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Burma clip 25 April
US companies rush to beat sanctions against Burma
Ted Bardacke in Rangoon, Financial Times, 25 April 97, p16
US companies signed more investment deals with Burma in February than in
the whole of the past eight years as they dashed to conclude talks before
President Bill Clinton banned new US investment in the southeast Asian nation.
More than $300m worth of deals were concluded with Burma's military regime,
according to official Burmese data. The ban - designed to punish the regime
for its poor human rights record and refusal to negotiate with the
democracy leader, Ms Aung San Suu Kyi, and to spur further international
isolation of the junta - was announced by Mr Clinton on Tuesday.
Most observers have been predicting since January that sanctions were
imminent after Ms Suu Kyi was attacked in Rangoon, students were rounded up
following demonstrations and Mrs Madeleine Albright, a severe critic of the
Burmese government, was named US secretary of state.
Approved investment by US companies at the end of January was $243m,
according to statistics from the Myanmar Investment Commission published in
official Burmese media. By the end of February, the last month for which
figures are available, that amount had leapt up 139 percent to $582m.
The $339m in deals signed in February was a huge increase over the $21.4m
approved in 1995 and 1996 combined, and consolidated the US's position as
the fourth largest foreign investor in Burma, after the UK (including the
British Virgin Islands), Singapore and Thailand.
Most of the new investment was in the oil and gas sector, with offshore
exploration rights held by Unocal and Texaco being converted into
This distinction is important as the executive order implementing the new
investment ban is expected to allow existing investment contracts to be
fulfilled but not allow them to be expanded, modified or upgraded. Arco has
also been heavily involved in natural gas exploration but it is unclear
whether a production-sharing agreement has been reached.
Foreign investment in the oil and gas sector during February increased by
$629m to $2.13bn. Total foreign investment in the month rose by $694m to
The UK was the second-largest investor in February, with $291m. The UK's
Premier Oil is a junior partner in the Texaco-led consortium.
The top US diplomat in Rangoon yesterday warned that Washington's decision
to impose sanctins could have implications for other foreign investors,
Reuter adds from Rangoon.
Mr Kent Wiedemann, US charge d'affaires to Burma, said that while the
initial economic impact of the move might be small, there would be
shockwaves. "It's a powerful message to US and other [foreign] companies
that this is not a good place to do business if you do so in the US," he said.