REPORT ON COMMUNICATIONS (13/11/95) (r)

[simon_billenness@xxxxxxxxxxxx]

Subject: Re: REPORT ON COMMUNICATIONS (13/11/95)

Dear Michael Pasco:

Thank you for a thoughtful and well-argued reply. It is the kind of letter
that raises the level of debate on Burmanet. My comments are below.

>
>
>On 19 Jan 1996 simon_billenness@xxxxxxxxxxxx wrote:
>
>[text deleted]
>
>> Economic pressure is amongst the most effective non-violent tactics. The
>> SLORC needs to be put between a rock and a hard place. We aim to be the
>> biggest rock possible.
>> 
>> Simon Billenness
>> Franklin Research & Development
>
>I have a few things to offer:
>
>The SLORC are sharks in a feeding frenzy who know that the meal will not
>last forever.  They do not care about the standard of living for the general
>population; the SLORC take what they need (I have been to Burma within the 
>last three months and have seen with my own eyes the current situation) 
>and if economic sanctions did actually have any effect it is likely that the
>population would be hurt the most -
>
>Also,
>
>The Chinese are more than happy (and capable) to satisfy the major trade 
>needs of the SLORC, to the casual observer.  What are the trade items 
>that the SLORC desperately need that the Chinese can not supply?
>
>The key to the success of economic pressure lies in China.  Considering 
>the less than admirable human rights record of the 'Middle Kingdom' and 
>the economic interests that the Chinese have in Burma (Burma being the place 
>where the Chinese can easily unload products of such low quality that no 
>other country will buy them) it is unlikely that the Chinese will join 
>the fray to bring Burma to democracy or a reasonable fascimile thereof-
>
>Please do not mistake my questions as an attack on your position, I am 
>genuinely interested in the resolution of the current disaster in Burma 
>but am at a loss concerning how the economic sanctions will be effective.
>
>Thanks!
>
>Mike P
>    

In response, I would argue that there are elements within the SLORC that
want to do more than just survive, they want to thrive. Those people see
foreign investment, particularly by the IMF and World Bank, as the key to
economic success.

You should distinguish between trade and investment. The kind of trade that
China does in Burma meets many needs of the Burmese people and provides
little benefits to the SLORC. If anything, it is taking capital out of the
country.

Investment, on the other hand, is the process of bringing capital into
Burma. It is concentrated in the oil industry and tourist industry, which
account for about two-thirds and a quarter of investment in Burma,
respectively. Oil industry and tourist investment is almost exclusively made
in collaboration with the government or entities such as the Union of
Myanmar Economic Holdings (UNEH), which is controlled by the army. Oil
industry and tourism investments disproportionately benefit the SLORC.
Moreover, they have also been linked to human rights abuses such as forced
labor.

Even investment in the seemingly inocuous apparel industry involves joint
ventures with the government or UNEH. In addition, according to "Investing
in Myanmar" (published by the Union of Myanmar Foreign Investment
Commission), all employers who hire five or more employees have to recruit
workers from a list of candidates provided by the government.

I would argue that only major American and European oil companies have the
necessary capital and technology to develop Burma's offshore gas fields. A
pullout of US companies alone, prompted by Administration action or the
passage of the "Burma Freedom and Democracy Act of 1995," would result in
the withdrawal of Texaco from its role as operating partner in one offshore
gas field and Unocal as a major partner of the Yadana field.

Likewise, the tourist industry will require an influx of Americans and
Europeans. Since the United States alone accounts of 25% of all consumer
spending, the inability of companies, such as Levi Strauss & Co, Liz
Claiborne, Eddie Bauer and Macy's, to market "Made in Myanmar" clothes in
the US is having a serious impact on future investment in the Burmese
apparel industry.

My bet is that SLORC technocrats at the Foreign Investment Commission and
the Industry Ministry understand their need for investment. As does Aung San
Suu Kyi who has call for people not to invest in Burma at this time. As
investment continues to be bottled up, the SLORC will realize that they have
to come to negotiating table with the democracy movement.

Michael, thank you for raising some important concerns and giving me the
opportunity to explore the issue further. I'll post this to the list for
people's interest.

Simon Billenness