EBO “Burma News” 18 August 2003

News Summary:

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1. China pledges to strengthen ties with Myanmar's junta

2. China to lend Myanmar $200 million for hydel project

3. US exempts diplomats from Myanmar trade sanctions

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China pledges to strengthen ties with Myanmar's junta

BEIJING, Aug 18 (AFP) - China pledged Monday to strengthen ties with the

military junta in Myanmar, which is starting to feel the pinch from aggressive

sanctions imposed after the arrest of opposition leader Aung San Suu Kyi.

"China is keen to develop the long-standing, friendly, neighbourly and

cooperative ties with Myanmar in the new century," said Guo Boxiong, vice

chairman of the Chinese Central Military Commission.

China is hosting a six-day visit by Myanmar's number-two leader Deputy

Senior General Maung Aye, who is also deputy commander-in-chief of the armed

forces, amid international pressure to push the military state towards

democratic reforms.

Myanmar's 32-member delegation also features top members of the ruling

State Peace and Development Council (SPDC), including Secretary Two Lieutenant

General Soe Win and number-three in the military Lieutenant General Thura Shwe

Mann.

The country is resisting an intense international push to release Aung San

Suu Kyi who was detained on May 30 following clashes between her supporters

and a junta-backed mob.

The United States, European Union and Canada have all slapped tough new

sanctions on the regime while Japan, its largest donor, has suspended new

economic aid.

China has refused to apply pressure on its neighbour over what it terms its

"internal affairs", prompting sharp criticism from the United States.

Thailand has however said China was being closely consulted on a "roadmap"

proposal it has floated aimed at securing Aung San Suu Kyi's release and

moving the country towards democracy.

Thai Foreign Minister Surakiart Sathirathai said this month China has given

its in-principle approval to the plan, which is currently being considered by

Yangon.

In a Xinhua dispatch, Guo did not mention the roadmap but stressed that

diplomatic relations with Myanmar stretched back 50 years and Beijing wanted

to build on them.

"Bilateral relations have been developing steadily during the 50 years of

diplomatic ties, based on the five Principles of Peaceful Coexistence jointly

advocated by both sides despite highly volatile changes in the international

situation," he said.

"Sino-Myanmar military ties is a major component part of the bilateral

relations, and China will join efforts with the Myanmar side to promote the

friendly cooperation between the two armed forces."

China is one of the few countries which maintains political ties with

Myanmar and has recently boosted its economic influence in the country.

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China to lend Myanmar $200 million for hydroelectric project

Associated Press

Yangon, August 16

China will lend Myanmar's military government $200 million for its biggest

hydroelectric power project, an official newspaper reported on Saturday.

Officials from the two neighbouring countries signed the loan agreement on

Friday in Myanmar's capital, Yangon, the Myanmar Ahlin daily said.

The money will be used to purchase equipment for the 790-megawatt Ye-Ywa

hydroelectric power project in central Myanmar, 50 kilometres southeast of

Mandalay city. Construction on the project began last year.

The loan will be issued in foreign currencies other than US dollars, the newspaper

said, without elaborating. Myanmar currently faces US sanctions banning dollar

payments to the country because of its poor human rights record.

Separately, a Chinese company, Yunnan Machinery and Equipment Import and

Export corporation, signed an agreement last week to build a $150 million,

400-megawatt hydroelectric power station in Myanmar's north-eastern Shan State.

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US exempts diplomats from Myanmar trade sanctions

WASHINGTON, Aug 18 (AFP) - The United States has exempted US and foreign

diplomats from aggressive new trade sanctions against Myanmar due to take

effect later this month, officials said Monday.

In a series of rulings issued late Friday, the US Treasury Department said

diplomats would be allowed to bring into the United States items produced in

Myanmar (Burma) as long as they are not to be sold, the officials said.

The exemption applies to "US diplomatic or consular officials entering the

United States directly or indirectly from Burma" as well as foreign "personnel

employed by a diplomatic mission or consulate in the United States," the

Treasury said.

In addition, the Treasury said it would allow otherwise banned money

transfers from the United States into Myanmar, provided the funds were

intended to support "conduct of diplomatic or consular activities."

The sanctions are to kick in August 28, one month after US President George

W. Bush signed the "Burmese Freedom and Democracy Act of 2003" aimed at

punishing Myanmar's military regime for its crackdown on the opposition.

The act, which bans all imports from Myanmar, also authorizes aid to

democracy activists, freezes the regime's financial assets in US banks and

property in the United States, and widens a visa ban on Myanmar officials.

But even before the sanctions take effect they are having an affect as US

banks engaged in most dollar-denominated transactions are refusing to process

transactions with their Myanmar counterparts.

This has blocked the flow of dollars in and out of the country, triggering

confusion for import-export traders over how to proceed with their business.

It has also prompted complaints from foreign organizations engaged in

public health and environmental protection as well as embassies which are all

facing difficulties in financing their day-to-day operations.

Those complaints appear to have been the catalyst for the Treasury

Department's diplomatic exemptions.

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