Weekly Business Roundup (March 22, 2008)

Thailand’s new PM Reinstates ‘Thaksin Loan’ to Junta

One of the first benefits to Burma of the installation of a new democratically elected government in Bangkok is a green light for a US $120 million loan by the Export-Import Bank of Thailand.

Resumption of the loan follows a visit to Burma by new Prime Minister Samak Sundaravej, who upset many people by saying he found Burma a country at peace run by a regime of meditating Buddhists.

The loan was originally provided under the government of former Prime Minister Thaksin Shinawatra, who was removed from office in 2006 by a military coup. The policies of the Samak government are close to those of Thaksin’s now-banned Thai Rak Thai party.

The loan was suspended after Thaksin’s removal on suspicion that his family businesses were benefiting.

The loan linked to criminal investigations into Thaksin which are still before the courts. The former prime minister returned to Thailand only this month after 18 months in self-imposed exile to face corruption charges.

The new Thai Foreign Minister Noppadon Pattama, Thaksin’s former lawyer,  said what he termed “political wrangles” in Thailand should not get in the way of improving relations with its neighbor.

“Thailand’s internal problems have no effect on the right of Burma to get the money,” he said.

New Delhi Gives Burma ‘Counterweight to Overbearing China’

Although trade relations between India and Burma are expanding as political ties warm, the New Delhi government will never realize its “Look East” dream unless it pushes development of modern road and railway links through Burma, says a leading Indian economist.

“Cross-border projects are essential to foster mutually beneficial cooperation. In order to take the bilateral relationship forward, India has major responsibilities,” said Prabir De of the New Delhi-based Research and Information System for Developing Countries organization.

Among other things, India should press for Burma to become a member of the eight-nation South Asian Association for Regional Cooperation.

Prabir De argues that the time is right for India to strengthen its links with Burma because the military junta does not wish to be too closely bound up with China.

“Heavy migration of mainland Chinese people has forced Myanmar [Burma] to seek an alternative partnership in the region,” said Prabir De, writing this week in India’s influential Financial Express.

He said New Delhi has provide US $50 million credit to the junta over the last five years to promote bilateral trade, and this has helped India become Burma’s fourth largest trading partner after Thailand, Singapore and China.

“But in order to take the bilateral relationship forward, India has major responsibilities. India should link the northeast Indian states of Manipur and Mizoram with its mainline railway corridor and help Myanmar re-establish its railway network.

“Without a modern and harmonized railway system in Myanmar, India’s dream to link Delhi with Hanoi or to hook up with the Trans-Asian Railway will be unfulfilled.”

Military Puts Brake on Trade Links with Bangladesh

Trade access to Bangladesh across the Burmese land border is being severely restricted.

The Burmese Border Merchant Association in Arakan State says the military authorities have suddenly and inexplicably begun limiting cross-border seven-day visas to a mere 25 people a day via the Maungdaw-Teknaf crossing.

Burmese traders planning to visit Bangladesh must also provide the visa-issuing office with a “testimonial.”

The curbs come as relations between the two countries appeared to be warming under the new military-controlled regime in Dhaka.

Bangladesh has recently increased it purchase of Burmese rice, but a bid by Dhaka to buy gas has been rejected.