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‘Frankenstein’s’ state?

One spectre threatens to over shadow the junta’s experiment with ‘democracy’ (see public relations) and in turn the country; a spectre that threatens to dominate the nation and define power within for years to come.

That it comes to Burma late is no surprise, that it seemingly comes in a most un-transparent manner is again no surprise. That ‘spectre’ is privatisation and the dramatic manner in which it threatens to create not a military government but an invisible, ruling oligarchy.

Machiavelli once revealed to us that true power is never given, it is always taken, and once taken must be defended with knowing brute and cunning. And so hands in Burma’s future are it seems working to create a dramatic experiment in neo-liberal feudalism, one that will shadow power from people and accountability.

At Bangkok’s Chulalongkorn University recently meanwhile the Canadian Ambassador H.E. Ron Hoffman questioned whether “external forces work at all” when talking about sanctions, he did however reiterate Canada’s position as the nation with the most strict sanctions; yet Mr Hoffman could not answer whether this ‘failed’ method is enforced for the biggest of economic concerns, such as Canada’s Ivanhoe Mines who are believed to operate what was once described as one of the ‘most profitable’ mines in the country.

They own a 50% stake in Myanmar Ivanhoe Copper Consortium Limited (MICCL), “by way of a blind trust”… “in 2007 they put their Burmese assets in a blind trust, which they claim is independently operated, it’s absurd for them to claim they don’t know what’s going on, they won’t disclose who operates the blind trust” says Kevin McLeod on the board of directors of the Canadian Friends of Burma. He also adds that the their share could have been sold by the trust to junta cronies which he hastens to add is also a breach of Canadian sanctions. MICCL is an entity which was added to US sanctions lists in January 2009 and is also on the European sanctions list.

Responding when asked to confirm Ivanhoe’s presence in the country the ambassador said; “I can’t say its not the case, its not come across my desk”. Ivanhoe meanwhile are part owned by the Canadian state with entities such as the state of Quebec pension fund owning considerable shares in the company.

Whilst one speaker, who wished to maintain anonymity (because he said he was “afraid” and became “emotional” when talking to the press) told DVB that; “frankly speaking what I am worried about is the Chinese cartels, the Chinese drug cartels occupying all these assets”.

He paradoxically said he supported the ‘cronies’ who are now accused of buying up state owned enterprises that are being sold off by the government, in order to prevent a Chinese ‘take over’ of Burma’s key assets.

He pointed to Asia World. A company that is not only Burma’s largest construction company, is conversely also accused of being ‘crony run’ and through recent privatisations has managed to acquire a near monopoly in freight import-exports; owning as they do the vital Rangoon docks that carry approximately 80% of Burma’s imports and exports.

He labelled the creator of Asia World, Lo Hsing Han as ‘Chinese’. He was indeed of Chinese origin, coming to Burma as part of the Chinese nationalist forces that came to be known as the KMT and were keenly supported by the US. They were assisted in their narcotic production and pedalling by the US in order to aid their anti communist activities. He is also a staunch junta ally, after being arrested in Thailand for his narcotic business he was given shelter in Burma and even organised functions for senior generals.

These early drug producing days are what enabled the creation of Asia World; a company that spans Asia and according to Global Markets Direct inc. had, as of this month an annual turnover of $3,272 million.

In the seminal work on the region’s drug cartels, Merchants of Madness, Bertil Lintner and Michael Black note; “it is beyond doubt that the initial capital for their legitimate business must have come from the drug trade; there is simply no other possible source.”

The US Office of Foreign Assets Control (OFAC) meanwhile noted that both Lo and his son, current director of Asia World, Steven Law had a ‘history of involvement in illicit activities’ in 2008 and also included Mr Law’s Singaporean wife, Cecilia Ng Sor Hong and her 10 Singaporean companies on their list.

If such men and companies are taking an increasing driving role in the economy, given privatisations and their role in projects such as the Shwe gas pipeline, (Earth Rights International note that Asia World are “providing services related to the construction of the Shwe project”) it raises the strange possibility that whilst the democratically elected leader of the country, Daw Aung San Suu Kyi will be excluded from the upcoming election because of the ‘foreign spouse clause’ the real winner, one of Burma’s invisible rulers will conversely have a foreign spouse and be the only generation of his family to be considered even vaguely a ‘Myanmar’ citizen.

The strange origins of the multi national Asia World, with Lo Hsing Han’s probable early backing by the US during his KMT days may be a distant memory. Nowadays however George P Kent a senior political counsellor at the US embassy in Thailand noted that the “elections are making a mockery of democracy”.

He also told DVB that oil companies, Chevron and Trans Ocean Inc., both US companies active in Burma’s oil and gas sector, did not need to be included in the ‘smart sanctions’ regime; the US “went after people and companies” and was “not looking at sanctions that affect the over all economy”, strange given the immense revenues that the oil and gas sectors generate for the military, and the practices the military engages in to avoid gas revenues from appearing on public accounts.

US economic concerns may be small when compared to the huge and rising direct investment made by neighbours China, Thailand and India. With India recently announcing the planning of a sovereign wealth fund that will seek to challenge Chinese foreign investment in the region.

Bur Trans Ocean Inc. meanwhile are considered to be some of the most competent oil drillers around and so the US company, like Asia World have been providing ‘vital services’ to the Shwe gas project, a project that amongst others stains the country with the ignominious prognosis of possessing a ‘mineral curse’. Are they working ‘together’? One company will pierce the floor of the Bay of Bengal the other will build the terminals through which the earth’s bounty will pass…

So whilst discourse tends to focus on a simple equation of free, not free, democratic or not, as western actions and positions demonstrate, and as Dr. Maung Zarni notes; “Burma is a product of external forces, it’s not, as the Burmese historiography would have it, simply a product of the nationalist struggle.”

Burma’s strategic position and bountiful natural resources make the country too important to ignore. The painful process of state building that occurred in many places, before the world was as small as it is now, is occurring in Burma with the voracious growth of two Asian super powers on either side and the tycoons and business’ that go hand in hand with such an ascendency.

If a confirmation was needed of the primacy of this region it is the region’s record, massively increased arms spending that along with Latin america concerned the Stockholm International Peace Research Institute, needless to say no data was available for Burma.

Just as colonialism created a rude shock for the mis-match of tribes brought together under the throne of Thibaw, the neo liberal, feudalist, experiment is being forced on Burma and sold as ‘democracy’ to avoid the transition of resources that accountability could entail.

Many have noted that transition is likely to be painful and difficult, no one in Burma needs reminding of that, the problem is that the harshness of far reaching economic transition is appearing in Burma with no one to shoot it down, or the prior involvement of government to soften the blow of neo liberalism. Further, 60 years of political conflict has left no one with the political clout to oppose the complexities of these moves.

Dr Zarni described Burma’s situation as a “Frankenstein scenario”. A ‘monster’ that is created by an unwitting doctor may not be entirely accurate but that Burma is being shaped by foreign powers, and reclusive tycoons seems to suggest that the almost previously unimaginable possibility of a less accountable power block than the military may be all too real. A monster that can march into the future with no reigns held by people or government, a monster with the mantras of Milton Friedman and Fukuyama ringing next to parochial tribalism.

In any case Steven Law can sit back knowing, as the ancient Chinese proverb goes, that “opportunity lies at the edge of chaos”.