Burma Business Roundup (Saturday, Sept. 15)

By William Boot 15 September 2012

Chinese Oil Firm ‘Ignores Land Rights’ with Burma Pipelines

China National Petroleum Corporation (CNPC) has again been accused of turning a blind eye to land rights abuses in Burma as Western oil firms call for new ground rules in the oil and gas industry.

Earlier this month multinationals such as Shell cited their code of ethics on human rights and transparency as holding them back in investing in Burma. They called for reform of the state agency Myanma Oil & Gas Enterprise (MOGE) which has been linked to underhand deals, land theft and forced labor under the former military regime.

Chinese and other Asian oil companies have had no such compunctions.

CNPC has a joint venture with MOGE to build gas and oil pipelines through Burma from the coast and into China’s southwest Yunnan Province. Human rights groups claim thousands of Burmese soldiers providing security along the pipelines’ route are continuing to seize land and coerce local people to provide labor.

“Land has been confiscated by the Burmese military for the [pipelines] projects. Some of these farmers have been forced to sign documents handing over their land to the project and have been given no compensation,” a new report by the Dutch NGO BankTrack alleged this week.

The offshore Shwe field will supply gas for one of the CNPC pipelines, while crude oil transhipped from tankers from Africa and the Middle East will feed the other. Both are due to begin operating sometime in 2013.

Thousands of farmers and fishermen affected by the Shwe gas project have “lost their livelihoods, and are displaced,” BankTrack said.

Millions of New Jobs for Burma in 2013 with Right Reforms, Says US Study

Burma is geo-strategically important and its economic growth will be rapid provided there is political stability, transparency and a crackdown on endemic corruption, said a US assessment.

Millions of new jobs could be created if the country’s gross domestic product expands by more than 10 percent in 2013, the Center for Strategic and International Studies (CSIS) in Washington said in a Sept. 10 report following a tour of the country by four center analysts.

But there are problems which could stand in the way, the report warned.

“The most important barriers to growth include political instability, corruption, and the lack of transparency, lack of education, a dearth of training, and poor infrastructure,” it said.

“Lack of training and expertise could hobble reform. The lack of expertise and experience is one of the biggest challenges facing the reforms. People the group met readily admitted that many officials have little idea what political reform and democracy mean after decades of authoritarian rule. The same is true for economic reforms,” the study said.

The center’s study team said it met a wide cross section of people, including President Thein Sein and several of cabinet members, opposition leader Aung San Suu Kyi, leaders of ethnic groups, business leaders, and foreign diplomats.

The study calls for US President Barack Obama to meet both Thein Sein and Aung San Suu Kyi during their forthcoming visit to the US, and for the “conditional” removal of a US ban on imports from Burma.

CSIS is hosting a conference on Burma in Washington later this month with the Burmese government, politicians, civil society leaders and US government officials on the invitation list.

“It will explore US policy options [on Burma] now that the first steps toward developing closer ties have been taken,” says the center.

Rice Crop Faces Slump without State Seed Aid after Floods

The Burmese government needs to intervene with financial help to ensure the country’s next rice crop is not undermined by recent severe monsoon flooding, the Myanmar Rice Federation said.

The industry itself could not afford to provide sufficient seed for replanting of wrecked paddy or new fertilizer, said the federation, which is providing 30,000 new baskets of rice seed.

Flood-wrecked paddy will require a total of 200,000 baskets of new seed, it said.

In addition to the flood damage, some land has not been planted this season because banks would not provide loans to farmers still in debt.

Burma has ambitions to become a major rice exporter again and had hoped to ship abroad at least 1 million tonnes this year.

The federation said it was holding meeting with the Myanmar Agribusiness Public Corporation and Ministry of Agriculture to find ways of overcoming farming setbacks caused by this year’s severe floods which have inundated 600,000 acres. At least 75,000 acres needs reseeding, the federation said.

Japanese Satellite Plan to Propel Burma into the 21st Century

Burma is moving closer to acquiring the fundamental infrastructure for a modern telecommunications system—with the aid of a Japanese space satellite.

A Japanese government-funded team, involving the Marubeni Aerospace Corporation, will meet Burmese government officials in October to plan for Tokyo’s promised technological assistance in key areas, state media reported.

Japan is offering to provide and launch a small earth-orbiting satellite equipped to give Burma access to 21st-century weather forecasting, agricultural mapping, aviation and maritime and government communications, the government newspaper New Light of Myanmar reported this week.

However, such a satellite will have little or no capability to improve Burma’s poor telephone services. The government is in the process of reforming the country’s backward personal telecommunications capabilities and is expected to invite in foreign investor expertise to establish wireless networks.

Burma has the lowest mobile phone usage in the world after North Korea and only 3 million people in the country have a landline or mobile phone out of a population of more than 55 million, according to the state post and telecommunications department MPT, and that figure is believed by some industry analysts to be exaggerated.

It’s the Real Thing: Coke Returns to Quench Burmese Thirsts

The ubiquitous Coca Cola can has reappeared on the shelves of Rangoon corner stores for the first time in many decades.

Until this week, Burma was one of only two countries—the other is North Korea—which did not stock the globally recognized soft drink brand.

The Coca Cola Company announced plans to return after the US government suspended sanctions against Burma and said it is making preparations to distribute both Coke and Sprite nationally.

Rival PepsiCo is also planning a return to Burma, setting the stage for a competition battle for Burmese thirsts by the two US drinks companies.