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News Analysis : Pepsi forecd out of

Subject: News Analysis : Pepsi forecd out of Myanmar (The Hindu, 30/1/97)

Pepsi forced out of Myanmar
The Hindu (New Delhi) 30/1/97.
News Analysis
>From C. Raja Mohan
NEW DELHI, Jan. 29. "We finally tied the Peps! Animal down! We did it!!!! 
We all did it!!! ... We now KNOW we have had the grass-roots power to 
yank one of the most powerful corporations in the world." That is a 
message posted on the Internet by an activist celebrating a major triumph 
of the civic movement in the United States to force American businesses 
out of Myanmar. The exit of Pepsi from Myanmar is likely to give a big 
boost to the defiant struggle of Ms. Aung San Suu Kyi to restore 
democracy in Myanmar by stepping up the international pressures on the 
military rulers in Yangon.
The move could also, however, escalate political tensions between the 
United States and South East Asia on Myanmar, and deepen the ideological 
cleavage between an American civil society ready to intervene 
aggressively to promote liberal internationalist principles, and the 
Asian states that are jealous in their defence of national sovereignty. 
How Asia copes with the rising tide of a new internationalism in America 
will be one of the most important features of international politics in 
the coming years.
Bowing to intense pressures from religious, human rights and other 
activist groups in the United States, the American multinational Peps! 
announced this week that it is severing all links to Myanmar. Peps! now 
joins a long list of American and Western corporations that have quit 
Myanmar in the recent months, under pressure from domestic public 
opinion. These include Apple, Walt Disney, Motorola, Hewlett-Packard ' 
Eastman Kodak, brewing companies like Heineken and Carlsberg, apparel 
companies like Levi Strauss, Macy's, London Fog and J.Crew, and 
investment companies like Peregrine.
As the focus of the Western human rights groups shifted to Asia after the 
collapse of-the Soviet Union and the end of Cold War in Europe, the 
tensions between the United States and Asia have mounted. The Clinton 
Administration added fuel to fire by seeking to intensify the linkage 
between trade and human rights in China and elsewhere in Asia. But the 
Administration eventually let down the activist groups as it began to 
appreciate the commercial opportunities in the emerging markets of Asia. 
The moralists in the United States lost the first round to the 
capitalists, but now have struck back by targeting the corporations in 
the most important of the markets -- the domestic one in the United States.
ASEAN concern
Pepsi's surrender on Myanmar was extracted through civic action within 
the United States. Protests against Pepsi's Myanmar connection came last 
year from one of the company's key market segments -- high school and 
college students -- and it began to hurt. Under pressure from student 
activists supporting democracy in Myanmar, Harvard University turned down 
for a $ million contract. Stanford University decided not to allow Taco 
Bell, a Pepsi-owned restaurant chain, an outlet on campus after 2,000 
students petitioned the university to boycott companies doing business in 
In the recent months, a number of state and local governments in the U.S. 
have passed laws that prohibit dealings with corporations with business 
involvement in Myanmar. The arguments of the American companies that 
economic engagement of Myanmar will promote prosperity in that nation and 
democracy will inevitably follow have worn thin. In contrast the latest 
appeal to the American students by ' Ms. Suu Kyi, "please use your 
liberty to promote ours," and discourage corporate America from business 
in "the shadowlands of lost rights" has a powerful resonance.
The companies that have withdrawn from Myanmar did not have significant 
investments in that country. About two thirds of the foreign investment 
that has flowed into Myanmar since 1988 is said to be in the oil and 
natural- gas sector. The activist movement has already targeted the 
American oil company Unocal - the single largest American investor in 
Myanmar. Unocal has developed an offshore natural gas field and, along 
with the French Company Total, it is building a pipeline to transport the 
gas to Thailand. Unocal has been accused of colluding with the military 
rulers in Myanmar to use forced labour to build the pipeline and shoring 
up the regime with a project that could provide regular and substantive 
hard currency earnings.
Religious groups, trade unions and human rights activists in the United 
States have begun to build a major campaign against Unocal. Taking on the 
big oil has never been easy, but the effort has got a boost from the 
investment banker, Mr. George Soros -- who made his billions on the stock 
market and has now turned into a crusader against the ills of capitalism. 
Mr. Soros has declared that "nothing would hurt" the Myanmarese regime " 
more than the oil companies suspending their operations on the Yadana 
pipeline". The activist movement in the U.S. is also pleased with the 
appointment of Ms. Madeline Albright, who has been a keen supporter of 
democracy in Myanmar, as the new Secretary of State.
As the campaign to isolate the military rulers in Myanmar gathers 
momentum in the United States, there is growing irritation in South East 
Asia, whose leaders now seem determined to bring the nation into ASEAN 
despite American and European objections. The dispute comes amidst 
growing anger in ASEAN at the sweeping Western interventionist agenda 
built around such issues as human rights, workers' rights, child labour, 
prison labour, environmental standard, and corruption. The ASEAN is also 
concerned that isolating Yangon would push it into a tighter embrace with 
China, whose economic and strategic presence in Myanmar has significantly 
increased in the recent years. Their worst suspicions may have now been 
confirmed with reports that the two countries have signed an unpublicised 
pact to deepen military cooperation.