Burma investment ban good for ASEAN : 1999-10-29

Written by U Ne Oo on 1999-10-29

Of recent, there have been rather peculiar reports of 'economic bad news' on Burma disseminated by Xinhua news agency. It, of course, is nothing unusual about bad economic news on Burma: anyone can readily checkout these economic data in publications such as Economic Intelligence Unit Quarterly/Country reports. The peculiar aspect is the way Xinhua news agency has come into featuring these economic data on Burma that needs our careful examination.

XINHUA, ANOTHER OUTLET FOR NLM

We know that there have been numbers of reporters from Xinhua residing in Rangoon and they appears to work collaboratively with NLM(or O collaboratively with NLM(or OSS). Questions need to be asked as to why these 'economic bad news on Burma' being featured by Xinhua quite recently. For example, on 18 October, the Xinhua is reporting foreign investment in Burma to be 11.8 million USD for the first half of 1999, a 94% drop from last year (see report enclosed). The revenue from custom duties dropped to mere 400 million USD down about 50% to that of last year's. The income taxes drop was reported on 27 October . A number of reports on downward trend in bilateral trade figures rade figures have also been presented (see following reports). The statistics put out by Xinhua may be as much accurate as it can be . The motive for Xinhua featuring these data, however, need some interpretation.

Firstly, by featuring incredibly minuscule number of foreign investment figure ($12 million in Six months) , Burmese junta is trying to soften our resolve to impose 'ban on new international investment'. This is also important for countries like China too: if we can get a UN imposed a ban on new investment on human rights ground, it may be setting a precedence. This way, Xinhua is serving for two bosses at the same time.

NO UNREALISTIC EXPECTATIONS

As stated before, I personally do not like economic sanctions. However, the ban on new investment is something I can certainly support to for several reasons.

Firstly, in comparison to full economic sanctions, the ban on investment is much more easier to enforce for United Nations and international community. In contrast, to enforce total econocontrast, to enforce total economic sanction -- which include import/export ban -- will require much more resources for UN and international community. Some people have rejected full economic sanctions even on ground of impossibility to be able to enforce by the UN. To monitor the ban on new investment will be a lot easier, and is entirely possible, for the UN and international community. On the otherhand, the investment sanctions are not as savage in humanitarian view points: it theoretically does not taken away any privileges th privileges the population currently enjoying (n.b. population in Burma virtually enjoy nothing from military government, however).

Secondly, the ban on new investment on Burma will send a clear signal to junta that they will have no chance of resurrecting themselves economically. Currently, the EU and USA have bilaterally imposed investment ban and various other sanctions on Burma, which are renewed each year. The international ban will help stop the possible investment coming from ASEAN countries and China.

On suggesting the investment ban, I am in no illusion that economic sanctions of any form will necessarily bring down the military dictatorship. However, the sanction will weaken the junta, both economically and politically.

HOW SANCTION CAN HELP US POLITICALLY

Regarding economic sanction politically helping the democracy movement, we can draw an example in early 1997. It is noticeable that we, as a movement, encounter less attack from various sources in USA after President Clinton imposed investment ban on Burma. It can even notice that on Internet we have less disruption since that ban. The thing is that there will be some 'poke around' by the businesses to make money in Burma in long and short terms. It means there will be attacks on existing sanctions imposed by EU and US. Such action by business will interrupt our campaign against the military junta. If we get the UN imposed investment ban, we can fight SLORC without much disruptions.

FREE-MARKET FORCES: FRIENDS AND FOES

We can roughly classify three distinct financial institutions that we encounter in our struggle. First, there are international financial institutions such as IMF, World Bank, Asian Development Bank etc. These institutions appears to operate in a more friendly fashion to the democracy movement.

Second, there are independent businesses, such as TOTAL/UNOCAL etc. These businesses have a law of their own. Unless the democracy movement can exercise our own power, these business will not become helpers of democracy movement.

Third, there are independent investors (fund managers etc). They are difficult to control and, mostly, unreliable to draw upon as useful political force for democracy movement. The effect of these independent investors have already been seen in recent years. In around 1994, these investors had poured their moneys into Thai economy, in which Burmese military indirectly benefited from it. By the end of 1996, and noticeably after Burma gain ASEAN membership in 97, these investors withdrawn their investments. The democratic changes in Thailand, South Korea and, recently, Indonesia (plus East Timor) can be undoubtedly attributed to the panic suffered by these independent investors.

Without a doubt, that panic in the ASEAN financial market had been brought about by bigger players in the US markets. By looking back on those the events, we can estimate financial power of these players. For example, Peregrine Investment Bank of Hong Kong, once mighty financial power house for Asia and staunch supporter to authoritarian regimes, went downoritarian regimes, went down in ASEAN financial crisis. All in all, we can be certain that the democracy movements are not without friends in these financial markets.

BURMA INVESTMENT BAN WILL BE GOOD FOR ASEAN

It will be in the interest of ASEAN countries and China to support the investment ban on Burma. This will isolate troublesome issue of Burma and ASEAN can rebuild its economy without disruption. The ASEAN countries can co-sponsor Burma resolution at this United Nations General Assembly as first practical step towards their economic recovery.

With best regards, U Ne Oo.

Foreign investment in Myanmar sharply drops

Xinhua, Yangon 18 October 1999. foreign investment in .Myanmar amounted to only 11.823 million U.S. dollars in the first half of this year, plummeting by 94.73 percent from the same period of last year when 224.482 million dollars came in. During the half-year period, Myanmar absorbed investment from India, Thailand, Japan and Indonesia, Thailand, Japan and Indonesia with 4.5 million dollars, 4.5 million dollars, 1.446 million dollars and 1.377 million dollars respectively, according to the latest figures published by the country's Central Statistical Organization.

Of the total, 7.323 million dollars were injected into manufacturing sector in three projects, 3.5 million dollars into hotels and tourism sector in one project and 1 million dollars into mining sector in one project. The sharp drop of foreign investment was mainly attributed to the impact of the Asian financial sian financial crisis. The Myanmar government openly admitted recently that due to the effect of the crisis, direct investment from member countries of the Association of Southeast Asian Nations reduced by 70 percent. According to the statistics, since Myanmar opened to foreign investment in late 1988, the country has drawn a total of 7.1 billion dollars from 24 countries and regions. The 10 major foreign investors lined up as Britain, Singapore, Thailand, Malaysia, France, the United States, Indonesia, the Netherlands, the Philipp, the Philippines and Japan. China ranked the 14th with 30.826 million dollars.

Myanmar gets less customs duties income

Xinhua, Yangon, 18 October 1999. Myanmar gained a total of only 389 million U.S. dollars in customs duties in the first half of this year, 46.34 percent less than the 725 million dollars it obtained in the same period of last year, according to the latest figures released by the country's Central Statistical Organization.

Of the total customs du total customs duties income, that obtained from import through normal trade amounted to as high as 339 million dollars, accounting for 87.14 percent of the total, while that gained from import through border trade was only 46.33 million dollars, accounting for 11.9 percent. The figures also show that in 1998, Myanmar received a total of 1.135 billion dollars of custom duties income, a reduction of 10.9 percent compared with 1997 when the figure was 1.274 billion dollars.

In recent years, Myanmar habsp; Myanmar has made some adjustments in the rate of customs duties in an effort to boost the development of agriculture. It exempted import duties on agricultural implements including machinery, pesticide and fertilizer while raising import duties on luxury goods.

Myanmar-Singapore bilateral trade falls

Xinhua, Yangon 20 October 1999. The value of the bilateral trade between Myanmar and Singapore fell by 7.4 percent to 419.96 million U.S. dollars in the firllars in the first half of this year from 453.72 million dollars in the same period of last year. During the first half, Myanmar's imports from Singapore amounted to 367.42 million dollars, dropping by 8.9 percent from 403.55 million dollars in the corresponding period of last year, the official economic indicators said in its latest issue. Meanwhile, Myanmar's exports to Singapore stood at 52.54 million dollars, increasing by 4.7 percent over the same period of last year which recorded 50.17 million dollars. The indicators als indicators also show that in 1998, Myanmar-Singapore bilateral trade was as high as 992.33 million dollars, with Myanmar's imports from Singapore amounting to 879.81 million dollars while exports to Singapore standing at only 112.52 million dollars.

Singapore has become Myanmar's largest trading partner with its bilateral trade with Myanmar accounting for 25 percent of the country's total foreign trade annually. Singapore is also Myanmar's leading investor with 1.087 billion dollars injected into the country in 46 projects in 6 projects in the past five years, which accounted for 19.27 percent of the 5.6415 billion dollars of total foreign investment flowing into the country in the period.

Myanmar-Japan bilateral trade drops slightly

Xinhua, Yangon 20 October 1999. The bilateral trade between Myanmar and Japan was 149.9 million U.S. dollars in the first half of this year, down 0.3 percent from the same period of last year which registered 150.49 million dollars. The official economic indicators said in its latest issue that Myanmar's import from Japan was valued at 122 million dollars, 10.29

percent less than the 136 million dollars in the corresponding period of last year.

Meanwhile, Myanmar's export to Japan in the period stood at 27.9 million dollars, increasing by 92.54 percent over the same period of last year which recorded 14.49 million dollars. In recent years, Myanmar has strengthened its economic cooperation with Japan. In the past five years, Myanmar absorbed investment amountingar absorbed investment amounting to 123 million dollars from Japan in 16 projects, which accounted for 2.18 percent of the total foreign investment of 5.6415 billion dollars flowing into Myanmar during the period. Japan ranks the 10th among the countries and regions investing in Myanmar. The five leading investors are Britain, Singapore, Thailand, Malaysia and France, with a total investment of 4.3248 billion dollars or 76.66 percent of Myanmar's total foreign investment.

Myanmar-Thai bilateral trade falls this year year

Xinhua, Yangon 21 Ocrober 1999. Bilateral trade between Myanmar and Thailand amounted to 174.54 million U.S. dollars in the first half of this year, falling by 30.16 percent from the 249.93 million dollars registered in the same period of last year. In the half-year period, Myanmar's imports from Thailand stood at 148.89 million dollars, a drop of 18.5 percent from the same period of last year which saw 182.69 million dollars, according to the latest economic indicators issued by the Central Statistical Organization. Meanwhile, Myanmar's exports to Thailand were 25.65 million dollars, down by 61.85 percent from 67.24 million dollars in the corresponding period of last year. The indicators also show that the bilateral trade between Myanmar and Thailand reached 441.38 million dollars in 1998. Myanmar's imports from Thailand were valued at 348.15 million dollars in the year, while its exports to Thailand were worth 93.23 million dollars. Thailand is Myanmar's second major trading partner after Singapore. The two countries' bilateral trade accounts for 11.14 percent of Myanmar's annual foreign trade. Thailand ranks the third among foreign countries and regions investing in Myanmar after Britain and Singapore. In the past five years, Myanmar has absorbed 961.2 million dollars of investment from Thailand in 27 projects, which accounted for 17.03 percent of the country's 5.6415 billion dollars of total foreign investment during the period.

Myanmar's fish, prawn export falls

Xinhua, Yangon, 21 October 1999. Myanmar exported 24,600 tons of fish and prawn in the first half of this year, a 14.58 percent drop from the same period of last year which was 28,800 tons. Of the total, fish accounted for 19,400 tons and prawn 5,200 tons, according to the latest figures released by the country's Central Statistical Organization. Meanwhile, export earnings of fish and prawn in the half-year period totaled 56.79 million U.S. dollars, 21.4 percent less than that obtained in the corresponding period of last year which was 72.26 million dollars. Myanmar annually produces over 910,000 tons of fish and prawn, of which over 240,000 tons are fresh water fish and prawn, and 670,000 tons are deep sea fish and prawn. According to the statistics, in 1998 Myanmar's export of fish and prawn totaled 62,400 tons with an earning of 159.38 million dollars. since Myanmar adopted an open economic policy in late 1988, foreign investment injected into the fishery sector has reached 197 million dollars in 11 projects.

Myanmar's cement production drops

Xinhua, Yangon, 22 October 1999. Myanmar produced a total of 159,588 tons of cement in the first half of this year, a drop of 22.65 percent compared with the same period of last year, according to the latest figures of the Central Statistical Organization. The figures also show that in the whole of 1998, Myanmar produced a total of 364,959 tons of cement.

In recent years, Myanmar has speeded up the pace of infrastructural construction of roads, bridges and dams, resulting in a shortage of cement. To meet the rising demand for cement, Myanmar plans to build more cement plants. It is learnt that Myanmar is trying to get a foreign loan of 150 million U.S. dollars to build a 4,000-ton-capacity cement plant. On the other hand, Myanmar is spending a large sum of foreign exchange to buy in cement. In fiscal 1998-99 which ended in March, Myanmar imported a total of 65.55 million dollars' worth of cement. The country mainly imports cement from China and Indonesia.

Myanmar's crude oil production drops slightly

Xinhua, Yangon, 25 October 1999. Myanmar produced a total of 1.66 million barrels of crude oil in the first half of this year, a 4.2 percent drop compared with the same period of last year which was 1.733 million barrels. According to the latest data published by the country's central statistical organization, the output of natural gas was 852 million cubic-meters during the period, a 3.97 percent reduction over the corresponding period of last year which was 887.3 million cubic-meters. In 1998, Myanmar produced a total of 3.424 million barrels of crude oil and 1.749 billion cubic-meters of natural gas, respectively reducing by 6.5 percent and 2 percent over 1997. Since Myanmar opened to foreign investment in late 1988, foreign investment in the oil and gas sector coming from Australia, Britain, France, Indonesia, Japan, Thailand and the United States had reached 2.3 billion U.S. dollars in 46 projects, accounting for 32.39 percent of the total foreign investment of 7.108 billion dollars. Until now, Myanmar's crude oil and petroleum products are still self-insufficient and the country has to import 280,000 to 300,000 tons of crude oil and 100,000 to 150,000 tons of diesel oil annually, according to the official statistics.

Electric power production drops in Myanmar

Xinhua, Yangon, 25 October 1999. Electric power generated by the state-run Myanma Electric Power Enterprise (MEPE), the main electricity supplier of the country, totaled 1.979 billion kilowatt-hours (kwh) in the first half of this year, a 12.82 percent drop compared with the same period of last year which was 2.27 billion kwh.

Acording to the latest figures of the official economic indicators, the installed capacity of the MEPE was 1,058 megawatts (mw) by the end of June this year. The figures also show that in 1998, the MEPE produced a total of 4.3 billion kwh of electricity. Other official statistics indicate that the MEPE added a total installed capacity of 509 mw in the past 11 years, of which natural gas power plants represented 255 mw, while steam power plants took up 143 mw and hydro-electric power plants 111 mw.

Meanwhile, Myanmar is implementing five more hydro-electric power plants Paunglaung, Mone and Thaphanseik are being built by China. The five power plants, upon completion, will add 407 mw more to Myanmar's electric power installed capacity and will ease the serious shortage problem of electricity in Myanmar.

Tourist arrivals drop in Myanmar

Xinhua, Yangon, 26 October 1999. A total of 138,561 foreign tourists visited Myanmar in the first half of this year and 80,572 of them came by land routes through border points.

The latest figures of the official economic indicators show that the number of tourist arrivals during the half-year period dropped by 1.57 percent compared with the same period of last year.

The figures also show that in 1998, a total of 279,335 foreign tourists came to Myanmar which earned just over 33 million U.S. dollars from tourism in the year.

Up to the end of March this year, there was a total of 492 hotels in operation in Myanmar with 13,984 rooms. There were also 521 licensed tour companies including 508 local companies, 12 joint ventures and one foreign company.

The country hopes to boost the number of tourist arrivals to 500,000 annually. Since Myanmar adopted the open-door economic policy in late 1988, foreign investment in the sector of hotels and tourism has reached 1.1 billion dollars in 30 projects.

Myanmar needs to import more edible oil

Xinhua, Yangon, 27 October 1999. Myanmar's domestic production of edible oil is not meeting its demand and it still has to import a large amount of such oil.

According to the latest figures released by the country's Central Statistical Organization, Myanmar imported a total of 53.4 million U.S. dollars' worth of edible oil in the first half of this yeaamount of such oil.

The statistics also show that in 1998, Myanmar imported a total of 121.7 million dollars' worth of edible oil. The figure for 1997 was 124.7 million dollars. Myanmar's population is growing at an annual rate of 2 percent.

As there is no corresponding adjustment of the cultivated area of oil crops with less per-hectare output, Myanmar is still insufficient with edible oil. To strive for self-sufficiency in the oil, Myanmar has leased out large plots of vacant and virgin land to be run by private entrepreneurs, providing the oil crop growers with agricultural loans and granting advance payment for the crops.

Myanmar's income from taxes drops

Xinhua, Yangon, 27 October 1999. Myanmar's State Internal Revenue Department collected a total of 27.521 billion kyats (91.7 million U.S. dollars) of taxes in the first half of this year, a 2.5 percent drop from the same period of last year. According to the latest official economic indicators, in the half-year period, Myanmar also gained a total of 389 million dollars from customs duties, a fall of 46.34 percent.

To cope with the impact of the Asian financial crisis, the Myanmar government has adopted some new policies to collect taxes in the country in recent years. Exemption of customs duties on the import of agricultural implements, including related machinery, pesticide and fertilizer, was among the measures taken to ensure that agriculture, the mainstay of the country's economy, is not effected.

Other measures include raising the customs duties of luxury goods imported and levying an 8 percent commercial tax on commodities sold in foreign currencies beginning January 1, 1999.