[Reader-list] Myanmar

[Rana Dasgupta]

good articles in this week's Economist about the geopolitics of the
intractable Myanmar situation if you get a chance to see it.

The EU and especially the US have placed severe sanctions but India,
China and particularly - as the article below from the NYT describes -
Thailand are providing good revenues to the generals because resource
shortages in the region are just far more pressing than anything else.

R


The New York Times - Myanmar's Resources Provide Leverage
By THOMAS FULLER
Published: October 2, 2007


BANGKOK, Oct. 1 — For two decades, Myanmar's neighbors have grappled
with the question of how to respond to the unrelenting repression by
the country's ruling generals of its people. In Thailand, the answer
comes each time Thais pay their electricity bill.

   Natural gas from Myanmar, which generates 20 percent of all
electricity in Thailand, keeps the lights on in Bangkok. The gas,
which this year will cost about $2.8 billion, is the largest single
export for Myanmar's otherwise impoverished and cash-strapped economy.

Thailand's gas imports highlight the dilemma facing China, India,
Singapore and Malaysia, among other countries, as they vie for
Myanmar's hardwoods, minerals, gems — and access to its market of 47
million people.

At a time of spiraling world energy prices, the prospect of extracting
resources appears to override the embarrassment and shame of dealing
with a junta that has attracted world notoriety. For this reason, the
countries that have the most leverage over Myanmar seem to be the most
reluctant to use it, analysts say.

>From the perspective of Myanmar's generals, the gas purchases by
Thailand are only the beginning of what promises to be a significant
infusion of cash. Myanmar will soon announce the winner of a
concession in the even larger Shwe gas fields off the coast of western
Myanmar. Companies from India, China and South Korea have put in bids
for those contracts.

In eastern Myanmar, Thai companies are building hydropower plants and
have contracts to pay the government billions of dollars for the
electricity generated there.

"For a country that's used to a hand-to-mouth existence there is
suddenly a bonanza of foreign exchange," said Sean Turnell, a
specialist on the Myanmar economy at Macquarie University in
Australia. "Burma is now getting the wherewithal to tell the world to
bug off. It strengthens their position immeasurably."

The cash has allowed the generals who run Myanmar to buy weapons from
China and helicopters from India, order a nuclear test reactor from
Russia and construct their new capital north of Myanmar's main city,
Yangon.

"The natural gas drastically changed the military government's fiscal
position," said Toshihiro Kudo, director of the Southeast Asian
Studies Group at the Institute of Developing Economies, a research
organization run by the Japanese government.

Myanmar's gas reserves are small by global standards. BP, the oil
company, estimates that Myanmar's total reserves are 538 billion cubic
meters, or 19 trillion cubic feet, far less than the reserves of
nearby Malaysia or Indonesia. But the billions of dollars these gas
fields will produce is valuable to the ruling generals, whose sources
of financing are extremely limited due to American sanctions.

Last year, Myanmar sold $2 billion worth of gas to Thailand, which
amounted to more than 40 percent of the country's total exports for
that year. Largely because of the gas deal, Thailand is Myanmar's
biggest trade partner, not China, as is widely reported.

"Thailand and Myanmar are increasingly integrated, increasingly
dependent on each other," Mr. Kudo said. As a result, he said, "I
don't think that Thailand is applying any very serious pressure on the
military government."

There is a stark contrast in Thailand between public anger over the
beatings and the business-as-usual attitude that underlies Thai policy
toward Myanmar.

At the United Nations last week, the Thai prime minister, Surayud
Chulanont called the Myanmar crackdown "unacceptable." Newspapers have
run scathing editorials about Myanmar's generals. And Thailand remains
a refuge for dissidents from Myanmar.

But the bottom line, Thai officials say, is that Thailand is competing
for the world's energy resources, and if it doesn't buy the gas,
someone else will.

"We need power," said Suthep Chimklai, director of the system planning
division at the electricity authority. "We need to balance our sources
by importing more power from our neighboring countries." Thailand also
buys small amounts of electricity from Laos and Malaysia.

To keep up with its demand for electricity, Thailand is building four
power plants, all of which are designed to run on natural gas. If the
supply of gas from Myanmar were disrupted, Mr. Suthep said, "it would
be a serious problem."

The natural gas reaches two power stations on the outskirts of Bangkok
by way of a pipeline laid a decade ago by Total, the French oil
company; Unocal, the American oil company which has since been
absorbed by Chevron; and PTT Exploration and Production, Thailand's
leading company in the field.

According to Thailand's Power Development Plan, the government plans
to increase energy imports from Myanmar, thus further bolstering the
financial position of the junta.

Thailand's policy calls for buying an additional 8,200 megawatts from
Myanmar over the next 14 years. Most of this is likely to come from
hydroelectric power plants on the Salween River. The Electricity
Generating Authority of Thailand has completed feasibility studies on
a dam at Hat Gyi in Myanmar's Karen state. A private Thai company,
MDX, has been given a contract to complete a larger dam at Tasang in
the Shan state.

Thailand's PTT Exploration and Production has won the rights to
explore three potential off-shore sites in the Gulf of Martaban, south
of Yangon.

Gen. Sonthi Boonyaratglin, the army chief who led Thailand's
military coup last year, said last week that Thailand should stay
engaged with Myanmar. "There are many friendly nations who help
Myanmar like China and Korea because Myanmar is a country with plenty
of natural resources that the powerful nations want to obtain,"
General Sonthi said.

For China, the attraction of Myanmar is both economic — Myanmar
imported $1.3 billion worth of Chinese goods in 2006 — and
geostrategic.

As part of its bid for the gas fields in western Myanmar, China has
proposed building a pipeline running from the Indian Ocean to Yunnan
Province. An additional pipeline could carry crude oil, allowing ships
coming from the Middle East to pump oil directly into China without
making the long journey through the Straits of Malacca.

For Myanmar, the gas fields would mean more cash. Mr. Turnell
estimates that gas pumped from Shwe platforms would have a value of $2
billion a year.