Weekly Business Roundup (September 26, 2009)

New US Policy ‘Still Needs to Stop Junta Income from Gas’

The change of US government policy to permit talks with the Burmese government while maintaining economic sanctions could be a “positive step forward,” says the human rights group that recently exposed how the regime siphons off billions of dollars from gas income.

US Secretary of State Hillary Clinton said this week that Washington will reverse a Bush presidency policy of totally ostracizing the regime to “engage” with the junta generals in a bid to promote change.
 
EarthRights International (ERI) has produced a detailed report revealing how, despite sanctions, the junta leadership has siphoned off as much US $4.83 billion from the national budget in revenues from industrial giants Chevron and Total’s operation of the Yadana gas field.
 
The money was secretly transferred to the DBS Bank and the Overseas Chinese Banking Corporation in Singapore, despite US sanctions meant to prevent such activity, said ERI.

“We fully support new and fresh ideas for how the US government and others can support the people of Burma,” ERI’s Matthew Smith told The Irrawaddy.
 
“However, we hope governments will actively explore new ways to pressure the military elite, most notably by applying multilateral pressure on Burma’s petroleum sector and on the multi-billion dollar revenues generated by Total and Chevron’s Yadana gas pipeline to Thailand.”
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As long as the Burmese junta has easy access to revenues, “even new policies risk failure,” warned Smith. 

Main Shwe Gas Developer is Subject of Takeover Rumors

The main foreign developer of Burma’s massive offshore Shwe gas field, Daewoo International, may be up for sale.
 
Almost 70 percent of the South Korean industrial conglomerate is owned by Korean banks and the state-controlled Korea Asset Management Corporation (KAMC).
 
Reports from Seoul this week say two other South Korean industrial firms, steelmaker Posco and chemicals producer Hanwha, are negotiating to buy the bank and KAMC shares—estimated to be worth about US $2.5 billion.
 
Daewoo is the main developer at Shwe with a 51 percent share in the foreign partnership about to begin gas production for sale to China.
 
Daewoo earlier this month disclosed that the cost of developing the Shwe gas field would be $3.2 billion.
 
South Korean business activities are often cloaked in secrecy and it’s not clear yet what effect a majority takeover of Daewoo would have on its international activities.

Daewoo’s Shwe partners include Korea Gas, which is also South Korean state owned. 

Junta-friendly Htoo Signs Dam Deal with Chinese Firm

One of the biggest junta-friendly businesses in Burma, Htoo Trading Group, has signed an agreement with a Chinese state-controlled company to jointly work on a Salween river hydro dam.

Chinese media report that the China Huaneng Lancang River Hydropower Company signed the deal with Htoo in Rangoon recently for the “Myanmar Salween River Basin hydropower project,” which is understood to refer to the giant Tasang hyderoelectric dam.

Most of the power generated from the Tasang project will go to Thailand and China.
 
Htoo is owned and controlled by Tay Za, who is known to be very close to the family of junta top leader Snr-Gen Than Shwe.

Tay Za is heavily involved in Burma’s tourism, logging and property development industries.

Assam Separatists ‘Trade with Chinese via Kachin State’

One of the most active separatist groups operating in northeastern India, the United Liberation Front of Assam (ULFA), is reportedly doing business with China via Burmese territory.

ULFA has not only set up training and refugee camps in Burma’s Kachin State but is also trading with neighboring China’s Yunnan Province.
 
The claims are made by The Telegraph of India, quoting what it calls credible army intelligence sources.

ULFA is said to be buying weapons from units of China’s People’s Liberation Army, the paper said.
 
India believes that China has secretly given support to separatist groups in the northeast which are ethnically closer to China.

“We do not have any evidence of the Chinese government directly aiding ULFA but the possibility of some Chinese army officers at the divisional level extending help to ULFA can’t be ruled out,” The Telegraph quoted its military source as saying.

There are about 3,000 ULFA fighters and their families now based inside Burma, the paper said.