Burma Business Roundup (Saturday, April 6)

By William Boot 6 April 2013

Japan Raises Aid for Thilawa Economic Zone, but Delays Persist

Japan is to increase its support for the Thilawa Special Economic Zone on the Rangoon river estuary by financing the construction of a new harbor facility.

The harbor will be developed in collaboration between Myanma Port Authority and Tokyo’s Official Development Assistance agency, the authority said without detailing costs involved.

The agency, part of the Japanese Ministry of Foreign Affairs, specializes in helping developing countries with civil engineering projects.

Three major Japanese conglomerates —Marubeni Corporation, Mitsubishi Corporation and Sumitomo Corporation—have undertaken to develop Thilawa, which is to be built downstream of the old Rangoon port closer to the river estuary mouth.

The three giant firms last year undertook to have 25 percent of the Tokyo government-supported economic zone completed by 2015 but initial development work has been delayed, the deputy chief of mission at the Japanese Embassy in Burma, Ichiro Maruyama, said at the end of March.

He said land access is a problem at the 5,000 acre site south of the main city, as well as electricity and water supply shortages and transport and other infrastructure impediments.

Thilawa is intended by President Thein Sein’s government to be the first completed of several specially designated industrial development zones. Another one is intended to be focused around the Chinese-built oil and gas terminal on the west coast at Kyaukphyu.

Laos-Burma Air Link Planned to Lure Chinese Tourists

State-owned Lao Airlines will restart flights from Vientiane to Burma for the first time in nearly 30 years. Regular scheduled services between the Laos capital and Rangoon will begin in October.

“We are re-establishing an air link between the two cities to open doors for investors and tourists,” the airline’s commercial director, Saleum Tayarath, told Bangkok tourism news service TTR Weekly.

Lao Airlines stopped flying to Rangoon in the late 1980s because it was unprofitable, Tayarath said, adding that the aim was to attract Chinese tourists.

The airline plans to also build in a flight link with the Lao tourist destination of Luang Prabang.

The privately owned Lao Central Airlines is also planning to start up flights between Vientiane and Naypyidaw, said TTR Weekly, although no timetable has yet been announced.

Almost 20 airlines big and small, regional and intercontinental, are now flying to Burma, compared with only a handful of airlines just over one year ago.

At the end of March the budget line Thai Smile, part of Thai Airways International, announced a service of five flights per week between Bangkok and Mandalay.

China ‘Restructuring’ Burma Relations as Thein Sein Visits Again

President Thein Sein will visit China on Saturday for a three-day trip, during which he will take part in a major trade development conference, the Boao Forum.

The annual forum brings together business and political leaders from across the Asia-Pacific region to discuss ways of bringing closer economic integration.

It will be Thein Sein’s third visit to China since becoming president, but despite a special welcome from new Chinese President Xi Jinping, Beijing’s wooing of Burma is unlikely to stop Naypyidaw from engaging with many other potential trade partners, say analysts.

“With its two pipelines for oil and gas, a vast quantity of hydroelectric power, mining and resource extraction interests, a major market for China’s landlocked southern Yunnan province, and an influx of unrecorded population of perhaps two million, Myanmar [Burma] is of obvious importance [to China],” David Steinberg, a professor of Asian Studies at Georgetown University in the United States, wrote in Asia Times.

Steinberg said China was “restructuring” its position in Burma and “regards with suspicion the US’s changed, positive policy toward Burma.”

Later this month, opposition leader Aung San Suu Kyi will visit Japan for talks with government leaders. Japan has been a rival investor to China in Burma in the last two years and recently canceled old debts owed by Burma totaling US $3.7 billion.

Burma ‘No Longer Trades in Arms from North Korea

Burma has halted all forms of armaments trading with North Korea, President Thein Sein’s chief political adviser Ko Ko Hlaing has said.

He gave the assurance in an interview with the South Korean news agency Yonhap during a visit to South Korea.

During the years of international economic sanctions, and because of what he termed “severe security problems,” Burma dealt with countries that were willing to sell weapons, Ko Ko Hlaing said.
Burma was not the intended recipient of sensitive equipment on a ship seized by Japan last August, he told Yonhap.

The ship, sailing under the flag of Singapore, was carrying aluminum alloy rods that could be used in the production of uranium enrichment centrifuges. The ship was believed to have picked up its cargo in North Korea.

As recently as last November, The Wall Street Journal reported that “ships or planes bound for Myanmar and Syria and loaded with weapons-related equipment originating in North Korea have been diverted or blocked in recent months.”

The business newspaper quoted unnamed US, Asian and Arab officials.

Oil Explorer ‘Very Optimistic’ of New Finds in Bay of Bengal

The boss of Burma’s largest private oil and gas explorer, MPRL E&P, says his company hopes to partner with several large Western oil companies in bids for offshore blocks expected to be put up for auction soon.

Moe Myint’s firm is already engaged in a multimillion dollar venture with Woodside Energy of Australia to find gas in Block A-6 in the Bay of Bengal.

He told Forbes business magazine he had been approached by a number of foreign companies because he had kept a distance from the former military regime and avoided being labeled a crony capitalist.

“MPRL operates Mann Field in central Burma, pumping a modest 1,500 barrels of oil a day along with up to 4 million cubic meters of gas,” said the Forbes report, which quoted Moe Myint as saying he was “very optimistic” for Burma’s offshore oil and gas developments.