"... In debates about economic globalisation, the case for leading corporations to engage with some of the world?s most desperate development challenges is increasingly heard. In just the last few years, the World Bank and Mandle have shown that economic globalisation can operate to the benefit of the poor, Bhagwati and Wolf have issued powerful defences of globalisation, and Friedman has urged individuals, corporations and governments to seize the opportunities present in the increasingly "flat" world in which we live.2 From the peak of the international political system, UN Secretary-General Kofi Annan has endorsed all these arguments by holding that it is "the absence of broad-based business activity, not its presence, that condemns much of humanity to suffering."3 To stimulate action, he sponsored the UN Global Compact, dedicated to promoting responsible corporate citizenship throughout the world, and appointed its principal author, Kennedy School Professor John Ruggie, to the position of Special Representative on the issue of human rights and transnational corporations and other business enterprises. However, despite all the mood music lauding the contribution business can make to development, it remains an open question whether corporate engagement, and in particular inward investment, should take place in extreme contexts. On the one hand, foreign capitalist involvement in some industries, notably resource extraction, has long been seen as highly exploitative. For decades, neo-Marxist critiques of capitalist underdevelopment held sway, stressing the extent of local state dependence on foreign capitalist interests, and the catastrophic impact of corporate engagement on local economic, social and political evolution.4 Notions of captured, rentier states mired in corruption and committed to systematic exploitation of Third World populations were commonly encountered. Few other than baleful local effects, generated by unprincipled involvement on the part of foreign corporations, were recorded. Today, criticism of this kind continues to be heard in, for example, responses to the World Bank?s Extractive Industries Review, released in December 2003, which itself reached rather equivocal conclusions.5 Under the influence of more recent analyses of economic globalisation and its effects, should such activity now be encouraged? As economies are opened to the forces of global capitalism, is resource extraction to be placed alongside other corporate activity as positive and constructive in its contribution to pro-poor policies? On the other hand, all forms of corporate engagement with regimes that commit gross human rights violations are widely viewed as thoroughly unprincipled. For many years now, the sanctions lobby has trained a moral spotlight on inward investment in countries dominated by violator regimes. While the condemnation, and the resultant corporate pullouts, have always been highly selective, picking up on, say, Myanmar in the Asian context but making little comment on China, they have been no less powerful for that. Indeed, informal sanctions, targeting brands and corporations with a great deal to lose from negative publicity, have often been much more potent than formal government sanctions applied by the US and some of its allies.6 Again, under the influence of the latest writings on economic globalisation, should this activity also now be endorsed? Even in the most unpromising domains, can profits and principles be secured in tandem?7 This article tackles these issues by focusing on one very specific development context: Myanmar, or the country formerly known as Burma. By almost any definition, this is a difficult environment for poverty reduction.8 It is also one of the most unpromising settings for business activity, ranking last out of the 127 countries included in the Fraser Institute?s Economic Freedom of the World Index for 2003.9 Furthermore, the kinds of extreme circumstance that generate the greatest development challenges are readily found here. Global corporations are engaged in extractive activities that provoke fierce critiques. Reports published over many years by Amnesty International, EarthRights International, Human Rights Watch and other organisations document gross human rights abuse by government-backed forces in virtually all parts of a country of more than 50 million people. Within this context, the article examines one particularly controversial extractive enterprise: the Yadana gas project, in which Western oil companies have long been prime movers. The debate that encircles this project is of course not unique. It is nestled in a broader discourse about corporate engagement with rights violating regimes all over the world, and reflected in specific ethical controversies thathave flared up in recentyears.11 When companies such as Carlsberg, Heineken, Levi Strauss and Reebok pulled out of Myanmar in the early and mid-1990s, they made public the moral concerns that prompted their decisions.12 Equally, some corporations targeted by campaigners have issued ethical justifications for ongoing engagement.13 Similar divisions are visible in other spheres. While the Global Fund made a high-profile withdrawal from Myanmar in August 2005, citing intolerable official interference in its work to combat AIDS, tuberculosis, and malaria, key internal groups such as the National League for Democracy and the Student Generations Since 1988 now call for humanitarian intervention; and international agencies such as Save the Children USA continue to operate inside the country.14 The Yadana project is special because this single case encapsulates Western corporate involvement in resource extraction in a highly repressive context. It also has the virtue of being very well documented. The article addresses two main questions. First, is the involvement of foreignowned corporations in Myanmar?s Yadana project to be welcomed? Second, with the experience gained from this involvement, can wider lessons about global corporate citizenship be drawn? To generate answers, the first section of the article provides some brief background material on the Yadana project. The second section then examines the cases made by its backers and critics, and evaluates the project from the perspective of its impact on the people of Myanmar. The third section focuses on wider lessons for corporate engagement that flow from the project, and in particular, the conditions in which inward investment in repressive settings is likely to be most constructive and positive in its effects. Applying these conditions to Myanmar, the fourth section considers ways forward for corporate involvement with the country. The article closes with a brief conclusion. The argument is that it is not possible to reach an overall evaluation of the Yadana project. However, some principles of responsible cross-border corporate engagement can be derived from it..."