Weekly Business Roundup (November 14, 2008)

By WILLIAM BOOT

Burma to Export Biofuel Resource to S Korea

Burma is to export yet another energy resource—this time the raw product for ethanol manufacture to make biodiesel.

Thousands of tons of oil from jatropha plants are to be shipped to South Korea for that country's growing biofuel needs.

The Burmese military government has been forcing tens of thousands of Burmese to cultivate jatropha plants, also known as physic nuts, supposedly a national effort to provide the country with an alternative to expensively imported plain diesel.

But Burma has no refining technology to convert the oil-rich plants into ethanol, which is the essential ingredient in biofuels.

Now, one of the government's closest linked commercial companies, First Myanmar Investment (FMI), has signed a supply contract with Enertech to ship partially processed jatropha "crude" to South Korea.

FMI, owned by junta-linked businessman Serge Pun, is contracted to ship 5,000 tons of jatropha oil to Korea in 2009, and has plans to expand plant cultivation in Burma beyond its existing 100,000 acres of plantations—some of which was confiscated from Burmese farmers, say human rights groups.

None of the South Korean biodiesel will be sent back to Burma, a country suffering energy shortages despite its abundant natural energy resources. Virtually all Burma's huge natural gas resource is shipped to buyers abroad. Electricity to be generated by a swathe of hydroelectric dams will go to Thailand, India and China.

Serge Pun told the Rangoon-based The Myanmar Times this week the South Korean deal is "an important milestone in the development of renewable energy sources in Myanmar [Burma]."

One of Malaysia's big ethanol producers, Golden Hope, is also involved in Serge Pun's export venture.

There is a surge across Southeast Asia in ethanol production for cheaper biofuels. The biggest producers are Malaysia and Indonesia, although Thailand is also catching up.

"It's not surprising that this Burmese raw energy material is going abroad," energy industries consultant Colin Reynolds told The Irrawaddy on Friday. "Burma does not have the technical resources to produce the final product, and even if it did, it's doubtful if many of the country's ageing vehicles could efficiently use biofuels."

India Joins Mediation Efforts in Disputed Waters Standoff

India is reportedly playing a behind-the-scenes role in trying to mediate in the confrontation between Bangladesh and Burma over disputed territorial waters.

Bangladesh has already asked Burma’s ally China to intervene to help after the navies of Burma and Bangladesh faced off around a drilling rig which Burma's state Myanmar Oil and Gas Enterprise (MOGE) allowed to enter the disputed area to search for oil and gas.

The new exploration, actually being financed by South Korea's Daewoo International engineering conglomerate, is not far from Burma's major offshore Shwe gas field near the coast of Arakan state.

MOGE sneaked the rig, operated by an American specialist company, into the disputed waters even while the two countries were engaged in talks to try to resolve the issue before presentations to the United Nations next year under the Law of the Sea Convention.

Burma and Bangladesh are due to meet again to discuss sea territory boundaries on November 16-17.

Earlier this year, both Burma and India protested when Bangladesh called for international bids for exploration licenses in disputed waters.

India Urges BIMSTEC Cooperation to Stem Economic Crisis

India called for greater economic cooperation among the seven “Bay of Bengal rim” countries at a meeting in New Delhi attended by leading members of Burma's junta this week.

Hosting a meeting of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), New Delhi said the nations' grouping needed initiatives to counteract the effects of the Western financial crisis now beginning to bite Asian economies.

BIMSTEC comprises India, Sri Lanka, Bangladesh, Burma, Thailand, Nepal and Bhutan.
The group was also expected to sign some form of cooperation in counterterrorism efforts—a deal of particular interest to Burma and India.

Rebels fighting for independence in some of India's northeast states bordering Burma, notably Assam, have been fleeing into Burmese jungle sanctuaries after carrying out attacks and bombings, the deadliest of which occurred in recent weeks.

BIMSTEC embraces 21 percent of the world's population, but is also home to some of the poorest people on earth, not least in Burma and Bangladesh where energy shortages, corruption and military meddling have hampered development for years, says analysts.