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The BurmaNet News: August 21, 1998



------------------------ BurmaNet ------------------------
"Appropriate Information Technologies, Practical Strategies"
----------------------------------------------------------

The BurmaNet News: August 21, 1998
Issue #1079

HEADLINES:
===========
THE NATION: SUU KYI LINKS STANDOFF END TO PRISONER RELEASE
BKK POST: JUNTA VETOES DEMAND TO OPEN PARLIAMENT
THE NATION: FOREIGNERS QUIZZED FOR LINKS TO MEDIA
THE NATION: ONE WEEK IN RANGOON
THE NATION: BORDER CHECKPOINT TO REOPEN IN SEPTEMBER
BKK POST: KYAT HITS NEW LOW AMID UNCERTAINTIES
FEER: BURMESE DAZE: HOW NOT TO WOO INVESTORS
FEER: POSING A PROBLEM
FAR EASTERN ECONOMIC REVIEW: HEADING FOR A FALL
FAR EASTERN ECONOMIC REVIEW: DOWN THE TUBE
FAR EASTERN ECONOMIC REVIEW: ASEAN'S RECURRING HEADACHE
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THE NATION: SUU KYI LINKS STANDOFF END TO PRISONER RELEASE

21 August, 1998

Associated Press

RANGOON -- Nobel laureate Aung San Suu Kyi offered yesterday to end her
roadside stand-off with the military regime if the government agrees to
free jailed members of her political party.

Suu Kyi's health was "failing" nine days into the stand-off but she was in
"high spirits", according to a statement released by the National League
for Democracy (NLD), her political party.

The offer came on the eve of the deadline set by Suu Kyi for the government
to finally convene a parliament elected in 1990 but never allowed to meet,
part of her renewed campaign against the government.

Citing her personal physicians, who have visited Suu Kyi, 53, twice in her
van 32 kilometres outside Rangoon, her eyes are turning yellow and she has
low blood pressure, the statement said.

Doctors took blood samples, fearing she may have contracted jaundice or
another disease after spending nine days in the van with three colleagues
on a small country bridge.

Suu Kyi is engaged in her fourth confrontation in two months with the
military government over her fight to travel freely within Burma. She was
stopped last Wednesday as she attempted to drive to the city of Bassein to
meet members of parliament from her party.

The NLD said the 1991 Nobel Peace Prize winner was willing to return to
Rangoon if the government released jailed members of parliament and other
members of her party imprisoned since May.

There are 42 NLD members of parliament in Burma's prison according to the
All Burma Students Democratic Front, an exile group.

The number of NLD members arrested since May is unclear. Suu Kyi has said
in the past that when people are arrested in far-flung provinces, the party
sometimes does not hear about it.

There was no immediate response from the government to Suu Kyi's demand. In
the past, they have never met her calls to release political prisoners or
begin a dialogue.

Suu Kyi's offer to end her protest comes one day before her party's
deadline for the government to convene the parliament. The military said
yesterday it has no intention of meeting the demand.

"The question is how does one call a parliament if there exists no
constitution," a government spokesman, on condition of anonymity, said in a
faxed statement. "The demand to convene one sounds like forcing a bald
person to dye his hair."

Several ethnic insurgent groups, exiled democracy activists and Western
governments have supported the NLD's call.

The party won 82 per cent of the seats in the assembly in a 1990 election,
but the refused to honour the results. 

After the NLD victory, it denied the election was for a parliament, but
instead for a convention to write a new constitution.

Two years later, the government called a constitutional convention but the
NLD had only 15 per cent of the delegates. The rest were appointed by the
military. In November 1995, the NLD pulled out of the convention.

****************************************************************

BKK POST: JUNTA VETOES DEMAND TO OPEN PARLIAMENT

21 August, 1998

Suu Kyi enters ninth day in road protest

RANGOON, BURMA, AP

One day before opposition leader Aung San Suu Kyi's deadline for the
military to convene the country's elected parliament, the military said
yesterday it has no intention of meeting her demand.

"The question is how does one call a parliament if there exists no
constitution," said a government spokesman, on condition of anonymity.

"The demand to convene one sounds like forcing a bald person to dye his hair."

Suu Kyi and her political party, the National League for Democracy, issued
the call three months ago for the military to allow parliament to convene
by August 21.

The 1991 Nobel Peace Prize winner spent the day before the deadline
encamped in her van on a bridge 19 miles west of Rangoon, the ninth day of
her protest against restrictions on her movements.

She was stopped there last Wednesday by authorities as she attempted for
the fourth time in two months to travel to the city of Bassein to meet
members of her party elected to parliament.

She refuses to return to Rangoon, insisting she be allowed to travel freely
within the country. The government has refused to let her proceed and ended
her last attempt to travel by force.

Several ethnic insurgent groups, exiled democracy activists and Western
governments have supported the NLD's call for parliament to be convened.

The NLD won 82 percent of the seats in the assembly in a 1990 election, but
the military refused to honour the results. It denied the election was for
a parliament, but instead for delegates to a convention to write a new
constitution.

****************************************************************

THE NATION: FOREIGNERS QUIZZED FOR LINKS TO MEDIA

21 August, 1998

Agence France-Presse

BURMESE Embassy officials in Bangkok were yesterday quizzing foreign
applicants for tourist visas about possible links with the media and
forcing some to sign declarations they were not journalists, applicants and
other sources said.

"They are telling people they know they are journalists, asking all sorts
of questions and making them sign these documents if they want visas," said
one Bangkok executive whose associate was attempting to travel to Burma.

One applicant said they were being told by embassy officials that they knew
they were journalists because they had been seen on television.

Foreign diplomats in Rangoon said scores of foreign journalists had
descended on the city amid escalating political tensions, with all but a
few arriving on tourist visas. Journalists who have applied for official
visas in recent weeks have been refused. Some journalists had also been
briefly detained in Rangoon and forced to sign documents saying they did
not work for news organisations, the diplomats added.

The junta has expelled two foreign journalists this week, saying the pair
had broken the law by declaring themselves as tourists.

"Most countries have laws controlling foreign journalists," a junta
official said on Wednesday. "Why shouldn't we?"

****************************************************************

THE NATION: ONE WEEK IN RANGOON

21 August, 1998

BURMA IS A BIG STAGE WHERE THE VILLAINS CARRY GUNS, WRITES ONG JU LYNN, ONE
OF THE 18 ACTIVISTS DETAINED RECENTLY BY THE BURMESE JUNTA.

I was one of the 18 detained in Rangoon for six days. The six Americans
have become national and international heroes. The other 12 -- three Thais,
three Indonesians, two Filipinos and one Australian are lesser (known) heroes.

The incident has also been given wide media in Burma coverage by the
Myanmar (Burmese) government. In The Mirror, a government propaganda news
daily (as with all media coverage in Burma), the editorial writes that the
people of Myanmar (Burma) can no longer bear the nefarious actions of the
18 alien instigators. The citizens of Myanmar (Burma) sees them, not as
doves of peace, but crows of chaos. Because of that, they had helped the
government arrest the 18.

Now with all the international attention on us, many may think that the
action was very well planned, a commando team of democracy fighters sent
forth on a mission, almost a conspiracy. Even the military was shaken.
Eighteen people from six countries. Were they hand-picked? Who was the
mastermind? Who was the leader of the group?

In reality, nothing can be further from the truth. We come from all walks
of life. A 19-year old American college kid. A 51-year old seasoned human
rights activist. A journalist who knows more about writing than direct
activism and facing 12 hours of interrogation. We fumbled and drifted, not
knowing what was coming next. Not knowing whether lying or telling the
truth would get us out or further incriminate us.

When our Malaysian Embassy officials came to see us, we thought we could
seek some assurance from them. How wrong we were. All the first secretary
could tell us was, "Do you realise the consequences of your actions on
bilateral ties?"

Sometimes we kept mum despite the shouts and threats from our
interrogators. Your story is different from the rest. It is up to you, we
were told. Sometimes we cooperated. We spilled information because we were
scared. (In my mind, this is a rogue government with no care of what the
world thinks.) For three days, my two Malaysian colleagues and I were kept
in the police headquarters before we were sent to a "guesthouse" to join
the 15 others. We lived in an office, sharing it with a police officer of
high rank, who came in at 9 am and left at 6 pm. Civil servant. He does his
own things. People come in to see him, take orders, leave. On the second
day he smiled at us. On the third day, he changed his longhi (sarong) into
his military uniform in front of us. We became natural inhabitants of his
office, like the ginkyoks (lizards) on the wall.

In the beginning we were defiant, cocky. We held on to our own. They too.
Hard, indifferent looks. After all, they are in power, our captors. But as
the days passed, they could neither feign power anymore than we could feign
disdain. We lived together 24 hours a day in an office six by eight metres.
They brought us food and cigarettes. They accompanied us to the toilet, our
only excursions.
Once in a while they came in to interrogate us. We fear interrogations. The
uncertainties, the lies we have to keep up. The disbelief in their eyes.
The continuous questions.

At night, they drape themselves on chairs and tables, while we sleep on
mattresses under mosquito nets. I wrote my letters inside. On the third
day, we got braver: will you get us bryiani rice from this shop at Sule
Pagoda Road? We'll pay. To our delight, they did.

The hard looks and indifference melted. Our smiles became genuine. Even our
"Thank you" (Je-zu-tin-bateh). They smiled at seeing us enjoy our meal,
they could not hide.

Our captors, they become people in my eyes. They fear us, and hate us, but
came to like us. Me too, though to admit it is as if to imply that the
junta, with their human rights abuses and atrocities, is okay.

We have a constant attendant, a spy you could say, who watched our every
move, and was present at every interrogation, who would not tell us what
was going on, or would only tell us lies.

"How long will we be kept here?"

"Very long."

"How lone. Forever?"

"Yes."

Once I said, "Don't ask him anything. He only tells lies." I notice a sting
of hurt in his eyes. He doesn't hide very well. Neither do the others.

Neither do I.

I came home with a knot in my chest that wouldn't go away. We came home
jubilant and triumphant. Heroes. But I did not feel jubilant and
triumphant. I was ashamed, not for what I did, (leafletting, small matter).
But because I really didn't want to see my captors as people, so I can come
home and condemn the junta with authoritative vigour.

So I can mock their ignorance and stupidity. My captors who are part of the
junta, who work a 9-to-5 job, and go home to their families and TV sets. A
small piece in a monstrous structure; which is responsible for more than
10,000 of its people fighting for democracy in exile; which is responsible
for arbitrary arrests, tortures and deaths of elected representatives and
activists; which is responsible for the butchery and rapes of ethnic
minorities; who is responsible for the 120,000 refugees languishing on the
borders of Thailand.

But I come home and I still think of them. Is he responsible? Richard, our
interrogator with a big pot belly? Who shouted at me for not co-operating.
He, whom we taught how to play cards; who patiently listened and translated
into Burmese for his other colleagues; who passed his cards to his friend
while he ran to answer a phone call. He who promised to teach us a Burmese
card game before we left.

Richard who looked like the mamak who pulls my teh tarik in my favourite
stall.

Or how about the woman attendant who insisted on standing and watching me
bathe? When I look into her eyes, she is as naked to me as I am to her.

Or is it the guard we affectionately call the flower boy, who would go
outdoors to pick flowers for our hair?

Which do you want?"

"The yellow ones." We made our choice peering out from the windows of our
prison.

Or was Khin Maung, the judge, responsible? His dedication to his job was
admirable. Eight hours of sitting in his big, hard chair wearing a yellow
scarf with a wing-like-thing on the right side of his head. Listening
patiently to statements from police officers and witnesses.

His sentencing, he delivered with utmost seriousness, five years in Insein
Prison, only to be negated moments later by the auspiciousness of the
Foreign Affairs Ministry. We were to be pardoned and deported. But he
played his role well.

And so we came back as heroes. Freedom fighters. We joked about the
ridiculousness of the whole experience. The trial, the interrogation, the
investigations of us. We mocked them and their antics. We condemned the
junta. We talked about human rights and democracy, as if our experience has
anything to do with the violent realities of Burma.

In our roles of heroes, we are as much actors in a play -- a shadow play --
as Richard, the judge, or the. 'Flower Boy'. We play into what is expected
of us b following a director's orders. In our case the director is the
world, the media. Who then is the master puppeteer in Burma? Again I ask,
who is responsible while people are tortured and killed? Those who direct,
those who participate, those who stand and watch, or those who try to lead
a 9-to-5 job, concentrating hard on their work so they won't hear cries of
pain, loss and death.

If those in the last group, the 9-to-5 people in Burma are to be condemned,
so should anyone around the world who has ignored the suffering in Burma.
Or in East Timor. Or Turkey. Or Mexico.

As there are different degrees of degree of blame and responsibility, then
there are also degrees of heroism. On one extreme, the Americans see us as
gallant heroes, taking on a military regime. I feel I do not fit there.
Neither do I deserve the Malaysian government's condemnation of our actions
and labelling us as trouble-makers and law-breakers. We went there to do a
good thing for a forgotten people, and that we took risks to our best.

During those six days, I discovered humanity behind the villain's mask
which they cannot hide despite the fact that in Burma, the actors carry
guns. Total evil is a clear target, a defined red bull's-eye in the centre
of a white circle. In Burma, I found that the paint was mixed to a solid
pink, bad inseparable from good. Humans. Like me.

I will continue to do what I do, to fight for the rights of the oppressed
under the military rule of Burma. I will write articles, compile updates,
research, lobby, not so much of conviction, but for a lack of wisdom to do
something different.

(I wish to thank Amy deKanter who has helped me throughout the process, of
writing this article. Thank you for giving me a safe space to allow me to
remove my mask.)

ONG JU LYNN IS A MALAYSIAN JOURNALIST.

****************************************************************

THE NATION: BORDER CHECKPOINT TO REOPEN IN SEPTEMBER

21 August, 1998

A CHECKPOINT on the border between Thailand and Burma linking Burma's
Myawaddy town with Tak province will resume operations next month having
been closed since April, Foreign Ministry deputy spokesman Kitti Wasinondh,
said yesterday.

Kitti said Thailand hoped the resumption of operations at the checkpoint
would help to boost Thai-Burmese border trade which has fallen by half
since the closure by the Burmese.

Burma has agreed that the checkpoint will be re-opened on Sept 9. The
checkpoint is linked by the first Thai-Burma Friendship Bridge that was
officially opened in August 1997.

However the checkpoint has been closed on several occasions by Burmese
authorities citing fund shortage.

****************************************************************

BKK POST: KYAT HITS NEW LOW AMID UNCERTAINTIES 

21 August, 1998

AFP

Burma's currency has hit new lows amid rising political tensions, foreign
exchange traders said yesterday, on the eve of an opposition deadline for
the junta to convene the parliament elected in 1990 but which has never
been allowed to sit.

The kyat unit was trading around 380 to the dollar in Rangoon yesterday but
had crashed through the 400 mark in some parts of the country, they added.

The black market rate was around 150 to the dollar before Asia became
embroiled in an economic crisis last July. The official rate is six kyat to
the dollar but is almost totally ignored.

Several money changers, who are licensed by the country's junta in a de
facto endorsement of the black market trade, have been detained this week
and intelligence agents were posted at exchanges. 

****************************************************************

FAR EASTERN ECONOMIC REVIEW: BURMESE DAZE: HOW NOT TO WOO INVESTORS

27 August, 1998

EDITORIAL

There's something we've long found curious about one of Asia's most
repressive regimes, Burma: It lets its most vocal and most internationally
known dissident stage public stunts. Indeed, for lack of a better
description, Aung San Suu Kyi has been on a stunts campaign, albeit one
aimed at a noble end of focusing outside attention on her beleaguered
people. For surely Miss Suu Kyi didn't expect to complete the journeys she
began recently -- visits to far -- flung members of her National League for
Democracy. As we go to press, she has already spent a week -- for the
second time -- encamped on a country bridge in a mini-van that left Rangoon
fully stocked with water and provisions.

And it wasn't so long ago that Miss Suu Kyi was padlocked within the
compound of her family home. Yet, she had only to walk over to her front
gate to retrieve a microphone from the international press, ready to
broadcast abroad her every barb against the generals.

As much as the military junta, the State Peace and Development Council,
just doesn't get how to deal with Miss Suu Kyi, it fails to comprehend why
the outside world holds its nose at it. So though we remain unconvinced of
the efficacy of sanctions -- a year after the United States banned new
investments by American companies, the generals remain on their perch -- we
can understand investor reservations. Indeed, we were told recently by one
such businessman that the hazards were too large to consider sinking in money.

Asia has changed over the last 12 months, as the go-go nineties transformed
into salad days. There is a whole lot less cash going around, and much of
it already spoken for. No doubt it is positive that the government has
started speaking with Miss Suu Kyi's party. But with investors demanding
more accountability all around, can a government that deadlocks with a
fragile-looking woman on a bridge oblige?                       

****************************************************************

FAR EASTERN ECONOMIC REVIEW: POSING A PROBLEM

27 August, 1998

Regime veers between tolerance and toughness

BY SHAWN W. CRISPIN IN BANGKOK

These days, Burma's military junta seems to have a proclivity for high
drama. But increasingly it seems that members of the top brass are reading
from different scripts.

Ever since the National League for Democracy upped the ante in its
opposition campaign in June, erratic policy responses -- oscillating
between tolerance to suppression -- have hinted at possible dissension
between military intelligence and the armed forces.

After a quiet coup in November 1997, the military intelligence chief,
Lt.-Gen. Khin Nyunt, seemed to have consolidated his power at the expense
of older army veterans. But now it appears that the traditional hard-line
elements within the armed forces are beginning to question Khin Nyunt's
open-door policies.

On August 9, the military regime known as the State Peace and Development
Council -- detained a group of 18 foreign activists for distributing
pro-democracy leaflets in Rangoon. After being held for six days, the
activists were tried and sentenced to five years' hard labour but were then
immediately deported to Bangkok.

The young protesters were well organized before setting out on their
mission of "goodwill." The so-called Alternative Asean Network on Burma, a
pro-democracy group based in Bangkok, helped the activists to mount their
protest. The organization has nettled the junta before by smuggling out
tapes of opposition leader Aung San Suu Kyi. But the detention of the 18
activists was its greatest public-relations coup yet.

"The SPDC seems bent on self-sabotage," says Debbie Stothard, Alternative
Asean's coordinator. "They simultaneously shot themselves in the foot and
dug their own grave. But now we thank them; the swirl of negative
international publicity makes our job a lot easier."

Indeed, the incident was a public-relations catastrophe for the junta. For
the second time in as many weeks, the international community heaped
condemnation on the military regime for its unseemly behaviour. Burma's
Asean neighbours rhetorically stuck to their policy of non-interference,
but many individually expressed disquiet.

The junta's behaviour represents a seemingly schizophrenic change. When the
U.S. imposed economic sanctions on Burma last year, the junta tried to
improve its international image and hired a Washington-based
public-relations firm to help. But the increasing domestic and
international pressures on the regime seem to have undermined its resolve
and forced it back to its old brutish behaviour.

In the background are the international pressures caused by sanctions and
the regional economic crisis, while domestically the junta is fielding the
results of its own mismanagement, which has brought the country to the
brink of economic collapse (see story on page 56). Worse still, opposition
leader Suu Kyi is again sitting on a bridge outside Rangoon, testing the
junta's refusal to let her meet supporters outside the capital, and the
world is watching.

Analysts say these stresses combined may blow the straining seams within
the regime and bring the hardliners to the fore. That could make for an
unhappy ending to Suu Kyi's demand that the junta should convene parliament
on August 21. As a Rangoon-based Asian ambassador puts it: "It's not beyond
the resources or mindset of the SPDC to jail every member of the opposition."

****************************************************************

FAR EASTERN ECONOMIC REVIEW: HEADING FOR A FALL

27 August, 1998

BURMA'S ECONOMY EDGES TOWARDS COLLAPSE

BY SHAWN W. CRISPIN IN RANGOON AND MANDALAY

The lights are out in Mandalay. As in Burma's villages, life moves to the
rhythms of sun and moon. At night, the population lives by candlelight,
spilling out onto the darkened streets to escape the stifling heat at home.
But with nearly 1 million inhabitants, Mandalay is no village but a city,
once poised to become the country's commercial centre. Now, without power,
it is without hope.

The country's coffers are nearly empty and there is no saviour on the
economic horizon. A rapid depletion of foreign reserves means that the
military regime -- the State Peace and Development Council -- is unable to
import spare parts to repair its ailing electricity generators and
turbines. As a result, Burma's cities have been increasingly afflicted by
blackouts: Mandalay was recently on a one-day-on, three-days-off cycle,
while many areas of the capital, Rangoon, have no power for more than eight
hours a day.

The spillover from Asia's economic crisis has taken a heavy toll on Burma's
economy. Most private analysts predict the soaring growth rates of the
early 1990s-which averaged more than 7% annually-will crash-land well under
the government's projected 4% this year, possibly even falling below 2%.
And with troubles at home, flocks of Asian investors have flown the coop
over the past year; foreign-investment approvals fell more than 70% in the
financial year that ended in March.

Slowing foreign investment is only one symptom of Burma's greater economic
malaise, the roots of which are predominantly home-grown. "The SPDC is used
to running boot-camps, not on the fast track of a free-market economy,"
quips a Rangoon-based diplomat. Indeed, as an economic commander, the junta
is being routed.

Breaking off a brief flirtation with liberalization, the regime has
reasserted control over the economy by resorting to crude administrative
fiat. On March 20, the government's Trade Policy Council imposed sweeping
restrictions on imports -- particularly on consumer goods -- that were
designed to curtail border trade and stem the outflow of foreign currency.
Two days later, the government re-established control over the export of
many key commodities that had only recently been liberalized, most notably
sugar and rice.

The restrictions have been swiftly circumvented by enterprising border
traders: Markets and shop-houses in Rangoon and Mandalay are still
well-stocked with cheap Chinese goods and processed Thai foods. "The
Burmese economy was largely a black-market economy for over 30 years," says
another Rangoon-based diplomat, adding: "The restrictions have been only
stop-gap and for the most part ineffective."

Nor have they reined in a new surge of inflation. Since May 1997, official
government statistics show, prices have increased by 45%; but such figures
are grossly understated as they don't include imported goods. Rangoon-based
analysts estimate that import prices have surged by more than 110% in the
past year.

Worse, the government's budget deficit swelled to 7% of GDP for the year
ended in March. Yet the military's 30% share of the national budget will
remain untouched while this year's deficit will probably be dealt with as
in the past: by rolling the monetary presses.

The overall result is that the kyat is on a spectacular downward spiral.
Rangoon nevertheless continues to perpetuate the fantasy of the official
exchange rate, which has been pegged at six kyat to the U.S. dollar since
1977. On the black-market, the exchange rate has ballooned in the last two
months to 360 kyat to the dollar from 280 kyat.

In January, the government tried to stabilize the runaway currency by
revoking the licences of the country's 30 foreign-exchange dealers. And in
March, the central bank suspended the rights of the 10 semi-government and
private banks to engage in foreign-exchange transactions. Even the Ministry
of Defence's Myawaddy and Inwa banks lost their licences-a reflection of
the gravity of the perceived threat. All foreign currency accounts were
transferred to the Finance Ministry's Myanmar Foreign Trade and Myanmar
Investment & Commercial Banks, which have regulations that discourage
withdrawals.

But such measures have only further undermined local confidence in the
kyat, as indicated by a 36% year-on-year hike in gold prices from May and
the increased flight into foreign currencies. Everybody who can is buying
dollars, and every trader in the markets of Rangoon and Mandalay doubles as
a currency dealer.

Although the latest official statistics put reserves at almost $250 million
in December, many Rangoon-based economic analysts estimate that by July the
figure had plunged to as low as $50 million-60 million. At less than one
week's import cover -- well below the internationally recognized crisis
level of three months --the country is at serious risk of defaulting on its
external debts, which are mostly owed to Japan.

The junta's recent reversal of market-oriented reforms drew sharp
condemnation from the International Monetary Fund during its annual
consultations in April. In a confidential report dated May 22, the IMF
stressed that without comprehensive reforms "prospects for economic growth
and exports will worsen." It also called for a "one-time devaluation" of
the kyat in line with the prevailing black-market rates while also warning
that the present "piecemeal approach to adjustment cannot succeed."

Yet rolling back reforms and reasserting control in an ad hoc manner is
exactly what the junta plans to do. "Every year, the junta pays the IMF
short shrift," says a Rangoon-based analyst. The problem, she explains, is
that the government knows that it's ineligible for most multilateral aid,
including IMF and World Bank assistance, because of the U.S.-led sanctions
imposed in 1997.

But with rampant inflation, the SPDC fears the effect a devaluation might
have on the already tenuous social balance. Many of the SPDC's senior
members remember the furious public reaction to former military dictator Ne
Win's disastrous "demonetization" policy of 1987 which made more than 80%
of the currency in circulation worthless overnight. So the junta continues
to pin its hopes of surviving the present downturn on the foreign exchange
it will receive from natural-gas exports to Thailand via the Yadana
pipeline (see story below).

Perhaps most worrying to the junta, though, is the price of rice, which
shot up 25 % in the 12 months to May. In late 1997, the government finally
released farmers from a policy that required them to sell to the state at
well below market rates. But, when it realized that farmers were hoarding
rice because of poor harvests, it quickly reimposed its procurement policy.

The government now predicts rice output will reach only 10 million tonnes
in the year to March 1999, about half its original forecast. To avoid
shortages, the SPDC will be forced to curtail exports at a time when the
country is desperate for foreign exchange. And, as low yields inevitably
push up prices, the junta may find it has to face social unrest as a
consequence of its economic mismanagement. 

****************************************************************

FAR EASTERN ECONOMIC REVIEW: DOWN THE TUBE

21 August, 1998

BY SHAWN W. CRISPIN

It seemed a perfect match. In the economic boom of the early 1990s,
Thailand's appetite for energy was insatiable; Burma, meanwhile, had a
hunger of its own -- for much-needed foreign exchange to fuel its own spurt
of growth.

So in a $1.2 billion joint venture, Southeast Asia's first cross-border
pipeline project was born. Its backers were France's Total, America's
Unocal, Thailand's PTT Exploration & Production and Burma's state-owned
Myanmar Oil & Gas Enterprise.

The plan came to fruition in July this year, when the first natural gas
started flowing from Burma's offshore Yadana field to Thailand, which had
signed a 30-year deal to buy it. But in the wake of Asia's economic crisis,
ever-rising energy forecasts have quickly faded. Where there was a dearth,
there is now a glut and this year demand for energy in Thailand has dropped
for the first time. That may spell trouble for Rangoon.

"We are revising our forecasts," says Pallapa Ruangrong, a policy and
planning analyst at the Thai prime minister's National Energy Policy
Office. "We didn't anticipate the crisis, and we may nee to renegotiate the
contract," she adds.

Rangoon, however, has banked heavily on the anticipated revenue. A May 22
IMF report reveals that the junta has already mortgaged its projected
revenues of $200 million a year to repay new loans and finance its 15%
stake in the project. This, the IMF suggests, will delay profit taking
until at least 2002.

An undisclosed portion of future earnings were also earmarked to finance
Rangoon's share of a "three-in-one" plan to develop a fertilizer plant, a
300-megawatt power station and a domestic pipeline with Mitsui of Japan and
Unocal.

But a Rangoon-based economic analyst says this project has been shelved
because the Burmese government "simply doesn't have any foreign reserves."
And as the Burmese economy deteriorates, the junta can ill-afford any
weakening of expected revenues.

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FAR EASTERN ECONOMIC REVIEW: ASEAN'S RECURRING HEADACHE

27 August, 1998

Thailand's foreign minister, Surin Pitsuwan, may have had his "flexible
engagement" concept rebuffed at the Asean ministerial meeting in Manila,
but his boast that the proposal has begun "gnawing away at the edges of
Asean thinking" is proving true. 

Vietnamese diplomats are already expressing concern that his proposal --
that Asean states should no longer refrain from criticizing one another --
will become a headache for them at the Asean summit in Hanoi scheduled for
December. They say it has already complicated preparations and will need to
be addressed in the chairman's statement. 

Like other Asean members, Vietnam is wary of Surin's ideas. Vietnamese
diplomats suspect Bangkok is pursuing a self-interested policy aimed at
attracting political support from the United States and Europe, rather than
seeking closer cooperation in Asean.
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