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China Lurks Behind Burma's Boom (r)



/* Written  4:55 pm  May 13, 1994 by mok@xxxxxxxxxxxxxxx in igc:bitl.seasia */
/* ---------- "China Lurks Behind Burma's Boom" ---------- */

China Lurks Behind Burma's Boom

Editorial Feature. The Asian Wall Street Journal. April 25, 1994.

By Clare Hollingworth. (Mrs. Hollingworth, a former defense correspondent of
the Telegraph, has covered Chinese military affairs for 23 years.)

One the surface, Burma appears to be going through a small renaissance.
Mandalay and Rangoon have the appearance of boom towns, with new hotels
going up and tourists pouring in, their visas now good for a month rather
than the parsimonious one week of past years.  Burma's neighbors,
particularly Singapore, are making modest diplomatic advances.

Much of this is the work of Lt. Gen. Khin Nyunt, strongman among the younger
and better-educated soldiers of the State Law and Order Restoration Council,
the military junta that has ruled since 1988.  Unlike many of his cohorts,
General Khin, known as "first among equals" in Slorc, is well aware of the
political and economic scene in Southeast Asia.  He has opened up the country
after 30 years of socialist stagnation, making himself the odds-on favorite
to succeed Burma's ailing paramount leader, Ne Win.

But even if life is looking up for the long suffering Burmese, the good times
may prove to be a Faustian bargain.  Burma has become a strategic client of
China, and in return for arms has allowed the Chinese military to establish
listening posts in the Bay of Bengal.  In addition, a considerable portion of
Burma's new prosperity seems to be based on an explosion in the opium trade
from the Golden Triangle.  This can only further antagonize Western nations
already determined to isolate the Rangoon regime for its heavy-handed
treatment of democracy activists, especially Nobel Prize winner Aung San Suu
Kyi.

There is no doubt, however, that Burma's open door is paying off.  Some $2
billion in foreign investment was planned for Burma in the first three
months of this year, much of it South Korean and Singaporean money going to
feed the boom in hotel construction.  Official figures say the economy
grew by 10% last year.

Burma's charming but run-down appearance is gradually giving way to signs of
modernity.  Streets that a few years ago were empty save for the odd old
cars and horse-drawn carts, are now full of smart new vehicles.  The shops
are loaded with consumer goods from China and Thailand, and eating houses are
packed with locals enjoying a higher standard of living than ever before.

But Beijing's influence is quite evident, to the chagrin of many Burmese.
The 1,300-mile border with China has been peaceful of late.  Open since
1989, when Beijing ceased to support the illegal Burmese Communist Party and
ethic groups that were in open revolt with the junta, the border has seen
growing barter and traffic with China.  Chinese consumer goods are now
flowing into Burma's main towns.  Thousands of radios and televisions sets,
virtually absent a decade ago, have poured into the country together with
clothes and canned food.

At the same time, China has supplied the junta with massive quantities of
small arms, ammunition and military vehicles that Slorc claims it needs in
order to maintain internal security.  The Chinese have also sent over
artillery pieces and rocket launchers.  While the heavier munitions are
largely for show, Slorc considers them useful to threaten the few isolated
ethic groups still in revolt against Rangoon.

For strategic reasons China wants to make its presence known in the Bay of
Bengal and the Indian Ocean.  Slorc has already allowed the People's
Liberation Army to establish two listening posts on uninhabited rocky
islands in the Bay of Bengal.  This has caused concern in India.  In
addition, Chinese technicians are now supervising work on the enlargement
of naval bases, one in the Irawaddy river estuary near Rangoon, and one or
possibly two on the coast.

China is involved in much of Burma's infrastructure development.  Engineers
have installed three hundred new telephone lines to the capital, making it
possible for the outside world to fax messages to Burma.  And Chinese
engineers are helping rebuild roads and bridges between the China-Burma
border and the Bay of Bengal.  Beijing is anxious to export produce from
south and west China along these roads to South Asia, the Middle East and
Europe.  This route via Burma and the Indian Ocean avoiuds the rail
transport to Shanghai or Hong Kong and the shipment through the Strait of
Malacca.

Economists within the junta boast that they have created an economic miracle
in a few years, adding that a certain amount of authoritarian rule is
beneficial to financial development.  But currently, Burmese factories are
operating at less than 40% of capacity because of competition with Chinese
imports.  Inflation is officially at 28%, although local diplomats and
bankers put it closer to 60%.  And outside the boom towns, there is serious
and rising discontent caused by a tripling in the price of rice since 1988.

Burma urgently requires new and sophisticated infrastructure to replace that
installed by the British before World War II.  This China cannot provide.
It could be obtained from Japan, but Tokyo is hesitant and no major loans or
contracts are expected from the Japanese or Western democracies until America
has re-entered the Burmese market.  Thanks to pressure from Bangkok, there
is, however, a lessening of tension with some of Burma's neighbors.  Burmese
government officials have been invited to Thailand to observe the July
meeting of the Association of Southeast Asian Nations.

But while Aung San Suu Kyi, 48, who led the National League for Democracy to
overwhelming victory in the elections of 1990, remains under house arrest in
Rangoon, Washington will continue to hold up a "wall of international
disapproval," as the diplomats say, and block Burma's trade and aid from the
West.  The U.S. hasn't had an ambassador in Burma for three years.
International pressure may yet drive the junta to make a serious attemtp to
come to terms with this courageous and intelligent woman.  But of course
Slorc would prefer that she leave Burma quickly and quietly and resume her
life as the wife of an Oxford don.

As they open up their economy, the military leaders in Rangoon are expected
to be increasingly influenced by those countries that invest large sums in
Burma.  That means China, but possibly other Southeast Asian countries as
well.  The junta realizes there's no turning back on economic reform, but
it is extremely anxious to prevent the political reforms that would make way
for democracy -- and the junta's comeuppance.  Indeed, many Burmese, still
wary of opening their mouths, whisper that major, if not sensational, changes
are envisaged when Ne Win, 83, dies.  If the United States and the United
Nations keep up their pressure on the junta, Burma's 43 million citizens,
the majority of whom voted for the National League for Democracy, will then
achieve the leadership they demand -- if not before.