Monday, April 23, 2012

The race is on for Burma's resources

Profile writers habitually compare Aung San Suu Kyi and Nelson Mandela for obvious reasons. Both have displayed immense bravery; both have endured many years of incarceration at the behest of brutal regimes; both are articulate and photogenic.

I fear that it will soon be possible to draw another parallel. Following his release, Mandela and his comrades were persuaded to turn South Africa into a dreamland for global corporations. The ANC proved so “generous” in allowing foreign investors take their profits out of the country that in 2001 George Soros told the World Economic Forum in Davos, Switzerland: “South Africa is now in the hands of international capital.” By some indicators, the poor got poorer.

Is a similar process underway in Burma?

On 1 April, the day of Suu Kyi’s election, a 12-storey “colonial style” hotel in Phonm Penh hosted the second annual business summit between the European Union and the Association of South East Asian Nations (ASEAN). Participants, including the EU’s trade commissioner Karel de Gucht, were invited to a side event titled “Building Business in Myanmar” (as Burma is officially known).

Not having previously heard of the event’s organisers, Vriens & Partners, I spent some time examining who is behind this outfit. Eventually, I found a 2009 article from the magazine PublicAffairsAsia, saying it is a joint project between Hans Vriens (previously a bigwig in the communications firm APCO) and Noke Kiroyan, Indonesia director with the mining colossus Rio Tinto. In 2008, Rio Tinto was excluded from Norway’s state-owned pension fund over the environmental damage the Anglo-Australian company’s activities had caused in West Papua (officially part of Indonesia).

Altruistic motives?

You would have to be suffering from an incurable strain of naivety to think Vriens and Kiroyan have an altruistic motive in promoting Burma’s investment opportunities.

Earlier this month, Human Rights Watch stated that it would favour a gradual easing of the EU’s sanctions on Burma but urged that restrictive measures should remain in place against certain sectors of the Burmese economy for the time being. Mining, gems and timber are still monopolised by the military.

Rio Tinto is the single largest shareholder in the Canadian firm Ivanhoe, which struck a deal in 1994 to exploit the Monya copper deposit in Burma. Thirteen years later, Ivanhoe supposedly withdrew from the project, supposedly selling its Monya assets to an independent trust registered in Canada. Recently, though, WikiLeaks published a US diplomatic cable revealing that Ivanhoe’s 50% stake in Monya was in fact sold to the Burmese military junta. The regime then re-sold the assets to a consortium headed by Norinco, a Chinese weapons firm. Tay Za, a Burmese “regime crony” (as the cable describes him) brokered the deal and was expected to pocket $50 million; he was one of the Burmese ruling elite subject to EU sanctions.

Vriens & Partners has an office in Rangoon (also known as Yangon), the Burmese capital. In a February letter to The Financial Times, its chief representative there Romain Caillaud wrote: “Western companies clearly have many allies among Myanmar’s business and political elite as well as among the broader population, and many more will appear once these companies establish a presence in the country. Having lived and worked in Yangon for more than four years now, I can say that western companies have a positive image here. Their investments are expected by many Myanmar nationals to be made in a more responsible manner than that displayed by some Asian companies not blocked by sanctions, which, in the longer term, are unlikely to face political and consumer pressure to behave more responsibly in Myanmar.”

This notion that European entrepreneurs are more ethical than their Chinese or Indian counterparts is flimsy.

Cameron’s corporate chums

When David Cameron toured south-east Asia, including Burma, earlier this month, he was accompanied by executive types from Shell, BAE Systems and BHP Billiton. It would take a considerable degree of chutzpah to defend Shell’s despoliation of the Niger Delta or the backhanders BAE gave to the Saudi royal family in return for weapons contracts on the grounds that the Chinese might do worse.

BHP Billiton – a merger between Australian and South African resource exploiters – has a strong historical connection to apartheid. Billiton’s parent company Gencor ran the Kincross gold mine, where the worst disaster in South Africa’s mining history occurred in 1986. Some 177 workers were killed in an underground fire. Even in death, they faced discrimination: white victims were named; the only details released for the blacks was the numbers who belonged to Sotho, Xhosa and other tribes.

I have no principled objection to the suspension or step-by-step removal of the EU’s sanctions on Burma. Clearly, the country will need both aid and investment if it is to undergo a successful transition from dictatorship to democracy (or what passes for democracy nowadays). But there should be no illusions about what is really happening here. Far from striving to improve the lot of Burma’s general population, a few corporations are eyeing Burma’s resources lasciviously. In February, BusinessEurope, the most powerful corporate group in Brussels, urged that the sanctions be lifted for pragmatic reasons. Its argument went like this: everyone else is getting a slice of Burma, so why can’t we?

“Just call me a Thatcherite,” Thabo Mbeki, Mandela’s successor, quipped in 1996 as he announced plans to slash government spending and increase privatisation. I just hope Burma doesn’t have a Thatcherite waiting in the wings.

●First published by New Europe, 22-28 April 2012.

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