Weekly Business Roundup (March 30, 2009)

By WILLIAM BOOT

India’s Tata Group Looks at Truck Factory in Burma

India’s industrial giant Tata is interested in developing a truck manufacturing factory in Burma.

Executives from the vehicle manufacturer have met Burmese military government officials to put forward factory proposals, reports India’s Business Standard newspaper.

Tata Motors, part of the Tata Group, already has a pickup assembly plant in Thailand, and it’s understood it wants to move more production outside India after abandoning a US $290 million new vehicle plant in West Bengal because of protests against it from local farmers and politicians.

Tata made headlines last week by beginning production of the world’s cheapest mass-produced car, the US $2,000 Nano, but Business Standard said the aim in Burma is for heavy trucks and components manufacture.

The paper said a deal would be backed by a US $20 million line of credit from the Indian government, although Tata is privately owned.


Conflicting Reports on Burma’s Gems Industry

Despite reports that Burma’s gem mining industry has been badly undermined by U.S. sanctions and the global financial crisis, the country’s military government reports it has earned US $191 million from its latest gem auction in Rangoon.

Jade was the main sale at the auction, which ran for two weeks in mid-March. More than 3,000 lots of jade were sold mostly to buyers from China, reported The Associated Press quoting Burmese sources.

The reported auction success comes as the military government in March also claimed that China pumped US $850 million into gemstone mining operations in 2008 in Burma.

The official Chinese news agency, Xinhua, said Chinese businesses contributed virtually all of last year’s foreign money invested in the industry, quoting Burma’s Central Statistical Organization.

Meanwhile, a BBC report said thousands of Burmese mine workers have lost their jobs in the ruby and jade production industries in the Mogok region in recent months.

However, a source in Bangkok’s gems processing industry told The Irrawaddy this week that precious stones such as rubies are being smuggled from Burma into Thailand where their source of origin is camouflaged before onward sales.

The source spoke on condition of anonymity.


Indian State Firm Rethinks Costly Burma Hydrodams

India’s state-owned National Hydroelectric Power Corporation is having second thoughts about an invitation from Burma’s military government to build two hydro dam power plants.

The NHPC is quoted by Indian media saying the remote location of the proposed two hydro plants on the Chindwin River, in far northwest Sagaing Division, would raise the development costs and the end-user electricity price.

The two projects, with a total 1,840 megawatts generating capacity, would likely cost about US $4.9 billion, The Hindustan Times quoted NHPC chairman SK Garg as saying.

Most of the electricity would be transmitted into energy-short northeast India, but further surveys were needed before a final go ahead decision could be made, Garg said.

At least 30,000 people would be forced to move for the construction of the dams, says the human rights NGO Burma Rivers Network.

Burma is equally short of electricity, especially in the area where the military regime is encouraging the NHPC to work.

The regime would receive revenue from India for “selling” it the electricity.

A similar deal has been struck with China Power Investment Corporation for hydroelectric projects in northern Kachin state.

The Chinese and junta-friendly Asia World Company Ltd will build seven dams on the Mali Hka and Nmai Hka Rivers, with the electricity generated from the dams sent via China’s Yunnan power network to feed the western region and eastern coastal areas of China.

Those dams will also displace thousands of people, while the electricity revenue to the Burmese junta from China could be about US $500 million per year.


Regional Garment Industry Slump in Serious Slump

The global recession has left hundreds of thousands of garment factory workers without jobs or on shorter work weeks in several Asean countries, reports say.

One of the worst hit countries is Cambodia, where 70,000 workers have lost their jobs since last October, according to the union Chea Mony.

A factory owners’ association in Burma says a slump in east European and Middle East market demand has forced a cutback in production since December, although it’s not clear exactly how many workers are affected.

The Myanmar Garment Manufacturers’ Association told The Myanmar Times most factories have reduced output and hours of operation and ended the use of their own diesel generators to provide extra electricity because of costs, thus relying on erratic state power supply.

The Garment Manufacturers Association in Cambodia said exports to the United States alone dropped 40 percent in January. The U.S. is 70 percent of the total Cambodian clothes export market.

In Malaysia, the government has canceled thousands of migrant worker visas because of a domestic jobs crisis in many factories.