Weekly Business Roundup (July 13, 2009)

Burmese Gems on Show at Chinese Fair backed by Asean

Burmese gem traders are participating in a regional precious stones sales fair in the southwest Chinese city of Kunming.

The 10-day Gem Emporium is also being visited by a delegation of business people from Burma’s Federation of Chambers of Commerce and Industry.
Although the fair is being held in China, it is linked with the Association of Southeast Asian Nations (Asean), according to the official news agency Xinhua.

Participants from outside Asean include traders from Taiwan and Hong Kong, as well as mainland China. Buyers from China and Hong Kong featured prominently at Burma’s officially backed second gems auction this year in Rangoon, which ended at the beginning of this month.

Despite Western sanctions, the Myanmar Gems Enterprise claims to have sold almost US $200 million worth of stones at an auction in Rangoon in March.

The state-controlled gems enterprise said recently it is planning to showcase Burmese stones at overseas fairs and auctions.

Junta Faces Possibility of New Sanctions in Wake of Ban Visit

The Burmese junta could face more economic sanctions in the wake of a report this week to the U.N. by Secretary-General Ban Ki-moon.

Ban is due to present a report on his visit to Burma and his spurned attempt to meet opposition leader Aung San Suu Kyi to the Security Council on Monday, July 13.

Britain’s Prime Minister Gordon Brown said the international community would have to make decisions about Burma on the basis of Ban’s report, but added in a statement: “My sad conclusion is that the Burmese regime has put increased isolation—including the possibility of further sanctions—on the international agenda.”

Ban will brief the U.N. Security Council immediately before leaving New York again to visit Egypt for a meeting of the Non Aligned Movement.

“Until the trial of Suu Kyi and the virtual snub to Ban by [Snr Gen] Than Shwe, there were signs—especially from the US—of a possible easing of sanctions against Burma, but this looks less likely now,” said an official from a European Union country in Bangkok speaking to The Irrawaddy on condition of anonymity.

The EU, including Britain, also enforces economic sanctions against Burma.

‘British’ Investment is from other Countries using a Tax Haven

Most of the investment in Burma attributed by the junta leadership to Britain can most likely be traced to at least half a dozen other countries, says a former top diplomat.

The junta claims British companies have invested over US$1 billion in Burma in recent years, but Derek Tonkin says most of this can be traced not to Britain, but to a clutch of countries ranging from China to Canada.

The money is linked with companies which register—for tax purposes—in the British Virgin Islands (BVI) in the Caribbean.

“Though it is a British overseas territory [dependency], almost all current investments in Burma made by companies incorporated in the BVI do not have mainland UK beneficial interests, but are made by companies incorporated in such diverse countries as Singapore, China, Malaysia, Russia, and Canada,” said Tonkin in a media commentary last week.

“However these BVI companies are registered with the MIC [Myanmar Investment Commission] as “UK” because the BVI is a British overseas territory,” Tonkin said.
Tonkin is a former British ambassador to Thailand and is currently chairman of Network Myanmar, a UK based NGO campaigning for human rights in Burma.

He said that although British government policy is to uphold sanctions against the Burmese junta and dissuade British firms from new investment in Burma, the British authorities “would be most reluctant” to pressure the BVI government to confront companies registered there because they provide the islands’ main source of income.

Ex-Canadian Premier Advises Junta-Linked Mining Firm

A Canadian mining company put on a sanctions list by the U.S. government because of its business links with Burma has acquired the services of a former prime minister of Canada to promote its international image.
Vancouver-based Ivanhoe Mines has hired Jean Chrétien as its senior international adviser.

Ivanhoe Mines has some form of joint ownership with the Burmese junta in Burma’s largest copper mine at Monywa.