President and CEO Kitti Jivacate yesterday said UAC would likely see the plant, which will purify biogas from dung and wastewater from the Mongkol and Sons pig farm in Chiang Mai, ready to start supplying biogas to the energy conglomerate by the end of July.

The biomethane from the droppings can be turned into natural gas for vehicles.

The CBG plant will have a |production capacity of 6 to 8 tonnes per day, or about 3,000 tonnes per year.

With a 15-year supply contract with PTT, UAC expects to realise sales of about Bt50 million annually from the project, starting from the third quarter of this year.

The company also plans to invest about Bt600 million in a petrochemical plant in Sukhothai, he said. The facility is expected to commence operations within the first quarter of next year and earn Bt300 million in annual revenue.

The plant will produce liquefied petroleum gas, compressed natural gas and natural gas liquid.

Sales of the new plant’s output are currently under negotiation with a leading domestic energy company, Kitti said.

UAC is also considering setting up a branch office in Myanmar. It is carefully studying the regulations, laws and taxes in the neighbouring country, and a clearer picture of the plan should emerge late this year, he added.

With the planned investment, UAC expects to generate annual revenue of about Bt2 billion within the next three years.

Revenue this year is forecast to reach Bt1 billion, 85 per cent of which is expected to come from its core business of chemical-product trading, and the rest from joint ventures.

In the first quarter, the company recorded a net profit of Bt37.47 million, up 4.53 per cent from the same period a year earlier.

Sixty-seven per cent came from the trading of chemical products, and the remainder from joint ventures in alternative energy and BBF (business biofuel).

EIN News

AAP

Two of Asia’s biggest stock exchanges are fighting for dominance in the world’s hottest new frontier market, as investors beat a path to Burma, following the end of decades of military rule.

The operator of the Tokyo Stock Exchange announced last month a deal with Burma’s central bank to open a stock market, along with Japan’s Daiwa Securities, after years of discussions.

Executives from Asia’s largest bourse plan to travel to Burma later this month to sign the agreement.

But they face competition from South Korea, whose exchange also aims to open a stock market in the former pariah state, according to a spokesman for Korea Exchange in Seoul.

Its director recently visited the capital Naypyidaw for talks with Burma’s central bank governor about developing the country’s capital markets.

But experts say the Japanese are unlikely to let the opportunity slip away.

“The Japanese need it more and they’ll be very, very competitive about getting into that market,” managing director for IHS Consulting in Singapore Tony Nash told AFP.

He said there was a sense that the Tokyo Stock Exchange felt left out of recent consolidation between global market operators and needed “a growth enhancer to make them a little more attractive in terms of an exchange tie-up”.

The Japanese consortium has stolen a march on the Koreans, thanks to a little-known but 16-year-old stock market tucked away in a crumbling building in downtown Yangon, offering over-the-counter deals in two stocks.

The Myanmar Securities Exchange Centre, a joint venture between Daiwa’s research arm and the government-run Myanma Economic Bank, has a skeleton staff of about 10 and just a few customers visiting every day.

But it is a market minnow with big ambitions, aiming to transform itself into a fully-fledged bourse by 2015 using the technology and trading platforms of the Tokyo Stock Exchange.

Its low turnover is not due to a lack of interest. The two stocks listed – a bank and a timber company, both majority-owned by the government – offered attractive dividend yields of about 25 to 30 per cent last year.

“Share trading is very tiny – there are so many buyers, but no sellers,” Myanmar Securities Exchange Centre managing director Shigeto Inami said in an interview at the bourse’s offices, where a small board displays the day’s prices of the two stocks printed on sheets of paper the old-fashioned way.

As well as interest among Burmese, foreign investors are eager not to be left out of what could be Asia’s next big economic boom, as the European Union and other countries start to roll back sanctions.

But investing in a country whose economy has been left in tatters by nearly half a century of military rule is not without risks.

“Due to its location, population and resources, Myanmar (Burma) is the holy grail for frontier investors, but it is still early in its reform process,” said Douglas Clayton, founder and chief executive officer of Cambodia-based Leopard Capital, which specialises in emerging markets and plans to launch a Burma fund.

“There are severe capacity constraints in human resources and physical infrastructure. Myanmar is simply not ready to absorb the tidal wave of projects foreigners can imagine starting there,” he said.

Much of Burma’s industry is currently controlled by companies owned by the government or their cronies, although the government’s economic reforms could lead to increased competition from new rivals.

But the real goldmine – abundant oil, gas and other natural resources – are largely dominated by foreign companies, with the exception of logging. Most of these companies are unlikely to be listed on the local stock market.

Even those that are listed may not be willing to sell their shares to overseas investors for now.

While there is no law against foreigners holding Burmese stocks, taking even a small stake means the company has to change its status to a foreign company, leading to restrictions in areas such as land ownership, said Inami.

His message for prospective foreign investors?

“I recommend them to marry a Myanmar lady and to buy in the name of the wife,” he said with a smile.

Such drastic measures may not be necessary for long, however, as the new quasi-civilian government seeks to overhaul its antiquated laws introduced during decades of rule by a repressive junta.

A new investment law, expected to be enacted later in the fiscal year, could pave the way for more companies to list their stocks on the Myanmar Securities Exchange, said Inami.

“There are so many good companies here in Myanmar, but they are waiting for the new companies act and securities exchange law,” he added.

Businessspectator

Yet while investors salivate over one of Asia’s last frontier markets, experts warn that nerves of steel may be needed.

“Myanmar is an incredible long-term opportunity, but patience and hard work will be required. You can’t modernise a substantial nation overnight,” said Clayton.

The state-owned China Petroleum and Chemical Corporation (Sinopec) demonstrated its massive appeal from the global investors when it garnered an overwhelming order book of USD19 billion for its three-tranche bond offering totaling USD3 billion.

This was the largest order book generated by a Chinese issuer in the international bond market, exceeding the USD17 billion attracted by CNOOC and US12.3 billion by China National Petroleum Corporation (CNPC), which both priced their deals in April. The offering, issued through Sinopec Group Overseas Development (2012) Limited, was the largest global bond issue among the Chinese state-owned enterprises.

Equally split at USD1 billion, Sinopec priced on May 10 a Reg S/144A five-, 10- and 30-year tranches well inside their initial guidance. The five-year tranche was priced at 99.717 percent with a coupon of 2.75 percent to offer a yield of 2.811 percent. This represented a 205bp over the US treasuries, or 20bp tighter than the initial guidance of 225bp.

The 10-year tranche was priced at 99.697 percent with a coupon of 3.90 percent to offer a yield of 3.937 percent. This was equivalent to a spread of 210bp over the US treasuries, likewise 20bp inside the initial guidance of 230bp. The 30-year tranche was priced at 99.672 percent with a coupon of 4.875 percent to offer a yield of 4.896 percent. This represented a spread of 185bp over the US treasuries, similarly 20bp tighter than the initial guidance of 205bp.

The deal represented Sinopec’s debut in the straight bond market, having sold a USD200 million convertible note in 1996.

“Sinopec is a great name to bring to the market and it is a top flight global player,” says a banker familiar with the deal. “There was a lot of focus during the roadshow from key accounts, which indicated their interest to participate in the transaction.”

Sinopec held a global roadshow that ended on May 9 in New York. The deal was announced during Asia hours on May 10 with an initial guidance of 225bp for five years, 230bp for 10 years and 205bp for 30 years, with the order book building steadily and was in excess of USD4.5 billion by lunch time. The book continued to grow in the afternoon and by Asia close, it was more than USD14 billion, with a healthy split across the three tranches.

On that basis, the arrangers revised the price guidance pretty aggressively and the deal was printed 20bp tighter than the initial guidance across all tenors. Sinopec was nimble during the process as the bond offering was executed within 24 hours. There was a lot of market volatility during the week, which saw some deals out of Asia really struggled.

In terms of comparables, Sinopec’s all-in yield was 2bp tighter than CNPC on 10 years and 15bp tighter than CNOOC on 30 years. The bonds performed in the secondary market, with the 2017s quoted at 199bp, the 2022s at 205bp and the 2042s at 183bp in the afternoon of May 11.

The five-year tranche attracted a total demand of USD6 billion from 354 accounts. The bonds were allocated 38 percent in Asia, 37 percent in the US and 25 percent in Europe. More than half of the paper, or 53 percent, was sold to asset and fund managers, 18 percent to banks, 10 percent to private banks, five percent to insurance companies, and 14 percent to public institutions and other investors.

The 10-year tranche generated a total demand of USD5 billion from 308 accounts with 46 percent of the bonds distributed in the US, 32 percent in Asia and 22 percent in Europe. Asset and fund managers bought 70 percent of the bonds, banks 11 percent, insurance companies seven percent, private banks five percent, and public institutions and other investors seven percent.

The 30-year tranche had the biggest slice of the order book at USD8 billion from 317 accounts, manifesting the increasing investor interest on longer dated paper. Asia accounted for 51 percent of the paper, the US 34 percent and Europe 15 percent. Asset and fund managers were allocated 57 percent, insurance companies 25 percent, private banks 10 percent, banks five percent, and public institutions and other investors three percent.

Citi, HSBC and BOC International acted as the joint global coordinators for the transactions, as well as joint bookrunners along with Barclays, Goldman Sachs, J.P. Morgan, Mizuho Securities and UBS.

The Asset Magazine

Senator Jim Webb (D-Va.), perennially oblivious to the brutality of the Burmese military government, has always opposed United States economic sanctions on the junta. Despite his attempts to gut them, U.S. sanctions were not only maintained but strengthened and are beginning to produce important results.

Now, in a letter to Secretary of State Clinton, Senator Webb is attempting to use the progress made in the April 1 elections as a pretext for repeating his call. In other words, he was first against them because they were supposedly not working and now he is against them because they are. This, despite clear evidence that the regime continues to make war on many of its citizens, recently attacking and killing ethnic minorities in Kachin State.

It’s certainly promising that some advances toward a more democratic Burma have been made. This progress should be encouraged. However, there is so much yet to be accomplished and we must recognize that this is the beginning of the road, not the end. The small steps forward on democracy can easily be undone and there are still ongoing and widespread atrocities being perpetrated by the army in Burma’s ethnic national states.

I just returned from one such state, Kachin, where I witnessed the escalation of Burmese troops and spoke with families fleeing the army’s attacks. The situation there continues to worsen. I met people like Nang Bauk, whose village had been attacked and husband captured, and the family of an elderly man who had been shot by the army while tending to his crops.
Recent reports indicate that 2,000 troops had moved in on the town of Laiza, which is home to thousands of displaced people, sparking fears that a major assault is imminent. Is this the type of behavior that should be encouraged?

Being cautious when easing restrictions on the Burmese regime isn’t just about maintaining consequences for ongoing bad behavior. It’s recognizing that years of pressure have encouraged a desire for progress. We must exercise prudence in removing this pressure by gradually rolling back sanctions in exchange for verifiable changes on the ground. The United States should also be clear about what it considers to be the benchmarks of progress.

As a starting point, the U.S. should require that the Burmese government end gross violations of international human rights law and humanitarian law; enter meaningful collective nationwide negotiations that lead to a political settlement with ethnic national groups; release all political prisoners and repeal laws that prohibit basic freedom including freedoms of assembly, speech, and press; implement constitutional changes that enable a civilian government to hold the military accountable; and establish the rule of law, including the creation of an independent judiciary.

What many people don’t know is that Burma is home to some of the longest running conflicts in the world. It has the highest number of child soldiers. There are decades of well-documented cases of war crimes and crimes against humanity, particularly against Burma’s ethnic national population. It’s going to take time and effort to address these challenges.

Even worse than rewarding the regime prematurely by rolling back sanctions, U.S. companies would actually be in a position to further exacerbate atrocities by rushing into Burma prematurely. At this point, the Burmese regime and its cronies still control the most lucrative sectors of the economy—including natural gas, gems, timber and mining—exploiting Burma’s natural resources at the expense of the people. These men with blood on their hands are exact same people that U.S. companies will be dealing with as they rush to invest.

In Kachin State—home to major dam projects and adjacent to the new Shwe oil and natural gas pipeline project—Chinese investment is fueling the current conflict.  With an eye to their economic interests, the Burmese army broke a 17-year ceasefire when they launched a military offensive last June. In less than a year, tens of thousands have been displaced from the homes because of the Burmese army’s attacks.

The attacks by the army in Kachin underscore two important points: first, the ongoing need for political agreements between the central government and each of Burma’s ethnic national groups and second, the Burmese army is still willing to employ the same brutal tactics today to target minorities that it has for decades.

The United States has led the international community in support of peace, human rights and democracy in Burma for years. Burma is at the beginning of a crossroads and U.S. leadership is being tested. By hastily removing sanctions the risk of reinforcing and exacerbating rights violations is great. By exercising patience and prudence, the U.S. can support real progress that lasts.

Andrews is president of United to End Genocide.

TheHill

The United States, European Union, Japan, Canada and Australia have all moved in recent weeks to ease or suspend sanctions on Myanmar, as the once pariah nation embarks on landmark democratic reforms and seeks engagement with the world.

While sanctions have blocked many Western investments, China has become Myanmar’s biggest ally, investing in infrastructure, hydropower dams and twin oil-and-gas pipelines to help feed southern China’s growing energy needs.

But with European, U.S. and Japanese firms all chomping at the bit to get in, Chinese firms long present in Myanmar with little competition could be in for a shock.

“Being based in Yunnan, which shares a long border with Myanmar, and not having to worry about sanctions, has been great for Chinese companies in the past,” said Wei Jijian, a manager at a Chinese mining company which operates in Myanmar.

“But now American and British companies are sniffing around, and once they go in a big way, it’s going to create difficulties for Chinese companies,” he told Reuters by telephone from the Yunnan provincial capital, Kunming.

“So Chinese firms should get in now and grab the first-mover advantage.”

Moves to ease or suspend sanctions have been accompanied by a degree of hand-wringing in Chinese media, especially in publications from southwestern Yunnan province and those linked to Chinese industry, the energy sector in particular.

China’s energy industry has more reason than others to be nervous.

Last year, Myanmar’s new civilian President Thein Sein suspended the $3.6 billion Myitsone dam being built and financed by Chinese companies in northern Myanmar after weeks of public criticism of the project.

But a more crucial project – twin oil and gas pipelines being built at huge expense across Myanmar and into China – appears safe despite unhappiness among some residents who live along its route and conflict with ethnic minority rebels close to the Chinese border.

CNPC, parent of PetroChina, is in charge of that project. China’s top three oil firms – CNPC, Sinopec Group and CNOOC Ltd – all operate in Myanmar.

Energy, a magazine published under the auspices of China’s state-owned Assets Supervision and Administration Commission, said in a recent blog on its website that Myanmar’s democratization would pose a big challenge to energy cooperation, noting Myanmar was “drifting away” from China.

“In the eyes of some of Myanmar’s top leadership, the country relies excessively on China, from daily necessities to strategic resources, and that is bad for the country’s international image and political and economic security,” the magazine said.

“The appropriate way to deal with this then is to put some distance between Myanmar and China and draw closer to other large powers.”

MORE TRANSPARENT ENVIRONMENT

China has counted on Myanmar as a bulwark against what China sees as U.S. attempts to surround it. That reliance could be threatened now the United States has renewed contacts with Myanmar as it embarks on political liberalization.

China’s pledged investment in Myanmar was more than $14 billion in the 2010/11 (April-March) fiscal year, as total foreign direct investment promises soared to $20 billion from just $300 million a year earlier, official data show.

The Chinese government has called on all sanctions on Myanmar to be lifted, after pro-democracy leader and Nobel Peace Prize laureate Aung San Suu Kyi and more than 40 members of her party won April 1 by-elections.

Still, China has expressed concern its influence in the country could be affected, especially by U.S. moves to re-engage with Myanmar. Vice Foreign Minister Cui Tiankai said on Wednesday he hoped better U.S. ties with Myanmar were not aimed at excluding China.

Chinese executives will also be hoping that Myanmar’s reforms lead to less corruption and bureaucracy and a better, fairer regulatory and governance environment.

“China has over the years monopolized the market, but that actually was not necessarily a good thing. Some of the investments there turned out to be bad bets,” one Chinese oil executive told Reuters.

“If we now get a more transparent environment, Chinese companies would be obliged to take a more objective look at potential opportunities,” said the executive, who declined to be identified as he is not authorized to speak to the media.

STILL MANY PROBLEMS

Not everyone in China is so sanguine about the prospects for Southeast Asia’s poorest country, sanctions or not.

The state-run Yunnan Information Daily this month outlined the case of a Yunnan firm which has invested millions in Myanmar, yet had an unspecified new project called off by a city mayor because of a dispute between the central and regional governments.

“This kind of thing just adds to the risks for Chinese companies. National reconciliation may be happening, but the old problems are still there and are just as prominent,” the newspaper said.

While some Chinese companies fret about competition from Western firms, it may actually in the nearer term be Japanese or South Korean companies that prove quicker on their toes.

Japanese companies have long conducted business in Myanmar, but interest has grown since the reform-minded government took office, particularly in planned industrial zones.

Japan will help draw up a blueprint for the Thilawa Special Economic Zone, potentially giving Japanese firms a leg-up over rivals in winning infrastructure projects for the area.

“Japan has started providing assistance again, including loan resumption and debt forgiveness, and has been sending numerous business delegations to look at deepening investment ties,” said Stephanie Kleine-Ahlbrandt, Northeast Asia director for the International Crisis Group.

“Competition at the regional level is likely to deepen, and Japanese – and probably also Korean – investment will move much faster than that from the West,” she said.

(Additional reporting by Chen Aizhu and Sabrina Mao; Editing by Robert Birsel)

REUTERS

   A natural gas production rig in the Yetagun Field (Marinerthai)

The total figure was up $640 million from $2.92 billion in 2009-10, local media reported on Tuesday.

Natural gas from the Yetagun and Yadana gas blocks mainly accounted for the export earnings. Gas from the Shwe and Zawtika gas blocks will be exported by 2013, said Weekly Eleven News.

Foreign investment in the oil and gas sectors reached $13.815 billion in 104 projects as of the end of November, 2011, accounting for 34 percent and ranking second in the country’s foreign investment sectors after electric power, mostly destined for China.

The Energy Ministry has granted permits to seven national-controlled companies to do joint venture business with international oil companies in nine out of 18 blocks and two contracts have been signed, according to the earlier press reports.

International oil companies now doing business in Burma include companies from  Indonesia, Thailand, France, Malaysia, Russia, China and India.

Since 1988, foreign companies have long been engaged in 49 inland blocks and 26 offshore ones in Mon, Taninthayi and Rakhine regions.

These companies include those from Australia, Britain, Canada, China, Indonesia, India, South Korea, Malaysia, Russia, Singapore, Thailand and Vietnam.

Burma is estimated to possess 3.2 billion barrels of recoverable crude oil reserve, according to official statistics.

(Mizzima)

The U.S. government on Tuesday eliminated restrictions on financial transactions in support of humanitarian, religious, and other not-for-profit activities in Burma, a move that will open the flood gates for humanitarian projects inside the poverty stricken country.

   U.S. Secretary of State Hillary Clinton speaks during the Special Session on Gender atthe Fourth High Level Forum on Aid Effectiveness in Korea on November 30, 2011. Photo: AFP

The action left in place broader sanctions on the export of certain goods and financial services to the Southeast Asian country, and the sale of military weapons.

Officials said the action comes as a reward for Burma’s recent successful by-election and its shift toward democratic reforms.

The U.S. is also “beginning the process of a targeted easing” of the bans on the export of U.S. financial services and investment, and will open an office of the Agency for International Development, in addition to the appointment an ambassador to the country.

A State Department spokesman said Tuesday that the Treasury Department license was the beginning of that process, according to Bloomberg News.

The lifting of the ban on financial transactions and investment could be the first step toward fully opening the resource-rich country to U.S. companies.

Transactions in support of the following not-for-profit activities are now permitted:

(1) projects to meet basic human needs;
(2) democracy-building and good-governance projects;
(3) educational activities;
(4) sporting activities;
(5) non-commercial development projects directly benefiting the Burmese people; and
(6) religious activities.

“These (steps) were action for action in response to what we viewed as very positive parliamentary elections,” State Department spokesman Mark Toner told a news briefing, adding that additional measures would be forthcoming.

“We are taking this step today to support a broader range of not-for-profit activity in Burma by private U.S. organizations and individuals to promote increased cooperation between the Burmese and the American people,” a senior Treasury Department official said.

Officials said additional future steps to ease sanctions could eventually open the door to U.S. investment in Myanmar’s agriculture, tourism, telecommunications and banking sectors, U.S. officials told Reuters news agecny.

However, U.S. officials say they want to see clear evidence of further reforms, including the release of all political prisoners, concrete steps toward national reconciliation, especially with ethnic groups that say they have long been oppressed by the central government, and an end to any military ties to North Korea.

Secretary of State Hillary Clinton, in a statement marking Burma’s New Year Water Festival on Tuesday, said the last year had seen the country embark “on a historic new path toward democracy and economic development.”

“We look forward to deepening cooperation on a wide range of issues that promote democratization and national reconciliation, from increasing access to education to expanding health care and encouraging a vibrant civil society,” she said.

Pro-democracy advocates have urged the U.S. to move cautiously, saying sanctions are an important tool to maintain pressure to follow through on pledges of greater democratic openness.

The advocacy group U.S. Campaign for Burma backed the changes, but said it would be too soon to ease the ban on investment and financial services, fearing changes could be exploited by the military and its cronies.

The group’s executive director, former political prisoner Aung Din, said the opposition would have only a small voice in Burma’s Parliament until full national elections in 2015. Western nations should keep their toughest restrictions in place for now, he said.

Australia on Monday said it will lift financial and travel restrictions for more than 260 people in Burma, including President Thein Sein, but will keep its arms embargo and sanctions against around 130 other people, including military officials.

On April 23, the European Union is expected to discuss suspending its economic sanctions – an idea endorsed by Suu Kyi when she met with British Prime Minister David Cameron in Rangoon last week. Such a step by the EU could put pressure on the U.S. to do likewise, for competitive business reasons.

The Center for Strategic and International Studies, a Washington-based think tank, said the U.S. is likely to ease investment restrictions in sectors such as tourism, agriculture, telecommunications and banking. But it would retain bans on sectors such as natural resources and precious stones that are perceived to be closely linked to the military. Oil, natural gas and timber are key money earners for Burma.

Lifting sanctions entirely will be contingent on the government consolidating the reforms. The military remains the dominant political force in the country and severe rights abuses are still reported in ethnic minority regions. Despite the release of hundreds of political prisoners in recent months, others remain in detention.
Mizzima

Since Myanmar suspended construction of a major Chinese dam last year, China has taken a gentler approach in its dealings with the government. More Photos »
HSIPAW, Myanmar — As Chinese workers in hard hats and red overalls bulldoze deep trenches into the orange soil across northern Myanmar for gas and oil pipelines to China, China’s largest energy conglomerate is paying cash for land and trees in the pipelines’ path, and building schools and health clinics for some of the poorest people on earth. The compensation offered by the China National Petroleum Corporation reflects a bitter lesson China learned about doing business in the new, more democratic Myanmar when construction on a major Chinese hydroelectric dam there was suspended last year after a groundswell of outrage erupted over what was seen as China’s imperious attitude toward Myanmar’s people and its environment.

The gentler approach also reflects hard calculations in an escalating battle with the United States for regional influence. As Myanmar loosens the grip of decades of military dictatorship and improves ties with the United States, China fears a threat to a strategic partnership that offers access to the Indian Ocean and a long-sought shortcut for oil deliveries from the Middle East.
With the United States reasserting itself in Asia, and an emboldened China projecting military and economic power as never before, each side is doing whatever it can to gain the favor of economically struggling, strategically placed Myanmar.The Obama administration would like a swift foreign policy success in an election year. Having another country move from dictatorship toward democracy on President Obama’s watch would be a political achievement;

having a friendly country on China’s border would be a strategic one.

But the United States is handicapped in delivering meaningful assistance by economic sanctions that Congress is reluctant to lift. Myanmar must conduct fair parliamentary elections on Sunday, settle conflicts with ethnic minorities and release more political prisoners before more than two decades of harsh sanctions can be removed, administration officials say.
China, Myanmar’s chief patron for decades, wants to maintain a relationship that will allow unfettered access to Myanmar’s energy resources. But the Chinese, accustomed to unwavering loyalty from Myanmar at the United Nations and other diplomatic forums, are faced with a new government led by President U Thein Sein that has shown signs of wanting to be less dependent on its old friend and more responsive to its citizens’ concerns.

In perhaps the most visible symbol of Myanmar’s new openness to the West, Secretary of State Hillary Rodham Clinton visited in December, the first secretary of state to do so in more than 50 years. Photographs of her shaking hands with the revered opposition leader, Daw Aung San Suu Kyi, women of similar age in white jackets, their hair drawn back in ponytails, radiant smiles on their faces, now hang in cafes and homes, an impossibility six months ago.
Mrs. Clinton tempered her visit with warnings that economic sanctions would not be lifted as fast as Myanmar would like. Even so, the United States restored full diplomatic relations, a reward for Myanmar’s political and economic changes so far.In a counterpunch, Chinese officials blamed American meddling for the suspension of the $3.6 billion dam project last September, and said the American diplomatic effort was a direct challenge in its backyard.

“It is hard for the Chinese to see the United States push into Myanmar as not about China,” said Yun Sun, a Chinese foreign policy expert based in Washington. “The United States is a global power. It’s natural it would want a relationship with Myanmar. But China had a monopoly, and if you have to share it, it makes it difficult to swallow. That’s why the Chinese are angry.”
A prominent Chinese historian, Qin Hui of Tsinghua University in Beijing, warned his government that blaming the West’s meddling for the dam rebuff missed the point. The people of Myanmar had expressed “exceedingly broad-based opposition” to building a dam at the headwaters of the Irrawaddy River, the nation’s biggest waterway, he wrote.
China still enjoys a strong position in Myanmar.
The two authoritarian governments have known how to do business in closed-door deals on arms sales and megaprojects that critics say are laced with corruption. While Myanmar was isolated by international sanctions, China was its main foreign investor, and it has the advantage of proximity over a long border. Beijing has plowed billions of dollars into the country, and the United States cannot compete with that, American officials say.

The New Yourk Time

Major Western oil firms were among more than 200 energy industry representatives from 20 countries who took part in an oil and gas “summit” in Rangoon this week.They included Total, Chevron, PTT of Thailand, China National Offshore Oil Corporation, Mitsubishi, Nippon Oil and Gas Exploration, and Salamander Energy of London.One of the keynote speakers at the three-day Myanmar Oil, Gas and Power Summit was James Rockall, managing director of the Paris-based World Liquefied Petroleum Gas Association.

The conference was organized by the Singapore-based Centre for Management Technology with Burma’s Ministry of Energy. Its theme was “Gearing Up for the Emerging Oil & Gas Opportunities.”The state Myanmar Oil and Gas Enterprise (MOGE) announced that it would soon issue oil and gas exploration licences to foreign firms for an additional nine onshore blocks, and planned more.At least 20 offshore exploration blocks also await bids for licences.

In addition, MOGE is preparing to invite bids for construction and installation of new onshore gas pipelines, mainly to replace old infrastructure, said the industry magazine Upstream. Oilwatch Southeast Asia, a regional grouping of energy industry NGOs, meanwhile urged foreign companies to wait and see before investing in Burma to avoid triggering what it termed a resource curse.“Increasing investments in Burma’s oil and gas sector at this time will exacerbate Burma’s resource curse, causing more harm than good to the country,” said an Oilwatch statement coinciding with the Rangoon conference.“Despite Burma’s resource wealth, gas revenues over the last decade have disappeared under corrupt military leadership. Investment in Burma’s oil and gas sector is not [currently] benefiting people of Burma nor the country’s sustainable economic development,” Oilwatch said.

Salween Hydrodam Back on Development Menu?

Chinese surveyors are reported to be working again at the site of what would be the big hydroelectric dam and reservoir in Burma, on the River Salween near the border with Thailand.Ground survey work for the 7,300 megawatts capacity dam, which would mostly supply Thailand with electricity, was halted several years ago because of fighting between Burmese and ethnic Shan militias.Chinese workers were seen surveying land around Tasang, a Shan State Army-South (SSA-South) officer told the Bangkok Post.“Major Lao Hseng said Myanmar troops had been building up their presence near a planned dam site at Ta Sang, on the western side of the Salween River in Pan and Chiang Tong towns, where dam locations are being surveyed,” the Thailand-based newspaper reported.SSA-South forces signed a truce earlier this year with the Burmese military.Sinohydro Corporation, the same Chinese company which is involved in the suspended Myitsone hydropower dam on the Irrawaddy River in Kachin State, is the main contractor for the Tasang project.“If built it will be the highest dam in Southeast Asia, taller than China’s massive Three Gorges Dam,” says the NGO Burma Rivers Network which opposes the damming of the Salween. Under existing deals, much of the electricity generated from a hydropower scheme at Tasang would be bought by the Electricity Generating Authority of Thailand.

Singapore Firm Eyes 100-Room Hotel for Rangoon

The construction company Hor Kew Corporation of Singapore is considering building a 100-room hotel in Rangoon as well as small housing estates.Prospects for the hotel were looked into during a visit to Burma by Hor Kew as part of a Singapore business delegation in February.Hor Kew’s business development director James Aw told the Asia Times that the economic climate in Burma has greatly changed since his last visit in the 1990s.“People have spending power now,” he said. “We couldn’t build mass housing of 30,000-40,000 units at one go yet, as we are doing in Singapore. But at least we could do 15-20 unit project types now.”He gave no further details on the prospective hotel project.A surge in foreign tourist visits in the wake of recent political and economic reforms has led to an acute shortage of accommodation in Rangoon and other popular visitor destinations.The government is “stepping up auctions of land plots in prime locations in Rangoon for hotel development,” according to the Bangkok Post.Pressure for more visitor accommodation will grow with Burma hosting the Southeast Asian Games in December next year and the 2014 summit of the Association of Southeast Asian Nations (Asean).

Australia Promises Step-by-Step End to Sanctions

Australia intends to lift economic sanctions against Burma “stage-by-stage,” the country’s foreign minister said this week.“We are committed to peeling back the sanctions after consultation with the opposition forces in Myanmar,” Bob Carr said in Phnom Penh after talks with Cambodian leaders.Cambodia currently chairs Asean and will host this year’s East Asia Summit.“We want to withdraw sanctions stage-by-stage as the government of Myanmar introduces democracy stage-by-stage,” Carr said in a statement. He did not give a timetable, however.In January, Australia lifted travel bans against some Burmese leaders.Australia’s extensive natural resources exploration industry has been deterred from operating in Burma because of the sanctions, which fell into line with US and European Union economic curbs.

Burma Last Country Logging Natural Teak: UN

Burma is one of only four countries left in the world still with natural teak forests, and the only one where a logging ban does not exist.Burma is home to almost 50 percent of the surviving 29 million hectares shared with Thailand, India and Laos, said a new report by the United Nation’s Food and Agricultural Organization (FAO).Prohibition of logging and export is credited with an increase in the area of teak woodland in Thailand since 1989, whereas Burma is estimated to have lost 1.1 million hectares of teak forest in that time, said the report.“Burma is the only country that currently produces quality teak from natural forests,” said the FAO which called for an urgent global program to preserve teak species.

IRRAWADDY

Chinese characters show all over Myanmar’s economy

Driving up Mandalay Hill to watch the sunset, the young taxi driver decides to identify the joggers going up and down the hill. “Chinese. Chinese. Chinese…” he points to men, women and teenagers puffing up and down the hill. No wonder then that the locals refer to their city with a wry sense of humour as ‘China Town’.

Over 50 per cent of Mandalay’s population of 16 lakh is of Chinese origin, and shop signs in the city centre are in Chinese as well as Burmese.

The Yunnan-Myanmar border is porous—opened by the Chinese when the West imposed sanctions on Myanmar. With trade came migration. Today, Chinese immigrants control the main businesses from Myitkyina to Mandalay. Some 50,000 youngsters are learning Mandarin in Mandalay.

“From here they have even gone to Yangon and have bought up properties there. The local people resent this…. Our youngsters are learning Chinese to get jobs in Chinese firms,” says Kyan Yin Myint, a writer based in Mandalay.
Chinese jewellery traders in Mandalay
The sanctions of 2003 gave China an opportunity to establish a firm foothold in Myanmar. China wanted access to the Indian Ocean through the sea ports in the Bay of Bengal from Kunming, capital of Yunnan province, and it built roads from Yunnan to ports in Myanmar. It also entered the financial sector, helped upgrade the state enterprises and offered soft loans.

China is the biggest investor in infrastructure and hydroelectric projects in Myanmar—facilitating trade and transport and generating electricity for its burgeoning needs. It has access to Myanmar’s reserves of copper, zinc, coal, oil, gas, etc. China is constructing oil storage tanks at Kyauk Phyu island in the Bay of Bengal, where oil from West Asia would be stored, and pumped through a 770 km pipeline to Ruilli on the China border and then on to Kunming. This would obviate the need to ship West Asian oil through the Straits of Malacca and Singapore, saving money and time.

However, Myanmar is not to be taken for granted. Public outrage over the environmental consequences of a 6,000 MW dam the Chinese were building at Myitsone on the upper reaches of the Irrawaddy forced its suspension. The Myanmarese being independent-minded and proud of their heritage, there is resistance to Chinese influence. Some claim the Chinese are rude and aggressive.

However, considering the close ties between them, it’s unlikely that China will be treated as just another foreign power dealing with Myanmar.
OUTLOOK Indai