Washington Gets Tougher

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Copyright 1997 South China Morning Post Ltd.
                            South China Morning Post

                               February  11, 1997

SECTION: BUSINESS; Asia File; Pg. 6


HEADLINE:  Burma  edges closer to full pariah status; Washington gets tougher
with junta, with corporate pull-out almost certainly a prelude to sanctions

BYLINE: As US President Bill Clinton gets tougher with  Burma's  junta,
diplomats in Rangoon say its almost complete support for pro-democracy
torch-bearer Aung San Suu Kyi has pushed Slorc close to the edge while, in
Mandalay, the influence of Chinese businessmen is gathering momentum

 BODY:
    You see them all over Rangoon as Visit  Burma  Year swings into action;
nervy US businessmen posing as tourists examining the market and political
situation on the sly.

    As  Burma  rapidly approaches pariah status in Washington, few seem to want
to admit any open interest in investment, yet they wander about peppering
Burmese and resident foreigners with all manner of sensitive interrogations.

    "Let's just say that I'm a tourist with an interest in regional business,"
engineering consultant Dirk Williamson said, from behind the facade of a
Hawaiian shirt and casual shorts.

    "The last thing you want to do is admit to eyeing up  Burma  . . . but that
is not to say we're not interested."

    As the Year of the Ox begins, the Washington-Rangoon relationship is
degenerating into a nasty spectacle indeed.

    Insiders warn of further worsening in coming months as the Clinton
administration pursues a new course of "gloves off" diplomacy with the junta.

    Sanctions on new investment are now likely, and US investors previously
committed to deals have shown an eagerness to walk away.

    PepsiCo has completed its withdrawal from the market and ended ties with the
ruling State Law and Order Restoration Council, or Slorc. 
    The company joins a string of big-name US defectors including Apple
Computer, Levi Strauss Associates, Amoco Corp and Eastman Kodak Co.

    Oil giant Unocal Corp remains the largest US investor, accounting for the
bulk of US$ 244 million in pledged US commitments out of $ 4.2 billion pledged
internationally.

    Unocal holds a key part in the country's controversial gas pipeline project
and recently completed a deal to extend offshore exploration rights.

    US diplomatic sources say Unocal could be the last big US player to move
into  Burma  for some time.

    They say the US Embassy in Rangoon has been painting an increasingly dire
political and social picture in cables to the White House after recent unrest.

    They also insist the sanctions issue has been reduced to a political
decision for the White House.

    Under legislation passed by Congress last year, President Bill Clinton must
impose a ban on all new US investment if pro-democracy torch-bearer Aung San Suu
Kyi is "harmed, re-arrested or exiled". US diplomats say privately that those

conditions have come close to being fulfilled by Slorc moves to blockade Ms Suu
Kyi's house after student protests and the Christmas Day bombing of a Rangoon
pagoda.

    Embassy charge d'affaires Kent Wiedemann was one of the first to be turned
away, but recently defied guards by inviting Ms Suu Kyi to his residence.

    Mr Wiedemann, a deputy assistant secretary of state, heads a new,
hard-headed US team in Rangoon known to be aggressively building up ties with Ms
Suu Kyi and her National League for Democracy.

    "There is virtually daily contact," one diplomat said. "The US is now
pushing things as far as they can, given that they do accept that Slorc is the
government. They make no bones that Washington's interests run parallel with Ms
Suu Kyi."

    The embassy has caused considerable anxiety within Slorc with the
publication of "unofficial" US estimates detailing economic woes and claiming
opium was still worth $ 900 million a year - a virtual second economy.

    The tensions have been further heightened by Mr Clinton's promotion of
aggressive Slorc critics Madeleine Albright and Bill Richardson to Secretary
of State and Ambassador to the United Nations.

    While the immediate effect of any US sanction could be slight in terms of
direct investment, Asian diplomats warn that it would put considerable pressure
on Japan - which is considering an expansion of aid - and complicate future
membership of the Association of Southeast Asian Nations (Asean).

    Slorc Foreign Minister U Ohn Gyaw said the regime could afford to ignore any
US move, adding that the country was fully capable of "feeding its own mouths".

    "They are meddlers and merely working on misinformation," Mr Gyaw said.
"Those already investing here know we can ignore them."

    Mr Gyaw is much happier talking about "seasoned" relations with China and
Singapore, which is the biggest investor in the country.

    "We have many friends and our people appreciate this."

    The ethnic Chinese business influence is particularly strong in and around
Mandalay, the country's second largest city.