MAY 1997

Volume 8, No.5

Investments:

INVESTMENTS - US\$2.8 BILLION

On 4 Apr, SLORC's Ministry of National Planning and Economic Development said

foreign investment for the 1996-7 fiscal year was US\$2.81 billion. Proposed

direct foreign investment from 1988 to 1997 was US\$6.05 billion (247 projects).

Of this total, US\$2.1 billion (34 projects) were in the petroleum

and natural gas sector and US\$1.1 billion (82 projects) were in manufacturing.

Other industries attracting major foreign investment were real estate - US\$0.9

billion (14 projects); and hotels/tourism - US\$0.8 billion (39 projects)

[Reu970404].

KYAT FALLS

On 7 May, the black market exchange rate in Rangoon rose from 167 to 182 Kyats

to the US dollar. The official exchange rate is 5.8 Kyats to the US dollar.

SLORC's foreign currency reserves are at US\$183 million, which is low when

compared to last year's US\$688 million [AT970508, B970427].

BURMA HOTEL OCCUPANCY DOWN

According to a 18 May report, room occupancy rates in Thai hotels in Burma

dropped to 10\%. Hotels and services make up the bulk of Thai investment in

Burma [B970518].

U.S. SANCTIONS FOR SLORC

On 20 May, US President Bill Clinton signed legislation barring US investment

in Burma. Companies already in Burma are exempt from the law, which threatens

those who break it with 10 years in prison and a US\$55,000 fine. The

sanctions ban `new investment' but until the US Treasury issues its

regulations, it is not clear if the sanctions will also cover new investments

in on-going projects [LAT970528].

Burma Alert - Fax: 1 819 647-5403

The May issue of the `BURMA ALERT' is late due to a re-organization. In

the future, the `ALERT' will be published in cooperation with the yet to be

established Euro-Burma Office in Brussels. Apologies for the delay - Ed.

AUSTRALIA:

FOSTER'S BREWING GROUP said on 11 Apr that it will not include Burma in its

investment strategy and will not sell beer in Burma. Foster's statement came

after the Ethical Investment Group of Victoria organized a consumer boycott

against Foster [FS970411, ES970412].

CANADA:

After talks with Canadian Friends of Burma, SEAGRAM COMPANY LTD announced on 30

Apr that it has stopped distributing its products to Burma. Seagram had been

sourcing Chivas Regal Whisky to Burma through Tanyaung International,

owned by Thein Tun. Tun who was a partner of PepsiCo before its divestment in

January [CFOB970501].

CHINA:

GUANG DON ZHU HAI CORP will build two sugar mills, one in Zeyawady, Pegu

Division, and the other in Taung Zin Aye area in Lewe, Mandalay Division.

The mills will be built in cooperation with Myanmar Sugarcane Enterprise of

the Ministry of Agriculture and Irrigation, and the Zeyawady mill, to cost

\$US 16.43 million, will process up to 1 500 tons of sugar per day [NLM970523].

FRANCE:

On 16 Apr TOTAL SA formally backed a plan by Ultramar Diamond of the USA to

acquire TOTAL's share in its North American assets. Although TOTAL had denied

US sanctions would affect TOTAL's operations, there was speculation that the

move was made in order to avoid confrontation with the US regarding sanctions

against Burma. TOTAL will give up its 55\% share for US\$811

million and retain on an 8\% interest in North America [FT970417].

Investments:

INDONESIA:

P.T. SEMEN CIBINONG and its sister company P.T. TIRTAMAS will hold

70\% of a new US\$210 million cement plant. Myanmar Economic Holdings Ltd,

SLORC's investment arm, will hold the remaining 30\%. The new plant

will triple Burma's cement output [BL970612].

JAPAN:

MITSUI \& CO may guarantee a US\$150 million loan to SLORC through the BANK

OF TOKYO. Commercial loans have not been guaranteed by private investors

since 1987. SLORC is short of foreign exchange and official growth figures of

8\%-9\% are exaggerated. Mitsui, in Burma since 1994, is currently building

an industrial complex located on the northern outskirts of Rangoon. Japanese

companies account for some US\$184 million of foreign investment in Burma

[BA9611, AT970519,28, F970605].

MYANMAR M.C.G.'s 110-room Yangon International Hotel opened on 15 May

[NLM970516].

KOREA:

A consortium of DAEWOO, HYUNDAI, and L.G. INTERNATIONAL CORP signed a US\$15

million contract to supply electronic equipment to SLORC. The contract, signed

28 May with the Myanmar Electric Power Enterprise, will be financed with loans

from the Korean government [NLM970521].

On 20 May, MYANMAR DAEWOO LTD signed a joint-venture agreement with the

Ministry of Rail Transportation to lease construction equipment [NLM970521,

KH970529].

On 2 May, HYUNDAI and Sinmardev International Pte Ltd of Singapore announced

the formation of a consortium to build a US\$300 million industrial complex

in Rangoon. The complex involves construction of a port 18 km southeast of

Rangoon, to be completed by 2000.

HYUNDAI also signed a Memorandum Of Understanding with SLORC on 3 Apr to

set up fertiliser processing plants in Burma. Hyundai agreed to ship 100,000

tons of fertiliser in two years [NLM970407, AFP970502, DJ970403].

LAOS:

LAOS on 19 May signed a bilateral agreement with SLORC to cooperate in tourism

matters. The Lao delegation was led by Cheuang Sombourzkanh, Deputy Minister

of the Prime Minister's office [NLM970516,20].

MALAYSIA:

Three weeks after US sanctions were enacted, Petroleum Nasional Berhad

(PETRONAS), the state-owned oil company of Malaysia, said it is looking into

buying Texaco's stake in Burma's Yetagun gas field. Hassan Marican,

Petronas president, said Texaco had appointed an investment banker to look for

buyers. At its annual meeting in May, Texaco cited financial

concerns as a reason to sell its 42.9% share in Yetagun. Petronas owns 70\%

of OGP Technical Services, which along with Nova Gas International was awarded

the contract in Jan'96 to build the Ban-I-Thong to Ratchburi segment of

the pipeline from Burma [N970523, NLM970529, Reu970610, BT960126].

MBF HOLDINGS BHD is applying for a licence to offer full banking services in

Burma. MBf set up a representative office in Rangoon two months ago [ST970524].

NORWAY:

On 1 May, Foreign Minister Byoern Tore Godal announced that Norway will remove

Burma from its Generalised System of Preferences (GSP). The European Union of

which Norway is not a member, removed Burma from its list of countries

receiving the GSP on 24 Mar [B970326, AFP970501].

SINGAPORE:

On 2 May, SINMARDEV INTERNATIONAL PTE LTD and Hyundai Corp of Korea announced

the formation of a consortium to build a US\$300 million industrial complex

in Rangoon. The complex involves construction of a port 18 km southeast of

Rangoon, to be completed by 2000 [NLM970407, AFP970502, DJ970403].

THAILAND:

ROJANA INDUSTRIAL PARK PLC announced on 17 Apr that it will hold a 60\% stake

in a new US\$23 million joint venture with SLORC's Department of Human

Settlement and Housing Development, to be called `Rojana Yangon' [N970418].

Investments:

THAILAND continued:

The EXPORT-IMPORT BANK (EXIM) OF THAILAND was forced to stop negotiations with

US firms after US sanctions against investment in Burma were imposed on 22 Apr.

EXIM is affected by the sanctions because it has granted a loan to the

Italian-Thai Development Co which is building the Mandalay airport [TT970424].

U.S.A.:

ANHEUSER BUSCH CO said on 25 Apr that it will no longer export BUDWEISER

BEER to Burma (US sanctions imposed 22 Apr). Budweiser was exported to Burma

but the company has no employees or investments there [Reu970425].

Four days before Bill Clinton signed legislation banning investment in Burma,

INTERDIGITAL COMMUNICATIONS CORP of Pennsylvania concluded a contract with

the Myanmar Posts \& Telecommunications department to supply equipment to Burma

for a wireless phone system. The equipment will be manufactured in the US and

assembled in Burma. InterDigital has worked with SLORC twice in the past two

years. In July 1995, InterDigital signed a contract to install 500 lines in

Rangoon, and in March 1996 another contract was signed to install a 250-line

auto-radio system in Mandalay. According to a Xinhua news agency, Burma now

has 170 000 phones, up from 73 000 [Net960305, BA0496, X970521, IHT970522].

On 2 May, after allegations that its Worldperks Frequent Flyer Program is

benefiting heroin producers in Burma, NORTHWEST AIRLINES withdrew the Rangoon

Traders Hotel from its program. The Traders Hotel is part-owned by Lo

Hsing-Han, named by the US State Department as a `narco-trafficker.' Lo's

son and business partner, Steven Law, is barred from visiting the US due to his

involvement in the drug trade [FBC970502, BG970406].

On 13 Apr. TEXACO INC Chief Executive Peter Bijur announced that Texaco is

considering selling its Andaman Sea natural gas project offshore Burma

[Reu970513].

On 24 Apr, John G Vandermeer, Vice-President for new ventures in South and

Southeast Asia of UNOCAL said that due to USA sanctions, UNOCAL will give up

two natural gas blocks in Burma's Andaman sea [AFP970424].

Due to the late publication of the ``BURMA ALERT'', significant news items

will be presented in chronological order in this issue:

News Chronology

SLORC DEMANDS REJECTED

On 31 Mar, SLORC presented the Karen National Union with a demand to withdraw

from the Mae Tha Raw Hta Agreement. The Agreement reached in January with

other ethnic groups in Burma called for an end to military rule and gave

support to the Burmese democracy movement. On 3 Apr, the KNU rejected the

demands. SLORC had reiterated that the KNU must lay down its arms and that

the KNU must not attempt to `collaborate' with other political parties. The

KNU responded by urging SLORC to dialogue with other political parties in

Burma [KNU970508, S970505].

UNOCAL OPENS K.L. OFFICE

On 9 Apr UNOCAL President John Imle said that UNOCAL is opening a new

regional head office in Kuala Lumpur, Malaysia [Reu970409].

SHANS CLASH WITH SLORC

Twenty-three Shan and ten SLORC soldiers were killed on 10 Apr when Shan United

Revolutionary Army (SURA) troops attacked a SLORC base near Ho Mong, the former

headquarters of Khun Sa, the infamous drug lord who surrendered in

1996 [Reu970421].

POWER STRUGGLE WITHIN JUNTA?

Reports of a power struggle between General Maung Aye and Lieut-Gen Khin Nyunt

resurfaced in the wake of the Tin Oo bombing. Tin Oo, SLORC Secretary-2 and

Army Chief-of-Staff, is reported to be allied with Maung Aye, mastermind of

the recent offensive against the KNU. Maung Aye, SLORC Vice Chairman and Army

Commander-in-Chief, is said to be against Burma joining the Association of

South East Asian Nations (ASEAN). Khin Nyunt, SLORC Secretary-1 and head of

military intelligence, is said to favour greater foreign investment and trade

liberalization [JT/B/N970410].

News Chronology:

MOSLEM FESTIVAL RESCHEDULED

On 11 Apr, SLORC announced that the ritual slaughter of animals would be

forbidden. Moslem community leaders, therefore, on 12 Apr cancelled the

rituals and rescheduled the Bakhri Eid Festival from 17 to 19 Apr to coincide

with the Burmese New Year [AFP970417].

U.N. EXTENDS MANDATE

The UN Commission on Human Rights in Geneva at its 53rd session, resolved on

16 Apr to extend the mandate of the Special Rapporteur for Human Rights in

Burma for another year. The UNCHR asked the Special Rapporteur to submit an

interim report to the UN General Assembly in New York in Oct'97 and to report

back to the Commission in Geneva in Apr'98. The UNCHR also expressed concern

at SLORC's continuing human rights abuses that include torture, arbitrary

executions, forced labour of children and adults, arbitrary detentions, forced

relocations, the oppression of ethnic minorities, and restrictions placed on

the National League for Democracy and its leader, Daw Aung San Suu Kyi

[UN9704].

UNOCAL LIABLE FOR ABUSES

US District Judge Richard Paez of Los Angeles, ruled on 18 Apr that UNOCAL

can be held liable for human rights abuses committed by SLORC.

UNOCAL will appeal the decision. The National Coalition Government of the

Union of Burma (NCGUB) and the Federation of Trade Unions of Burma (FTUB) filed

a lawsuit against UNOCAL on 3 Sept 1996, accusing UNOCAL of relying on SLORC

for the security of its gas pipeline in the Tenasserim division. Human rights

abuses, particularly involuntary labour and forced relocation, have been

documented in the area of the proposed pipeline [LAT970418, BA9609].

A.S.E.A.N. MISSION TO BURMA

On 21 Apr, a delegation from ASEAN visited Burma to assess its readiness for

joining the organization [F970508, B970421, NLM970422].

BANGLADESH REPATRIATION

On 21 Apr the United Nations High Commissioner for Refugees resumed the

repatriation of 250,000 Rohingya refugees to Burma. The repatriation had been

suspended on 1 Apr. SLORC and Bangladesh had agreed that all

refugees would be repatriated by 31 Mar, and as of 1 Apr, only 229,000

refugees living in Cox's Bazaar had been sent back [Reu970421].

A.B.S.D.F. CAMP CAPTURED

On 22 Apr, the All Burma Students' Democratic Front's 8888 base was taken

by SLORC troops commanded by Strategic Commander Colonel Zaw Tun. SLORC troops

from Light Infantry Battalions No.358, 224, 262 and 432 attacked the base on

11 Apr. The 8888 camp is located opposite Thap Sakae in Thailand's Prachuab

Kiri Khan Province, in the area of the planned land bridge between Burma's

Bote Pyin Industrial Estate and Bang Saphan in Thailand [ABSDF970418,

AFP970419, BR970429]

AUSTRALIA FUNDS REFUGEES

Australia's Foreign Minister Alexander Downer said 22 Apr that Australia will

give A\$1.8 million to help Burmese refugees. A\$1 million will go to the

World Food Program, another A\$300,000 will go to the United Nations High

Commission for Refugees for resettlement issues, and A\$500,000 will go to the

Australian branch of Medecins Sans Frontieres [AAP970422].

SOUTH AFRICAN HONOUR

The University of Natal on 23 Apr, awarded Daw Aung San Suu Kyi

an honorary Doctorate of Law in recognition of her work to promote

democracy and freedom in Burma. Daw Suu's husband, Dr Michael Aris received

the award on her behalf at the University of Natal, Durban, and delivered

her address. Daw Suu said that the same issues surrounding the efficacy

of sanctions against Burma exists now as they did in South Africa ten years

ago [SK970423, FBS970418, ST970420].

INDIA-BURMA TRADE HALTED

Indian traders decided to halt the flow of Indian goods to Burma in April

to protest the closure of a trade route from Prem Nagar in India, to Tamu in

Burma. The route was closed when cross-border trade between Burma and India

was legalised [TH970423].

News Chronology:

SLORC-WA TALKS FAIL

Talks between SLORC and the United Wa State Army failed when the UWSA refused

to accept SLORC's demand that they put down their arms by 1999. SLORC also

wanted to construct a dam on the Mae Kon River south of Ban Peng Kam, 15

km from the Thai border. UWSA and SLORC officials met at Ban Pengkam opposite

Thailand's Mae Ai in Chiang Mai province. Over 100 Wa and SLORC troops have

died in recent months in clashes around the area of the planned dam

[TT970421, N970425].

K.N.U. ATTACKS SLORC BASE

In retaliation for the torture of a Karen boy by SLORC soldiers, a combined

force of ABSDF and KNU troops attacked a SLORC camp (Mor Ta) opposite Umphang

in Thailand's Tak province [TT970424].

KAREN CAMP ATTACKED BY SLORC

At midnight on 26 Apr, SLORC and Democratic Karen Buddhist Army (DKBA) troops

attacked Ta Per Poo camp in Umphang, Thailand. The intruders looted goods and

cash worth Baht 150,000 (US\$6,000) and set fire to 19 houses and shop stalls.

Colonel Suwit Maenmuen, commander of the 4th Army Regiment Task Force, said

the Thai-Burmese Border Committee had sent a letter to the Burmese military on

5 May in protest of the attack on Ta Per Poo. The Thai-Burmese Border Committee

consists of Thai and Burmese government and army officials. About 2,200

refugees from Burma live in Ta Per Poo [TT970505, KNU970427, N970428],

CAMPS TO AMALGAMATE

The Thai Army's 9th Division is planning to combine refugee camps in

Kanchanaburi and Ratchburi provinces. Huay Sut and Bo Wi in Ratchburi will

become one camp called Tham Hin, with a population of 7,200. Htee Lai Pah and

Thu Kah in Kanchanaburi will be amalgamated at a place named Maw Raka, near

Sankhlaburi province, with a population of 4,000. Refugees at Thu Kah were

told on 16 Apr to leave within one week and either go to Phu Muang or

Halockani refugee camps, or return to Burma. Major-Gen eral Thaweep Suwan

Nasingh of the Thai 9th Div made the announcement shortly after Thu Kah

received heavy shelling from SLORC troops on 12-13 Apr. Phu Muang camp was

reported on 29 Apr as having 2,700 people, who are sheltering under plastic

sheets as the wet season begins [BR0429, N970418].

E.U. ARMS SANCTIONS

On 29 Apr, the European Union has agreed to extend sanctions against Burma

for another 6 months. This embargo prevents EU nations or companies from

providing military assistance or aid to Burma [AFP970429].

DRUG FACTORIES MOVED

On 2 May, Veerakorn Kamprakob of Thailand's Office of the Narcotics Control

Board said seven or eight factories producing amphetamines, run by the UWSA,

had been relocated from Shan State to Karen State, opposite Tak province in

Thailand. It was reported that Pao Yochang, leader of the UWSA, had met with

Chinese officials in February and was told to stop the flow of drugs, including

amphetamines, into Yunnan province [B970502, F970508].

U.S.D.A. BLAMES DAW SUU

At a mass rally of 30,000 people on 4 May in Rangoon, Union for Solidarity

and Development Association spokesman Kyi Kyi Htway accused Daw Aung San Suu

Kyi of `falsehoods' which had influenced the USA to invoke sanctions against

SLORC. Kyi Kyi Htway said Daw Suu and others `bent on subverting the economy'

should be driven out of the country. Meanwhile, sources predicted mass

rallies would be held throughout Burma by USDA to condemn US sanctions. An

unconfirmed report on 8 May said the USDA group that attacked Daw Suu's

motorcade in 1996 is now undergoing further training and may be planning

another attack [AP970505, N970508].

PRISONERS TRANSFERRED

The Southeast Asian Information Network reported on 6 May that since April,

SLORC has transferred 46 prisoners from Rangoon jail to other prisons

upcountry where they cannot receive food and material support from family

members. The transferral, named `Operation Crow,' apparently affects doctors

active in the NLD who were arrested during the SLORC's `Operation Ngwe Byaing

Phyu'. SAIN gave the names and whereabouts of 46 political prisoners [SAIN

970506].

News Chronology:

U.N. OFFICIAL MEETS DAW SUU

From 6 to 10 May, United Nations Assistant Secretary-General for Political

Affairs Alavaro de Soto visited Burma and met with political leaders including

Daw Aung San Suu Kyi and Lieut-Gen Khin Nyunt, Secretary-1 of SLORC. De Soto

also met with Khun Htun Oo, chairman of the Shan Nationalities League for

Democracy, as well as SLORC Foreign Minister Ohn Gyaw, Chief Justice Aung Toe,

and others [AFP970410].

THAI TRANSPORT LINKS

Thailand's Transport and Communication Minister Suwat Liptapanlop visited

Rangoon 8-9 May to discuss improvement of air, rail and road links between

Burma and Thailand. On the agenda was the extension of the Saiyoke rail link

to Burma through the Three Pagodas Pass, more flights between Bangkok and

Rangoon, and the management of the Thai-Burma friendship bridge in Mae Sot

/Myawaddy. The bridge was completed on 6 May [N970508, B970507].

SLORC TROOPS ATTACK MON BASE

On 10 May, SLORC Infantry Battalion No.106 entered Halockanee, a Mon refugee

camp located about 60 km southwest of Thailand's Sankhlaburi district, and

occupied the camp rice store. A ceasefire agreement signed by SLORC and the

New Mon State Party in June 1995 stipulated that SLORC troops cannot enter

Mon refugee camps. On 28 Apr, SLORC troops also overran a Mon base at Tab

Guncha and burned it down, causing 1,000 Mons to flee to Bang Saphan's Tambon

Chaikasem in Thailand [B970430, MUL970512].

PAKISTAN ATTACHE VISITS BURMA

Lieut-Col Zahid Hussaid Khan, military attache of Pakistan, resident in Dhaka,

Bangladesh, met with Lieut-Gen Tin Ngwe, Commander-in-chief of SLORC's Air

Force on 13 May [NLM970514].

UNOCAL'S IMLE MEETS DAW SUU

On 16 May, John Imle, president of UNOCAL, met with National League for

Democracy (NLD) leader Daw Aung San Suu Kyi at her home. Imle gave

no details saying only that, ``They were useful discussions'' [LAT970515].

CHAVALIT VISITS RANGOON

Thai Prime Minister Chavalit Yongchaiyudh visited Burma 16-17 May. SLORC

Chairman Senior General Than Shwe and Chavalit discussed port construction,

industrial projects, foreign investment in Burma, and Burmese migrant

workers in Thailand. Gen Chettha, Thai Army Commander, accompanied him

[Reu970421, TT970419, B970515].

THAI PRESS CAN'T MEET DAW SUU

Thai press covering Prime Minister Chavalit's visit to Burma, 16-17 May, were

prevented from meeting with NLD members when they were issued two-day visas

instead of the usual 14-day visas. Journalists were told by SLORC to stay away

from the house of Daw Suu and that their movements would be monitored

[B970516].

NEWS SOURCES THIS ISSUE:

The ``Burma Alert'' is published monthly by the Associates to Develop

Democratic Burma Inc to provide data for the Burmese democracy movement.

In 1996, grants were received from the International Centre for Human Rights

and Democratic Development, Montreal, Canada; the Evangelisches Missionswerk,

Germany; the Friedrich Ebert Stiftung, Germany; and the National Endowment for

Democracy, USA. SUBSCRIPTIONS: Institutions - US\$100 (or C$100), Individuals

- US\$25 (or C\$25) per annum. Readers are also invited to become `Associates'

and participate in promoting democracy in Burma by contributing US\$100.00

(or C$100) per annum. All Cheques and money orders are payable to ADDB Inc,

P.O.Box 659, Shawville, Quebec J0X 2Y0, Canada. Fax: 1 (819) 647-5403.

E-mail: yawnghwe@hookup.net

End