Weekly Business Roundup (April 03, 2009)

By WILLIAM BOOT

Burma to Host Asean Energy Summit

Burma is to host a top level meeting of the Association of Southeast Asian Nations (Asean) to discuss energy issues. The electricity-starved country will provide the venue, in Mandalay, for Asean energy ministers in July.

Burma will also host the group’s Energy Business Forum, the Chinese news agency Xinhua reported.

It’s understood that the military regime will also host Asean’s energy awards competition in June.

Although Burma is rich in fossil fuel sources such as gas and oil, the country suffers from an inadequate electricity infrastructure and constant power blackouts.

Much of industry and many buildings such as tourist hotels are dependent on highly polluting generators using imported diesel oil.

Virtually all Burma’s large natural gas resources are exported. The biggest find to date, the offshore Shwe field, is to be sold to China.


NGO Names Chinese Firm in Blacklisted Burma Copper Mine

The Canadian Friends of Burma human rights organization has identified a Chinese state-owned company as the buyer of a Canadian 50 percent stake in the Myanmar Ivanhoe Copper Company Limited (MICCL).

MICCL was recently placed on a banned list under US government economic sanctions against the Burmese military regime.

Canada’s Ivanhoe Mines had previously claimed to have placed its 50 percent stake in the hands of an “independent” trust and had received no money from the deal.

“Did Ivanhoe in fact receive any funds for its 50 percent stake in MICCL? If Ivanhoe didn't, then who did?” asks the non-governmental organization in a research report disclosing the Chinese connection.

Ivanhoe’s share was reportedly bought by Chinese Aluminum Company in a multimillion dollar agreement.

MICCL operates Burma’s biggest copper mine, the Monywa project in Sagaing Division, which is blamed for numerous abuses against the local population.

“Was this backdoor deal arranged in order to skirt American and Canadian trade sanctions with Burma?” the NGO asks in its report.

The US Treasury Department's Office of Foreign Assets Control describes the copper mine company as a joint venture owned or controlled by the Burmese state.

Ivanhoe Mines claims to have withdrawn from active business in the mine in 2007 after placing its 50 percent stake in the hands of an “independent” but unnamed third party trust.

However, the Canadian Friends of Burma says there is no firm evidence that Vancouver-based Ivanhoe has completely withdrawn.


Private Airline Plan Raises Safety Concerns

Plans by Burmese surgeon Khin Maung Win to start up an air ambulance service and specialist tourism flights have raised questions about safety after a major Lloyd’s list insurer said it would give up its Burma business.

Local media reports have quoted Khin Maung Win saying he hopes to lease 20-seater planes from financially troubled Ukraine to start up his private airline.

A key member of Lloyd’s insurer network of London says it is canceling its business in Burma.

QBE Insurance of Australia says it has canceled all business globally which has a “direct or indirect benefit for the current ruling party in Burma.”

Burma-owned shipping firms and airlines cannot operate without insurance, which is internationally handled mostly by Lloyds-linked firms.

QBE is listed as Lloyd’s largest managing agent.

Aside from the insurance issue, Ukraine is listed by international aviation safety organizations—including the US Federal Aviation Administration—as a Category Two country, which means its planes often lack minimum safety standards.

“Reports have suggested that this airline proposal aims to cater to foreigners but one would want to know more about its safety capabilities before recommending anyone to step aboard,” an analyst with a European Union country embassy in Bangkok told The Irrawaddy, speaking on condition of anonymity.

The EU has previously banned planes from Indonesia because of poor safety standards.


Bangladesh-Burma Trade Talks Planned Despite Border Dispute

Top level Burmese and Bangladesh trade officials and businesspeople are due to meet in Naypyidaw next week, in the midst of a diplomatic row between the two countries.

The Dhaka government is angry over the Burma military government’s unannounced construction of a fence along their joint border, and there is a summering dispute over offshore territorial claims which are stymieing oil and gas exploration.

In next week’s Naypyidaw meeting, Bangladesh Commerce Secretary Feroz Ahmed will lead an 11-member delegation to discuss issues ranging from shipping links to easier visa regulations for Bangladeshi businessmen and direct banking arrangements to simplify payment procedures.

The Burmese military government says the border fence is to stop smuggling.

However, there have been border tensions between the two countries since last October’s failed diplomatic talks to try to resolve a sea boundary dispute which flared last year.

Bangladeshi and Burmese navy vessels confronted one another around a drill rig set up by South Korea’s Daewoo company to search for gas at Burma’s request in waters claimed by Bangladesh.