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Stephan Brooke's Predictions--A Rep



Subject: Stephan Brooke's Predictions--A Report Card



---------- Forwarded message ----------
Date: Fri, 3 Jan 1997 18:11:26 -0800 (PST)
To: strider@xxxxxxxxxxx
Subject: Stephan Brooke's Predictions--A Report Card




In April of this year Stephan Brooke, who is trying to build a
journalistic career on articles sympathetic to the SLORC, made a number of
predictions in an article printed in the Asia Times entitled "What the
year 1358 has in store for Myanmar."  By the Burmese calendar, 1358 isn't
quite over yet but as 1996 has come and gone, it is worth looking back at
Brooke's predictions and assigning a tentative grade. 


Subject: "What the year 1358 has in store of Myanmar" Asia Times



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Asia Times
April 17, 1996

WHAT THE YEAR 1358 HAS IN STORE FOR MYANMAR

Stephen Brookes 

BROOKES:
 Prediction One: Myanmar'[s economy will continue to grow
 rapidly.  Despite the remaining distortions in the economy,
 gross domestic product can be expected to expand at a rate of
 more than seven percent annually, due to continued capital
 inflows, mobilization of domestic savings, confidence in
 political stability, increased opportunities for entrepreneurs,
 continued privatization of state - owned enterprises, improved
 infrastructure, the likelihood of increased foreign aid, and
 other factors.

 Agriculture, which makes up 55 percent of GDP, is being
 aided by government sponsored irrigation and fertilization
 programs, and is expected to continue the spectacular growth
 it has enjoyed for the past several years.

 And one of the key obstacles to industrial expansion -- the
 inadequate energy supply -- should be helped by new supplies
 of natural gas coming on line and the installation of gas
 turbine engines.

REALITY: Brookes was wrong.  Burma's economy is comatose.  If there is any
growth this year, which is unlikely, it will be de minimis.  Foreign
investment has dropped dramatically and many western companies have
already pulled out.  Even Asian companies are showing a reluctance to set
up shop in Burma because selective purchasing laws in the United States
would penalize them for doing so.  Foreign aid is almost non-existent and
the rice crop doesn't look good.  Foreign oil companies even briefly
stopped shipping gasoline to Burma because the government defaulted on its
bill.  Another default, which has not been widely reported yet, will cost
an American tractor manufacturer several million dollars because the SLORC
can't afford to pay for tractors its ordered and took delivery of. 

BROOKES:
 Prediction Two: Foreign investment may level out, but
 domestic investment will increase.  Businessmen are still
 scared of missing out on Myanmar's spectacular growth, but
 as more realistic expectations set in, foreign investment may
 slow from its frenetic pace of past years.  Much of the recent
 investment has been in the hotel sector, and that may slow as
 investors assess occupancy rates during Visit Myanmar Year
 1996.
 
 Domestic investment is expected to increase, however, as
 more opportunities become available.  Myanmar's first stock
 market will be opening this year, the banking sector is slowly
 being liberalized, and the huge amount of domestic savings
 that is now in the underground banking sector is starting to
 move back into the mainstream economy as savers regain
 confidence in the economy.

REALITY: Brookes was wrong.  Foreign investment has not leveled off.  It
is in a free fall.  There has been almost no significant investment in
Burma since the middle of 1996 and the country is now in an economic
crisis.  The rate of inflation is over 35% and the interest rate paid to
savers is sharply negative.  Most, if not all of the domestic investment
seems to be coming from narcotics related figures such as Lo Hsing Han and
the Asia World Company and Khun Sa.  The most recent foreign investor to
pull out is Peregrine, which generally does well even in countries plagued
by corruption.  That Burma is governed so poorly and corruptly that even
Peregrine can't make money is not a promising sign for the SLORC. 


BROOKES:
 Prediction Three: International aid will not flow in on a major
 scale.  Myanmar is deeply in arrears on its foreign debt, for
 which it may receive help from individual countries.  Japan,
 for example, recently agreed on the extension of debt - relief
 grants.

 However, while a number of countries, including Japan and
 South Korea, would like to see the IMF resume loans to
 Myanmar (specifically to provide the balance - of - payments
 support that would allow a smooth devaluation of the kyat),
 Washington is likely to continue to veto such aid.  But as the
 SLORC moves to meet more of the IMF economic criteria for
 loans, Washington will face increasing isolation.

REALITY: Brookes was right, sort of.  Foreign aid is not forthcoming. 
Washington is anything but isolated on this score because the lack of
transparency in the Burmese economy is such that no outside organization
is likely to put money into the country without significant economic
reforms. 


BROOKES:
 Prediction Four: Aung San Suu Kyi will go on the offensive. 
 Yangon is rife with rumors that the NLD, frustrated over
 increasing irrelevance, is planning a dramatic confrontation
 with the government.  One possibility is that Suu Kyi and her
 supporters would deliberately get themselves arrested in an
 act of civil disobedience, thereby refocusing the attention of
 the world press on themselves and possibly inspiring a
 national popular response.

 Few think a strategy is realistic, however.  "Suu Kyi thinks
 that the country is ripe for revolution, that people will rise up
 against the government."  says one diplomat in Yangon.  "But
 it isn't -- that's just wishful thinking on her part.  And the
 SLORC isn't stupid.  They know that arresting her would
 only strengthen her position.  They would arrest her
 supporters and leave her alone."

REALITY: Brookes was wrong.  The country, or at least the universities,
were ripe for revolution.  Aung San Suu Kyi has mostly played it cool. 
She has called for sanctions and regularly criticizes the regime, but has
not called for street demonstrations or staged acts of civil disobedience. 
Students on the other hand have staged a number of disciplined and
non-violent demonstrations that came as a surprise to the SLORC.  Suu Kyi
does not appear to have had any role in organizing the demonstrations but
the students also pretty clearly share the same goals and don't think of
her as irrelevant.  If anything, the lengths that the students have gone
to to disclaim any overt allegiance to her or the NLD bespeak their
concern for her safety.  SLORC has been the one to push for a
confrontation.  The SLORC orchestrated physical attacks on her and other
NLD leaders and has imposed a limited house arrest on her. 

BROOKES:
 Prediction Five: Some personnel changes in the government
 are possible.  Many of the members of the ruling SLORC are
 over the usual mandatory military retirement age of 60 and
 may retire this year.  A number of military officials have been
 promoted in the past year, creating seven new Ministers
 Without Portfolio.

REALITY: Brookes was wrong.  So far, the only major change is the demotion
of one minister to "Minister without Portfolio" because of his unseemly
involvement with American investor Miriam Marshall Segal.  Segal lost a
multimillion dollar judgement to her former employer Peregrine and a SLORC
minister was implicated in Segal's attempt to defraud the Hong Kong based
company.  On another note, Gen. Than Shwe is rumored to have suffered a
stroke and does not appear healthy in public appearances.  He may well be
cashiered before 1358 is over. 


BROOKES:
 Prediction Six: The policy of forced labor may be gradually
 abandoned.  The government has been defending its use of
 forced labor in road building and other projects in recent
 months, but may decide that the negative international
 publicity isn't worth the price of free labor.  It's already
 started to give out new road projects to private companies.

REALITY:  Brookes is probably wrong.  SLORC is making a show of using more
military labor on infrastructure projects but the evidence is ambiguous. 
There may be some reduction in the amount of forced labor.  But if there
is a reduction, is is a modest amount so far and it would be a reduction
from such a high starting point that even a reduced amount of slave labor
would still constitute a violation of human rights on an extraordinary
scale.  The U.S. Embassy in Rangoon estimated the amount of slave labor
used in Burma in 1995 to be equal in value to 27% of the government's cash
revenue.  That would require about 800,000 people per day on each day of
the year.  No other country uses slave labor on such a massive scale (even
China with 20X the population probably does not use as many workers in its
prison labor system).  The road project that Brookes referred to as going
to a private company went to a company owned by Lo Hsing Han, the heroin
warlord.  While the use of narcotics revenues to fund infrastructure is
arguably less egregious than using slave labor, it is not endearing SLORC
to western narcotics officials or governments. 


BROOKES:
 Prediction Seven: The United States will become increasingly
 isolated.  Despite the likelihood of more student protests on
 college campuses and the posturing of some Congressmen and
 Senators, the Clinton administration is unlikely to risk
 abandoning its fence - sitting policy during the election year. 
 Moreover, the US business community is said to be
 increasingly hostile toward legislation that would forbid
 American companies from investing in Myanmar.

REALITY:  Brookes was wrong.  The U.S. has become less isolated as the
Europeans have warmed to the idea of sanctions.  The European Union just
imposed sanction on Burma for its use of slave labor.  The Clinton
Administration will probably impose sanctions under the Cohen-Feinstein
bill as well, which could trigger further European trade sanctions. 


BROOKES:
 Prediction Eight: Myanmar will move closer to Asean.  In
 fact, Myanmar may join the ASEAN Regional Forum this
 year, as part of its desire to become more involved in regional
 security and political issues.  In contrast tot he position taken
 by the United States, ASEAN has expressed a desire for
 "constructive engagement" with Myanmar.  With the US and
 Europe still opposing the SLORC's politics, Myanmar's
 future looks increasingly closely involved with its Asian
 neighbors.

REALITY:  Brookes was right, sort of.  SLORC sought to move closer to
ASEAN but ASEAN took some pains to move further away from SLORC. 
According to some diplomats, SLORC's attempt to exploit ASEAN membership
to deflect criticism over its human rights record was embarrassing. 
 

SUMMARY: Out of eight predictions Brookes was wrong on six and gets 
partial credit on two.  As an analyst, Brookes' merits a D- or F.  

Since Brookes went out on a limb to make predictions, it is only fair 
(although probably not wise) to do the same.  So here are a number of 
predictions for 1997:

1. The United States will impose sanctions on Burma pursuant to the 
Cohen-Feinstein Amendment, which will prohibit future investment in Burma 
by Americans.

2. Unocal will sell its stake in the Yadana pipeline to another 
investor.  Likely buyers are Total and Thailand's CP Group.

3.  There will be more student demonstrations in 1997, to be followed by 
more arrests.

4. After the U.S. imposes sanctions, SLORC will formalize the de facto 
house arrest of Aung San Suu Kyi.

5. After SLORC formalizes the house arrest of Suu Kyi, the Japanese will 
stop forgiving the foreign debt SLORC owed them ($150 million in interest 
every year on a principal of $3 billion).

6. Lo Hsing Han and/or one or more members of the SLORC will be indicted 
in the United States on drug related charges.

7. After Singapore's election is over, the United States will increase 
pressure on Singapore's government to cut its links to the SLORC through 
its Government Investment fund.  Singapore will distance itself from the 
SLORC.

8. The economy will continue to deteriorate and inflation will continue 
at over 30%.  News of SLORC's defaults on payments to foreign creditors 
will scare off most new foreign investment.