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Trade and Security Trump Democracy in Burma – Part I

Burma, called Myanmar by its current rulers, is rich with natural resources, yet one of the poorest nations in Asia. All resources go toward keeping the current regime in power, and the military junta relies on violent repression to stop Buddhist monks and activists marching in protest to seek political and economic reform. This two-part YaleGlobal series analyzes the international response. In the first article, Bertil Lintner, journalist and author of many books on Burma, argues that the military junta will ignore international calls for restraint, unless China and other nations that hold the most leverage on Burma join the outcry. Countries that trade with Burma seek status-quo stability and are least likely to press for democratization, explains Lintner. China, Russia and even democratic India hesitate to disrupt arms and energy deals, largely conducted by barter. The Association of Southeast Asian Nations, currently under Singapore's chairmanship, have expressed criticism motivated more by threat of financial sanctions from the West than compassion for the people of Burma, says Lintner. Myanmar’s trade partners take a big gamble that unrest, bitterness and violence won’t spread beyond the nation’s borders and come back to haunt them. – YaleGlobal

Trade and Security Trump Democracy in Burma – Part I

Neighboring countries have leverage, but trade and strategic factors dictate they remain silent about repression
Bertil Lintner
YaleGlobal, 3 October 2007
Power dance: China's predominant influence in Burma ensures its own interests without pressuring the repressive government

CHIANG MAI: Burma’s saffron revolt and the first flush of images and news through cell phones and internet blogs may create premature expectations about a new era of public protest. A closer look at the varied interest of Burma’s neighbors in maintaining the current regime suggests that the more things change, the more they remain the same.

The Burmese crisis has discredited the country’s repressive regime, but not enough to isolate the leaders from their closest trading partners and political allies. China, Russia and India have weighed their economic and strategic interests against expressions of world outrage, and for now decided against showing a united front against General Than Shwe and his coterie of generals and colonels.

China – Burma’s main trading partner, major arms supplier, and therefore the only country believed to have any leverage over the generals – expressed “concern,” but reaffirmed its policy of “non-interference” in the “internal affairs,” as stated by Zhang Zhijun, a vice minister of the Chinese Communist Party International Department in Beijing on September 25.

On September 27, the foreign ministers of the Association of Southeast Asian Nations, Asean, also issued a surprisingly strong statement through its chairman, George Yeo, Singapore’s minister for foreign affairs. The foreign ministers “expressed their revulsion to Myanmar Foreign Minister Nyan Win over reports that the demonstrations in Myanmar are being suppressed by violent force.” The day before, a spokesman for Singapore’s foreign ministry had urged the Burmese authorities “to exercise utmost restraint.” Such a statement, especially concerning Burma, is unusual for Singapore, another important trading partner. Immediately after the Burmese military had crushed a previous, much bigger anti-government movement in 1988, Singapore had delivered a substantial quantity of military hardware to Burma.

A spokesperson for India, which like China has economic and strategic interests in Burma, expressed “concern” on September 26. But India, a democracy, cannot easily ignore international and domestic opinion in the way China does. On October 1, External Affairs Minister Pranab Mukherjee suggested that Myanmar conduct an inquiry into the use of force in Yangon and other cities.

All these countries have historical reasons for the wary response. China was the first major country to show interest in Burma’s riches: Renowned for planning far ahead, the Chinese had expressed their intentions in a Beijing Review article as early as September 2, 1985. The article, “Opening to the Southwest: An Expert Opinion,” written by Pan Qi, former vice-minister of communications, outlined possible outlets for trade from China's landlocked provinces of Yunnan and Sichuan, through Burma, to the Indian Ocean. It mentioned Burmese railheads of Myitkyina and Lashio in the northeast and Irrawaddy River as possible conduits for export of Chinese goods.

Hence, interest in protecting those trade routes has, in recent years, led China to upgrade Burma’s naval bases and access intelligence collected from Chinese-supplied equipment, without the Chinese Navy having any permanent presence there.

Since 1988, China has also supplied Burma with more than US$1.4 billion worth of military hardware, including fighter, ground-attack and transport aircraft; tanks and armored personnel carriers; naval vessels and surface-to-air missiles.

By late 1991, Chinese experts assisted in a series of infrastructure projects to spruce up poorly maintained roads and railways. Chinese military advisers arrived the same year, the first foreign military personnel to be stationed in Burma since the Australians had a contingent there to train the Burmese army in the 1950s.

Thus, Burma is of vital strategic and economic importance to China, and it’s highly unlikely that Beijing would jeopardize that by joining Western boycotts or encouraging a more democratic system in Burma. China wants “stability” in Burma, not regime change. In January this year, China – along with Russia – used its veto power to block a US- and UK-sponsored resolution, approved by a majority of UN members, in the UN Security Council. Not even appeals by activists for a boycott of the 2008 Beijing Olympics have yet swayed China into being more critical of the Burmese regime.

Russia has also supplied Burma with military hardware. In late 2002, Burma purchased eight MiG-29B-12 air-superiority combat aircraft and two dual-seat MiG-29UB trainers from Russia, at a cost of about $130 million, and the nation negotiates to purchase Russian air-defense systems. In May, Russia signed a deal to build a 10-megawatt nuclear-research reactor in Burma – and Russia, like China and India, shows interest in energy cooperation with Burma. Hardly surprisingly, Russian President Vladimir Putin said on September 28 that although he was “sorry about civilian deaths” in Rangoon, it was “premature” to speak about sanctions.

Burma’s close relationship with China caused concern in India. To counter China’s growing influence, India at first supported Burma’s pro-democracy movement from the uprising in 1988 to the early-1990s. But when it became clear that the movement would not achieve power within the foreseeable future, India too courted the junta. Burmese troops stationed along the country’s north-western border are now, at least in part, supplied from the Indian side, and some Burmese army officers have trained at the Indian military academy in Pune. The Indian government also encourages border trade: The north-eastern state of Manipur is the main conduit for consumer goods from India and raw materials in the other direction.

Enticing Burma to distance itself from China, however, was not New Delhi’s only concern; the rapidly expanding Indian economy needs energy, and Burma has ample resources of natural gas. India apparently fears that any strong position from the Indian side vis-à-vis the Burmese generals would play into the hands of China, and India could lose the foothold it managed to gain in Burma over the past decade.

Singapore’s stronger reaction could be interpreted as acute embarrassment over its close relationship with the Burmese regime, a target of worldwide condemnation. Apart from arms deliveries in 1988 and most likely also later, Singapore has trained Burmese intelligence officers in cyber warfare and even helped establish a cyber-warfare center in Rangoon, which monitors the activities of dissidents in the country and in exile.

Perhaps more importantly, Singapore is the banking center of choice for Burma’s generals and their business cronies. Most have Singapore bank accounts, as does the powerful 43-year-old tycoon Tay Za, who is close to junta leader Than and his family. Tay’s Htoo Trading Company was one of two main contractors that built Burma’s new administrative capital, Naypyidaw. The other was the Asia World Group, headed by Tun Myint Naing, or Steven Law, son of Lo Hsing-han, who, in the 1970s, was branded by US authorities as the King of Opium in Burma’s sector of the Golden Triangle. Both Tay and Law are frequent visitors to Singapore, and Than himself goes there for medical treatment.

Htoo Trading reportedly “shut down” operations in late September, but some observers suggest that the company will simply adopt a new name to dodge a September 27 US Department of Treasury order, prohibiting US citizens from doing business with Burma’s notorious elite. Burma’s elite and the Singapore banks have reason to be nervous, if their accounts come under greater scrutiny by the Department of Treasury. US sanctions against a Macau bank in September 2005 for dealings with North Korea caused near-collapse of that bank.

But, in the end, the generals may get away with their crimes – because of their economic and strategic importance to neighbors and other allies.

Bertil Lintner is a Swedish journalist based in Thailand, and the author of several works on Asia, including “Blood Brothers: The Criminal Underworld of Asia” and “Great Leader, Dear Leader: Demystifying North Korea Under the Kim Clan.”

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