Us Business Faces Confused Signals From Washington On Burma

[tombkk]

US
Assistant Secretary of State for Economic and Business Affairs Jose
Fernandez speaks at the UMFCCI office in Rangoon on Feb. 25, 2013.
(Photo: The Irrawaddy)

The sudden recognition by Washington of four Burmese banks—one owned
by a man accused by the US of arms and drugs trade—appears to have been
more than coincidence immediately before a top-level American business
team arrived in Rangoon.

It may have eased the handshake meeting on Monday between US
Assistant Secretary of State for Economic and Business Affairs Jose
Fernandez, and Win Aung, the president of the Union of Myanmar
Federation of Chamber of Commerce and Industry (UMFCCI).

Win Aung is on a US government blacklist of Burmese company leaders
dubbed cronies of the former military regime who benefited financially
from close relationships with army-controlled businesses.

That blacklist got a little whiter just ahead of the visit by
Fernandez, who heads up a 50-strong US business delegation in Burma this
week. One of the four private banks approved by Washington for use by
American business, Asia Green Development Bank, is owned by Tay Za, who
in the past has been accused by the US of involvement in weapons, drugs
and money laundering, and remains on the Washington blacklist.

Tay Za heads the conglomerate Htoo Trading, whose business interests range through mining, agriculture, hotels and an airline.

Win Aung is boss of the Dagon Group of Companies, which is heavily
engaged in natural resource extraction, including rubber and timber,
plus construction, property and retailing.

Both tycoons and others who built their business empires on the back
of a tightly controlled economy run by army generals are advantageously
placed as the country’s economy now opens up to foreign investment.

The Fernandez-led business group, which will spend this week touring
the country and meeting business and government leaders, includes
executives and managers from two major oil companies, Chevron and
ConocoPhillips, plus General Motors, General Electric, Honeywell,
Caterpillar, Fedex and Target, a discount retailer similar to Walmart.

Although the US government suspended economic sanctions against Burma
in May of last year, this is the first large American trade delegation
to visit the country.

Chevron and ConocoPhillips took part in an energy industry
opportunities seminar in Rangoon last September, but few American firms
have registered for a third energy conference being organized by the
Ministry of Energy on March 4-6. The continued presence of the
military-linked state agency Myanma Oil & Gas Enterprise (MOGE) in
the sector has been widely criticized.

European Union economic sanctions were also suspended indefinitely
last year, except for a continuing ban on the sale of “arms and
equipment that can be used for internal repression.” This restriction
comes up for review in April.

Some of the business leaders in the US delegation, as well as Win
Aung, expressed concern on Monday that Washington’s sanctions remain
only suspended, the Voice of America (VOA) reported.

The radio quoted Caterpillar’s Asia Pacific senior legal counsel
Darren Brooks as saying, “We would like to see more reliability or more
stability in the fact that the sanctions have been lifted.

“[The sanctions] are of course temporarily or conditionally lifted …
so it’s not like you can come in and invest US $100 million right now.
The sanctions could come back tomorrow and we’d be right back where we
were a couple of years ago,” Brooks told VOA.

Win Aung told VOA: “It is to be noted that total lifting of sanctions
can only enable investors to come and invest without any hesitation in
our new era of new economic development.”

Fernandez told a meeting between the US group and Burmese business
leaders in Rangoon that American companies would “bring international
business standards for transparency, labor rights [and] environmental
protection.”

Opposition leader Aung San Suu Kyi is among those who have criticized
the state oil and gas agency MOGE, which is a partner with China
National Petroleum Corporation in the pipelines. Their construction
across Burma, under heavy army security, has been associated with
frequent reports of rights abuses including farmers’ loss of land
without proper compensation.

Suu Kyi called for MOGE to be reformed and become more transparent.
There is no evidence that this has happened. In January in Naypyidaw
during parliamentary sessions she said that military-linked crony
business leaders should be investigated for any evidence of wrongdoing
during the regime years.

The US group’s visit coincides with a new risk assessment of doing
business in Burma by the British firm Maplecroft, which listed potential
problems in particular for the oil and gas sector as well as human
rights issues surrounding the Kachin conflict.

“Businesses face serious reputational risks from being associated
with security forces engaging in human rights violations while
protecting commercial assets,” said Maplecroft in its assessment
published on Feb. 25. “Constitutional powers grant the military the
ability to block legislation, limiting the scope of reforms that elected
officials can implement without military approval.

“Military leaders also hold significant power over the oil and gas
sector, and risk destabilizing the security situation while acquiring
land for further investment.

“Furthermore, China is worried that the Shwe oil and gas pipelines
could be affected by any growing instability [in Kachin]. While current
scope for direct Chinese military intervention in Myanmar is low, this
could change in the event of a serious escalation in the conflict.”

Source: http://www.irrawaddy.org/archives/27941