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Burma Related News - February 20, 2001.



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BURMA RELATED NEWS - February - 20, 2001. 
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HEADLINE
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AP - Rescue workers fail to find missing crash victims in Myanmar
AP - 14 Myanmar Crash Victims Missing
AFP - UN urges Asian leaders to tackle arms trade
Xinhua - Search for Myanmar Helicopter Crash Victims Underway
Xinhua - Myanmar to Privatize More State Enterprises
Xinhua - WHO's Regional Health Secretaries Meet in Myanmar
Xinhua - Nepali FM Ends Visit to Myanmar
The Daily Star - Myanmar currency hits all-time low
Bkk Post - Local panels get green light to find peace
Kyodo - Thai-Myanmar tension should be resolved: junta leader
The Nation - Burma not aggressive, Nyunt says
Asiaweek - A Boom Town Beckons
Asia Times - Political infighting weakens Myanmar

WIRE: 02/20/2001 7:21 am ET
Rescue workers fail to find missing crash victims in Myanmar
 
YANGON, Myanmar (AP) Rescue workers failed on Tuesday to find 14 people missing in a helicopter crash that killed the No. 4 general in Myanmar's ruling military junta the worst tragedy to befall the junta in its 12 years in power.
Twenty-nine people were aboard the helicopter when it went down Monday in a river 100 miles southeast of Yangon, the capital. In addition to the 14 still missing, 13 were known to have survived and two, army chief of staff Lt. Gen. Tin Oo and Maj. Aung Phone Naing, were confirmed dead.
 
The search effort is difficult because the river is flowing so rapidly, a government official said on condition of anonymity.
 
Official newspapers reported that the Russian-made Mi-17 helicopter crashed into the Salween River in bad weather Monday near Pa-an in Karen State. The helicopter was carrying Tin Oo to inspect a new bridge.
 
Tin Oo, 67, was an opponent of rebel groups fighting for independence in Myanmar and had survived an assassination attempt four years ago. There was no indication that the helicopter that crashed had been attacked or sabotaged.
 
Tin Oo's obituary in official newspapers said he had "suddenly died while serving the country." He was the fourth most powerful man on the ruling council, a 21-member group of army officers who took power in Myanmar in 1988 after crushing a democracy uprising.
 
Official media said that of the 14 missing people, nine were government officials, two were pilots and the rest were crew members.
 
Government officials said the missing included one other member of the dominant ruling military council, Maj. Gen. Sit Maung, who is the commander of the southeastern forces, and Brig. Gen. Lun Maung, a minister in the prime minister's office.
 
Ba Thein, president of the Karen National Union rebels, told The Associated Press that it believed the accident did not involve sabotage.
 
Tin Oo was a veteran of campaigns against ethnic and communist insurgents and had often threatened in public to "annihilate" opponents of the regime.
 
He had survived at least one assassination attempt in April 1997, when a parcel bomb exploded in his house, killing one of his daughters. Tin Oo was in the house but escaped unhurt.
 
The government blamed dissidents, but rebel groups said the bombing was the result of a power struggle in the junta.
 
On Christmas Day in 1996, two bombs tore through a Yangon pagoda that Tin Oo had visited hours earlier. Five people were killed, but it wasn't clear if Tin Oo was the target.
 
Tin Oo rarely spoke about politics and was not regarded as a key government policy maker.
 
His death comes as the military regimes moves to improve relations with Myanmar pro-democracy leader Aung San Suu Kyi.
 
It is also seeking to resolve a border dispute with its neighbor, Thailand.
 
Lt. Gen. Khin Nyunt was quoted in official newspapers Tuesday as saying that Myanmar wanted a border solution based on "mutual understanding, respect and magnanimity."
 
Earlier this month, Myanmar and Thai troops clashed when fighting between Myanmar and ethnic Shan rebels spilled into Thailand. The fighting drove relations to their lowest point in several years.

Tuesday February 20, 8:53 PM
14 Myanmar Crash Victims Missing
By AYE AYE WIN, Associated Press Writer
 
YANGON, Myanmar (AP) - Rescue workers failed on Tuesday to find 14 people missing in a helicopter crash that killed the No. 4 general in Myanmar's ruling military junta - the worst tragedy to befall the junta in its 12 years in power.
 
Twenty-nine people were aboard the helicopter when it went down Monday in a river 100 miles southeast of Yangon, the capital. In addition to the 14 still missing, 13 were known to have survived and two, army chief of staff Lt. Gen. Tin Oo and Maj. Aung Phone Naing, were confirmed dead.
 
The search effort is difficult because the river is flowing so rapidly, a government official said on condition of anonymity.
 
Official newspapers reported that the Russian-made Mi-17 helicopter crashed into the Salween River in bad weather Monday near Pa-an in Karen State. The helicopter was carrying Tin Oo to inspect a new bridge.
 
Tin Oo, 67, was an opponent of rebel groups fighting for independence in Myanmar and had survived an assassination attempt four years ago. There was no indication that the helicopter that crashed had been attacked or sabotaged.
 
Tin Oo's obituary in official newspapers said he had ``suddenly died while serving the country.'' He was the fourth most powerful man on the ruling council, a 21-member group of army officers who took power in Myanmar in 1988 after crushing a democracy uprising.
 
Official media said that of the 14 missing people, nine were government officials, two were pilots and the rest were crew members.
 
Government officials said the missing included one other member of the dominant ruling military council, Maj. Gen. Sit Maung, who is the commander of the southeastern forces, and Brig. Gen. Lun Maung, a minister in the prime minister's office.
 
Ba Thein, president of the Karen National Union rebels, told The Associated Press that it believed the accident did not involve sabotage.
 
Tin Oo was a veteran of campaigns against ethnic and communist insurgents and had often threatened in public to ``annihilate'' opponents of the regime.
 
He had survived at least one assassination attempt in April 1997, when a parcel bomb exploded in his house, killing one of his daughters. Tin Oo was in the house but escaped unhurt.
 
The government blamed dissidents, but rebel groups said the bombing was the result of a power struggle in the junta.
 
On Christmas Day in 1996, two bombs tore through a Yangon pagoda that Tin Oo had visited hours earlier. Five people were killed, but it wasn't clear if Tin Oo was the target.
 
Tin Oo rarely spoke about politics and was not regarded as a key government policy maker.
 
His death comes as the military regimes moves to improve relations with Myanmar pro-democracy leader Aung San Suu Kyi.
 
It is also seeking to resolve a border dispute with its neighbor, Thailand.
 
Lt. Gen. Khin Nyunt was quoted in official newspapers Tuesday as saying that Myanmar wanted a border solution based on ``mutual understanding, respect and magnanimity.''
 
Earlier this month, Myanmar and Thai troops clashed when fighting between Myanmar and ethnic Shan rebels spilled into Thailand. The fighting drove relations to their lowest point in several years.

Monday February 19, 3:27 PM
UN urges Asian leaders to tackle arms trade
PHNOM PENH, Feb 19 (AFP) - The UN's top arms control envoy urged Asian and Pacific leaders Monday to slash spending on weapons and tackle the booming trade in small arms to help reduce poverty.
 
United Nations undersecretary-general for disarmament affairs Jayantha Dhanapala said cutting weapons spending would go a long way toward meeting the UN's millennium pledge to halve global poverty by 2015.
 
"Leadership in dealing with problems stemming from the proliferation of small arms in the Asia-Pacific region must necessarily come from the region itself," he told delegates at an international conference on small arms proliferation in the Cambodian capital.
 
"It is vital for leaders in this region to view outside efforts to address this problem as fully consistent with national sovereignty, and not motivated simply to achieve expedient foreign policy objectives."
 
He said with half the world's population living on less than two dollars a day, arms purchases were limiting development options.
 
Global military expenditure began rising again in 1997 after a dip at the end of the Cold War and now stand at about 800 billion dollars a year, he said. Roughly 70 percent of arms deliveries have gone to developing nations over the past decade, he added.
 
"Global arms transfer agreements with developing nations increased from 16.8 billion dollars in 1998 to 20.6 billion in 1999," he said.
 
"By comparison, some UN agencies estimate that it would require an additional 70-80 billion dollars per year to provide primary education, low-cost water, sanitation and public health facilities and reproductive health, family planning and clinical services to all those in need."
 
The two-day arms control conference is being attended by academics, civil servents and a number of senior ministers from Asia, Europe and North America.
 
It is to be followed Wednesday by a two-day ASEAN Regional Forum (ARF) meeting on conventional arms and light weapons jointly organised by the Canadian, Cambodian and Japanese governments.
 
The ARF, with includes the 10 members of the Association of Southeast Asian Nations (ASEAN) and its dialogue partners, is the only region-wide forum for discussing security issues.
 
Delegates at the conference which began Monday stressed the significance of meeting in Cambodia, which is recovering from decades of civil war which ended in 1998 with the collapse of the Khmer Rouge insurgency.
 
They said Cambodia was believed to be a major source of small arms fuelling the illicit regional trade in weapons being supplied to insurgencies in Myanmar, Sri Lanka and Indonesia.
 
Cambodian Senior Minister Sok An, who delivered a speech on behalf of Prime Minister Hun Sen, said Cambodia was doing its best to decommission weapons in a responsible manner.
 
"Recognising the fact that Cambodia has surplusses of small arms as a result of an extended period of war and conflict (we have) been able to collect hundreds of thousands of small arms and light weapons in the past several years and a large number of them have been completely destroyed," he said.
 
"These efforts also greatly contribute to the prevention of small arms proliferation and trade in the region."

Search for Myanmar Helicopter Crash Victims Underway
2001.02.20 23:00:16 
 
YANGON, February 20 (Xinhuanet) -- A search operation for victims  from Monday's Myanmar helicopter crash, in which the country's  fourth most powerful leader Lieutenant-General Tin Oo was killed,  is underway at the crash site.
 
Along with Tin Oo, 67, Second Secretary of the ruling Myanmar  State Peace and Development Council (SPDC) and Chief of Bureau of  Special Operations and Chief of Staff of the Army, an army officer of major rank was also killed in the crash.
Of a total of 29 on board the military helicopter, 22 were  government officials and seven were crew members. It has been  confirmed that 13 people have been rescued with 14 still missing.
 
Officials said here Tuesday that there is little hope for the  missing 14 victims to survive. The 14 include two cabinet  ministers-- Brigadier-General Lun Maung, Minister at the Prime  Minister's Office, and Colonel Thein Nyunt, Minister of  Development of Border Areas -- and Chairman of the Mon SPDC and  Southeasten Commander Major-General Sit Maung.  
The helicopter, which carried Tin Oo and entourage on an  inspection tour of a new bridge, was heading for Hpa-an in eastern Kayin state from Mawlamyine in southern Mon state and crashed into the Thanlwin River near Hpa-an.
 
While the government report said that the accident was due to  bad weather condition, sources close to the government believed  that the accident was resulted from mechanical failure.
Tin Oo became the second secretary of Myanmar's military ruling body, the State Law and Order Restoration Council (SLORC), in  September 1988 when the military took over the power of state, and his post was retained when the SLORC was renamed as the SPDC in  November.
 
Tin Oo escaped twice from assassination attempts in the 1990s -- one in December 1996 when two bomb attacks were launched on a  sacred tooth relic housed in the capital's Kaba Aye Pagoda after  his visit, and the other in April 1997 when a parcel bomb attack  was launched on his Yangon residence, killing his daughter.
Meanwhile, the funeral procession of late Tin Oo will take  place on Friday in a grand military form.  

Myanmar to Privatize More State Enterprises
2001.02.20 12:08:13 
 
YANGON, February 20 (Xinhuanet) -- Five more state-owned  enterprises, which include a land plot, a saw mill and three  cinemas respectively located in the country's Bago and Mawlamyine  townships, will be sold through competitive biddings, official  newspaper The New Light of Myanmar reported Tuesday.
 
These state enterprises are the first batch to be privatized in this year.
Myanmar has been implementing a privatization plan for its  state-owned economic enterprises since January 1995, aimed at  systematically transferring them into effective business  organizations.
 
The plan, being implemented by the government-formed  Privatization Commission, is carried out by auctioning and leasing out the enterprises or establishing joint-ventures with local and  foreign investors.
The first phase of the scheme covered 51 such enterprises  including processing and manufacturing factories, livestock  breeding farms and cinemas.
 
According to official statistics, 118 state enterprises in 1999 and 19 of such enterprises in 2000 were covered by the  privatization plan.
These enterprises include land plots, rice mills, saw mills,  cinemas, hotels, biscuit and garment factories and timber shops.
It is reported that there is a total of 1,760 state enterprises in Myanmar, mostly being industrial enterprises. 

WHO's Regional Health Secretaries Meet in Myanmar
2001.02.20 10:39:02 
 
YANGON, February 20 (Xinhuanet) -- The Sixth Meeting of Health  Secretaries of the Countries of the World Health Organization (WHO) Southeast Asian Region began here Monday.
 
The three-day meeting will serve as a forum for exchanging  views and experiences with respect to health and health-related  matters in countries of the region, said Tuesday's official  newspaper The New Light of Myanmar.
Speaking at the opening of the meeting, Myanmar Health Minister Major-General Ket Sein urged countries in the region to act  accordingly to meet the changing conditions and challenges in  political, economic and social sectors all over the world over the past few years.
 
He said that the WHO is always trying to improve and intensify  its efforts in fulfilling the health development needs of member  countries, stressing that promotion of health and social  development is vital for enhancing the quality of life.
He told the meeting that Myanmar, in accordance with its social objective of uplifting the health standards of the entire people,  has accorded priority in allocation of government budget to the  health sector, adding that the country's ministry of health is one of the largest recipients of budgetary funds.
 
He also disclosed that aimed at increasing equity, efficiency  and quality of health services, the Myanmar Health Ministry has  carried out health sector reform which encompasses policy,  organization, institutional development, human resources, health  financing and the private sector.
He described the meeting as a very useful one, saying that such meetings have not only been able to address regional health  problems but also to formulate sound plans of actions and  strategies to tackle the issues of common concern.
He was convinced that inter-country cooperation can be further  strengthened to effectively reduce the burden of ill health in the countries of the region.

Nepali FM Ends Visit to Myanmar
2001.02.19 23:14:22 
 
YANGON, February 19 (Xinhuanet) -- Nepali Foreign Minister Chakra  Prasad Bastola left here Monday after concluding his three-day  official visit to Myanmar.
 
During his visit, Bastola met with Chairman of the Myanmar  State Peace and Development Council Senior-General Than Shwe.
He also met with his Myanmar counterpart U Win Aung and the two ministers discussed maintenance of friendly relations between the  two countries and mutual cooperation.
 
At the invitation of U Win Aung, the Nepali foreign minister  arrived here last Tuesday and first attended as an observer the  two-day Third Trade and Economic Ministers' Meeting of the BIMST- EC (Bangladesh, India, Myanmar, Sri Lanka and Thailand-Economic  Cooperation) before starting his official visit to Myanmar on  Friday.
This is the first visit to Yangon of a high-ranking official of Nepal in five years during which there were almost no economic and trade activities between the two countries except maintenance of  cultural exchange.

The Daily Star - February 20, 2001.
Myanmar currency hits all-time low
AFP, Yangon
 
Myanmar's currency, the kyat, has plunged to an all-time low on the free market, falling to 503 against the US dollar in a symptom of the nation's economic decline.
The kyat's value on the black market, through which most business is carried out, compares to an official exchange rate of six to the greenback.
 
The value of Foreign Exchange Certificates (FECs), a special currency denominated in dollars, has also fallen.
 
The kyat's most recent slide started several weeks ago, when it was worth about 450 to the dollar, against about 320 at the beginning of this year before a substantial pay increase was awarded to government workers.
 
Meanwhile FECs are valued at slightly more than 400 to the dollar. The kyat rate of FECs was once equal or even higher than that of the dollar when its local usage was widespread.
 
The growing price disparity has been attributed to over-printing of the special currency, which has meant that the amount in circulation exceeds the number of dollars collected by the government.
 
The shortfall has already been accounted for in the local economy. Some restaurants in Yangon are now charging 15 per cent more for meals paid for in FECs instead of dollars.
 
"The government makes a profit of around 100 kyats on each dollar given the present gap in rates," one analyst said.
 
The city is now awash in FECs, and as demand shrinks people are eager to hedge their bets by offloading the currency by buying dollars or gold. The price of gold in Myanmar has shot up as a result.

Australian Broadcasting Corporation - February 20, 2001.
Signs of progress in Asia's drug blackspots
 
A United Nations report on the drug trade says Afghanistan and Burma remain countries of "major concern" in Asia, but their governments have made some progress in clamping down on production.
 
The report by the International Narcotics Control Board, says drug problems in South Asia have been mostly related to its proximity to the two main regions illicitly producing opiates, namely West Asia, including Afghanistan, and East Asia including Burma.
 
The INCB and the UN Drug Control Programme have praised Afghanistan for its efforts to clamp down on opium poppy cultivation.
 
But INCB president Hamid Ghodse, says the agency remains concerned about Afghanistan, citing figures suggesting the existence of drug stockpiles equivalent to 3-4 years of illicit exports.
 
The report says there are also encouraging signs on Burma, with a decline in illicit opium production, although the country continues to be the world's second largest source of heroin and opium.

Bangkok Post - February 20, 2001.
Local panels get green light to find peace
Premier not likely to visit Rangoon soon 
Post Reporters
 
Thailand expressed confidence the country's border conflict with Burma can be resolved through talks between local-level authorities.
 
A joint meeting of agencies responsible for national security agreed efforts to settle the conflict should be handled by an existing border committee made up of representatives from the two countries.
 
Prime Minister Thaksin Shinawatra said once the conflict is resolved, bilateral relations between the two countries could be improved through another round of high-level talks at a later stage.
 
"We need to undertake a policy that will not attract suspicion from each other," said Mr Thaksin after chairing a crisis meeting attended by senior members of the foreign and interior ministries, the armed forces, the National Security Council and the National Intelligence Agency.
 
Foreign Minister Surakiart Sathirathai said yesterday he also remained optimistic the border dispute with Burma could be tackled through negotiations at the local level.
 
Mr Surakiart acknowledged the complexity of the ongoing row at the Burmese border would be difficult to settle in a single round of talks and said continued discussions under the local mechanism would be necessary.
 
"I still firmly believe that the problem can be settled either through the township or regional border committees", he told reporters after paying his respects at the statue of Prince Devavong Varopraharn, the father of Thai diplomacy, on his first day in office.
 
The first round of border committee talks which took place back-to-back on Thursday in Tachilek, on the Burmese side, and Mae Sai, in Chiang Rai, ended in deadlock after each side accused the other of border intrusion.
 
He said there was no need to visit Burma soon and a trip to Rangoon and other member states of the Association of Southeast Asian Nations would be arranged only when better conditions permit.
 
While maintaining a policy of non-interference in domestic issues, he said Thailand and Burma could also forge co-operation in several areas such as tourism, culture and energy.
 
Peace, better living standards and stronger ties along the border with neighbouring countries were what the government was trying to achieve, he said.
 
Defence Minister Chavalit Yongchaiyudh also expressed confidence the border tension would be contained.
 
Concerned authorities have taken every step to ensure the standoff would not degenerate into violence, Gen Chavalit said after emerging from yesterday's top-level meeting.
 
He said the situation in Chiang Rai has been left to the local authorities to handle and ruled out any immediate high-level negotiations. Any such dialogue would be supervised by the Third Region Army and the Chiang Rai provincial governor.
 
If the tambon-level border committee was unable to handle the problem, the regional joint Thai-Burmese border panel would step in to assist in the talks.

Thai-Myanmar tension should be resolved: junta leader
 
YANGON Feb. 20 Kyodo - The recent tension between Myanmar and Thailand was caused by ''wedge-driving'' by a group of drug trafficking rebels and should be resolved through an ''optimistic approach'' based on ''mutual understanding, respect and magnanimity,'' a senior member of the Myanmar's military junta was quoted by local newspapers on Tuesday as saying.
 
Gen. Khin Nyunt, No. 3 in the junta hierarchy and first secretary of the ruling State Peace and Development Council (SPDC) made the statement at the closing ceremony of a teachers reorientation course in Phaunggyi, 60 kilometers north of Yangon, according to the papers.
 
''Myanmar always maintains friendly relations with neighbors based on the principle of peaceful coexistence and also in accord with ancestors' teaching that 'Let amity be eternal and enmity be ephemeral,''' the general was quoted as saying.
 
''Myanmar has never encouraged any group to endanger other countries from our territory, never kept them in our territory to use them to serve our interest,'' he said.
 
''Some officials of the other country (Thailand) are making one-sided accusations and talking on one-sided information. We believe that this matter should be solved with optimistic approach based on mutual understanding, respect and magnanimity as true good neighbors,'' he said.
 
Tension flared between the two countries after Myanmar troops began operations on Feb. 8 to dislodge the drug-running ethnic minority Shan rebel group, the Shan United Revolutionary Army (SURA), from the hilltops on the border overlooking the Myanmar town of Tachilek, 560 km northeast of Yangon.
 
The Shan ethnic minority inhabits in the eastern part of the country bordering China, Laos and Thailand. The SURA is a splinter group of former drug warlord Khun Sa's Mong Tai Army (MTA).
 
Myanmar troop operations spilled over to the Thai side, as Yangon accused the Thai military of providing the rebels with heavy weapons.
 
Civilians were killed in both border towns -- Tachilek in Myanmar and Mae Sai on the Thai side -- by shells, for which each side blamed the other.
 
Bangkok media reported the statements of senior Thai military officials to punish the intrusion.
 
Yangon newspapers published maps of SURA rebel camps on the common border and also inside the Thai territory, while Myanmar officials claimed there was no intention of encroachment on Thai territory, apart from crushing the rebels.

The Nation, Associated Press - February 20, 2001.
Burma not aggressive, Nyunt says
 
RANGOON - Burma's military regime was not "aggressive" in its foreign relations and wanted to resolve its border dispute with Thailand peacefully, a top Burmese general was quoted as saying yesterday.
 
"The current [Burmese]-Thai border problem should be solved with [an] optimistic approach based on mutual understanding, respect and magnanimity as true good neighbours," Lt-General Khin Nyunt, fourth highest official in the state hierarchy, was quoted as saying by all three official Burmese newspapers yesterday.
 
Earlier this month Burmese and Thai troops clashed when fighting between Burmese and rebel Shan State Army (SSA) forces spilt over into Thailand's Chiang Rai province. At least five civilians were killed on both sides of the border, driving relations to their lowest point in several years. Border checkpoints in the region have been closed for more than a week.
 
Thailand launched a heavy artillery attack to drive out Burmese forces that the army said intruded onto Chiang Rai's Ban Pang Noon hill to attack the SSA. Burma, meanwhile, accused Thailand of aiding the Shan rebels.
 
Khin Nyunt said the SSA and "a misunderstanding by some Thai authorities who had relied on false information from lower-level Thai officials" had been to blame for the dispute.
 
"Although our government is a military government, we have no aggressive attitude. We promote friendly relations with every country and abide by international rules and regulations," Khin Nyunt said at a ceremony to mark the end of a teacher-training course on Monday at Phaunggyi, 60 kilometres north of Rangoon.
 
But in an apparent jab at Thailand for allegedly supporting the Shan rebels, Khin Nyunt said Burma had never allowed another group to endanger other countries from its territory or used such groups for its own ends.
 
That claim would be contested by Thailand, which has expressed growing frustration at the activities of another Burmese ethnic army, the United Wa State Army, that produces illegal drugs in the border area adjoining Thailand.
 
The drug trade is regarded as socially divisive and a major cause of violent crime in Thailand. But the Wa army has reached a cease-fire agreement with Burma and enjoys virtual autonomy in areas of Shan State in eastern Burma.
 
Thai Third Army commander Lt-General Wattanachai Chaimuanwong said yesterday tension on the northern border would be reduced if Thai and Burmese officials could hold a high-level meeting, but Burma would have to initiate this.
 
"We would lose face if we went up to them and asked for one. We didn't do anything wrong. Besides, it's their turn to call a meeting," the commander said.
 
There was no indication, Wattanachai said, that the Burmese government would reconvene the Regional Border Committee (RBC) set up to settle border disputes between the two countries. But Thailand believed Burma should be the one to call the meeting as it was Burma which "violated our sovereignty and territorial integrity".
 
The RBC has not met for two years.
 
Wattanachai said Thai troops would stand firm on the border, at least until there was an indication that the Burmese would pull back.
 
According to the Shan Herald Agency for News (Shan) yesterday, ethnic Shan living in Thailand have been supplying the SSA.
 
"Thanks to the media's kind coverage of our Army's struggle against drugs and the Burmese military, Shan exiles in Thailand have been visiting us every day with food, clothing, medicine and even cash donations," Lt-Colonel Kawnzuen, 39, commander of the SSA's Keng Tung front, was quoted by the agency as saying.
 
The Keng Tung front is facing 11 battalions, two of which are from the United Wa State Army, a pro-Burma rebel army, according to the agency.

AsiaWeek -
FEBRUARY 23, 2001 VOL.27 NO.7
A Boom Town Beckons
Business radars are on alert in the wake of political talks. But is investment wise?
By ROGER MITTON

The meeting was unusual enough, but the outcome even more so. On one side were two generals from Myanmar's military junta, and on the other were members of Yangon's leading chambers of commerce. The businessmen — local and foreign — had a common gripe: too much bureaucratic red tape getting in their way. Could the generals help them cut through it? Yes, came the answer. The next day, a trader in the fisheries industry received a call from his bank. He had complained to the generals about currency exchange problems that dogged his export business. The bankers asked him to drop by so they could devise a solution. An efficient response, in anyone's commercial language.
 
Myanmar is back in business. With a moribund economy and biting sanctions, the generals are bending over backwards to keep the vital signs ticking over. Indeed, business interests may have helped spur the recent talks between the junta and its determined nemesis, National League for Democracy leader Aung San Suu Kyi. The dialogue may lead to nothing, but the fact that it is even taking place has already warmed the international climate toward pariah state Myanmar. The new U.S. administration has hinted that economic sanctions imposed in 1997 due to political repression may be lifted. The European Union is scrambling to establish meaningful ties after years of avoiding eye contact. Is it the beginning of real change for Myanmar, or just a cynical gambit by the military dictators?
 
Whatever the case, developments have foreign investors rubbing their hands — and the generals licking their lips. "Economic stability is the key to political stability," says respected Myanmar analyst-in-exile Aung Naing Oo. "The junta sees sanctions as obstacles to economic development and thus a threat to their future hold on power." Despite a shambolic economy born of decades of mismanagement, Myanmar is often rated Southeast Asia's richest nation in terms of natural resources. And now the time seems ripe for a sustainable boom. "When foreign investors hear the talks {with Aung San Suu Kyi} are going on, they feel a glimmer of hope," says Moe Kyaw, who heads a market research company in Yangon. "They feel Myanmar may no longer be ostracized."
 
If only it were that simple. Yes, out of self-interest, the junta has sent unmistakable signals that it is preparing to come in from the cold. And yes, the generals are increasingly eager to make life easy for investors. But ethical dilemmas remain. Will increased engagement result in a rapprochement between Suu Kyi and the generals, ending the 13-year military dictatorship? Or will it serve to prop up the regime? Will investment make a difference to the lives of ordinary Burmese, or will the junta cream the benefits? Not least, will forced labor be used to build this new Myanmar? ASEAN countries, plus China, India, South Korea and Japan, have already made up their minds: business opportunities are too hot to ignore. For the rest of the world, the writing on the balance sheet isn't hard to read. Says Bo Olson of the nongovernment Sweden-Democratic Burma Friendship Association: "The West is just dying to get in there."
 
But should it? That depends on whom you ask. Broadly speaking, three schools of thought have emerged. One says that whatever political game the junta is now playing, more business activity will inevitably enrich the population. Even if the generals and their cronies rake off most of the profits, the man in the street will still benefit. Big business is a leading proponent of this line. U.S. oil company Unocal arrived in Myanmar in 1993 to help build the Yadana offshore gas pipeline to Thailand, now among Myanmar's most profitable legitimate operations. The Washington sanctions barred U.S. companies from setting up new business deals, but Unocal, as an established outfit, was allowed to remain. It retains a small foreign workforce of managers and technicians on the pipeline with its French partner Total — and points to the jobs and community facilities it provides for local maintenance workers. "Real change and improvement will come when there are dozens of Yadana-size projects," says Unocal spokesman Barry Lane. Critics say forced labor was used to build Yadana. The companies deny this.
 
A second school of thought is more cautious. It has few problems with investment, but does want to see evidence of political progress. Olson believes that foreign investment on the whole is a positive thing: "Naturally the generals get most out of it, but ordinary people can get jobs and can sell their produce if the economy is rolling." Yangon-based lawyer and foreign business consultant Alec Christie thinks investment can only improve standards of living for all. "If you ask me what are the areas where there are problems, it would be infrastructure," Christie says. More money would improve telecommunications, electricity supply and roads — especially outside the capital. "If there is investment and international aid, things would be better," he says.
 
Compromise, however, remains a dirty word for many Burmese. Kanbawza Win, a dissident and visiting professor at the University of Winnipeg, Canada, believes that investment merely strengthens the dictatorship. "The system put in place by the junta aims to prevent the growth of the middle class — which has the potential to lead the country to democracy," he says. "Only the top brass and the cronies get richer while the mass of the people remain poor." The rallying cry of Western labor groups, too, remains "sanctions on, business off." Says Phillip Fishman, the assistant Asia director for the American Federation of Labor-Congress of Industrial Organizations: "What would most help the citizens of Burma would be the restoration of civilian, democratic governance and the rule of law, and an end to widespread corruption."
 
That's a big wish list, but one that helped convince mostly U.S. companies to abandon Myanmar in 1997. Pepsico Inc., for instance, which had an estimated 80% share of the soft-drink market, sold its joint-venture stake with a local company in 1996. The next year it closed shop completely by canceling supplies of Pepsi syrup. The company said its decision was "based on our assessment of the spirit of current U.S. government policy." In fact, its involvement in Myanmar had resulted in boycotts by U.S. students — the company's main domestic market — which soon translated into shareholder concern. Other U.S. firms quick to toe the domestic-opinion line included Levi Strauss, Amoco, Apple and Eastman Kodak.
 
Did their withdrawal make a difference? Possibly. But for almost every outfit that left, one arrived. Tiger Beer (Singapore), Rothmans (U.K., tobacco), Japanese conglomerates Sumitomo and Mitsui, Clough Engineering (Australia) and Ivanhoe Mines (Canada) are well established. Oil and gas players Premier (U.K.), Petronas (Malaysia) and Nippon (Japan) jostle with Unocal and Total. Singapore companies, the biggest investors, have hotels, garments, defense supplies, banking and travel services. A French-Myanmar fisheries joint venture began operations in November. The bottom line, says market researcher Moe Kyaw, is that if you know how to do business, you can do it in Myanmar. So long as
you are not too fussy about the company you keep.

Political infighting weakens Myanmar
STRATFOR.COM's
Global Intelligence Update
Feb 20, 2001

Summary

Lieutenant-General Tin Oo, Secretary 2 of Myanmar's State Peace and Development Council (SPDC) and chief of staff of the army, died in a helicopter crash on February 19. Tin Oo's death is likely to accelerate the factional struggle within the SPDC, as the more liberal factions see an opportunity to acquire some of the conservatives' waning power. The political infighting threatens not only Yangon's stability, but also threatens already strained relations with Myanmar's neighbor Thailand.

AnalysisAnalysis

Lieutenant General Tin Oo, Secretary 2 in Myanmar's State Peace and Development Council (SPDC) and chief of staff of the army, died in a helicopter crash on February 19. According to official state media, the crash resulted from inclement weather. Earlier reports from Myanmar and Thailand, however, have cited the cause of the crash as engine failure or an attack by ethnic rebels.

Tin Oo, No 4 in the SPDC hierarchy, was responsible for military operations and economic affairs. He advocated a strong response to Myanmar's numerous ethnic and political opposition groups and reportedly survived three assassination attempts in the last five years. His death will likely stir an internal power struggle within the SPDC between hard-line leaders and a competing pragmatic faction. The internal political strife threatens not only Yangon's stability, but will further strain relations with Myanmar's neighbor Thailand.

For several years, the SPDC leadership has been embroiled in an internal power struggle over who will replace the aging chairman, Senior General Than Shwe. At the center of the battle are SPDC Vice Chairman and army Commander in Chief General Maung Aye and SPDC Secretary 1 and Chief of the Directorate of Defense Services Intelligence Khin Nyunt, the respective No 2 and No 3 within the ruling council.

Maung Aye holds the support of the armed forces, and as vice chairman stands to inherit the leadership role from Than Shwe. The more pragmatic Khin Nyunt, who has less support from the military, instead has been instrumental in arranging peace deals with various ethnic rebel factions and promotes a more moderate and economically open Yangon.

Tin Oo, a hard-line element in the SPDC, was rumored to be Maung Aye's choice for SPDC vice chairman, supplanting Khin Nyunt in the ruling junta. Sources in Myanmar say that Khin Nyunt has long wanted Tin Oo dead, suggesting previous assassination attempts were part of the internal power struggle. With Tin Oo gone, both Maung Aye and Khin Nyunt will move to fill the vacuum with their own supporters.

While the competition heats up inside Yangon, relations with neighboring Thailand may suffer. Bangkok and Yangon share a contentious relationship, due largely to Myanmar's ethnic armies and drug cartels along the border. During the term of former Thai prime minister Chuan Leekpai, Bangkok pulled back from contact with Yangon, sending relations into an even deeper spiral. Thailand's new Prime Minister Thaksin Shinawatra, elected February 9, has pledged to reopen the stalled contact with Yangon.

On the same weekend that Thaksin was elected, however, clashes between the Myanmar army and Thai army broke out around the Thai border town of Mae Sai in Chiang Rai province. The fighting, a spillover from Myanmar's annual spring offensive against ethnic Shan rebels, left at least 19 dead on both sides of the border, according to The Associated Press.

While the fighting subsided after three days, a war of words between the neighbors continued to intensify. Thailand accused Myanmar of violating its territory and shelling civilians in an artillery barrage. Thaksin, who had earlier suggested his first official foreign visit would be to Yangon, criticized Myanmar for allowing some ethnic minority groups on the border to produce drugs. Thaksin added that if diplomatic means proved insufficient to solve the long-standing border issue, "We will have to deal with it in our own way, and this is an assertive policy," according to the Times of India.

For its part, Yangon repeated allegations that the Thai military supports the ethnic Shan rebels, giving them sanctuary and even supplying them with landmines and other explosives. Official Myanmar media said Thailand was suspected of reinvigorating a 50-year-old concept of "Greater Thai Policy" which called for the annexation of parts of Laos, Myanmar and China.

With increasing numbers of troops on both sides of the border, the situation remains tense. On February 19, Thai cabinet members, including the foreign minister and defense minister, emphasized they no longer had plans for any official visits to Yangon. For its part, Yangon played up fears of a Thai military coup, releasing an editorial in the official New Light of Myanmar that politicians and military officers in Thailand were stirring border problems and arming ethnic rebels in order to undermine Thaksin's intentions of rebuilding ties with Myanmar.

Tin Oo's death further complicates efforts for the two sides to reconcile. While state media blamed weather for the crash, radio reports in Thailand and Myanmar suggest ethnic Shan rebels shot down his helicopter - the very group Thailand has been accused of supporting.

Acceleration of infighting within the SPDC ranks will cause settling the border rift with Thailand to take the back seat. Worse, the political wrangling in Yangon could lead to two different sets of negotiations with Thailand, likely leading to more chaos.