For many years foreign investment has
undeniably been sustaining the SDPC.
Despite huge investments flowing into Burma a third of the country’s population lives on less than one US dollar a day.1 Many companies investing in Burma claim they are helping society through greater economic prosperity, however, an essential question remains to be answered: Why is it that the most at risk populations who should be benefiting from foreign investment are subsequently being victimized because of it? This is a compelling question to be addressed and should serve to voice the opinion of the
Burmese who live in constant fear and struggle for their livelihoods. This question also calls upon all of us to recognise our moral obligation to hold accountable those companies and governments responsible for investing in the regime and to find real solutions to deny the regime the crucial funds it uses to maintain its grip on power.
An isolated economy prior to the 1988 coup, the generals that established the State Law and Order Restoration Council (SLORC) after the coup took immediate measures to exploit Burma’s natural resources and target new foreign investment. Through the creation of the Union of Myanmar Foreign Investment Laws the same year, various state ministries and departments controlled all areas of direct investment for SLORC and now does the same for the State Peace and Development Council (SPDC).2 These rigorous legal restrictions make it impossible for investors to work independently of the regime. An International Confederation of Free Trade Unions (ICFTU) report from 2005, building on an earlier report from Altsean in 2003, outlines the details of doing business in Burma. “The Burmese regime,” it says “has manipulated the development of the economic system so that it has ‘tentacles’ reaching all throughout the economy, making it almost impossible to do business in or with Burma without directly profiting the regime.”3
While economic prosperity through foreign investment should lead to wealth creation and higher standards of living, the SPDC is using this money to maintain control over the population. Since its inception in 1988, the SPDC (previously SLORC) has received US$2 Billion worth of arms imports.4 In fact, figures as high as between 35 per cent to 45 per cent of Burma’s GDP goes to military spending.5 This comes at the expense of desperately needed public investment in health and education which remains among the lowest in the world. Despite these sentiments and the knowledge that investments are sustaining SPDC atrocities and human rights abuses, foreign investments continue to flow into Burma. This conclusion is best summarized by a Burmese reporter in October 2007 as he writes, “Modern thinking says that businesses must consider the interests of society by taking responsibility for the impact on customers, employees, shareholders, communities and the environment in all aspects of their operations. It is shameful to do business with a brutal regime that kills and oppresses its own people. Good business must be built on ethics and morality.”6
While economic prosperity through foreign investment should lead to wealth creation and higher standards of living, the SPDC is using the money to maintain control over the people
Burma is figuratively and literally speaking a goldmine for investors as there are so many existing as well as new and potential markets that can be exploited for profit. It is no secret that Burma has vast deposits of untapped natural resources that are sort after internationally to supply growing demands for energy and raw materials. Burma has extensive offshore and onshore drilling operations for oil and gas while hydroelectric power is also being expanded for development to exploit the vast Irrawaddy watershed. The junta has also had a long history of extensive logging and mining operations through out the country. Burma’s relatively recent rise from economic isolation into the global economy has also lead to emerging markets in tourism, communications and information technology. Specific incentives for foreign investors such as tax holidays and import exemptions help create a prolific environment for investment and lure companies into making heavy investments. There are 427 companies directly or indirectly invested in Burma with a recent Central Statistical Organisation figure of US$750 Million in foreign direct investment going into the country.78
International energy giants Total and Chevron are two companies coming under fire for their continual support for the Yadana energy project in south east Burma, despite protests from human rights and environmental activists about what their investments are actually sustaining. Both Total and Chevron have made statements that their project is positively contributing by providing health care and educational benefits to people working on and living around the site. An official statement from Chevron even goes as far as admitting that if it was to suspend operations in Burma, it “could generate hundreds of millions of dollars in additional revenue for the Government of Myanmar.”9 There is also a growing, if not even-handed sentiment from these larger international companies that if they don’t continue investing in their projects, other companies, especially from Asia, will simply come and take their place.10 However, a closer examination would suggest that these companies are hiding behind the veils of complex business practice involved with foreign investment and are denying the extent in which their investments are sustaining the brutal regime.
Unfortunately it is often unassuming private investors from all over the world who are providing banks with the financial capital to make high end loans to companies investing in Burma. The highly publicised case of Ivanhoe mines in Canada has drawn attention to the fact that companies are not disclosing information to their investors as to where and what their money is invested in. The case of Ivanhoe Mines should have led to a positive outcome with the company bowing to public pressure and claiming disinvestment in Burma in 2004, however there is evidence that Ivanhoe Mines is still indirectly involved with the SPDC through arrangements with other companies and is still receiving returns on their previous operations.11
The US, UK and Canadian governments as well as the EU have generally been responsive to the use of sanctions which have also been supported by international trade organisations as well as many pro democracy leaders in Burma, especially Aung San Suu Kyi. Debates surround the moral implications of sanctions and whether they are harming the most at risk populations and denying them what little money may be earned in Burma. This is because sanctions and boycotts to date have been very limited in their purpose to prevent foreign investments flooding into Burma. This is partially due to the fact that sanctions only prohibit specific areas of trade and investment and are only governable by the country or body imposing them. It is argued that only by preventing all access to direct and indirect funds to the SPDC will the intended impact of sanctions be felt by the junta and put them in a situation where they will have to oblige to international pressure.
Asian investors, who happen to make up the majority of foreign investors in Burma, will need some serious convincing to impose sanctions. Working for a global condemnation of the regime, many governments and organisations are pushing the most influential Asian countries to impose their own sanctions on Burma. Sanctions however go completely against the regional economic program as laid out by ASEAN. The south east asian body has been at the forefront of promoting direct foreign investment as a way to build upon a growing regional economy. It is no surprise that companies coming from ASEAN and what is called ASEAN +3, referring to the economic powerhouses of China, South Korea and Japan, all have deeply rooted interests in Burma. Through promoting and developing investments in the key regional sectors of tourism, agriculture, information and communication technology, the automotive industry, rubber production, fishing, wood-based production, electronics, healthcare, air travel, and the garments and textiles industry, ASEAN is attempting to create an industry that is competitive in the global financial markets.12 Promoting investment, whether or not there are issues of fundamental human rights abuses, is leveraging ASEAN influence in the financial world. This may have changed somewhat in light of the recent ratification of ASEAN’s charter which has highlighted the need for a regional commitment to democracy and human rights as well as economic integration. ASEAN leaders will hopefully challenge the junta and tow them in line should there be any discrepancies to the charter and perhaps help facilitate the move towards genuine democratic dialogue within Burma.
The truth of the matter is that governments and companies will continue to invest in Burma as long as there is no damage to their national and international reputations. The recent international exposure from the August/September ‘Saffron Revolution’ and subsequent crackdown has not only offered a glance into the realities inside Burma but has also paved the way for a collective international response to challenge the extent in which governments and companies are involved in sustaining the brutal and oppressive regime. If there is one thing the international community can do to help bring freedom to the people of Burma, it is to apply as much direct pressure on the junta as possible by denying the fundamental financial resources the junta uses to systematically victimise its own people. People from all over the world not only need to engage their governments and companies to take responsibility for their business practices, but also ensure their own interests are not some how intertwined in the complexities of foreign investment and consumerism that are helping sustain the SPDC. Through a conscientious awareness of our actions and a compassionate and collective effort for change, the actions we choose to take now will give the Burmese what has been denied to them for too long; respect for their inalienable human rights and the granting of the same freedoms we too easily ourselves take for granted.
Footnotes
“House of Commons Debate”, Publications & Records, UK Parliament October 29th 2007
“Incentives for Investment”, Ministry of Energy Website, February 2001
“Doing Business In or With Burma: ICFTU Report, January 2005
“Burma: Country in Crises” Asia Observer January 15th 2007
“The Arms Keep Coming-But who Pays?”, The Irrawaddy, July 15th 2004
“Burma’s Business Partners Can Promote Change”, The Irrawaddy, October 9th, 2007
“Global Unions Campaign for Burma.” Global Unions Website, 10th October, 2007
“Cental Statistical Organization Website”, November 2007
“Chevron Statement on Myanmar,” Chevron Company Website, October 18th, 2007
“Chevron Committed to Myanmar Project,” Bloomberg, October 29th, 2007
“Canadian Miners Sour on Burma,” The Tyee, October 12th, 2007
“ASEAN Integration in East Asian Integration” PACT Report, August 9th, 2007
To go to the other articles published in the November 2007 BI Newsletter click on the links below:
While economic prosperity through foreign investment should lead to wealth creation and higher standards of living, the SPDC is using the money to maintain control over the people
