Foreign backers of the Burmese dictatorship
By Eva Cheng
Despite its notoriously brutal rule since the bloody repression of a 1 million-strong national uprising in August 1988, the State Law and Order Restoration Council (SLORC) military regime in Rangoon had managed to secure foreign investments exceeding US$3 billion at the end of last year. Ignoring the landslide victory of the Aung San Suu Kyi-led National League of Democracy in the 1990 election, the SLORC continues to refuse to surrender power.
The SLORC was formally admitted on July 23 into the ASEAN Regional Forum, notwithstanding grassroots protests in various countries against the move. The SLORC last year expressed a wish to become a full member of ASEAN, a move which, if it eventuates, would give the illegal regime further legitimacy.
Why do so many countries and businesses collaborate with the butchers? "Which ASEAN countries do not have a human rights problem?", was the response of an ASEAN minister to this question last December.
In reaction to the SLORC's arrests in May of more than 230 NLD parliamentarians for their attempt to convene a parliamentary session, Indonesian foreign minister Ali Alatas drew a parallel, appropriately, between the SLORC's human rights records and Jakarta's in East Timor. He said that both cases were "internal" affairs in which others should not intervene. This argument was supported by at least Malaysia, Singapore, and Thailand — all major investors in Burma — as well as the ASEAN secretary general, Ajit Singh.
Other key investors, including Britain, the US, Japan, South Korea and Germany, condemned the arrests, but their investments in and trade with Burma continued as usual. Australia — despite being a minor investor — was "angry" enough to join the condemnation but not to the extent of stopping the promotion of trade with Burma through its Austrade office in Rangoon.
France, the third biggest foreign investor in Burma, merely appealed for "calm and dialogue". China, the SLORC's biggest supplier of arms and other crucial basic supplies, did not comment. But Chinese Premier Li Peng, during his 1994 visit to Rangoon, said that the Aung San Suu Kyi problem was Burma's "internal" affair, in which Beijing did not intend to interfere.
Of course, this pretense of non-intervention ignores the fact that the SLORC would have much greater difficulty maintaining its repressive rule without the benefits from these business deals. The regime has a chronic current account deficit problem ($341 million in fiscal 1995 and more than $500 million in fiscal 1991 — nearly as large as its average annual exports in recent years). To counter this, it allows foreign firms to pillage Burma's natural resources. It accepted a $250 million down payment in 1989 from 21 Thai firms for the rights to log 714,000 cubic metres of Burmese hardwood and teak. Substantial amounts have been prepaid in anticipation of $400 million a year revenue from the US Unocal and French Total oil conglomerates' gas and oil project in the offshore Yadana field.
Despite a big and repressive state machine, Rangoon managed to collect public sector revenue equivalent only to a 7% of GDP in fiscal 1995, the result of a huge black market arising from a grossly overvalued official exchange rate. Yet the SLORC has more than doubled its armed forces to 300,000 personnel since 1988 and spends close to 40% of the national budget on arms.
Unocal is not prepared to waste time on "internal affairs" rhetoric. In response to reports of Rangoon's murders and other atrocities against the Karen and Mon peoples for resisting forced reallocation and slave labour for the gas project, Unocal president John Imle was quoted by the Financial Times in January as saying: "If you threaten the pipeline, there's going to be more military. If forced labour goes hand in glove with military, yes, there will be more forced labour. For every threat to the pipeline, there will be a reaction."
However, the alliance between the SLORC and foreign interests has begun to crack. As a result of a sustained campaigns by supporters of democracy in other countries in collaboration with Burmese exiles, a number of businesses have pulled out of Burma. Levi Strauss, Liz Claiborne, Macy's, Eddie Bauer, Reebok, Amoco, Oshkosh B'Gosh and Petro-Canada are some prominent examples, joined last month by Dutch brewer Heineken and Danish brewer Carlsberg in stopping both sales and investment in Burma.
The death of James Leander Nichols, honorary consul of four Scandinavian countries, while in a Burmese jail for running a fax/phone at home, seemed to give the brewers a needed push. Heineken chairperson Karel Vuusteen attributed the decision to changed public opinion on investments in Burma which could have an adverse effect on Heineken's brand and reputation. But Carlsberg qualified its move with the warning that it would reverse it if the products of other international competitors are on sale in Burma.
A main focus of the international boycott Burma campaign will be on oil and gas. Involving $1.14 billion in 15 projects as of last August, this is the single most important sector into which foreign funds flow. Apart from Total and Unocal — main partners in the Yadana project — Texaco and Arco of the US, Japan's Nippon Oil and Britain's Premier are also key targets.
Initiated by a Republican senator, a US bill last year calling for economic sanctions against Burma was knocked back after intense lobbying by major oil firms. The latter are pulling all their strings again to bash another similar attempt — the Burma Freedom and Democracy Act, which coincides with the Clinton administration's warning last month of a new policy on Burma. Despite this, Arco's chief executive Mike Bowlin continues to propagandise for "constructive engagement" with the SLORC.
Meanwhile, the International Union of Food, Agricultural and Allied Workers Associations (IUF) announced on July 14 its plan to focus next on Pepsico in its boycott Burma campaign. IUF spokesperson Peter Rossman said: "The two brewers [Carlsberg and Heineken] had said if one didn't trade with Burma, others would. They also said if they didn't, Pepsico would. Now Pepsico is alone."
In late June, the US Senate Appropriations Committee unanimously approved a bill that would ban any US air service to or investment in Burma until the SLORC hands over power to an elected government. Massachusetts in early June became the first US state to ban state contracts with companies having commercial ties with Burma.
But in Singapore and Thailand, the governments continue the push for more business with Burma.
As of last August, Britain remained the biggest investor with $628 million in 13 projects. Singapore had $545 million in 30, France $465 million in one, Thailand $354 million in 25, the US $161 million in 12, Japan $67 million in five, Hong Kong $65 million in 17, South Korea $11 million in six and China $6 million in five.
Other countries have 16 projects involving $24 million. Japan continues to be a key supplier of aid. Apart from China, other countries selling arms to the SLORC include Germany, Pakistan, Belgium, Poland, Portugal and Russia.
The SLORC-engineered Visit Myanmar (Burma) Year — 1996 — was to start in January, but is now scheduled to start in November. The projected number of tourists has been revised down to 300,000 from 500,000. Burma received 150,000 visitors in 1995.