15 June 2001

Talks Revisited: A Breakthrough?

--Since reports had been circulating that, "Aung San Suu Kyi is believed to have demanded that the junta begin to release prisoners, and allow the party to re-open its offices around the country, before the contacts develop into a full-blown dialogue" (AFP 13 June), people watching developments looked for more generous gestures from the junta to confirm that the talks between the junta and Daw Aung San Suu Kyi were progressing.

14 June--SPDC announces the release of more political prisoners with a confirmation that the releases came about "due to an understanding achieved between the State Peace and Development Council (SPDC) government and the NLD." AFP quoted the statement as saying the eight MPs released had been "staying at government guesthouses and have returned home to their respective families since 5:00 pm on June 14. They are all in good health."

--National League for Democracy (NLD) sources say the NLD plans to revive party activities by reopening 18 township offices and raising flags and signboards.

Sources close to the National League for Democracy have said NLD leadership has asked the rank and file "to show patience" and "not to pressure the leaders at this crucial juncture in time."

What is significant about the release of political prisoners this time is that it was accompanied by a statement from the generals, who for the first time since the secret talks got underway in October last year, admitted that it was "due to an understanding achieved" with the NLD. Another important development is the release of Dr Saw Mra Aung. The 10-member Committee Representing the People's Parliament (CRPP) named him Speaker of Parliament in 1998. Before the talks began, the junta had been trying to get the committee abolished because of its legitimacy and mandate given by a large majority of elected representatives to act on their behalf before the parliament can be convened.

The Visit and Expectations

Prior to the visit, the media had raised expectations that the Envoy would succeed "in securing the release of more of National League for Democracy members in prison" and that he would be able "to breathe new life into the national reconciliation process which could end four decades of military rule." There were also hopes that the generals would use the opportunity to shed some light on the direction and intent of the talks and calm down the calls by the Burmese democracy movement and the nation's many ethnic nationalities to shed light on the secret dialogue.

However, a muted statement about the visit by the UN Secretary General's Office provoked immediate reaction from various sources--from the All Burma Democratic Students' Front, the British Broadcasting Corporation, to the U.S. Government.

The ABSDF statement, quoted by Times of India, noted that the secret talks have "failed to make any headway" and should now be opened to public scrutiny. In a similar vein, the BBC's "Burma analyst" referring to the UN statement that said, "..the UN hoped Mr Razali's visit would help dialogue to progress further," but that the visit "has had little impact on re-starting talks between the military leadership and the opposition leader."

US Assistant Deputy Secretary of State Ralph Boyce, however, expressed an optimistic view saying that he "welcomed signs of a political thaw in Burma where the junta and its pro-democracy nemesis are holding their first dialogue since 1994. He told The Nation newspaper after a meeting with Thai Foreign Minister Surakiart Sathirathai: "We expect to see a concrete result in a short while."

Special Envoy Razali is to visit Rangoon again in July.

Kyat Value

Unlike previous times when the junta quickly jumped in to prevent the dollar from rising too high, the junta stood by without intervention when the kyat started to dip this time round. The situation coupled with reports that Myanmar had failed to secure loans from the Asian Development Bangkok (AFP 10 May), started rumors and speculations in Rangoon that the government agents were behind the demand for the greenback as foreign currency reserves were fast dwindling.

When the dollar rose to frightening heights it also jacked up commodity prices since all major stores in Rangoon were refusing to sell their goods in kyats. Business transactions continue to take place either in Foreign Exchange Certificates (slightly worth less than their dollar equivalents) or in US dollars. This, in a country where possession of foreign currency, unless officially permitted, is a crime.

An article in the state-run Myanmar Alin warned traders against driving up the dollar and commodity prices, saying the government could correct the situation by "giving a bitter pill." The article suggested people use their "consumer power"--boycotting stores and goods and reducing demand--to bring down prices. The junta then stepped in and sources in Rangoon say phones of major currency dealers were tapped and around 300 people, including dealers and those who had dollars in hand, were arrested.

Speculations have been rife about why the kyat was freefalling and the generals earlier attributed the problem to "misunderstanding over the border trade" where traders were only conducting transactions in dollars and contributing to an increase in demand for the US greenback. The generals tried to correct the situation then by permitting trade transactions in regional currencies.

Grant for Lawpita Power Station

The recent approval of 3.2 billion yen grant by Japan to Burma to fix the turbines at the Lawpita power station and the Baluchaung Dam "is not going to help the common people much," says an engineer who has worked in the energy field in Burma and who requested anonymity. The assistance, Japan said, was a "gesture of support" for the secret talks and it is “humanitarian” because it will help lower electricity prices and make it more accessible to the poor and help prevent accidents and blackouts which are having serious impact on hospitals.

The engineer however said that the refurbishment of the Lawpita hydroelectric power generation plant would not be enough even to cover the needs of the military-related consumers and it would not create trickle down benefits for the ordinary people in Burma. "Even with full power generation of 180 megawatt from Lawpita, which would give an increase of 27% more power, the country's power generation total is only about 620 mw--a capacity way below the current national demand of over 1200 mw," he said.

"What is more disturbing is the current electricity distribution system in Burma. The increase in power supply will never reach the intended consumers because the present electricity distribution system incorporates a special privileges and prioritization package that is discriminatory to ordinary citizens. Under the system today, selective groups of people or certain categories are enjoying reduced tariffs or are simply paying no tariff at all at the expense of ordinary consumers," the engineer said.

The present "prioritized electricity distribution system" as enunciated by the engineer:

(1) A special distribution network or power grid for the residences of top military personnel and government ministers get special privileges and priority and a constant supply of electricity with reduced tariff or no tariff.

(2) Military establishments all over the country enjoy special privileges and given priority and a constant supply of electricity with reduced tariff or no tariff.

(3) Factories and businesses owned and controlled by the Ministry of Defense enjoy a constant supply of electricity with reduced tariff or no tariff.

(4) Factories and business owned and controlled by various army, navy, and air force divisions, battalions, and regiments enjoy a constant supply of electricity with reduced tariff or no tariff.

(5) Factories and businesses owned and controlled by the Myanmar Economic Holdings Enterprise, MEHE, (run by the Defense Services) enjoy a constant supply of electricity with reduced tariffs.

(6) Factories and businesses jointly owned by the foreign investors and MEHE enjoy a constant supply of electricity but with an electricity tariff of $0.80 per unit payable in Foreign Exchange Certificate (worth slightly less than its dollar equivalent) to the MEHE.

(7) Factories and businesses owned and controlled by the military-organized and managed Union Solidarity Development Association, a so-called civic association, always enjoy a constant supply of electricity with reduced tariffs.

Gold--but at what cost?

Ivanhoe Mines and its affiliates which have been exploring for copper in Burma's Monywa and Letpadaung have announced that they have struck gold in Burma. A Radio Free Asia article expressed concern that gold mining by Ivanhoe Mines could lead to ecological disaster particularly because of the past track record of companies headed by Ivanhoe Chairman Robert Friedland (photo) which are notorious for causing environmental disasters all over the world.

NewsDesk followed up on the story and found startling details about Robert Friedland. Here are a few details extracted from "A Man with the Midas Touch" by Rick Young and Dan Moyes, Oct. 1994,and "Backers of gold mine have history of disaster" by Pratap Chatterjee--1995.

1985: Friedland described as "a magnetic leader" and "a promoter extraordinaire," announced an "important historic breakthrough" to promising investors, declaring that gold worth hundreds of millions of dollars could be mined from a mountain in Summitville, Colorado, by his company Galactic Resources Ltd. He attracted major investors, including Bank of America and Bechtel Corporation. But, the company went bankrupt, the gold mine was abandoned, and $20 million in debt remained unpaid. A similar incident was reported at Venezuela's Las Cristinas gold mine. Environmental disaster caused by Galactic's cyanide-extraction technique called "heap-leach" and declared by the then Secretary of Interior as an "extraordinary disaster" prompted congressional consideration for a change to the General Mining Act of 1872. ("Heap Leach" involves spraying cyanide solution on the ore to extract gold and the cyanide waste that was left over is supposed to be stored in lined and covered ponds to prevent contact with local wildlife which can die if they drink the water. Unfortunately, in Galactic's case, the cyanide solution did not stay in the ponds but leaked through the lining into nearby creeks.)

At age 19, "Friedland was identified by federal agents as a key figure in an LSD distribution network that stretched from Maine to California. In 1970, agents announced what was called the biggest LSD bust in New England history....At Friedland's sentencing, the federal judge called him 'the principal in this affair' and gave him the only prison term among the defendants. Friedland was sentenced to two years in prison."

Friedland also ran the Golden Star Resources mining company which, together with Cambior of Montreal, was "implicated in Guyana's biggest environmental disaster." The holding pond at the Omai gold mine broke and spilled some four billion liters of cyanide-laced waste into a tributary of the Essequibo River over a period of five days.

"Just as Friedland vanished from Summitville when it was in trouble, he also took flight from Golden Star Resources selling his shares before the problems emerged."

Trouble Brewing

When Maj Gen Tun Kyi, former commander of the Northwest Regional Command and Minister of Trade, was arrested and removed from the State Law and Order Restoration Council to make way for the present State Peace and Development Council in November 1997, darkness also fell on businesses that were set up with the ousted commander's influence. One of them was Yaung Chi Oo (meaning Aurora in Burmese) Trading, a company based in Singapore and operating the Mandalay Brewery joint venture with the junta. The joint venture came to a close in November 1998 when soldiers raided the brewery and seized it. Win Win Nu, who had invested $6.3 million in the brewery said her local bank accounts were frozen and she was threatened with arrest for misappropriating funds, according to Far Eastern Economic Review.

Win Win Nu said, "We fell on the wrong side of the power struggle and as a result lost our business. Unfortunately in Burma that's what matters--political connections, not law."

Since the seizure of the brewery, Win Win Nu has tried to get back her investments but to no avail. She has already exhausted all legal means in Burma as well as put her case before Asean's untested dispute-settlement mechanism on the grounds that Burma's seizure of Mandalay Brewery directly violated the commitments to protect foreign investment that it entered into upon joining Asean in 1997.

According to the Far Eastern Economic Review, the International Court of Justice has accepted to hear the case of the Mandalay Brewery. The Court's acceptance has "made certain quarters of Burma's ruling junta skittish. On May 31, military intelligence official Gen. Kyaw Min, recently assigned the task of striking a settlement, made Yaung Chi Oo's managing director, Win Win Nu, a do-or-die offer. Return to Burma and present her case in person to intelligence chief Lt. Gen. Khin Nyunt, or be banished permanently."