Weekly Business Roundup (March 08, 2008)

Burma Authorizes Singapore Dollar Accounts at Banks

The Burmese junta’s approval of Singapore dollar bank accounts in at least two state-controlled banks is seen in some quarters as a reaction to recent stepped-up international sanctions aimed at the regime’s pocketbook.

Just two weeks ago the United States’ Office of Foreign Assets Control named several key Burmese and Singaporean business figures and their companies on an extended sanctions list.

The names were in addition to 13 junta-linked people and companies blacklisted in early February by the US.

Hong Kong money laundering expert and risk analyst Peter Gallo said the sanctions were aimed primarily at embarrassing Singapore, which has long been one of the junta’s favored banking sites.

The sanctions affect not only the Burmese individuals and companies named, but also banks which deal with them and with the US.

The junta has approved the opening of Singapore dollar currency accounts at the Myanmar Foreign Trade Bank  and Myanma [Burma] Investment and Commercial Bank.

The MFTB in particular deals with foreign currency transactions.

The changes will “certainly help those people and businesses linked with Singapore who are now on the US sanctions lists,” said an economics official at a European Union embassy in Bangkok who asked to remain anonymous.

Samak Green Lights the Salween Hydro-dam

The new Thai government of Samak Sundaravej has given the green light to large-scale infrastructure projects such as hydro dams on Burma’s Salween River, which had appeared less certain following the coup that ousted pro-Burma Prime Minister Thaksin Shinawara.

Samak’s first visit to Burma as prime minister, scheduled for next week, is expected to not only offer reassurances on existing agreements—but will positively encourage more business deals  between the two countries.

Thailand is not only the largest importer from Burma— mainly in the form of gas —it is also increasing exports to its poorer neighbor.

The increased two-way traffic comes in spite of Western calls for greater pressure on the Burmese military regime through trade curbs and boycotts of regime-linked businesses.

“There was some breath holding in recent months, during the Bangkok-installed military government phase, on projects such as the hydroelectric dam on the Salween at Tasang,” said Bangkok-based power industries consultant Collin Reynolds.

“But I think the China link on this project has to keep it afloat, even though it is highly expensive and of questionable value given the environmental problems almost certain to ensue on both sides of the border.”

Full Steam Ahead for Trans-asia Trains?

The Indian government has approved plans for the development of its section the Trans Asian Railway Network, which international organizations including the UN and Asia Development Bank are promoting.

The network, known as TARN, will one day link south and East Asia with Europe via the Middle East.

But India’s railway minister Lalu Prasad acknowledged this week that for the route to work for India as a trade link with Southeast Asia, New Delhi would likely have to spend more than US $300 million.

This is the estimated cost of building new or upgrading track through its northeast state and Burma, said a report by The Times of India.

New Delhi has previously expressed support for helping Burma to upgrade a line linking northeast India with Thailand and Malaysia and Singapore.

The last time this dream was pursued was during World War II when thousands of forced laborers died working on the route for the Japanese army of occupation.

It’s not clear what the Burmese regime may think of the idea of a transnational line, described by Indian Railway Board chairman K.C.