Tension mounts on Bangladesh-Myanmar border

Discussion in 'Subcontinent & Central Asia' started by Singh, Oct 12, 2009.

  1. Singh

    Singh Phat Cat Administrator

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    Tension mounts on Bangladesh-Myanmar border


    Dhaka - Tension has mounted along the Bangladesh-Myanmar border after Myanmar military authorities resumed the construction of border fences, newspaper reports said Wednesday.

    Bangladesh has reinforced its paramilitary troops along the south-eastern border in the hilly Bandarban district, canceling troopers' leaves, the English-language New Age newspaper reported quoting a top official of the Bangladesh Rifles border force.

    'Troop deployment at the border has been reinforced and all-but-essential leaves of BDR personnel have been cancelled,' chief of the paramilitary force Major General Mohammad Mainul Islam was quoted by the paper as saying.

    He said the BDR troops had been deployed along sensitive areas on the border and other preparations had been made.

    The recent troubles between the two neighbouring countries started in November 2008 when a Myanmar naval ship allegedly intruded into Bangladesh's territorial waters for hydrocarbon exploration in the Bay of Bengal.

    Bangladesh, which also sent warships into the bay to counter the alleged intrusion at that time, had managed to defuse tension after involving China in negotiations.

    Bangladesh also resumed negotiation with Myanmar to define their maritime borders in 2008, after about three decades of uncertainty, but a series of discussions are yet to make any headway in resolving the issue.

    The tension surged again when Myanmar began erecting barbed-wire fencing along the border with Bangladesh early this year. It was stopped after Dhaka sent a note of protest to Yangon.

    But the Yangon authorities resumed the fencing project again recently and also deployed troop reinforcements on their side of the border, according to Bangladesh intelligence reports.

    Report: Tension mounts on Bangladesh-Myanmar border - Monsters and Critics
     
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  3. Eagle_Flights

    Eagle_Flights Regular Member

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    Myanmar brings in everything along the border with Bangladesh

    Myanmar brings in everything
    Troops, tanks, warships, frigate to spread tension further; Dhaka terms it routine exercise
    M Abul Kalam Azad and Ahmede Hussain

    The Myanmar military brought in heavy tanks, artillery guns, 12 warships and a frigate along its border with Bangladesh in the last 24 hours ended yesterday evening as part of its preparation for a large-scale conflict with Bangladesh, sources at the Bangladesh Armed Forces said.

    Bangladesh also has strengthened its military build-up in a bid to repulse a Myanmarese incursion by preparing 30 warships in Chittagong and Khulna, a Navy official stationed at Chittagong told The Daily Star.

    However, Foreign Minister Dipu Moni at a press conference yesterday rejected reports about the heavy military build-up by Myanmar along Bangladesh border, saying it is a routine movement of the security personnel.

    "I had talks with our ambassador, an army officer, in Myanmar and he told me that it is a routine practice," she said, adding, “Foreign Secretary Mijarul Quayes also called the Myanmar ambassador in Dhaka and the envoy conveyed him the same message.”

    Ground reality did not support the foreign minister's claim as various sources in the military, Bangladesh Rifles (BDR) and intelligence agencies said that the situation on the border remained tense.

    "The situation at Bangladesh-Myanmar border has remained tense," Major General Mainul Islam, director general (DG) of BDR, said last night.

    The BDR DG met State Minister for Home Affairs Shamsul Haq Tuku yesterday and 'normally' discussed the border situation.

    "I am going to place some proposals tomorrow (Monday) to include construction of more Border Operations Outposts across the border and a few more battalions to strengthen the border guards," he told The Daily Star.

    An intelligence agency official said Myanmar has doubled its military presence at the border over the last couple of weeks, a move that has prompted Bangladesh to take similar measures.

    "Myanmar has sent in 37/57mm artillery guns that will bring Chittagong under their firing range," the Navy officer told The Daily Star after the foreign minister claimed normalcy at the border.

    Based on the information so far gathered, we suspect that Myanmar is making preparation for a short-scale naval conflict, he said.

    "Suspicious military preparations have been going on at the Myanmarese side of the border over the last two months," an intelligence official said, adding that the Myanmar army has newly deployed two battle units at their side.

    Earlier Myanmar had deployed nine Light Infantry Battalions in its border with Bangladesh. As part of their repeated provocative acts, the junta has violated international border rules and constructed illegal barbed wire fences along the frontier.

    "We in the Bangladesh Navy suspect that Myanmar wants to intrude into our sea and declare a large chunk of area as their Maritime Exclusive Zone," the Navy official said.

    The Myanmar junta can intrude into the Bangladeshi waters any time to claim ten nautical miles area, which covers the disputed block, which is thought to be a big source of oil and natural gas, he said.

    Sources said after Bangladesh's maritime boundary talks with Myanmar ended inconclusively in April, Bangladesh Navy made a deployment plan last September and sent it to the government for immediate action.

    The deployment plan urged the government to strengthen maritime patrol at the Bay of Bengal and arrange joint naval exercises with friendly countries.

    Meanwhile, sources in Sittwe (formerly known as Akiab) said that Myanmarese Air Force Tatmadaw has stationed three fighter planes at the Sittwe airfield. Sittwe is only 80km away from Chittagong airport.

    Twelve warships are constantly patrolling the Bay area, which borders Bangladesh, the sources added.

    According to Bangladesh Navy sources, a new Myanmar navy frigate, built with the Chinese help at Yangon, has arrived at the Bay of Bengal.

    "There have also been new tanks and armoured columns are pouring in using the 40km road that they have recently built," said another Navy officer.

    He said Bangladesh has kept around 30 warships standby in Chittagong and Khulna to repulse any Myanmarese incursion. “The Myanmarese army personnel are regularly infiltrating into Bangladesh territory in the guise of civilians to gather information.”

    Briefing newsmen, Foreign Minister Dipu Moni also said she had no information about whether Myanmar's border guards were trying to push Rohingya refugees across the border.

    In reply to a question, the foreign minister said Myanmar is not violating international laws by erecting barbed wire fences along Bangladesh border as well. "Myanmar is constructing fences in their territory conforming to international laws," she said.

    Dipu Moni also said the movement of the Myanmar security forces has no link with Bangladesh's decision to seek UN arbitration to determine maritime boundary between the two neighbouring countries.

    Asked whether Bangladesh asked China to mediate to resolve the crisis, she replied that she had no idea about any official proposal in this regard.

    Meanwhile, no new leave for the navy men are now being granted, as all leaves in the Bangladesh Navy have been restricted, sources at the navy said.

    The Daily Star - Details News
     
  4. amitkriit

    amitkriit Senior Member Senior Member

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    Who will be the biggest winner if the war breaks out?
    a) China
    b) India
    c) USA

    I really doubt that this war will help Bangladeshi/Myanmar's cause in any big way.
     
  5. ppgj

    ppgj Senior Member Senior Member

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    china wont allow the war to happen. they have too many interests in both the countries.
     
  6. Eagle_Flights

    Eagle_Flights Regular Member

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    Bangladesh. dont be surprised 'cause Myanmar needs a hard reply...It was always Myanmar who showed up with aggressive attitude toward Bangladesh. But we always acted as a civilized nation by trying to solve the problems in a diplomatic way..
     
  7. Mohan

    Mohan Respected Member

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    How long would the war last? if it ever happened. I know that it will not happen.What would India do if China tries to back Myanmar.Me thinks it has to remain neutral and seal the border.Let them slog it out.

    Our previous experience shows that its not worth anything helping any body.
     
  8. amitkriit

    amitkriit Senior Member Senior Member

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    India will surely remain neutral, we share border with both the countries, its not in our national interest to favour one against the other. Its a bilateral issue between Bangladesh and Myanmar, they are the ones who need to short it out. China will try everything to diffuse the situation, as assisting one against the other will not serve their long-term interest in the region. From the reports/statements coming in we can deduce that war is not going to happen any time soon.
     
  9. leonblack08

    leonblack08 Respected Member

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    Latest news

    Border sees push-ins, push-backs
    Rohingyas driven into Bangladesh territory every day

    [​IMG]
    A Myanmar national with her child crosses over to Bangladesh territory at Naikkhangchhari of Bandarban avoiding detection by Bangladesh Rifles personnel and persecution by Nasaka on the other side. Inset, these people end up at the Rohingya refugee camp in Ukhia. Photo: Anisur Rahman

    Our Correspondent, Bandarban
    Push-ins and push-backs are going on across the border with Myanmar amid tensions following mobilisation of a huge number of Myanmarese troops along the border for erecting barbed wire fence.

    Meanwhile, Bangladesh has sent in more reinforcements on the border with Myanmar to strengthen its strategic position in the face of massive military build-up by the latter's junta.

    Sources at the intelligence agencies said Nasaka, the border security force of Myanmar, gathered about 10,000 Rohingyas at several bordering points opposite Naikhongchhari last week in a bid to push them into the Bangladesh territory.

    Local people said even after receiving the Rohingyas from the Bangladesh authorities, Nasaka forced them again to enter into the country using other borders of the hill district.

    Some 154 Rohingyas were pushed back to their country in last two weeks through the Naikhongchhari border, BDR sources said.

    The Rohingyas who returned from their country after the handover to the Myanmar authorities said they were compelled to enter into Bangladesh as Nasaka men tortured them and forced them to work like building barbed wire fence, bunkers, etc.

    Against the backdrop of this trend, police and BDR have taken the policy of pushing the Rohingyas back to Myanmar instead of filing cases against them to avoid the problems in jails created by their continued infiltration into Bangladesh.

    A source in Bandarban district police said 550 accused and convicts, most of them Rohingyas, are staying in the Bandarban jail with a capacity of 114.

    The source said the pushing back policy has been taken following directives from the high-ups in the government.

    Wishing anonymity a BDR official told The Daily Star that they cannot stop Rohingya infiltration due to lack of surveillance on 288 km long border as the geographical location is unfavourable and the number of border out post (BoP) insufficient.

    Police and BDR in separate drives held 44 Rohingyas from the district this week. Of them, 12 Rohingyas were held from Ali Kadam upazila on Sunday night, 21 from Sadar upazila on Tuesday while 11 from Lama upazila on Wednesday.

    MORE TROOPS MOBILSED ON BORDER

    Bangladesh has sent in more reinforcements on the Myanmar border to strengthen its strategic position in the face of massive build-up and repeated provocative actions by the military junta on the other side, border sources said.

    They said three more battalions were mobilised yesterday. A convoy carrying cannons, artillery guns and other armaments from Comilla and Chittagong were moved to the border. They were stationed in Barabil of Ramu and Fashiakhali in Bandarban.

    Tension arose on the Bangladesh-Myanmar border as Myanmar augmented its forces in the border area with tanks, artillery guns and warships in the adjacent waters.

    People in the bordering villages said Myanmar constructed bunkers to fortify the border area and its forces were patrolling with heavy weapons.

    Earlier Bangladesh sent a brigade to Ramu upazila of Cox's Bazar. It was moved in to the bordering area yesterday.

    Sources in Bangladesh army said Myanmar would not be able to intrude into our territory, as the soldiers of BDR remain on high alert.

    The Daily Star - Details News
     
  10. leonblack08

    leonblack08 Respected Member

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    Without a doubt Uncle Sam will be the champion.

    The reason being,if a war breaks out,US gets the excuse to overthrow the Junta and set up a puppet govt. so that US gets its hand on Burmese oil and gas.
    Even if US does not attend physically,they will be backing Bangladesh.Now after the war is over,US get to set up a base in Bangladesh.Also get hand on the oil in Bay of Bengal.
    Also it will allow US to keep the Chinese in check,reducing two of its friends in the region.


    Now if you ask me about the biggest loser,then it has to be Bangladesh.A war at this moment is going to hurt our economy seriously.So we need to try to diffuse it through talks.But unfortunately it seems that the Burmese are unwilling to talk.
     
  11. Atul

    Atul Founding Member

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    Practically this war will not benefit either Bangladesh or Myanmar.

    Diplomatically it will be a direct blow to the Chinese. Since china views both Bangladesh & Myanmar as a tool to encircle India. any war will result in a failure of the Chinese Diplomacy.

    The US may had tried to en-cash on the situation, had it being during the Bush Era.

    The Biggest beneficiary will be India, Coz this war will loosen the Chinese Grip on both its Neighbours.
     
  12. leonblack08

    leonblack08 Respected Member

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    Myanmar Border
    Bangladesh makes diplomatic moves to calm tension
    M Abul Kalam Azad
    Apart from mobilising reinforcement, Bangladesh is also making diplomatic efforts to calm the tension sparked last week following Myanmar's heavy military build-up in the border areas, said sources.

    The foreign ministry has already talked with the Myanmar ambassador in Dhaka while Bangladesh ambassador in Yangon is discussing with the country's government for a peaceful solution of the latest border crisis between the two neighbours, the sources said.

    "We want a peaceful solution and discussion is going on in different forums," Home Secretary Abdus Sobhan Sikder told The Daily Star yesterday. He said Bangladesh as before would try to resolve the current problem through discussions.

    He said home ministry would call the Myanmar ambassador in Dhaka within a day or two to discuss the border situation.

    Sources in the foreign and home ministries said Bangladesh is also negotiating with China, a close friend of Myanmar, to resolve the crisis.

    Asked whether Bangladesh is negotiating with China or any other third party to mediate the matter, the home secretary declined to say anything.

    Meanwhile, Chief of Bangladesh Rifles (BDR) Maj Gen Mainul Islam is expected to visit Myanmar soon to talk with the country's military authorities about the border situation. He is also likely to have discussions on some other unresolved issues.

    "I have proposed a visit to Myanmar by the home ministry to defuse the tension, the directorate general of BDR told The Daily Star.

    Asked what actions Bangladesh has taken following the military build-up by Myanmar, the home secretary said the government has no intention to engage in a conflict but put on alert all forces, including the BDR, navy, air force and coastguards.

    On the presence of Myanmar military personnel on the border violating international laws, he said Bangladesh objected to the incident urging the country's government not to bring in military on the border.

    "Border guards are supposed to be on both sides of the border. But if one country brings in its army on the border it triggers tension," said the home secretary, adding that the Myanmar authorities informed Bangladesh that their military personnel visited the border to see various activities by Nasaka (border force of Myanmar).

    He said the government is also in talks with the United Nation High Commissioner for Refugees (UNHCR) in Dhaka, requesting her to persuade the Myanmar authorities so that no more refugees are pushed in.

    The foreign ministry officials are tight-lipped about the border crisis. Foreign Minister Dipu Moni termed the military movements in Myanmar territory a routine work.

    But some foreign ministry officials, seeking anonymity, confirmed the diplomatic manoeuvring to resolve the crisis peacefully. "You can term it silent diplomacy," said one of the officials.

    Myanmar has brought in tanks, artillery and warships indicating a large-scale conflict with Bangladesh. Its forces are repeatedly making bids to push-in Rohingyas. Bangladesh forces remained alert in the bordering areas to thwart such attempts.

    The Daily Star - Details News
     
  13. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    China is going to help resolve this ?? Unlikely China has armed Burma and is probably got it eyes on Bangladesh's natural gas to pillage. China has also always voted against sanctions for Burma in UNSC.
     
  14. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Bangladesh Worried About “Massive Burmese Troops Build Up” | 2point6billion.com - Foreign Direct Investment in Asia

    Bangladesh Worried About “Massive Burmese Troops Build Up”

    Oct. 14 – Senior Military officials in Bangladesh have expressed concern about a “massive” build up of Burmese troops on the country’s eastern border and have deployed three army brigades to the border as reinforcements, Reuters reports.

    The buildup has occurred along the 320 kilometer frontier, which runs partially along the Naf River. The Burmese troops have apparently massed positions facing towards Bangladesh, dug bunkers and brought in artillery.

    The river has some disputed border areas, most notably several islands that are claimed by both sides. Bangladesh has recently expressed dissatisfaction with Burmese exploration in the river. The two sides have previously exchanged gunfire in a previous altercation in 2001.
     
  15. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    India’s Army Chief visits Burma

    India’s Army Chief visits Burma

    The chief of India’s army, General Deepak Kapoor, kicked off a three-day visit to Burma on Sunday to meet with Burmese generals to enhance military-to-military cooperation.

    “We have always had close ties with them [Burma], including in counter-insurgency training,” an Indian army officer told Press Trust of India (PTI) on Sunday.
    Indian Army chief General Deepak Kapoor inspects the guard of honour during the Army Day parade in New Delhi in January. (Photo: Reuters)

    The PTI reported that the Indian generals’ visit to Burma “comes at a time when China has unveiled plans to construct a railway line up to its border” with military-ruled Burma.

    Commenting on Beijing’s influence in the region, Deepak Kapoor, in a TV interview on Oct. 6, said, “The Indian army is capable of looking after and ensuring the defense of the country. It would take care of any aggression against Indian territory.”

    “The charter of the Indian army is to defend India’s territory and that will be ensured at all costs. Any talks of a repeat of 1962, I think that it is totally incorrect and uncalled for and it’s not fair,” he said, referring to the Sino-India border conflict in 1962 when the Chinese People’s Liberation Army advanced into India’s territory.

    Recently, India media have accused the Chinese military of transgressions in 2008 and 2009.

    “As far the transgressions are concerned, in the year 2009 so far, they are almost exactly at the same level as they were in the same corresponding period in 2008,” Deepak Kapoor said.

    Burmese state-run media have not reported on the meeting with India’s military chief.

    Following the crackdown on the 1988 democracy uprising in Burma, India was a strong supporter of the Burmese pro-democracy movement, and it is now home of tens of thousands of Burmese refugee.

    India’s pro-democracy policy on Burma made a sudden turn when the world’s largest democracy launched its “Look East Policy” in the 1990s to counter Chinese influence in Southeast Asia.

    Since then, India has built a closer relationship with the Burmese junta, engaging in increased trade and providing it with military hardware, while toning down its pro-democracy stance.

    “The Sino-Burmese gas pipeline and the Kumming-Singapore railway route through Burma are concerns for India. Apart from their Chinese concerns, the Indian insurgency in the northwest is another significant issue in the Indo-Burmese relationship,” said Tint Swe, an exiled Burmese politician in New Delhi.

    The Burmese military cooperated more closely with its Indian counterparts in counter insurgency along the border after New Delhi toned down its pro-democracy policy on Burma. However, Indian insurgents are still based in Burmese jungles along the border and they frequently clash with the Indian army using Chinese-made weapons.

    The Jame’s Intelligence Review reported in 2008 that Indian insurgents bought Chinese weapons through the biggest non-state armed group in Burma, the United Wa State Army, based on the Sino-Burmese border.

    Burma military experts say the junta wants a good relationship with India to balance its dependency on China. The Burmese military has imported arms from India and also sent military officers to attend India’s military academies.

    The junta’s No.2, Vice Snr-Gen Maung Aye, is the key player in improving the Indo-Burma relationship. His last visit to India was in early April 2008. During the trip, India signed mult-million dollar agreements for the construction of a seaport and transportation system in Burma.

    According to India’s media, former Indian Army chief Gen. J. J. Singh and Navy chief Admiral Arun Prakash visited Burma in November 2005 and January 2006.

    Meanwhile, US President Barrack Obama’s new Burma policy calls for more pro-active cooperation from Burma’s neighbors, such as India and China, in promoting democracy in the military-ruled state.
     
  16. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    your facts are not correct India has very close relations with Burma. Burma has pledged they will not allow any anti-Indian activity from Burmese soil in India. India and Burma share strong military ties, and India has never pressurized Burma in the UN even after US demands or enforced sanctions, you are misled into thinking Burma is playing an anti-Indian role. Bangladesh is anti-indian and they will help China try to encircle India so India will most definetly be backing Burma in this conflict, as far as USA goes they are not going to bother with small fries of no strategic value or irritate a nation backed by two behemoth military powers especially when they are having trouble in their own wars.
     
  17. leonblack08

    leonblack08 Respected Member

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    Last November we had a similar naval stand off with Burma.And it was China who helped resolve the situation.I don't see any reason why it won't be able to do it again.Unless,the Burmese Junta have completely lost their sanity.

    In case you forgot,China also armed Bangladesh.Our largest arms supplier.They have lot of investment here in Bangladesh.So China has interest on both the countries.
     
  18. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Chinese would benefit most in any war situiation as you have said:
    1)they are arming Burma and Bangladesh (US model arming both Iran/IRAQ, India/pakistan etc..)
    2)when Burma gains any territory it benefits China in terms of natural resources
    3) why invest in Bangladesh when you can take the natural resources by war (following US model)
     
  19. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    Burma and Its Neighbours: The Geopolitics of Gas — Global Collaborative

    Burma and Its Neighbours: The Geopolitics of Gas


    Essay - Burma and Its Neighbours: The Geopolitics of Gas
    Introduction

    At present, no progress is being made in the direction of reintroducing democracy in Burma, [1] or even in preparing the ground for a government with more civilian influence. Rather, the situation within the country seems to be deteriorating, with numerous new reports of violence, forced displacement and other signs of repression. The Burmese military regime recently moved its official capital from the commercial and cultural metropolis Yangon to a more protected, newly constructed internal capital at Pyinmana. Yangon was probably seen by the regime as too exposed from a security perspective.

    The illegitimate and oppressive nature of the current Burmese regime has been a key concern in European and American policymaking on Burma, and has also represented a problem for Burma's fellow member-states in the Association of Southeast Asian Nations (ASEAN). Several of the ASEAN countries, as well as India and China, have sought to downplay or even ignore this problem so as not to undermine their national interests in maintaining close relations with the Burmese power-holders.

    The energy-security concerns of Thailand, India and China are key factors in the relations of all three countries with Burma. In principle, India and China have pledged to cooperate in the field of energy security in order to avoid costly rivalries. In practice, however, commentators expect that the two oil-importing giants will find it more or less impossible to avoid such rivalries. In relation to Burma, this seems difficult indeed. The immediate issue is competition between India and China over gas from Shwe, a newly discovered gas field off the coast of Arakan. An underlying Indian concern is China's naval presence and intelligence-monitoring both in the Bay of Bengal and the Andaman Sea, where the Indian navy has been used to operating without interference, and in the Strait of Malacca.

    For fear of losing influence with the Burmese regime, both India and Thailand have chosen a 'pragmatic' approach to the country's State Peace and Development Council (SPDC), whereas China tends to support Burma's rulers whenever they come under external pressure to undertake reforms. All three of Burma's neighbours are set to maintain a strong strategic interest in Burma, but the importance of Burma to the Chinese security agenda deserves particular attention. China relies on its bases on Burmese territory to monitor the Indian Ocean and the entrance to the Strait of Malacca, a waterway of crucial importance for the provision of oil and other necessities to China, Taiwan, South Korea and Japan. The strategic importance of the Malacca Strait has become even greater over the last decade, with China's growing dependence on imported oil. About 80% of all oil supplies to China are currently shipped by tankers through the Malacca Strait. Military planners in China fear an embargo in the event of war or an acute crisis in their relationship with the United States. Chinese assistance to port development in Burma is linked closely to China's objective to reduce its dependence on tanker transports through the Malacca Strait and South China Sea. The current Sino-Indian rivalry over Burmese natural gas from the Shwe field may give rise to further competition to assist the Burmese regime in building deep-sea ports and maritime facilities, as well as connecting infrastructure such as roads and airstrips, and of course gas pipelines. Calls by the Burmese pro-democracy movement for a tightening of the current EU and US sanctions regimes are premised on the assumption that it would be difficult for the Burmese military regime to remain in power without foreign trade and investments. That may be so, but the likelihood that Burma could be economically isolated is currently growing ever more remote. Burma's single most valuable export commodity is natural gas, which is becoming increasingly important to Burma's neighbours and key trading partners. Thailand has already invested heavily in Burmese natural gas and is currently entering into new energy deals with the Burmese regime. China plays a key role as a trading partner. Its trade with Burma reached $1.2 billion in 2005, of a total Burma trade of $5 billion. [2] China will further consolidate its economic ties with Burma with the building of two new pipelines through the country, one for oil and the other for gas. India is set to become a third major partner to the Burmese regime if its new gas pipeline plans are realized. Considering the vital significance of Burmese natural gas, both as a major source of revenue for the military regime and as an important aspect of the current energy security strategies of the neighbouring states, the present report takes a comprehensive look at the geopolitics of Burmese gas. It describes the history of oil and gas exploitation in Burma, the political context and the main stakeholders involved, with a focus on the emerging rivalry between India and China over Burmese gas. In conclusion, the report outlines some basic policy implications of the analysis, suggesting issues to consider in a much-needed re-examination of how to 'constructively engage' the Burmese junta.
    A History of Oil and Gas Exploitation

    Burma is one of the poorest countries in Asia. It is also among the world's oldest oil-producing countries. Oil has been extracted manually at Yenangyaung on the Irrawaddy River since ancient times, and the first exports of crude oil were shipped to Britain as early as 1853. [3] The first foreign oil company to operate in Burma was the Rangoon Oil Company, set up in 1871 by a group of Scottish entrepreneurs. Oil, timber and gems were the natural resources that drew British interests to Burma, which was annexed as a province of British India in 1886. The extraction of oil was subsequently monopolized by the British through the Burmah Oil Company, which was set up in continuation of the Rangoon Oil Company in 1886 and dominated the Burmese oil industry until 1962. Immediately after Burma's annexation, the Burmah Oil Company took over the Yenangyaung oil field from its indigenous owners. In 1897, another major oil field was discovered at Singu in the Irrawaddy basin: the Chauk-Lanywa field. By 1906, Burmah Oil delivered nearly half of all kerosene supplies to India and was a contracted provider of fuel oil to the British Navy. Oil refineries were built at Syriam, a river port opposite Yangon (Rangoon). Later, crude oil from Chauk was sent by a 563 km pipeline to Syriam for refining. A profitable oil industry was established, with production reaching 6.56 million barrels in 1939 and oil exports amounting to US$35 million in 1940. [4]

    Oil production declined from 1942, when Japan occupied the country and destroyed the Syriam refinery. Insurgent sabotage of the pipeline during the independence struggle after World War II confined marketing of Chauk's oil to northern Burma. Oil tankers began operation on the Irrawaddy River as an alternative means of transport to the damaged pipeline. A refinery at Chauk was renovated in 1954, and the pipeline was repaired between Chauk, Tagaing and Yenenma, and between Prome and Syriam. The Syriam refinery was restored in 1957 and underwent expansion in 1979 with Japanese assistance. A pipeline connecting the Mann oilfield and Syriam was also completed in 1979, and the Syriam refinery now has a tanker terminal, while Mann has its own refinery. [5]

    Burma's independence from Great Britain in 1948, after 62 years of colonization, was followed by recurrent political unrest, armed insurrections and civil strife, particularly among the Mon, Rohingya and Karen minorities. The Chinese civil war also spilled over into northern Burma. According to some estimates, the death toll from armed conflict may have reached 60,000 in the first two years after independence. [6] During the first years of civil war, oil production was badly hit. The oil fields at Yenangyaung, which were for a long time the country's most productive, were seized by rebels (Communist Party of Burma and People's Volunteer Organisation) and not recaptured by government troops until 1953. [7] The Burmese government always regarded the country's oil and gas reserves as an important economic asset, and even the opposition used promises of oil concessions to fund their activities. According to one account, the prominent opposition leader U Nu, who served as prime minister in 1948-58 and 1960-62, received US$1 million after reportedly making a deal with the Canadian Asmara Oil Company in the late 1960s. [8]

    After 1962, when Socialist military rule was established under Ne Win, the oil industry was nationalized. The Myanma Oil and Gas Enterprise (MOGE) was set up in 1963, under the Ministry of Energy. The ministry later established the Myanma Petrochemical Enterprise, which operated refineries and processing plants, and the Myanma Petroleum Products Enterprise, which handled the distribution of petroleum products. In the early 1980s, the first offshore joint venture was set up with a Japanese investment company to explore and develop offshore gas in the Gulf of Martaban. In 1985, another agreement was signed with Petro-Canada International Assistance Corporation to do a feasibility study for offshore gas development in the Gulf. When Ne Win finally stepped down in the summer of 1988, what became known as the Burmese democracy movement organized numerous mass rallies and strikes all over the country. The Syriam oil refinery was brought to a standstill. [9] The movement was defeated after a military coup and the imposition of martial law by the State Law and Order Restoration Council (SLORC). [10] A year later, in 1989, the Syriam refinery was targeted by a bomb attack, leading to the arrest and execution of three suspects after summary trials. Until the 1990s, timber and oil were key export products for Burma. During the 1960s and 1970s, oil production remained modest, but increased from 3.81 million barrels in 1965, to 6.3 million barrels in 1971, to 9.55 million barrels in 1978. [11] In the early 1980s, however, production declined, owing to technical limitations and government reluctance to accept the participation of foreign firms. Before SLORC took power in September 1988, all Burmese governments had prohibited foreign participation in onshore oil exploration and production. In 1988 SLORC opened up the opportunity for foreign companies to explore for oil and gas. After the promulgation of the Foreign Investment Law in November 1988, [12] MOGE entered into production-sharing contracts (PSCs) with several multinational oil companies on petroleum exploration and production in both onshore and offshore areas. Ten companies, from the USA (Amoco), Canada (Petro-Canada), Britain (Royal, Premier), France (Total), the Netherlands (Dutch Shell), Japan (Idemitsu), Australia (Broken Hill) and Korea (Yukong) received concessions. [13] Substantial payments were made to SLORC on the signing of contracts. However, the results of onshore oil exploration were disappointing, and by 1997 only five companies remained active in the country. Throughout this period, oil production was in decline. In the fiscal year 1989/90 annual production was as low as 5.5 million barrels, in 1994/95 the figure was 4.28 million barrels, and in 1996/97 only 3.8 million barrels. [14]

    Natural gas production started in 1974 at the Aphyauk gas field near Taikkyi Township in the lower delta of the Irrawaddy River. Gas produced by the wells at this field was piped to Yangon for power generation at Thaketa and at Shwedaung near Prome, as well as for industrial use at the Sittaung paper mill in Yangon. In 1975, gas production reached 4,575 million cubic feet, rising to some 40,000 million cubic feet in 1990, dropping to 31,782 million cubic feet in 1991/92, and rising again to 58,575 million cubic feet in 1996/97. [15] Starting in 1990, the first foreign companies to buy offshore natural gas concessions were Premier Oil (UK) and Total (France). In the early 1990s, SLORC invited foreign bids for offshore exploration in 18 concession blocks, 13 in the Gulf of Martaban and five off the coast of Arakan state. Oil companies such as Texaco, Premier Oil, Total and Unocal were among the successful bidders. Two major offshore gas fields, Yadana and Yetagun, were discovered in the Gulf of Martaban. The Yadana field has estimated gas reserves of more than 5.3 trillion cubic feet, or 150 billion cubic metres, with an expected field life of 30 years. The Yetagun field has estimated reserves of 48 billion cubic metres. Production from the Yadana field started in 1998, and production from Yetagun started in 2000. The discovery of a new gas field off the coast of Arakan was announced in 2004. The Shwe gas field, as it was named, has been divided into several blocks, of which the A-1 and A-3 blocks are currently under development.

    continued
     
  20. LETHALFORCE

    LETHALFORCE Moderator Moderator

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    The Political Context

    The National League for Democracy (NLD) grew out of the 1988 democracy movement and has been led since that time by Aung San Suu Kyi. Soon after SLORC rule was established, Suu Kyi was detained and put under house arrest. In 1990, general elections were held. The NLD gained a clear majority of the votes, but SLORC refused to give up its dictatorial rule. Suu Kyi was held under house arrest until 1995, and has been closely watched and under house arrest intermittently in the last eleven years as well.

    Although SLORC invited foreign investment and a number of Western companies took up their offer, many have since withdrawn from Burma - for varying reasons. Following longstanding protests against investment in Burma, the European Union introduced its first Common Position on sanctions against Burma in 1996, and US President Bill Clinton enforced a prohibition on future investments in Burma in 1997. This was on the advice of the Burmese democracy movement, including Burmese exile activist groups, Aung San Suu Kyi and the NLD. The EU Common Position has been gradually expanded. It currently prohibits investment in Burmese state-owned enterprises, precludes travel to the EU by officials of the SPDC and their families, and freezes their bank accounts. Multinational companies operating in Burma have also been under heavy pressure from NGOs, especially in Europe and the United States, who have carried out numerous public campaigns, including protests outside shareholder meetings and the publication of blacklists of companies with a presence in Burma. [16] The Yadana pipeline and Yetagun gas development projects have been particularly controversial. Since the 1990s, NGOs have also provided legal assistance to Burmese nationals affected by the construction of the Yadana pipeline, and have taken their cases to court in the USA and Europe. In 1996, EarthRights International filed a lawsuit in US courts on behalf of 15 Burmese villagers, against California-based Unocal for human rights abuses associated with the construction of the Yadana pipeline. [17] In 1997, the US Federal District Court in Los Angeles found that 'the evidence does suggest that Unocal knew that forced labor was being utilized and that the Joint Venturers benefited from the practice'. On the basis of this finding, the Court concluded that corporations and their executive officers can be held legally responsible under the Alien Tort Claims Act for violating international human rights in foreign countries, and that US courts have the authority to adjudicate such claims. [18] In Europe, lawsuits were filed against Total, first in Belgium on the basis of the Universal Jurisdiction Law, citing 'complicity in crimes against humanity', and later in France, citing 'complicity in unlawful confinement'. [19]

    Both the case in France against Total and the case in the USA against Unocal were settled out of court, and none of the companies ceased operating in Burma. However, the mounting pressure did lead other oil companies to withdraw. In the mid-1990s, Texaco and Premier Oil were joint partners in the Yetagun project, but in 1997 Texaco withdrew from the venture and Premier Oil increased its stake from 20 to 27%. In 2002, Premier Oil also had to pull out of the Yetagun project, following sharp criticism of its involvement and calls for it to withdraw from both the British government and US investors. Premier's share in the Yetagun consortium was bought by the Malaysian oil company Petronas. In 2000, Aung San Suu Kyi was again detained, but in May 2002 she was released from house arrest after UN-led confidence-building negotiations. Following this, Japan and Australia agreed to provide financial support for targeted development programmes and dispatched their foreign ministers to Burma for the first time in almost two decades. Tokyo also began releasing part of a US$28 million aid package for a hydroelectric dam. [20] However, this situation did not last long. In May 2003, Suu Kyi was rearrested, together with a large number of NLD followers. The Association of Southeast Asian Nations (ASEAN), of which Burma became a member in 1997, broke its traditional principle of non-interference in the domestic affairs of its members and called for the release of Suu Kyi and other political prisoners in Burma. Japan, Burma's top donor, stopped all new humanitarian and development aid, and the EU extended and intensified sanctions for another year. [21] The United States authorized new sanctions under the Burma Freedom and Democracy Act of 2003 and the accompanying 'Presidential Executive Order', extending a visa blacklist to all of Burma's military leaders, freezing their overseas assets, and banning all imports from Burma. [22] US financial institutions were also directed to take special measures against Burma to deny access to the US financial system through correspondent accounts. [23]

    In August 2003, General Than Shwe resigned as prime minister while continuing as chairman of the SPDC, and General Khin Nyunt, former chief of military intelligence, became the new prime minister. In October 2004, new fissures appeared within the SPDC. After just over a year in office, Khin Nyunt was arrested on corruption charges (receiving a 44-year suspended sentence in 2005) and replaced by Lieutenant General Soe Win. Khin Nyunt had promoted UN-brokered talks between the government and the NLD and was considered to represent a relatively outward-oriented and conciliatory faction in the regime. However, the talks reached a stalemate when the government excluded the political parties from the constitutional drafting process and kept Suu Kyi under detention. [24] In the autumn of 2003, the government introduced a 'Road Map to Democracy', which has likewise failed to meet expectations. When the National Convention finally resumed constitutional talks in February-March 2005, a number of ethnic and political groups, including the NLD, were left out. In an unexpected turn of events, the regime also announced its decision to move the capital to Pyinmana. Moreover, the SPDC refused entry for both the UN special envoy for political reform and the UN human rights envoy. [25]

    Although the withdrawal of Western oil companies operating in Burma has certainly had consequences for the projects in question, the impact of such withdrawals on the Burmese economy has been negligible, since countries such as Thailand, China, India and Russia are expanding their economic ties with Burma. The Burmese regime depends on revenues from foreign investment, primarily in oil and gas production. Access to Burma's gas resources is highly attractive for Thailand, India and China, as well as Malaysia, South Korea and Japan.

    China and several ASEAN countries also see Burma as an important potential source of hydroelectric power. Hydropower development is set to become an important new income source for Burma, and another industry in which Burma has vital interests in common with its neighbours, particularly Thailand. In 2005, Burma signed an agreement with Thailand to build four new dams on the Salween River and one on the Tenasserim River. At the same time, the SPDC also signed contracts with two Chinese companies, CITIC Technology Co Ltd and Sino Hydro Corp Ltd, to build a new hydroelectric facility, the 790-megawatt Yeywa hydropower plant on the Dukhtawaddy River near Mandalay. [26]

    Japan provided funds for Burma's first large-scale hydroelectric project, the Lawpita hydropower plant and Mobye dam on the Balu Chaung River, built in the 1960s as part of Japan's war reparations package after World War II. According to the Karenni movement, the construction led to the displacement of more than 12,000 local villagers (mainly Shan and Karenni), due to forced relocation and land loss. [27] A Japanese company, Nippon Koei, was also involved in the initial planning, starting in 1981, of the Tasang Dam on the Salween River. At 228 metres, the Tasang Dam is slated to become the highest dam in Southeast Asia. The Chinese hydroelectric construction company Sino Hydro Corp Ltd is one of the interested parties in the hydropower projects developed by the Electricity Generating Authority of Thailand (EGAT), including the Tasang Dam and four other dams in Burma. The Asian Development Bank is promoting a US$4.6 billion regional electricity scheme, which is to be powered in part by the Tasang Dam. [28] According to current plans, 12 hydropower projects in China, Burma and Laos will fuel the 'Mekong Power Grid' and generate power for consumers in Thailand and Vietnam. These include the Tasang in Burma, the Jinghong and Nuozhadu projects in China, and the Nam Theun 2 in Laos. In addition to the need for foreign revenue from hydropower and gas development, Burma's foreign relations are driven by the SPDC's need for military assistance. Since the early 1990s, China has been the major provider of weapons, military aircraft, naval ships and other military hardware. China withdrew, however, from a project to develop a Burmese nuclear research reactor. In 2002, Russia instead signed an agreement to assist Burma in building this reactor. It has since been constructed on an island off the Burmese coast. There is also reliable evidence that Pakistan has been assisting the Burmese nuclear research programme. Two Pakistani scientists who were involved in Pakistan's nuclear arms programme have been working in Burma for several years. Their presence in Burma was revealed when they appeared on a list of suspected 'terrorist connections' presented to Pakistani authorities by the CIA in late 2001. [29] Burma recently granted the two scientists asylum. [30]

    In April 2006, a top-level Burmese 'goodwill' delegation to Moscow reportedly sought Russian investment in hydropower and communications projects. [31] The Russian foreign ministry announced that the two sides discussed the importance of a regular dialogue on international and regional problems and expressed interest in cultivating cooperation in fighting terrorism and drug-trafficking. In exchange for access to Burmese oil and gas resources, Russia also agreed to supply a range of arms, including Tor-M1 and Buk-M1-2 air-defence systems, as well as MiG-29 fighters. [32] Russia further offered to build factories for repairing and upgrading arms bought from the former Soviet Union. According to some analysts, this was done 'in a bid to end Chinese monopoly'. [33] However, an alternative interpretation is that these factories would accommodate Chinese as well as Russian interests, since the hardware in question is also used by the Chinese military. In support of this view, Russian assistance to Burma was described by one commentator as 'a contribution to regional security following President Vladimir Putin's recent visit to China'. [34] From the SPDC's perspective one of the key advantages of cooperating with Russia is to reduce the country's dependence on China. Another factor is the Russian assistance to Burma's nuclear research programme. ASEAN, Australia and India are all seeking to 'constructively engage' the Burmese regime, and this, as well as China's close cooperation with the SPDC, is regarded by critics as undermining sanctions imposed by the USA and the EU. However, others take a more pragmatic view, also taking into consideration factors such as the implications of the Western-imposed sanctions on Burma's economic and geopolitical ties, as described above. For instance, within the EU negotiations on the Common Position, France has objected to the current use of sanctions and called for more lenient sanctions or the replacement of sanctions with active engagement. In 2005, China and Russia also challenged US Burma policies, using the threat of a veto to block a US move in the UN Security Council to implement recommendations on Burma. After the USA and the EU had threatened to boycott ASEAN meetings if Burma assumed the chair in 2006, Burma's rulers agreed to relinquish the country's turn to hold the rotating ASEAN chairmanship. During a recent meeting of the ASEAN Regional Forum (ARF), however, Chinese Foreign Minister Li Zhaoxing chose to skip the security point on the agenda, and travelled to Burma instead to express solidarity with the regime. [35] These are just a few examples of the continuous diplomatic manoeuvring over Burma, with China, Thailand and other ASEAN countries, the United States, India, the EU, Australia and Russia playing the key roles.
    Actors and Interests in Burmese Natural Gas

    In 2004, Burma exported natural gas (through the Yadana pipeline) to Thailand for nearly US$1 billion, which is claimed to be at least twice as much as Burma could have earned from trade with the USA and the EU if they had not applied sanctions. [36] The oil and gas sector continued to grow in 2005, owing to Chinese, Thai, South Korean and Indian investments. Thailand's imports from Burma, mainly consisting of gas from Yadana and Yetagun, rose by more than 50% that year. [37] Gas is now by far the most important source of income for Burma, and one-third of foreign direct investment (FDI) in Burma is in the oil and gas sector. The combined FDI in Burmese oil and gas since 1988 is approximately US$2.5 billion, 33% of all of Burma's FDI. [38] From the newly discovered Shwe field alone, the Korean Daewoo International has predicted at least US$86 million in net profit annually for 20 years from 2010, while Burma is projected to earn a minimum of US$800 million a year, and potentially up to US$3 billion. [39]

    The Yadana project was developed by a consortium consisting of Total (31%), Unocal (28%), PTT-EP of Thailand (26%) and Burma's own MOGE (15%). It is operated by Total. Gas from Yadana is transported via a 346 km subsea pipeline and a 63 km onshore pipeline from the Yadana field to the border between Burma and Thailand at Ban I Thong. At the border, the Yadana pipeline connects with a pipeline built by Thailand, which carries the gas to its destination area near Bangkok, providing fuel to the Rathcaburi and Wang Noi power plants. Gas from the Yadana field covers an estimated 15-20% of Thailand's demand for natural gas. [40]

    The Yetagun gas field was developed by a joint venture of Texaco (50%), the British oil company Premier Oil (30%) and Nippon Oil (20%). Following Texaco's withdrawal in 1997 and Premier Oil's in 2002, Yetagun is operated by Petronas in partnership with MOGE (20%), Nippon Oil (19%) and PTT-EP (19%). The gas is transported by 210 km of subsea pipeline and 67 km of onshore pipeline, linking up onshore to the Yadana pipeline. The Yadana pipeline was constructed and is operated by the Moattama Gas Transportation Company, which has been set up by the shareholders in the Yadana gas field project. In August 2000, the South Korean Daewoo International partnered with MOGE to explore and potentially develop offshore natural gas deposits in the Bay of Bengal off the coast of Arakan. Exploration commenced, and in 2004 Daewoo International announced the discovery of the Shwe field, off the coast of Sittwe, the capital of Arakan state. There are preliminary plans to explore for gas in several blocks in the Bay of Bengal, but so far test drilling has only been made in Shwe's blocks A-1 and A-3. The A-1 block is the largest, estimated to contain between 2.88 trillion and 3.56 trillion cubic feet of natural gas. Partners in the project's international consortium are Daewoo (60%), the state-owned Korean Gas Corporation (10%), and India's ONGC (20%) and GAIL (10%). Production from the Shwe field is planned to start in 2009. Natural gas from Shwe has become a contentious issue in relations between India and China, and an obstacle to Sino-Indian energy cooperation. For more than two years, it was presumed that gas from the A-1 Block would serve uniquely the Indian market via an overland pipeline running through Burma's Arakan and Chin states, across Bangladesh to Kolkata. [41] However, using India's growing demand for natural gas as a leverage point, Dhaka set forth a number of conditions for allowing any pipeline to cross Bangladeshi territory: establishing trade routes for commodities from Bangladesh to Nepal and Bhutan through Indian territory; allowing transmission of hydro-electricity from Nepal and Bhutan to Bangladesh through Indian territory; and pursuing measures to reduce Bangladesh's trade imbalance with India. [42] The project reached a diplomatic stalemate when India rejected these conditions. In December 2005, while India and Bangladesh deliberated to a standstill, Burma seized the opportunity to sign a Memorandum of Understanding with PetroChina for the sale of gas from the A-1 Block to China through an overland pipeline through Burma to Kunming, the capital of China's Yunnan province. [43]

    The introduction of China into the Shwe gas picture was to be expected for several reasons. According to Burmese scholar Dr. Kyaw Yin Hlaing, the Memorandum of Understanding with PetroChina should be seen in light of the ever-growing trade relationship between Burma and China. When PetroChina indicated that it was ready to buy, the Burmese regime had no incentive to set aside the gas exclusively for India and patiently await the outcome of stalled bilateral negotiations with Bangladesh. [44] With another buyer at hand, there is also added pressure on the Indians to find solutions to their problems, including alternative pipeline routes bypassing Bangladesh. Burma already gains substantial hard currency from the sale of natural gas through pipeline to Thailand, and the Burmese rulers are of course aware of the advantages they can reap from negotiating prices when selling gas from the same field to more than one country at a time. Following publicity on the PetroChina agreement, Burma assured the Indian petroleum ministry that it had sufficient gas reserves to meet the needs of both China and India, although India would have to wait until May 2006 for third-party consultants to confirm reserves before export deals were finalized. Burma was waiting for assessments of several deposits, including the Mya1 well in the A-3 block. The Burmese promise seems to have satisfied the Indian government. In early 2006, Brussels-based consulting firm Suz Tractebel was hired to conduct a feasibility study for overland pipeline routes to Northeast India, circumventing Bangladeshi territory. [45]

    It should be in the interest of Burma to diversify its foreign relations, but the military regime has done so only to a limited extent, favouring its relations with China. Burma has of course strengthened its economic ties with other neighbours, including Laos, Thailand and India, and with allies such as Vietnam and Russia. However, when Burma recently agreed to Chinese pipeline projects both for oil and gas, this drew Burma even deeper into the Chinese sphere of interest. On the other hand, if the current plans are realized, gas pipelines from Burma will extend into two new and significant markets for Burmese natural gas, India and China. Burma may then play its three gas customers against each other when negotiating for the best possible prices.

    continued
     
  21. LETHALFORCE

    LETHALFORCE Moderator Moderator

    Joined:
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    The Political Context

    The National League for Democracy (NLD) grew out of the 1988 democracy movement and has been led since that time by Aung San Suu Kyi. Soon after SLORC rule was established, Suu Kyi was detained and put under house arrest. In 1990, general elections were held. The NLD gained a clear majority of the votes, but SLORC refused to give up its dictatorial rule. Suu Kyi was held under house arrest until 1995, and has been closely watched and under house arrest intermittently in the last eleven years as well.

    Although SLORC invited foreign investment and a number of Western companies took up their offer, many have since withdrawn from Burma - for varying reasons. Following longstanding protests against investment in Burma, the European Union introduced its first Common Position on sanctions against Burma in 1996, and US President Bill Clinton enforced a prohibition on future investments in Burma in 1997. This was on the advice of the Burmese democracy movement, including Burmese exile activist groups, Aung San Suu Kyi and the NLD. The EU Common Position has been gradually expanded. It currently prohibits investment in Burmese state-owned enterprises, precludes travel to the EU by officials of the SPDC and their families, and freezes their bank accounts. Multinational companies operating in Burma have also been under heavy pressure from NGOs, especially in Europe and the United States, who have carried out numerous public campaigns, including protests outside shareholder meetings and the publication of blacklists of companies with a presence in Burma. [16] The Yadana pipeline and Yetagun gas development projects have been particularly controversial. Since the 1990s, NGOs have also provided legal assistance to Burmese nationals affected by the construction of the Yadana pipeline, and have taken their cases to court in the USA and Europe. In 1996, EarthRights International filed a lawsuit in US courts on behalf of 15 Burmese villagers, against California-based Unocal for human rights abuses associated with the construction of the Yadana pipeline. [17] In 1997, the US Federal District Court in Los Angeles found that 'the evidence does suggest that Unocal knew that forced labor was being utilized and that the Joint Venturers benefited from the practice'. On the basis of this finding, the Court concluded that corporations and their executive officers can be held legally responsible under the Alien Tort Claims Act for violating international human rights in foreign countries, and that US courts have the authority to adjudicate such claims. [18] In Europe, lawsuits were filed against Total, first in Belgium on the basis of the Universal Jurisdiction Law, citing 'complicity in crimes against humanity', and later in France, citing 'complicity in unlawful confinement'. [19]

    Both the case in France against Total and the case in the USA against Unocal were settled out of court, and none of the companies ceased operating in Burma. However, the mounting pressure did lead other oil companies to withdraw. In the mid-1990s, Texaco and Premier Oil were joint partners in the Yetagun project, but in 1997 Texaco withdrew from the venture and Premier Oil increased its stake from 20 to 27%. In 2002, Premier Oil also had to pull out of the Yetagun project, following sharp criticism of its involvement and calls for it to withdraw from both the British government and US investors. Premier's share in the Yetagun consortium was bought by the Malaysian oil company Petronas. In 2000, Aung San Suu Kyi was again detained, but in May 2002 she was released from house arrest after UN-led confidence-building negotiations. Following this, Japan and Australia agreed to provide financial support for targeted development programmes and dispatched their foreign ministers to Burma for the first time in almost two decades. Tokyo also began releasing part of a US$28 million aid package for a hydroelectric dam. [20] However, this situation did not last long. In May 2003, Suu Kyi was rearrested, together with a large number of NLD followers. The Association of Southeast Asian Nations (ASEAN), of which Burma became a member in 1997, broke its traditional principle of non-interference in the domestic affairs of its members and called for the release of Suu Kyi and other political prisoners in Burma. Japan, Burma's top donor, stopped all new humanitarian and development aid, and the EU extended and intensified sanctions for another year. [21] The United States authorized new sanctions under the Burma Freedom and Democracy Act of 2003 and the accompanying 'Presidential Executive Order', extending a visa blacklist to all of Burma's military leaders, freezing their overseas assets, and banning all imports from Burma. [22] US financial institutions were also directed to take special measures against Burma to deny access to the US financial system through correspondent accounts. [23]

    In August 2003, General Than Shwe resigned as prime minister while continuing as chairman of the SPDC, and General Khin Nyunt, former chief of military intelligence, became the new prime minister. In October 2004, new fissures appeared within the SPDC. After just over a year in office, Khin Nyunt was arrested on corruption charges (receiving a 44-year suspended sentence in 2005) and replaced by Lieutenant General Soe Win. Khin Nyunt had promoted UN-brokered talks between the government and the NLD and was considered to represent a relatively outward-oriented and conciliatory faction in the regime. However, the talks reached a stalemate when the government excluded the political parties from the constitutional drafting process and kept Suu Kyi under detention. [24] In the autumn of 2003, the government introduced a 'Road Map to Democracy', which has likewise failed to meet expectations. When the National Convention finally resumed constitutional talks in February-March 2005, a number of ethnic and political groups, including the NLD, were left out. In an unexpected turn of events, the regime also announced its decision to move the capital to Pyinmana. Moreover, the SPDC refused entry for both the UN special envoy for political reform and the UN human rights envoy. [25]

    Although the withdrawal of Western oil companies operating in Burma has certainly had consequences for the projects in question, the impact of such withdrawals on the Burmese economy has been negligible, since countries such as Thailand, China, India and Russia are expanding their economic ties with Burma. The Burmese regime depends on revenues from foreign investment, primarily in oil and gas production. Access to Burma's gas resources is highly attractive for Thailand, India and China, as well as Malaysia, South Korea and Japan.

    China and several ASEAN countries also see Burma as an important potential source of hydroelectric power. Hydropower development is set to become an important new income source for Burma, and another industry in which Burma has vital interests in common with its neighbours, particularly Thailand. In 2005, Burma signed an agreement with Thailand to build four new dams on the Salween River and one on the Tenasserim River. At the same time, the SPDC also signed contracts with two Chinese companies, CITIC Technology Co Ltd and Sino Hydro Corp Ltd, to build a new hydroelectric facility, the 790-megawatt Yeywa hydropower plant on the Dukhtawaddy River near Mandalay. [26]

    Japan provided funds for Burma's first large-scale hydroelectric project, the Lawpita hydropower plant and Mobye dam on the Balu Chaung River, built in the 1960s as part of Japan's war reparations package after World War II. According to the Karenni movement, the construction led to the displacement of more than 12,000 local villagers (mainly Shan and Karenni), due to forced relocation and land loss. [27] A Japanese company, Nippon Koei, was also involved in the initial planning, starting in 1981, of the Tasang Dam on the Salween River. At 228 metres, the Tasang Dam is slated to become the highest dam in Southeast Asia. The Chinese hydroelectric construction company Sino Hydro Corp Ltd is one of the interested parties in the hydropower projects developed by the Electricity Generating Authority of Thailand (EGAT), including the Tasang Dam and four other dams in Burma. The Asian Development Bank is promoting a US$4.6 billion regional electricity scheme, which is to be powered in part by the Tasang Dam. [28] According to current plans, 12 hydropower projects in China, Burma and Laos will fuel the 'Mekong Power Grid' and generate power for consumers in Thailand and Vietnam. These include the Tasang in Burma, the Jinghong and Nuozhadu projects in China, and the Nam Theun 2 in Laos. In addition to the need for foreign revenue from hydropower and gas development, Burma's foreign relations are driven by the SPDC's need for military assistance. Since the early 1990s, China has been the major provider of weapons, military aircraft, naval ships and other military hardware. China withdrew, however, from a project to develop a Burmese nuclear research reactor. In 2002, Russia instead signed an agreement to assist Burma in building this reactor. It has since been constructed on an island off the Burmese coast. There is also reliable evidence that Pakistan has been assisting the Burmese nuclear research programme. Two Pakistani scientists who were involved in Pakistan's nuclear arms programme have been working in Burma for several years. Their presence in Burma was revealed when they appeared on a list of suspected 'terrorist connections' presented to Pakistani authorities by the CIA in late 2001. [29] Burma recently granted the two scientists asylum. [30]

    In April 2006, a top-level Burmese 'goodwill' delegation to Moscow reportedly sought Russian investment in hydropower and communications projects. [31] The Russian foreign ministry announced that the two sides discussed the importance of a regular dialogue on international and regional problems and expressed interest in cultivating cooperation in fighting terrorism and drug-trafficking. In exchange for access to Burmese oil and gas resources, Russia also agreed to supply a range of arms, including Tor-M1 and Buk-M1-2 air-defence systems, as well as MiG-29 fighters. [32] Russia further offered to build factories for repairing and upgrading arms bought from the former Soviet Union. According to some analysts, this was done 'in a bid to end Chinese monopoly'. [33] However, an alternative interpretation is that these factories would accommodate Chinese as well as Russian interests, since the hardware in question is also used by the Chinese military. In support of this view, Russian assistance to Burma was described by one commentator as 'a contribution to regional security following President Vladimir Putin's recent visit to China'. [34] From the SPDC's perspective one of the key advantages of cooperating with Russia is to reduce the country's dependence on China. Another factor is the Russian assistance to Burma's nuclear research programme. ASEAN, Australia and India are all seeking to 'constructively engage' the Burmese regime, and this, as well as China's close cooperation with the SPDC, is regarded by critics as undermining sanctions imposed by the USA and the EU. However, others take a more pragmatic view, also taking into consideration factors such as the implications of the Western-imposed sanctions on Burma's economic and geopolitical ties, as described above. For instance, within the EU negotiations on the Common Position, France has objected to the current use of sanctions and called for more lenient sanctions or the replacement of sanctions with active engagement. In 2005, China and Russia also challenged US Burma policies, using the threat of a veto to block a US move in the UN Security Council to implement recommendations on Burma. After the USA and the EU had threatened to boycott ASEAN meetings if Burma assumed the chair in 2006, Burma's rulers agreed to relinquish the country's turn to hold the rotating ASEAN chairmanship. During a recent meeting of the ASEAN Regional Forum (ARF), however, Chinese Foreign Minister Li Zhaoxing chose to skip the security point on the agenda, and travelled to Burma instead to express solidarity with the regime. [35] These are just a few examples of the continuous diplomatic manoeuvring over Burma, with China, Thailand and other ASEAN countries, the United States, India, the EU, Australia and Russia playing the key roles.
    Actors and Interests in Burmese Natural Gas

    In 2004, Burma exported natural gas (through the Yadana pipeline) to Thailand for nearly US$1 billion, which is claimed to be at least twice as much as Burma could have earned from trade with the USA and the EU if they had not applied sanctions. [36] The oil and gas sector continued to grow in 2005, owing to Chinese, Thai, South Korean and Indian investments. Thailand's imports from Burma, mainly consisting of gas from Yadana and Yetagun, rose by more than 50% that year. [37] Gas is now by far the most important source of income for Burma, and one-third of foreign direct investment (FDI) in Burma is in the oil and gas sector. The combined FDI in Burmese oil and gas since 1988 is approximately US$2.5 billion, 33% of all of Burma's FDI. [38] From the newly discovered Shwe field alone, the Korean Daewoo International has predicted at least US$86 million in net profit annually for 20 years from 2010, while Burma is projected to earn a minimum of US$800 million a year, and potentially up to US$3 billion. [39]

    The Yadana project was developed by a consortium consisting of Total (31%), Unocal (28%), PTT-EP of Thailand (26%) and Burma's own MOGE (15%). It is operated by Total. Gas from Yadana is transported via a 346 km subsea pipeline and a 63 km onshore pipeline from the Yadana field to the border between Burma and Thailand at Ban I Thong. At the border, the Yadana pipeline connects with a pipeline built by Thailand, which carries the gas to its destination area near Bangkok, providing fuel to the Rathcaburi and Wang Noi power plants. Gas from the Yadana field covers an estimated 15-20% of Thailand's demand for natural gas. [40]

    The Yetagun gas field was developed by a joint venture of Texaco (50%), the British oil company Premier Oil (30%) and Nippon Oil (20%). Following Texaco's withdrawal in 1997 and Premier Oil's in 2002, Yetagun is operated by Petronas in partnership with MOGE (20%), Nippon Oil (19%) and PTT-EP (19%). The gas is transported by 210 km of subsea pipeline and 67 km of onshore pipeline, linking up onshore to the Yadana pipeline. The Yadana pipeline was constructed and is operated by the Moattama Gas Transportation Company, which has been set up by the shareholders in the Yadana gas field project. In August 2000, the South Korean Daewoo International partnered with MOGE to explore and potentially develop offshore natural gas deposits in the Bay of Bengal off the coast of Arakan. Exploration commenced, and in 2004 Daewoo International announced the discovery of the Shwe field, off the coast of Sittwe, the capital of Arakan state. There are preliminary plans to explore for gas in several blocks in the Bay of Bengal, but so far test drilling has only been made in Shwe's blocks A-1 and A-3. The A-1 block is the largest, estimated to contain between 2.88 trillion and 3.56 trillion cubic feet of natural gas. Partners in the project's international consortium are Daewoo (60%), the state-owned Korean Gas Corporation (10%), and India's ONGC (20%) and GAIL (10%). Production from the Shwe field is planned to start in 2009. Natural gas from Shwe has become a contentious issue in relations between India and China, and an obstacle to Sino-Indian energy cooperation. For more than two years, it was presumed that gas from the A-1 Block would serve uniquely the Indian market via an overland pipeline running through Burma's Arakan and Chin states, across Bangladesh to Kolkata. [41] However, using India's growing demand for natural gas as a leverage point, Dhaka set forth a number of conditions for allowing any pipeline to cross Bangladeshi territory: establishing trade routes for commodities from Bangladesh to Nepal and Bhutan through Indian territory; allowing transmission of hydro-electricity from Nepal and Bhutan to Bangladesh through Indian territory; and pursuing measures to reduce Bangladesh's trade imbalance with India. [42] The project reached a diplomatic stalemate when India rejected these conditions. In December 2005, while India and Bangladesh deliberated to a standstill, Burma seized the opportunity to sign a Memorandum of Understanding with PetroChina for the sale of gas from the A-1 Block to China through an overland pipeline through Burma to Kunming, the capital of China's Yunnan province. [43]

    The introduction of China into the Shwe gas picture was to be expected for several reasons. According to Burmese scholar Dr. Kyaw Yin Hlaing, the Memorandum of Understanding with PetroChina should be seen in light of the ever-growing trade relationship between Burma and China. When PetroChina indicated that it was ready to buy, the Burmese regime had no incentive to set aside the gas exclusively for India and patiently await the outcome of stalled bilateral negotiations with Bangladesh. [44] With another buyer at hand, there is also added pressure on the Indians to find solutions to their problems, including alternative pipeline routes bypassing Bangladesh. Burma already gains substantial hard currency from the sale of natural gas through pipeline to Thailand, and the Burmese rulers are of course aware of the advantages they can reap from negotiating prices when selling gas from the same field to more than one country at a time. Following publicity on the PetroChina agreement, Burma assured the Indian petroleum ministry that it had sufficient gas reserves to meet the needs of both China and India, although India would have to wait until May 2006 for third-party consultants to confirm reserves before export deals were finalized. Burma was waiting for assessments of several deposits, including the Mya1 well in the A-3 block. The Burmese promise seems to have satisfied the Indian government. In early 2006, Brussels-based consulting firm Suz Tractebel was hired to conduct a feasibility study for overland pipeline routes to Northeast India, circumventing Bangladeshi territory. [45]

    It should be in the interest of Burma to diversify its foreign relations, but the military regime has done so only to a limited extent, favouring its relations with China. Burma has of course strengthened its economic ties with other neighbours, including Laos, Thailand and India, and with allies such as Vietnam and Russia. However, when Burma recently agreed to Chinese pipeline projects both for oil and gas, this drew Burma even deeper into the Chinese sphere of interest. On the other hand, if the current plans are realized, gas pipelines from Burma will extend into two new and significant markets for Burmese natural gas, India and China. Burma may then play its three gas customers against each other when negotiating for the best possible prices.

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