Weekly Business Roundup (October 10, 2009)

US Gems Sanctions Policy ‘Not Working’: Washington Agency

The United States admits its sanctions legislation to cut off profits to the Burmese junta from precious stones has so far been largely unsuccessful.

A law was passed by the US Congress last year to curb Burmese gem imports, but a report just published says Washington government agencies have “not shown that they are effectively restricting imports of Burmese-origin rubies, jadeite and related jewelry.”
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The report by the Government Accountability Office (GAO) says Washington agencies have also failed to persuade other countries and the United Nations to join collective action to halt Burmese junta-linked gems trade.

The GAO admits to “difficulties” complying with the new law in the absence of verifiable means of establishing the origin of stones, and the lack of cooperation from other countries linked to the trade.

“Strong support and the cooperation of China and Thailand are important to restrict trade in these items, but highly unlikely,” said the GAO report.
 
Thailand remains a major source of finished ruby and jade jewelry for the US and Europe, but insists that its products—although often sourced from Burma for raw materials—are substantially finished in Thailand and thus not subject to the sanctions.
 
Thai jewelry exports to the US in 2008 were valued at US $8 billion, said the GAO.
“The GAO report highlights the wishful thinking of [US] legislators in placing requirements for international action on US government agencies which stand no chance of success,” said the London-based campaign for democratic change in Burma, Network Myanmar.

“There is however no doubt that the [Burmese] military regime and its agencies generally control the ruby trade and this is insufficiently highlighted in the [GAO] report.”
 
The chairman of Network Myanmar, Derek Tonkin, is a former British ambassador to Thailand.

Don’t Lift Junta Sanctions Now, Urge Experts on Burma’s Economy

Lifting economic sanctions now against the Burmese military junta and its business cronies would “embolden” the regime and undermine Western efforts to try to promote reform, say two Burma economy experts.

The recent trend of calls for an easing of sanctions is wrong because it implies that sanctions have contributed to Burma’s poverty, they argue.
 
But Burma’s desperate condition has “everything to do with the chronic economic mismanagement by the military regimes that have ruled Burma since 1962,” say Sean Turnell and Alison Vicary.

Both are academics at Macquarie University in Australia and co-editors of the journal Burma Economic Watch.

“Burma’s military regime has created an environment in which genuine transformative economic growth of the sort that has transformed its neighbors is not possible,” the pair write in the Australian newspaper The Age.
 
They lambaste the junta as a “simple-minded looter, destroying what it can neither create nor understand.”
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“Lifting economic sanctions now would not only embolden Burma’s present reform-shy regime, but also greatly deleverage the ability of the US, Australia and like-minded countries to influence future events,” they argue.

Thailand Suspends Major Hydro Dam on the Salween

Thailand’s state-monopoly electricity producer EGAT is suspending power plant projects in neighboring countries, including the Hatgyi hydropower dam on the Salween River in Burma.

EGAT—the Electricity Generating Authority of Thailand—says the suspensions are due to falling demand for electricity, in part caused by the global economic slump which has severely damaged the country’s export industries.

The Hatgyi hydro dam in Karen State is a big project, aiming to have a massive installed generating capacity of 1,200 megawatts, but it is highly controversial because it would force many local people to relocate and could cause environmental problems downstream.

EGAT’s partners at Hatgyi are the Burmese state-owned Myanmar Electric Power Enterprise and the Chinese government-owned Sinohydro Corporation.

The project has already been beset with delays.

EGAT said this week it would also suspend a smaller but equally contentious hydroelectric project in Laos, the 440-megawatt Nam Ngiep hydropower plant.

Bangladesh Worries Burma, India with New Will to Drill for Gas

Competition for gas beneath the waves in the Bay of Bengal is likely to follow the award of licenses this month by Bangladesh to two international exploration firms, say industry analysts.