Daniel Ten Kate

Gas Exports to Thailand, China Provide Burma Cash Comfort

Bangkok. Burma’s growing trade ties with Thailand and China, driven by natural gas sales, appear to be allowing the military to ignore international calls to free opposition leader Aung San Suu Kyi and return the country to democracy.

The junta that runs Burma has used Asia’s seventh-largest natural gas reservoir to increase foreign currency reserves fourfold to $3.6 billion, a return that will grow as daily output is forecast to double by 2015.

The sales and new trading partners are giving Burma a financial cushion, rendering ineffective economic sanctions imposed by the United States and European Union designed to press the junta to introduce democratic changes and drop charges against Nobel Peace Prize laureate Suu Kyi that could result in a five-year prison sentence.

“Outside influence on the regime’s calculations is minimal,” said Thant Myint-U, a former United Nations official and author of “The River of Lost Footsteps: A Personal History of Burma.” The regime “is arguably in a stronger financial position than ever before,” mostly because of its gas sales.

Burma’s exports to the United States and the European Union amounted to less than 7 percent of total trade in 2007, according to EU data.

The country also receives less humanitarian aid than 38 so-called fragile states identified by the Organization for Economic Cooperation and Development.

The junta says that Burma’s annual economic growth was more than 10 percent from 1999 to 2007, with gross domestic product quadrupling in US dollar terms to $383.3 billion. The figures, however, haven’t been verified by the International Monetary Fund.

Unofficial estimates say that the figure is about half that, the Asian Development Bank said in its 2009 outlook.

The country has capitalized on providing gas to its energy- hungry neighbors, Thailand and China.

Exports to Thailand have more than tripled since 2003 to $3.3 billion in 2008 thanks to natural gas, which accounts for 92 percent of shipments. Thailand buys about 30 percent of its gas from Burma. About two-thirds of Thailand’s electricity comes from domestic gas supplies and those from its neighbor.

China plans to start construction of oil and gas pipelines through Burma that would allow it to access Middle Eastern crude without passing through the Strait of Malacca.

A group led by South Korea’s Daewoo International signed an agreement in December to sell gas from Burma to China National Petroleum, the country’s biggest oil company, for 30 years.

The junta last month put Suu Kyi, 63, on trial for breaching her detention order. Pro-democracy supporters say that the generals are looking for a legal pretext to keep her out of elections scheduled for 2010, the first since her National League for Democracy party won a 1990 ballot that the military rejected.

The trial was adjourned on Friday until June 12 while a higher court hears an appeal by the defense to allow three witnesses to testify, the Associated Press reported, citing Nyan Win, one of Suu Kyi’s lawyers.

Sean Turnell, a professor at Macquarie University in Australia who conducts research on Burma’s economy, said that the junta is “still pretty comfortable as a regime, but everyone else is complaining bitterly and there’s the potential for widespread hunger by the end of the year.”

The country is recovering from Cyclone Nargis, which devastated the main rice-producing region in May last year, leaving at least 138,000 residents dead or missing.

“The pile of cash could even provide a false comfort,” he said. “The extent to which they feel they don’t need to make concessions and engage in dialogue could force them into error.”

Bloomberg

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