Cooler Approach, but Business as Usual with Junta

By WILLIAM BOOT

BANGKOK—Thailand's first prime minister from outside the Thaksin Shinawatra political stable since 2001 is unlikely to alter relations with Burma, especially in business, say analysts and observers.

Abhisit Vejjajiva, a 44-year-old British-born and Oxford-educated economist, has vowed to usher in an era of clean politics and sweeping reforms, but he is going to be very preoccupied with just holding on to power and trying to stave off a recession, Thailand watchers say.

Without giving a clear indication of his policies, Abhisit, the country’s third prime minister in as many months, says his priorities will be to heal domestic rifts and restore the economy after months of political unrest.

Pro-democracy groups are hopeful that Abhisit will place the issue of human rights, particularly in neighboring Burma, higher up the agenda, but with Thailand’s economy in free-fall, domestic economic concerns are likely to take precedence.

“It’s quite likely that Abhisit will take a more distant, cool approach toward the Burmese junta, especially in view of their continuing crackdown on pro-democracy activists, but it is unlikely to substantially change major business links,” said an official at a European Union embassy in Bangkok, speaking on condition of anonymity. “Human rights groups would love to see Abhisit take a swipe at the generals, but he is going to be too preoccupied with the Thai political pot.”

Previous Thai governments have courted Burma’s regime, desperate to secure much needed gas and energy for Thailand’s rising domestic demand. Thailand’s gas imports alone provide the military junta with 30 percent of its hard currency.

“Thailand’s mid-to-long term energy needs are linked with projects now under way in Myanmar (Burma), and so I think it would be difficult for new prime minister Abhisit to withdraw from any of them,” said energy industries consultant Sar Watana in Bangkok.

PTTEP is drilling for gas in Burma’s Gulf of Martaban and the Electricity Generating Authority of Thailand is engaged in hydroelectric schemes on the Salween River.

“In both cases, Thailand has already diluted its financial liabilities by inviting in Chinese firms to take a share, and shoulder some of the risks,” said Watana. “Thailand needs energy from Myanmar—regardless of who is running things on either side of their joint border.”

On Wednesday, the Electricity Authority of Thailand (EGAT) announces that they will next year set up a joint venture to develop the Haygyi dam construction project on the Salween River in Burma, according to The Nation, an English-language newspaper in Bangkok.

The report said that EGAT, the Chinese state enterprise Sinohydro Corp and Burma will form a consortium to operate the 1.4-gigawatt plant. EGAT will own 45 percent; China 40 percent and Burma 15 percent.

The newspaper said China will fully finance the construction, costing an estimated US $1.4 billion. Energy from the dam will be put to work in Thailand starting around 2015.
Production cost will be $4.50 per kilowatt per hour, and the project is expected to produce a 19 percent return on investment.

The hydro energy project, along with others on the Salween River, has been strongly opposed by local environmental groups and human rights organizations that fear minority groups will be displaced without proper recourse.

So some villages near Mae Hong Son, Thailand, are expected to be flooded as a result to the project.