Why Unocal ignores calls for Myanma

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Subject: Why Unocal ignores calls for Myanmar sanctions? (fwd)



---------- Forwarded message ----------
Date: 4 Sep 1996 04:05:31 -0400
Newsgroups: soc.culture.burma
Subject: Why Unocal ignores calls for Myanmar sanctions?

Why Unocal ignores calls for Myanmar sanctions?
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Over the past several months, human rights groups in Europe
and United States have been stopping up their calls for tough
economic on Myanmar, arguing that be constructive
engagement favored by ASEAN has failed to bring about
democracy. Faced with the threat of consumer boycotts, Pepsi,
Heinken and a number of other multinational companies have
already withdraw Meanwhile, pro-democracy leader Aung San
Suu Kyi has been calling for and international clite. But some of
the most significant foreign investors in Myanmar say the
activists are misguided and argue that their projects create a
wealth of jobs and economic opposites. Two of the most
visible-France's Total and  the American company Unocal- are
involved in a U$$ 1.2 billion pipeline project that will export
natural gas to Thailand, boosting both the country's economic
growth  and its domestic power supplies. During a trip to
Yangon this weekend, Unocal president Join F IMLE spoke
with Asia Times correspondent Stephen  Brookes about the
pipeline  project, US sanctions legislation and the economic
future of Myanmar.

	Q: As the biggest United State investor in Myanmar,
Unocal has become a prine target for the pro-sanctions activists.
Has the pressure affected your commitment to staying?

          A: We're fully committed. We feel that we're making an
investment in the right kind of place, at the right time and for
the right reasons. First of all, it's good for our shareholders-it
makes sense from a business point of view. Secondly, we're
firmly convinced makes sense for Myanmar, for its future its
people.

	Q: Yet, the human rights groups argue that foreign
investments only benefit a few people and that they keep an
illegitimate regime in power.

	A: I disagree with that point of view. These investment
employ people and provide meaningful improvements in health,
education and economic opportunity, not only in terms of the
jobs that our projects provides, but in terms of development
projects we're founding-for example, shrimp farming and
livestock raising. These are providing people with economic
opportunities that they simply didn't have before, and wouldn't
have any other way, things that this economy is not able to
provide internally.

	Q: So you see a significant economic overflow?

	A: Absolutely, Economic projects bring a multiplier
effect into the economy. The number of our direct employees is
not astounding - there are between 300 and 600 Myanmars who
work for us, depending on the season. But beyond that, there's a
population of about 20,000 people whose lives are being
directly affected by the project we're sponsoring. They have
doctors available for the first time, for example. And we're
seeing signs of growing prosperity.

	Q: What about the charges that people have been
forcibly relocated out of the area and forced to work as porters?

	A: Those accusations are absolutely unfounded and
untrue. We have carefully researched that area going back for
year's using satellite photography and local maps. There have
been no villages moved in the area if this pipeline and there has
been no use of conscripted labor on this project.

	Q: Even by the military?

	A: Even by the military. There are military units there to
provide security for the pipeline, surveying and eventually
construction crews.. There was an attack in March 1995 and
one earlier this year. Of course, those attack require security
forces to be in the area. We do not pay the army for that
security. It just goes with being there.

	Q: There seem to be two points of view on foreign
investment : One that it preserves the status quo, the other that
it promotes change.

	A: In our experience, economic opportunity and
progress always create change for the better in terms of
government, human rights and the general welfare of the people.

	Q: So what effect do you think sanctions would have?

	A: We believe that sanctions are rarely, if ever,
productive and certainly would not be productive in terms of
their stated goals in Myanmar. The movement in favor of
sanctions is well-intentioned, but it might even stagnate the
move toward democracy and I think if's counterproductive.
Sanctioning US business out of  a national like Myanmar simply
isolates the United States. I fail to understand how the people in
favor of sanctions think they can influence a government by
disengagement.

	Q: What about the effects on the US business
community?

	A: The propensity of our Congress to adopt sanctions
makes us a less reliable coventurer for foreign companies. I also
worry about the perception of governments, who may be
looking at a European company versus a US company. They
want someone who's going to be there for decades and they
wonder, is there a political risk with the US Congress? Will they
have sanctions problems?  So they pick a European
organization. It's a huge problem for US business.

	Q: It looks like a watered-down version of the original
sanctions legislation may get passed in September. How would
that affect you?

	A: There is a Senate bill which has a sanctions
amendment  attached to it [HR3540] which is in the approval
process now. We're not happy to have that sanctions legislation
coming along, but in terms of possibilities, it's one we think we
can live with.

	Q :Were you concerned about the McConnell bill [ an
earlier, stronger version of sanctions legislation]?

	A: The McConnell sanctions, if they had passed, would
have caused us to immediately divest. Word of that possibility
was out and for the last year we were accumulating the names
of companies, mostly Asian companies, who wanted to buy our
share of the project. So the project should have continued- the
effect would simply be to replace US investors with other
investors. But it would not have any effect on the project. And
one could wonder if the new owners would have the same
attitude about the socioeconomic parts of the project that we
have had.

	Q: How about pressure from your from your own
shareholders?

	A: Well, 95 percent of our shareholders are squarely
behind this investment policy and 100 percent of our outside
directors are behind it. There seems to be an activist group of
shareholders who are against our investment in Myanmar, but
they're also against certain investments in Canada, Indonesia and
Azerbaij an-I would classify them as anti-investment! But
they're very small minority.

	Q: Aung San Suu Kyi recently came out in favor of
sanctions, but she's also been saying investors should stay away
because the economy is in bad shape. What's your view?

	A: I've been here off and on since 1989, and I'm
astounded by the amount of economic progress that has been
made. I didn't think I've ever seen a similar rate of progress
anywhere. And with respect to not investing because the
economy is sluggish or poor, that's how we create better
economics- by investing . By putting money into the system and
letting it circulate and letting people use it to buy the things they
want, educate their children, improve their health care.

	Q: What effect will the energy supplies from the gas
pipeline have on the broader economy? Investors often point to
poor electricity as a key infrastructure problem in Myanmar.

	A: That's right. And we've noticed in Thailand , as an
example, when natural gas production allowed the economical
increase of power generation, that economy really took of. They
had inexpensive power and that's needed for industry. The cycle
begins building upon itself. It creates rapid economic growth for
most of the population.

	Q: You've been meeting with some of the top people in
the government here. Do you think they're serious about moving
toward a full market economy?

	A: I don't think there's any doubt  about it. You see signs
of it all over this nation-individual businesses in what was
formerly a socialist system. The Asian propensity for doing
business in an entrepreneurial way is alive and well in this
country. They're throwing the economy open to the markets of
the world, and the results are unfolding at a rapid speed.

	And after this visit, I think that this government is
seriously committed to transitioning itself into a democracy.
That is their publicly-stated goal and I think that is not
understood in the United States.

	Q: What would you tell foreign investors about doing
business here?

	A: I would ask them to look very objectively and not
believe everything they read in the press. Talk to the leadership,
talk to people who live here, talk to their businessmen- and
them judge for themselves whether it's a good place to invest.

*****