jim Webb is a Democratic senator from Virginia.

____________________________________

August 26, Irrawaddy
Tension in the North – Editorial

Tension between the Burmese military and the ethnic ceasefire militias has
been rising along the Sino-Burmese border in recent months.

The latest episode occurred on Monday, when junta troops moved against the
leader of the Kokang ceasefire group known as the Myanmar National
Democratic Alliance Army (MNDAA) in the Lao Kai area in northern Shan
State.

Kokang leader Pheung Kya-shin escaped arrest by Burmese troops who were
looking for illegal drugs in his home, fleeing with his followers. Pheung
Kya-shin, also known as Peng Jiasheng, negotiated the ceasefire agreement
between the MNDAA and the regime in 1989.

The main reason for the increased tension has been the regime’s adamant
demand for ceasefire groups to transform their militias into border guard
forces, and the ceasefire groups’ steadfast refusal to comply.

In April 2009, the regime told ceasefire groups about their plan to
transform the ceasefire militias into a border guard force.

Under the new scheme, each border guard battalion would have 326 troops,
with 30 soldiers from the Burmese army, including one of three commanding
officers, who would take charge of administration. The border guard
battalions would only be located in the territory of the ceasefire groups,
and their members would receive the same pay as regular Burmese soldiers.

Large and powerful ethnic armed groups, like the Kachin, Wa and Kokang
based along the Sino-Burmese border, have refused to accept the order, but
smaller, weaker groups are more likely to agree.

Understandably, the ceasefire groups want to maintain their independent
armed forces to control their own territories and enjoy
self-determination.

Analysts predict that the regime’s next target will be the Wa. The United
Wa State Party’s (UWSP) opposition to the junta’s proposal has lead to
heightened tensions and speculation about a renewal of armed conflict.

However, the Wa army has 20,000 soldiers and the regime is unlikely to
risk fighting on the Chinese border. Chinese officials who are sympathetic
to ethnic groups on the border have warned the Burmese not to initiate
military conflict in the area.

As in the case of the Kokang group, whose new leaders are likely to be
more pliant to Burmese military demands in the absence of Pheung Kya-shin,
it is likely that the regime will wait for the Wa leadership to weaken.

In the south, the regime employed a divide and rule strategy to defeat the
Karen National Union. The ongoing internal conflicts and infighting among
Karen groups seriously weakened the once formidable Karen forces.

The ethnic armed groups in the north are not united enough to confront the
regime, nor have they shown a clear political vision for the future of
Burma. In the past, they expressed a desire for a federal union and sent
representatives to the military-sponsored National Convention to seek
amendments to the constitution, but the regime rejected their proposals.

Like the Burmese military dictators, the leaders of the ethnic groups in
the north are feudal warlords who are anything but democratic. Making
matters worse, the Wa and Kokang leaders are renowned for their
involvement in the drug trade.

The US has blacklisted many of their leaders. In 2005, the US Department
of Justice announced the indictment of eight UWSP leaders, including
Chairman Bao You Chang.

Hostile attitudes have hardened and preparations for an offensive on the
Wa and Kokang groups have heightened since US Senator Jim Webb, who
advocates engagement with the regime, visited Burma in mid-August.

The regime knows that fighting against notorious drug lords would gain the
sympathy if not blessing of the US. Ironically, it is the same regime that
previously turned a blind eye on the drug trade in the north, even
allowing Wa and Kokang leaders to establish businesses in Burma to launder
drug money.

Resolving the status of ethnic groups in the political structure of Burma
is an important issue that requires a durable political solution.
Meanwhile, maintaining peace in Burma is paramount, but the regime’s
recent actions against the Kokang and other ethnic groups along the border
can only increase distrust and exacerbate tensions.

____________________________________

August 26, Asia Times
On the march to do business in Myanmar – Brian McCartan

BANGKOK – The debate over United States and European Union-led sanctions
against doing business in Myanmar is set to intensify in the wake of US
Senator Jim Webb's recent high-profile meeting with Senior General Than
Shwe and detained pro-democracy leader Aung San Suu Kyi.

Webb spoke out against the sanctions and Myanmar's junta echoed that call
through state media. As US policymakers weigh the pros and cons of
economically re-engaging the ruling junta, the process will necessarily
take into account that a handful of military linked businessmen, many
allegedly involved in illegal activities, including drug trafficking,
dominate Myanmar's underdeveloped economy.

For US investors eyeing business opportunities that the cessation of
sanctions would present, dealing with Myanmar's top military and business
leaders would be key to gaining market access. Myanmar is one of the
world's most corrupt countries, according to Transparency International,
an independent corruption watchdog, and US businesses would enter Myanmar
at great risk to their corporate reputations.

In Myanmar business circles, the most talked about businessman is Tay Za,
who owns the Htoo Trading Company Ltd, also known as the Htoo Group of
Companies. Htoo maintains large logging, construction, property
development, import-export, aviation, transportation, shipping and mining
operations. Tay Za has also made recent forays into telecommunications and
banking, and established Myanmar's first privately invested airline, Air
Bagan.

The US Treasury Department placed five of those companies, along with Tay
Za, his wife, and eldest son, Pye Phyo Za, on a sanctions list in October
2007 because of their financial connections to the regime and Tay Za's
alleged role as an arms broker. In February 2008, the US stepped up those
sanctions by putting several more companies and Tay Za's business
associates in both Myanmar and Singapore on a black list, including Tay
Za's brother and business partner Thiha. Htoo Trading Company Ltd, which
includes Ayer Shwe Wah Company Ltd, Myanmar Avia Export Company Ltd and
Pavo Aircraft Leasing Company Ltd, are all currently under US sanctions.

US sanctions, first imposed broadly in 1995, have since 2007 targeted
specific generals and their associated business interests by freezing
their assets in American financial institutions. The restrictions also
prohibit any commercial or financial transactions between American
individuals and Myanmar firms named in the sanctions order and ban named
individuals from travel to the US.

Tay Za and Htoo Trading have also been targeted by the European Union,
which imposed sanctions against them in December 2007. Similar to the US
sanctions, the EU also targeted Tay Za's wife, eldest son and brother.
Canada also put Tay Za and his family on their Canadian Special Economic
Measures Regulations list in December 2007. (Tay Za could not be reached
for comment for this article.)

Sprawling empire

Despite those impediments, Tay Za's businesses continue to thrive,
including through contracts with China. In 2008, he negotiated a
concession from Alcatel Shanghai Bell to cooperate on projects in the new
Yadanabon cyber-city currently under construction in central Myanmar. He
also built the old capital Yangon's top shopping complex, the Myanmar
Shopping Center, which is stocked with international brands. Htoo Trading
was also one of two main companies granted contracts to construct the new
capital city at Naypyidaw.

Tay Za's rise is directly connected to his close relations with Myanmar's
generals, especially Senior General Than Shwe, the country's authoritarian
ruler. He is also well-connected to General Thura Shwe Mann, currently the
junta's third-ranking officer and often tipped to be Than Shwe's eventual
successor. Shwe Mann currently holds a position on Htoo Trading's board,
while his son, Aung Thet Mann, is director of Htoo Trading subsidiary Ayer
Shwe Wah Company Ltd, which is involved in construction, palm oil products
and import-export activities.

Those relationships, analysts and opposition groups say, have helped him
win many lucrative government contracts and trade concessions. In the
months following the destruction wrought by Cyclone Nargis in May 2008,
Htoo Trading claimed it spent some US$3 million on rescue and
rehabilitation. Myanmar watchers say Tay Za was granted lucrative
reconstruction contracts from the generals for his donations to the relief
effort.

He has come under criticism, including from the United Nations
Educational, Scientific and Cultural Organization, for a project to build
a 150-room hotel and 60-meter-high tower in the historical town of Bagan
which some say damages the religious site's aesthetics. His timber
businesses stand widely accused of unsustainably cutting large swathes of
Myanmar's remaining forests. But of special concern to the US is Tay Za's
alleged role in brokering past arms purchases. Tay Za has consistently
denied he is an arms broker for the military regime.

The US Treasury claims that Tay Za's Myanmar Avia Export Company Ltd has
been used to buy aircraft and helicopters for the Myanmar Air Force,
including the 2001 purchase from Russia of 10 MiG 29 fighters and several
Mi-8 helicopters. Established in 1993 to supply spare aircraft parts to
the military, the company is now the representative for MAPO, Russia's
major state-owned military aircraft manufacturer and a subsidiary of MiG.
It also represents Russian helicopter company Rostverol, which in 2006
merged with Mil and Kamov to become Oboronprom Corporation.

More worrying to US and regional security interests is his alleged role in
brokering Russian and North Korean aid for Myanmar's suspected nuclear
program. Tay Za was part of the delegation led by Vice Senior General
Maung Aye, the junta's second-ranking official, to Russia in 2006,
reportedly to discuss weapons purchases as well as the construction of a
nuclear reactor.

Testimony from a defector claiming to be a former bookkeeper for Tay Za
was recently made public by Desmond Ball, a professor at Australian
National University. The self-professed accountant claimed that Htoo
Trading was directly involved in discussions with officials from North
Korea and Russia "concerning contracts and memoranda of understanding for
the provision of nuclear assistance, as well as the logistic arrangements
for the export of uranium and the importation of equipment and materials
for various elements of [Myanmar's] nuclear program".

Htoo Trading is also allegedly involved in contracting for construction at
the sites of the two reactors. According to the defector's testimony, Tay
Za is also responsible for shipping equipment to the sites, often under
cover of night. According to Ball's notes, the defector was with Tay Za
when he played golf with Kyaw Thein, the deputy director of the
Directorate of Defense Services Intelligence, and an Iranian intelligence
officer and nuclear expert.

Controversial enterprise

Two other top businessmen with top connections to the regime are Lo Hsing
Han and his son Steven Law, also known as Tun Myint Naing. Together they
run Asia World Ltd, Myanmar's biggest and most diversified conglomerate
with interests in industrial development, construction, transportation,
import-export and a chain of local supermarkets. Ten more companies are
owned under the group in Singapore by Law's wife, Cecilia Ng.

Both Lo Hsing Han and Steven Law have been on a US visa blacklist since
1996 for suspected drug trafficking activities. In February 2008, they
were also put on the Treasury Department's sanctions list, along with Asia
World Company and subsidiaries Asia World Co Ltd, Asia World Port
Management, Asia World Industries Ltd and Asia World Light Ltd for their
financial connections to the regime.

Asia World currently holds the contract to run Yangon's main port, which
handles 40% of Myanmar's container traffic and operates a cargo and
shipping business from the same facility. The company was the second main
contractor for the construction of the new capital now located at
Naypyidaw and earned government reconstruction contracts in the Irrawaddy
Delta in the wake of the cyclone disaster.

Asia World currently has contracts to build several hydropower projects,
including the Myit Sone dam on a tributary of the Irrawaddy River north of
Mytikyina. It is known to have strong links to China. For instance, the
company was contracted by the Myanmar government to develop a port at
Kyaukpyu on Ramree Island off Myanmar's western Arakan coast, which is
intended to facilitate shipping goods between the coast and China's
southwestern Yunnan province.

There is strong speculation that Lo Hsing Han's business empire was
originally built on narco-profits - though he has consistently denied the
widespread drug trafficking allegations. Starting as a local militia
leader in the northern Kokang region in 1960, Lo Hsing Han was dubbed the
"King of Opium" by US drug enforcement authorities in the 1970s because of
large amount of heroin his alleged networks were sending through Thailand.
Arrested by Thai police in 1973 and deported to Myanmar, he was sentenced
to death for rebellion but granted an amnesty in 1980. He promptly moved
back to northern Myanmar in a known drug cultivation area.

Lo Hsing Han's usefulness to the regime became evident in 1989 when
then-chief of intelligence, Lieutenant General Khin Nyunt, used him as a
go-between for ceasefire agreements with several ethnic insurgent groups,
including the Kokang and the United Wa State Army, recognized as the
world's largest narco-producing militia. According to a 1993 Thai Office
of Narcotics Control Board report, in exchange he was granted the right to
smuggle heroin from northern Myanmar to the Thai border.

By 1994, his organization was widely considered among the most heavily
armed drug trafficking organizations in Southeast Asia. Law enforcement
officials say he might have stepped back from the trade in the mid-1990s,
soon after he established Asia World. He also made strong efforts to
cultivate relations with Myanmar's senior generals, especially Than Shwe;
in 2006, Lo Hsing Han was known to have catered the extravagant wedding of
Than Shwe's daughter.

Lo Hsing Han is now one of the most prominent persons foreign investors
seek out to establish joint venture arrangements. Golden Aaron, an Asia
World subsidiary, has been linked to China's National Offshore Oil
Corporation (CNOOC) since 2004 in a production-sharing contract for oil
and gas deposits in Arakan State's controversial Shwe gas project, which
has been linked with land confiscation and human rights abuses by
monitoring groups.

While Tay Za, Lo Hsing Han and Steven Law are the more well-known
businessmen connected to the regime, a handful of other lesser-known and
controversial entrepreneurs have also parlayed their relationships with
senior generals into lucrative business empires.

Brothers Nay Aung and Pyi Aung are the sons of powerful Ministry of
Industry [1] head Aung Thaung, who is known to be close to both Than Shwe
and Maung Aye. Pyi Aung is married to Nandar Aye, Maung Aye's daughter.
The brothers founded Aung Yee Phyo Company Ltd and IGE Company Ltd in
1994, which in 2001 was registered in Singapore. IGE has since evolved
into one of Myanmar's leading oil and gas companies, while also providing
spare parts for electrical generation projects, the agriculture industry
and timber trade.

In March 2007, IGE signed a contract with Rimbunan Petrogas Ltd, making it
a partner in a joint venture with the state-owned Myanmar Oil and Gas
Enterprise in offshore oil and gas exploration in the Shwe gas field. Both
men are banned from travel to Australia and the EU, but are not on the
US's sanctions list.

Khin Shwe, owner of the Zaykabar Company, is the country's leading
property developer and has played a leading role in the tourism industry
through his chairmanship of the Myanmar Hotelier Association. He was
placed on the US sanctions list in 2007 for his close ties to the
generals, including his daughter's marriage to Shwe Mann's youngest son.

He has also served as chairman of the Myanmar-Japan Friendship
Association, Myanmar-Korean Friendship Association and the Myanmar Thai
Development Company. He maintains strong connections to the regime and
hired US public relations firm Bain and Associated in 1997 in a failed
attempt to improve the junta's image on Capitol Hill.

Also on the US sanctions list is Htay Myint, founder of the Yuzana Company
which has interests spanning real estate, transportation, construction,
hotels and tourism, fisheries, palm oil production and rubber plantations.
He also owns the Yuzan Supermarket and Yuzana Hotel in Yangon and an oil
refinery in Thaketa township near Yangon.

These are some of the businessmen who will be rehabilitated and free
forTurkish charity organization making strides in Myanmar joint ventures
with Western partners if the US and EU drop or relax their sanctions
against Myanmar's rights-abusing regime. They are also the business groups
foreign investors will likely need to seek out to gain access to Myanmar's
various underinvested industries and markets.

While dropping sanctions would no doubt ease the suffering of the general
population, the policy shift would simultaneously further enrich and
entrench some of the region's most controversial business groups.

Brian McCartan is a Bangkok-based freelance journalist. He may be reached
at brianpm at comcast.net.