Weekly Business Roundup (March 20, 2009)

By WILLIAM BOOT

China Invests Heavily in Burma’s Mining Operations

Amid reports swirling that Burma’s precious stones industry is contracting sharply because of US economic sanctions, the Chinese official news agency says that China has pumped US $850 million into Burmese mining operations in 2008.

The Xinhua agency said last week that Chinese companies contributed virtually all of last year’s foreign money invested in the industry, with the only other investor, Singapore, spending a mere US $5 million.

Xinhua quoted Burma’s Central Statistical Organization for the figures.

The investment contradicts a report by the BBC this week that said tens of thousands of mine workers have lost their jobs in the ruby and jade production industries in the Mogok region.

The BBC quoted ex-miners saying foreign demand for rubies, especially from dealers in neighboring Thailand, had virtually dried up.

The report said the industry’s slump is in part due to US import embargoes imposed while George W. Bush was president. But the general global financial crisis, especially in Europe, has added to the problem.

Precious stones have been one of the biggest sources of foreign income for the Burmese military regime.


Oil, Gas Cloud Claims by Burma, India, Bangladesh

Talks have resumed between India and Bangladesh on disputed territorial waters in the Bay of Bengal while a similar dispute on Bangladesh’s border with Burma remains in deadlock.

At issue between the three countries are 28 sea blocks which potentially hold lucrative oil and gas deposits.

India lays claim to nine of those blocks while Burma insists that 11 are inside its sea borders.

The dispute has simmered for years but is now more pressing for two urgent reasons: one, United Nations pressure for submissions on boundary recognition under the Law of the Sea Convention; and two, all three countries are intensifying their search for hydrocarbon energy.

India and Burma are supposed to file claims this year, while Bangladesh has until 2011 but has recently upset its neighbors by attempting to issue eight offshore exploration licenses to foreign companies.

India has until the end of June to file a claim with the U.N.

According to Bangladesh’s Daily Star, Burma has ignored Dhaka’s request for a resumption of negotiations that were briefly opened in October and already lodged a unilateral boundaries claim to the U.N.

The two countries’ navies engaged in a high seas confrontation before last October’s talks after the state Myanmar Oil and Gas Enterprise issued an exploration license to South Korea’s Daewoo International in waters claimed by the Bangladeshis.

Meanwhile, land border tensions between the two countries increased this week as Burma moved more troops into the border area.


Norway Bans Chinese Firm for Selling Trucks to Burma

Norway has taken the unusual step of banning all state investment in one of China’s biggest vehicle manufacturers, because the Chinese sell military trucks to Burma.

The Norwegian government’s Council on Ethics has forced the state-controlled sovereign fund to sell off a US $5 million stake in China’s Dongfeng Motors Group.

“We can’t finance companies that support the military dictatorship in Burma through the sale of military materials,” Finance Minister Kristin Halvorsen said in a statement.

The ministry has oversight of the fund. He cited support for European Union and US sanctions against Burma’s military regime, including a weapons embargo.

Norway is not a member of the EU, but often adheres to its rules and standards voluntarily.

Norway’s sovereign fund, run by its central bank is one of the world’s largest and has strict ethical codes of operation. It has also put the giant German electronics company Siemens on “watch” because of allegations against it of corruption.


Ban Trip to Burma after Asean Meeting?

An UN-based human rights lobby group is linking a US reconsideration on economic sanctions against Burma with what it says will be an April visit to Naypyidaw by UN Secretary-General Ban Ki-moon.

The NGO Inner City Press reported that a senior UN official told it this week that Ban would like to visit Burma “just after the April 12 Asean meeting, most probably on April 18.”

Inner City Press, which also investigates issues such as transparency and corporate accountability, said Ban’s plan to visit Burma follows a meeting he had last week at the White House with President Barack Obama.

They discussed sanctions and what Ban termed a “softening” by junta leader Snr-Gen Than Shwe, said Inner City Press spokesman Matthew Russell Lee.

“Sources in the White House say that lobbying by the US oil and gas industries has played a role in the administration's signals that economic sanctions haven't been working in Myanmar, that it's time for more engagement,” said Lee in a commentary on recent events. “For that, read US business entry,” he said.