Weekly Business Roundup (April 20, 2009)

By WILLAM BOOT

Burma to Benefit from China Aid Package

Burma is one of three countries of the Association of Southeast Asian Nations (Asean) to benefit from a Chinese financial package designed to reboot regional growth in the wake of the global slump.
Burma, Laos and Cambodia will share US$39 million for projects expected to be infrastructure developments such as roads and railways— aid which will also benefit China’s trade links to the sea from its landlocked southwest region.

The “poorest nations” aid is part of an overall investment and credit package worth $25 billion proposed by China to boost trade with the 10 Asean countries and help their economies.

China’s Prime Minister Wen Jiabao had planned to unveil the package at the disrupted Asia summit in Thailand’s resort town of Pattaya.

The package was instead revealed later to media by the China foreign ministry.

It includes a $10 billion China-Asean investment cooperation fund to promote infrastructure, and credit of $15 billion for Asean countries.

The Pattaya meeting was billed as Asia’s version of the recent G-20 summit of major economies in London, which China also attended.

Thailand’s government was acutely embarrassed by the Pattaya summit’s abandonment, which was the second time in five months it has failed.

The summit was originally planned for Bangkok last December but was postponed because of other street protests which also closed the capital’s airports.

Bangladesh Plans Deep Port as Regional Hub

The Bangladesh government is planning to develop a deep draft port to handle the world’s biggest cargo ships and tankers in a bid to become a regional transit hub for China and northeast India.

The plan is to build the facility alongside existing Chittagong port, Shipping Minister Afsarul Amin told Dhaka newspapers.

A feasibility report by Japanese infrastructure firm Pacific Consultant International has said the new port could be developed in three phases, with the first one completed by 2016, Amin said.

The cost has been estimated at US $1.2 billion—considerably more than the $120 million India is spending to redevelop Burma’s west coast port of Sittwe and Kaladan River. The river flows from India’s Mizoram state adjoining both Burma and Bangladesh.

The deep sea port plan was announced after Bangladesh said it was seeking financial aid from China for a 128 kilometer railway track between Chittagong and Ramu, adjacent to the border with Burma at Cox’s Bazaar.

The track is intended to be part of the trans-Asia railway scheme being pushed by the United Nations to help develop the region.

The Burmese military government has shown reluctance to support the plan, said the Daily Star newspaper in Dhaka.

Bangladesh says China is keen to develop a railway network that would eventually link the Bay of Bengal port of Chittagong with Kunming, capital of China’s southwest Yunnan province, which borders northern Burma.

India’s UBI State Bank Works with Burmese Banks

The state United Bank of India is working with Burmese banks to provide banking facilities to help improve cross border trade, India’s ambassador to Burma, Alok Sen, announced.

The bank cooperation is one of several measures being taken to improve trade, which the envoy said last week suffered from “certain operational problems.”

Alok Sen has been visiting border areas between the two countries to find out about persistent problems afflicting commerce, said India’s Sangai Express newspaper.

Indian media said Sen spent a week in Mizoram examining several issues, including plans for a river transport improvement project on the Kaladan waterway down to the Burmese port of Sittwe.

India is funding several cross-border transport improvement projects to help trade grow as part of New Delhi’s so-called Look East policy.

Burma Little Affected by Global Financial Crisis, Says PM

The global financial crisis has had only an “insignificant” effect on Burma, according to Burmese Prime Minister Gen Thein Sein.

Burma’s success in avoiding the worst of the crisis is due to the absence of links between its financial institutions and the Western banking system blamed for triggering the crisis, Thein Sein was quoted by China’s official news agency Xinhua as saying.

He was commenting in the context of a regional economic conference which took place at the weekend, on the southern Chinese island province of Hainan.

Thein Sein represented Burma at the Boao Forum, a meeting of Asian leaders named after the town where it has been held annually since 2002.

This year’s theme was “managing beyond crisis.”

The Boao Forum involves China, Japan, Australia, countries from south and central Asia, and the 10 members of the Association of Southeast Asian Nations.