October 4, 2007 at 22:39:07

Burma: The Back Story

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By Rowan Wolf (about the author) Page 2 of 3 page(s)

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According to HRW, the State Peace and Development Council (SPDC), allocates only a fraction of the available resources to social programs (for example health and education). This is consistent with the typical structural adjustment program regime which requires significant decreases in spending on social infrastructure - though HRW does not discuss this. Also typical of structural adjustment, massive amounts of the economic resources have been redirected to the military. It is estimated that 50% of the Burma's funds are designated for the military.

Burma has significant natural gas reserves which have created strong trade relations with both India and China, and there are significant hardwood exports to China as well. This gives China and India (among others) some degree of influence with the Junta. However, it is also likely that the Junta elite are directly beneffiting from these relationships. Whether China and India would do more than "request" the Junta back away from its brutal repression is questionable. After all, their agreements are with the current government. It is not surprising given the dramatically increasing demand for natural gas to fuel the growth in China and India, they (and Russia) have been very active in helping finance the development of Burma's natural gas reserves. Also involved have been major petrochemical companies. According to HRW:

At present the SPDC receives the bulk of its gas money from the onshore "Yadana" and "Yetagun" gas fields. The Yadana consortium is led by Total of France and includes UNOCAL (now Chevron) of the United States and Thailand's state-controlled PTT Exploration and Production Co Ltd (PTTEP). The Yetagun consortium, led by Malaysia's state-owned Petronas, includes Japan's Nippon Oil as well as PTTEP. PTTEP, a subsidiary of the largely state-owned PTT Public Co Ltd (PTT) of Thailand, buys the gas for export to Thailand.

Major offshore natural gas projects are under development. A consortium of South Korean and Indian firms, in partnership with the Myanmar Oil and Gas Enterprise, has made a large gas find off the coast of Arakan State in western Burma. Known as the "Shwe" gas project, it is expected to produce massive revenues once it is in production. Estimates of the gas yield of the Shwe deposits range between US$37 to US$52 billion, and could lead to a total gain in revenues to the junta or future Burmese governments of US$12 to US$17 billion over 20 years.

The Shwe gas consortium is composed of the South Korean company Daewoo International, state-owned companies from India and South Korea, and the Myanmar Oil and Gas Enterprise. Some of the foreign partners also have separate deals with the Burmese government entity for other concessions.

On September 24, for example, India's state-controlled Oil and Natural Gas Co (ONGC), whose subsidiary ONGC Videsh is a partner in the Shwe consortium, signed a deal with Myanmar Oil and Gas Enterprise to explore for gas in three more offshore blocks. Under the deal, Oil and Natural Gas Co pledged to invest US$150 million through ONGC Videsh.

India's Office of the President holds nearly 75 percent of the shares in Oil and Natural Gas Co. India's minister for oil, Murli Deora, traveled to the Burmese capital last week to sign the agreement as thousands of protesters in Burma took to the streets to call for political freedom, an end to the SPDC's abuses, and economic improvements.

India, China and Russia have also provided military support to the Junta according to a separate report from HRW.

The money gathering in the pockets of the Burma elite are certainly being kept outside of Burma. Tom Malinowski of HRW testified before the Senate Foreign Relations Committee on October 3, 2007. The transcript is not yet available though the hearing was broadcast on C-Span. Malinowski testified that the strongest international bank relations of the Burma elite has been with Singapore, though certainly they have other international finance connections. He recommended that targeted sanctions freezing the international accounts of the Junta and others might be most effective in pressuring the government to release the political prisoners and relax their response to the protests. This seems like a most reasonable response as broader sanctions against the country would only cause more damage to the population. The Burmese military is a huge organization - second only to China in number of forces. Given the record of the ruling Junta, they would not hesitate to further mobilize against the population.

But there is perhaps a deeper and darker link to U.S. interests in Burma, and why for 40 years the U.S. has shown little concern for the people of Burma. That goes to the Vietnam war. Burma is part of the "Golden Triangle" - the rich opium producing region of Asia. In fact, until recently, Burma was second only Afghanistan in opium production. The French utilized the opium production and support of war lords to finance their covert networks, and when the U.S. stepped into France's shoes they inherited that lucrative network (Alfred McCoy). The CIA utilized the opium trade, and the network connected to it, in the Golden Triangle to finance covert operations in Laos and Cambodia (the secret wars). They also used it to help fund anti-communitist armies of people such as the Hmong (Djedje and Korff).

Of course that is ancient history (perhaps).

Part of the Burma Junta's efforts with the IMF and World Bank has recently been anti-drug activities including the elimination of opium production. If a March 7, 2006 Reuters report - War on opium gives Golden Triangle a different hue - is accurate, that war on opium has been largely successful. Of course, that success might be part of the deteriorating economic situation of the people of Burma. Much of the population of Burma lives by agriculture, and there is no more lucrative crop than opium. Look to Afghanistan as a companion example.

It seems odd that the U.S. is taking official attention to the most recent protests and Junta response in Burma. For 40 years the U.S. has largely looked the other way. Similarly, the U.S. continued to work with the Taleban government of Afghanistan despite its repression and abuses - until they also successfully drastically reduced opium production. Perhaps it is just coincidence, and of course both situations are more complex than this.

Regardless, it is well past time to ease the conditions of the people of Burma. It is well past time for us to speak out to end the repression and the resulting displacement of millions of Burmese. It is also time to demand debt relief for Burma. Like all such burdens, it benefits interests outside of Burma while crushing the people of Burma.

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Rowan Wolf is an activist and sociologist living in Oregon. She is the founder and principle author of Uncommon Thought Journal, and a Senior Editor for more...)

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