Tycoon’s Plans for Putao Come under Scrutiny

By Saw Yan Naing 27 November 2013

MYITKYINA, Kachin State — Surrounded by Burma’s highest, snow-capped mountains, the remote and rugged Putao Valley in northern Kachin State is a place of stunning beauty and pristine mountain landscapes.

This wilderness amid the Himalayan foothills is home to unique wildlife and vast forests, endangered Himalayan Yew trees and rare orchids, and even a small ethnic pygmy tribe.

The Putao Valley, located at an altitude of about 1,000 meters, was long off limits due to its remoteness and ethnic conflict, but, according to sources in the Kachin State capital Myitkyina, one of Burma’s wealthiest men is taking a growing interest in the area.

Htoo Group of Companies director Tay Za, who became rich by cutting deals with the former military regime, is believed to be actively expanding his business projects in Putao District. Residents of Myitkyina say his firms have been granted a concession to log 120,000 hectares of old-growth mountain forest and a 240,000-hectare gold mining exploration concession along the banks of the Malikha River in northern Putao.

The US-sanctioned businessman is reportedly also building a luxury resort called Malikha Lodge in Mulashidi village, near the district capital Putao, located some 220 km north of Myitkyina.

“We heard the Putao Valley is now owned by U Tay Za. He has many investments there,” said Rev Lama Yaw, director of the Kachin Baptist Convention, who recently visited villagers in the area displaced by clashes between government forces and the Kachin Independence Army (KIA). “All the local people I met said he bought it from the government.”

“Tay Za’s resort, in Mulashidi village, is like an international-standard luxury resort. It costs US $500 per night to stay there,” Lama Yaw said. “Putao region has beautiful natural scenery, but it is very remote. I doubt many tourists will visit this place.”

In the past, the Htoo Group CEO also expressed interest in developing a ski resort in the region and his airline, Air Bagan, operates a flight between Myitkyina and Putao. But the extravagant investment schemes of Tay Za in one of the country’s remotest and poorest regions do not end there.

During a recent interview in Myitkyina with an Irrawaddy reporter, Lama Yaw showed photos of a speedboat owned by the Htoo Group that was spotted on the Malikha River in Putao District. “Bringing this kind of boat to such an isolated region would be no easy matter, but he brought it here, anyway,” the reverend said, pointing at the picture. “It seems he has big business plans in Putao.”

A Controversial Tycoon Who Loves the Kachin Mountains

Tay Za, 48, has long taken an interest in Burma’s northernmost region, which borders on the Tibetan Plateau to the west. In 2011, he led a five-man expedition to explore Fukan Razi Mountain, but the team became stranded in the mountains for three days and had to be rescued after their helicopter crash-landed.

After returning from the trip, Tay Za visited Snr-Gen Than Shwe, then leader of Burma’s ruling junta, to pay his respects and express his gratitude for sending a rescue mission to save him and his team. It was reported that the military strongman had ordered an entire battalion to look for the tycoon when he heard what had happened to him.

Tay Za, Htoo Group of Companies, ethnic conflict, deforestation, environment, KIA, Kachin rebels
Tay Za (with flag) leads a mountaineering expedition at Mount Phon Yin in Putao District, Kachin State, in this undated photo. (Photo: U Tay Za’s Facebook Page)
Tay Za (with flag) leads a mountaineering expedition at Mount Phon Yin in Putao District, Kachin State, in this undated photo. (Photo: U Tay Za’s Facebook Page)

Recently, an expedition involving several American professional climbers scaled Mount Gamlang with funding from Tay Za’s Htoo Foundation. Following their return, the climbers claimed it was higher than Mount Hkakabo, which is believed to be Burma’s highest peak.

In an effort to promote the event, the foundation brought a member of the ethnic Tarong group from Putao to Rangoon. The 60-year-old man, named Dar Weik and measuring less than 4 feet, is one of several surviving Tarong and was put on show wearing Htoo Foundation promotional clothing at the upscale Traders Hotel.

Tay Za made much of his fortune by cutting deals with Burma’s former military regime, which had grown isolated and cash-strapped in the years following the 1988 military coup. Since the 1990s, he has expanded from agribusiness into large-scale logging of natural forests, before moving into mining, construction and hotels, and setting up AGD Bank and Air Bagan.

The US Treasury placed him on a sanctions list in 2008 and dubbed him “an arms dealer and financial henchman of Burma’s repressive junta” for helping the military secure arms deals, including the procurement of Russian-made helicopter gunships that were used during the ongoing Kachin conflict.

Earlier this month, Tay Za visited the Russian Federal Republic of Tatarstan to represent Burma government interests, and met with its president, trade minister and the director of Kamaz, Russia’s largest truck manufacturer. Tatarstan President Rustam Minnikhanov suggested he bring “helicopters, trucks, machine-building products and shipbuilding products” back to Burma, according to a press release.

Tay Za’s projects aimed at stripping forest and mineral resources in ethnic areas have allegedly involved militarization of project areas by the Burma Army, leading to complaints from activists, rebel groups and local communities.

The projects are alleged to have negative environmental and social impacts, while military units have been accused of committing rights abuses against the local population during its ongoing conflict with the KIA.

Many Myitkyina residents believe Tay Za, in addition to gaining government approval for his projects, has obtained security guarantees from the Burma Army’s northern command for his plans in Kachin State.

A Myitkyina-based researcher with an international development agency, who was speaking on condition of anonymity, said Tay Za’s firms were securing rights to vast swathes of land in Putao Valley and planned to develop tourism in the region.

“He [Tay Za] is trying to buy more land. He is trying to be friendly with local indigenous ethnics who live there,” the researcher said. “We heard he even provided local, ethnic [government-backed] militias with arms to confront the Kachin rebels, the Kachin Independence Army, if needed.”

The Kachin News Group, a Thailand-based news agency, has claimed that the government-backed ethnic Rawang Militia has launched attacks on KIA Battalion 7 in order secure areas in Putao District for Tay Za’s projects.

But Tay Za doesn’t only maintain good relations with the government and the military. The tycoon recently also met with KIA Deputy Chief of Staff Gen Gun Maw in Rangoon, according to a local news report. Gun Maw told Eleven Media that the “Meeting with U Tay Za is not a work-related matter. When we came down here, he gave some support, especially for travelling. And I met him at a previous conference and we became friends.”

A Htoo Group of Companies spokesman Nyi Nyi Aung on Tuesday denied reports that the firm was engaged in resource exploitation in Putao District and insisted that reports of teak logging in the area by the company were not true.

“There are no teak trees in the Putao region. They just don’t grow there. We even tried at one point to establish a teak plantation there, but it was not successful. So it is hard to do logging where there is no teak,” he said

“It’s also strange that we’re accused of logging in Putao and transferring the logs down to Yangon by boat. That would cost four or five times what the logs are worth,” he said, while also denying that Htoo firms were exploring for gold in the area.

According to government regulations, all timber exported from Burma must go through Rangoon port. However, international environmental groups have documented large-scale overland timber trade from Kachin State into China.

Nyi Nyi Aung said he was unaware of Tay Za’s potential plans to develop a ski resort in Putao, but insisted that the tycoon’s activities in the valley were of a philanthropic nature. “We help inhabitants of Putao as much as we can to improve their livelihood. We want to develop the Putao region,” he told The Irrawaddy.

Khon Ja, a leading activist with the Rangoon-based Kachin Peace Network, questioned Tay Za’s intentions in Putao, adding that both government and the public should take note of the projects’ impacts on one of the country’s most beautiful regions.

“The snow-covered mountains in Putao are like the country’s jewels. There are also wildlife sanctuaries there. What happens there concerns all people in Burma,” she said.

“We have to think about environmental impacts and climate change. If natural beauty is destroyed, it damages the whole country. Even if local people support U Tay Za’s projects, it is a big loss that we can never regain.”