Subject: The BurmaNet News February 7, 1997 Date: Fri, 07 Feb 1997 16:42:23 -0800 (PST) From: strider@igc.apc.org Reply-To: Conference "reg.burma" To: Recipients of burmanet-l ------------------------ BurmaNet ------------------------ "Appropriate Information Technologies, Practical Strategies" ---------------------------------------------------------- The BurmaNet News: February 7, 1997 Issue #631 HEADLINES: ========== INT’L HERALD TRIBUNE: OPINION- INVESTMENT IN BURMA THAILAND TIMES: MINORITY GROUPS PLAN ANTI-SLORC TACTICS NATION: KAREN REFUGEES UNDER THREAT OF FURTHER ATTACKS WASHINGTON POST: UNTIL THEY GET DEMOCRACY REUTER: THAILAND'S 300M BAHT LOAN TO MYANMAR THE NATION: THE BALANCING ACT OF ASEAN-EU RELATIONS THE NATION: PEPSI PULLOUT DOES NOT JAR UNOCAL CONSCIENCE BKK POST: CHETHA UPSET OVER BORDER ATTACKS KNU REPORT: SITUATION INSIDE BURMA ABSDF:REPORT-COMBING OPERATION IN TUNZAN TOWNSHIP RANGOON RADIO MYANMAR: SLORC HOLDS NEWS CONFERENCE ASIA TIMES: THE PARTY LINE ON DEVELOPMENT BKK POST: SMUGGLING DEPRESSES GARLIC PRICE ------------------------------------------------------------------------------- INT’L HERALD TRIBUNE: OPINION-A CASE FOR INVESTMENT IN BURMA February 6, 1997 by John Imle RANGOON -- The participation of Unocal Corp. of the United States in a $1.2 billion project to develop a world-class natural gas field in the Andaman Sea off Burma and pipe the gas to neighboring Thailand for power generation has plunged the company into controversy. At its center is the question of whether engagement with Burma is preferable to isolation in bringing about positive change and improving living conditions and human rights. This is a legitimate debate and Unocal respects the views of those who disagree that increased business improves human conditions. But many thoughtful observers, as well as the members of ASEAN, the Association of South East Asian Nations, are committed to economic and diplomatic engagement with Burma. We in the United States are too often under intense fire from politicians and human rights activists who promote isolationism. They want the U.S. government to implement sanctions, banning future investment in Burma. If they have their way, Unocal and other American companies will be forced to pull out. Advocates of sanctions believe this would bring about a change of government in Rangoon. But the history of sanctions against other countries clearly suggests that the critics of U.S. investment in Burma are wrong. Sanctions are counterproductive. They hurt people, not regimes. Consider nearly four decades of failed U.S. sanctions against Cuba. Sanctions have damaged the economies of Cuba and other countries, and hurt ordinary people, but their leaders remain entrenched. History also shows that real, long-term political change must come from within. Economic reforms almost always precede political reforms. Economic progress, fueled by foreign investment, provides the foundation for more democratic and open societies. This has been Unocals experience over 30 years as an investor in large energy projects in Indonesia, Thailand and the Philippines. Unocals Burma project is basically a 30-year gas supply agreement between the Burmese and Thai governments the first such cross-border commercial energy agreement between them. It is a contract that will contribute to long-term regional cooperation between two nations that have not always been on the best of terms. The first gas is scheduled to be piped to Thailand in mid-1998. Currently, all the project partners are providing capital. The earliest financial break-even point would be 2001, more likely 2002 or later. Early proceeds to Burma from sale of the gas to Thailand are already being earmarked for other energy projects that would provide an even broader underpinning for manufacturing and agriculture. The construction of the onshore section of the pipeline in Burma is creating jobs, small industries and new opportunities for the 35,000 people who live in the area a very poor region. Unocal and its partners are providing improved medical care, better schools, and sustainable livestock and agricultural development. Unlike many of our critics, I have been to Burma and experienced firsthand the gratitude of the villagers for our presence. These people Mon, Burmese and Karen are also stakeholders in the project, a fact that should not be forgotten in this international debate. There is also a wider issue at stake for foreign investors and exporters. The growing trend toward using the business community as an instrument of foreign policy must be halted. Economic isolation of Burma will not work. Three decades of self-imposed isolation have made the country one of the poorest in the world. To reimpose isolation would be a cruel trick on the 50 million people of Burma, many of whom are just beginning to benefit from economic opportunity and broader international contacts. The U.S. government should keep the door open to Burma, using its diplomatic skills and taking advantage of the American Embassy in Rangoon. Diplomacy and business should play complementary roles in building economies and opening societies. The writer, president of Unocal Corp. of the United States, contributed this comment to the International Herald Tribune. ******************************************** THAILAND TIMES: BURMESE MINORITY GROUPS PLAN ANTI-SLORC TACTICS February 6, 1997 By Assawin Pinitwong TAK; Ethnic minority groups in Burma yesterday gathered to begin discussing their political and military strategies against the Burmese junta, an informed source from the Karen National Union (KNU) said yesterday. Seven KNU representatives based in Thailand, led by KNU Supreme Commander Tamalabaw, yesterday left their Teekaper stronghold to join the convention. They reached the border via the Thai districts of Tha Song Yang in Tak province and Mae Sariang in Mae Hong Son. The source said the meeting was held in Kayah state opposite Mae Hong Son province's Khun Yuam district. The KNU's involvement in the meeting, convened by the Karenni National Progressive Party (KNPP), comes after a series of clashes between the border region's ethnic minorities, with conflict spilling over onto Thai soil. Representatives of the various ethnic groups will discuss what line of action to take against the State Law and Order Restoration Council (SLORC), which has violated ceasefire agreements made with Burma's minorities. The Kayah have been particularly affected by Slorc outrages, following the stationing of Burmese troops in Kayan state. A road through the state, currently being constructed by forced laborers under Slorc supervision, is thought to be designed to facilitate Slorc military action against the Kayah. KNU sources have said that Slorc troops participated in the arson attacks last week on two Thai refugee camps in which more than 8,000 Karen refugees were left homeless. Most of the camp's residents were relatives of KNU members. ********************************** NATION: KAREN REFUGEES UNDER THREAT OF FURTHER ATTACKS FROM BURMA February 6, 1997 Yindee Lertcharoenchok MAE SOT, Tak ­ Armed Karen renegades who joined Burmese troops in raids on three refugee camps in Tak province last week have threatened to renew their offensive before Feb 17 in a bid to force tens of thousands of Karen Refugees back to Burma. Karen and Thai officials said yesterday that the Democratic Karen Buddhist Army (DKBA) suffered heavy casualties from Thai artillery between Jan 30 to Feb 2 while trying to cross the Moei River to re-launch attacks on Mae Hla camp in Tha Song Yang district. The Moei River is a natural border between Thailand and Burma. They said six DKBA soldiers were killed and 32 injured, five seriously. The Burmese and DKBA troops made a lightning assault on Jan 29 on Mae Hla, the largest camp housing over 25,000 refugees, but their attempt to burn down the site was foiled by the intervention of the Karen National Union (KNU) and Thai Border Patrol Police. Separate raids, however, succeeded in the burning down of a large portion of Huay Kalok camp, or ''Wangka", in Mae Sot district and Huay Bong, or ''Don Pa Kiang", in Mae Ramat district, leaving about 10,000 refugees homeless. According to the sources, who intercepted Burmese radio communications, the DKBA temporarily called a halt to their operations due to the rate of casualties. After failing to raze Mae Hla, four key DKBA commanders involved in the incursions ­ Maung Soe, Maung Chit Tun, Moe Kyaw and Sa Tuey ­ travelled to Ta Lae to meet Burmese commanders to assess and review their offensives and strategy. ''For the time being they have retreated, but they have threatened to return before Feb 17," said Padoh Law Thee, the Karen chief at Mae Hla. The attacks on the camps prompted relief agencies and the UN High Commissioner for Refugees to urge the Thai government to relocate about a dozen Karen camps, mostly those close to the border, further into Thai territory for safety reasons. Army Commander-in-Chief Gen Chettha Thanajaro agreed and asked the government to consider the relocation plan. In an interview yesterday, Mary Ohn, chief of Huay Kalok camp, said the 6,700 residents do not want to move elsewhere. She believes that the Burmese and DKBA would follow and attack even if they were relocated. She said the refugees have lived with the fear of DKBA attacks for a long time, but now the camp has been raided and burned, they have heard no more threats against them. ''We [the refugees] have lost everything we had after 14 years of living in Wangka. Now we have nothing more to lose, so we don't have to be afraid of renewed attacks," Mary Ohn said.(TN) ************************************ WASHINGTON POST: UNTIL THEY GET DEMOCRACY February 3, 1997 (excerpt) By Fred Hiatt FROM one of the deepest shadowlands, the lush Asian nation of Myanmar, came a soft-spoken former graduate student of English literature named Aung Naing Oo. Eight years ago, at the age of 24, he joined thousands of his comrades to demonstrate against Myanmar's dictatorship. When the military regime cracked down, massacring hundreds, he escaped through the jungle. He has lived ever since on the Thai-Burma border, seeking to support and revive the democracy movement in his country. He cannot return or even speak to his parents by phone, for fear of subjecting them to retaliation. Why does he do it? "We have to keep on going until we get democracy," he said. The rightful leader of Myanmar, Aung San Suu Kyi, offered a more eloquent answer. She overwhelmingly won an election in 1990, but the military regime refused to cede power and has kept her in jail or under virtual house arrest ever since. She says that Myanmar's many brave students prove that "man is not an economic animal interested only in his material well-being". "Happiness takes on many forms. The danger of standing up for basic human rights in a repressive society is preferable to the safety of a quiescent life in servitude." Aung San Suu Kyi put these remarks into an acceptance speech last Sunday at American University, which awarded her an honorary degree. She asked Americans to realize that U.S. companies that invest in Burma-- she was too polite to name the chief actor, Unocal -- are helping only the regime, not her country. ************************** REUTER: THAILAND'S 300M BAHT LOAN TO MYANMAR February 5, 1997 [BANGKOK] The Thai cabinet yesterday approved a finance ministry proposal to grant a 300 million baht (S$16.3 million) soft loan to Myanmar, an official said. The loan comes from a fund to help restore the economies of Thailand's Indochinese neighbours, Deputy Finance Minister Thawatwong Na Chiangmai said. The 20-year loan is interest free for the first 10 years, with annual interest for the remaining time of 1.5 per cent, Mr Thawatwong told reporters. -- Reuter *************************************** THE NATION: THE BALANCING ACT OF ASEAN-EU RELATIONS February 6, 1997 Regional Perspective, Kavi Chongkittavorn Future relations between Asean and EU are now hanging in the balance because of the sensitive issue of Burma. The breakthrough of Asean-EU relations in Karlruhe, Germany, in 1994 provided the much needed momentum to propel the stalled bilateral ties. The Asean-EU improvement led to the first Asia-Europe Meeting (Asem) last March in Bangkok, but the Asean-EU friendship once again is subjected to the issue of human rights and democracy. For years, the EU has avoided discussing the situation in East Timor, even though Portugal, the former ruler of this island, has been trying hard to break rank. It has succeeded so many times that Asean has warned the EU that their cooperation would suffer if East Timor continued to be a point in their relations. Both Asean and the EU blew their tops in 1991 at the Luxemburg meeting when their relations reached an all time low. As far as the issue of Burma is concerned, it has been featured in Asean-EU ties for quite some time now since it first appeared in the post ministerial meeting between Asean and the representatives of EU in 1991 at the Asean foreign ministerial meeting in Kuala Lumpur. Along with the US, the EU adopted a hard-line attitude against Slorc. It urged Asean to influence the military regime to respect human rights and treat the opposition parties humanely. But Asean responded with its statement that Asean has no business to interfere with the internal affairs of Burma and it is the Asean way of dealing with Burma. In the past few years, while Asean members defined their policies towards Burma that has resulted in closer ties with that country, EU nations have been plagued with divisions between liberal and conservative members on what types of sanctions should be imposed on Burma. Meanwhile, EU investments in oil industries increased. German Foreign Minister Klaus Kinkle must be given credit for breaking the ice with Asean in elevating bilateral ties to a higher plane at the Karlruhe meeting. When he served as EU foreign minister, he did not take up sensitive issues on human rights and democracy including the situations in East Timor or Burma. Instead, he focused on how to increase trade and economic ties and improve mutual trust. But when James Leander Nicolas, the honorary consul of Norway and contact person for Denmark, Switzerland and Finland, died in custody in Rangoon last year, the EU position on Burma was shaken in major ways. Although Denmark failed to convince the rest of the EU to impose harsher sanctions, it continues to lobby other EU countries to adopt a stronger attitude towards the Burmese military regime. At the Asean-EU ministerial meeting in Singapore next week, the Burmese issue will be discussed. The bone of contention between EU and Asean is the latter's plan to take in Burma as member, along with Laos and Cambodia, this July. Although, the EU and other Western countries are familiar with Asean's position on Burma, they were caught off-guard with Asean's ambitious plan to include all Southeast Asian countries this year. On its own, the EU might not have the leverage to bargain with Asean, let alone pressuring Asean on specific political issues such as East Timor. However, with the additional top-level Asem forum, Asean's advantage against the EU is not as strong as it used to be. At present, Slorc leaders are not allowed to travel to the EU because of visa restrictions and sanctions introduced last year. If Burma is admitted as a member of Asean as planned, Burmese officials as part of the Asean delegation will not be able to enter the EU. Certainly, as a member of Asean, Burma's admission to Asem will not be easy as it would need a consensus from all current members. Now that the admission of Burma into Asean has been billed as an East-West confrontation, it is hard to see how Asean will backtrack its position. At a recent senior officials' meeting of Asem in Dublin, representatives from Asean have been told by their EU counterparts that Burma's Asean membership will definitely affect its overall ties with EU. Since 1994, the Asean-EU relationship has been kept trouble-free because EU presidencies were among the European countries ­ including Germany, France, Italy, Spain, and Ireland ­ that wanted to strengthen ties with Asean. However, the mood of the EU can also change depending on which nation takes up the rotating presidency every six months. Indonesia informed the EU in Dublin that it would walk out from the Asean-EU ministerial meeting if East Timor was raised. Jakarta reiterated that policy again a few days ago. On the converse, Portugal has been equally adamant that it will raise the issue of East Timor. Be that as it may, it is not the end of the problems that Asean-EU will face in the coming years. In addition to Burma and East Timor, Asean must also convince the EU, its oldest dialogue partner, that the current Asean-EU forum is useful and pivotal to promote a multi-faceted cooperation, especially Asean-EU trading issues. With Asem leaders meeting every two years with the highest mandate, it can dilute the current Asean-EU forum. Since Asean-EU deals with economic and cultural aspects of cooperation, there has been some discussion among the EU leaders that Asem could be very well devoted to political dialogues. The EU views the summit meeting as the best way to build up confidence and work out solutions to on-going conflicts and potential disputes. For instance, the relations between North America and Europe are stronger because they are able to deal with all issues without shying away. In the first Asem meeting, the sensitive issues of human rights, democracy and social rights were not discussed. At the London meeting, which is scheduled for May, the EU feels that political dialogue must be established at the highest level to encompass sensitive issues. The London agenda will include the future of Asem and matters related to the Asean Regional Forum, Korean Energy Development Organisation, expansion of the North Atlantic Treaty Organisation, and terrorism. The Singapore meeting can determine the future direction of Asean-EU as well as Asem. One thing is obvious: economic cooperation, as advocated by Asean, alone cannot and will not sustain the future cooperation between the two continents as it would have to encompass a broader scope of cooperation in the fields of politics, security, and culture.(TN) ************************************ THE NATION: PEPSI PULLOUT DOES NOT JAR UNOCAL CONSCIENCE February 6, 1997 The US oil company digs in its heels despite Burma's human rights record, writes Inter Press Service's Farhan Haq in New York. A California-based petroleum company is vowing to maintain and expand its operations in Burma, despite US criticism of the ruling military regime there. The California-based Unocal Corporation, already the largest US investor in Burma, has announced plans to explore and develop offshore gas fields, even as other companies ­ most recently Pepsi ­ have said they will sever ties with Rangoon. In deciding to expand its activities in Burma, Unocal is taking a chance on the ruling State Law and Order Restoration Council (Slorc), which is widely criticised for its 1990 crackdown on Burma's democratic movement and for allegations of drug dealing and forced labour. The US State Department last week charged Slorc with escalating a campaign of ''rolling repression" last year, and added that human rights violations in the country increased in 1996. Other groups, including Human Rights Watch/Asia, have charged Rangoon with using forced labour to build infrastructure in its bid to woo foreign investors. Last Oct 3, 15 ethnic Karen Burmese citizens filed a lawsuit against Unocal, claiming the company should share responsibility for rights violations in Burma, including the alleged forced labour of some 500,000 Burmese. Unocal is adamant that its own relations with Slorc are untainted by such allegations. David Garcia, senior public relations representative for Unocal, said the company's main project ­ a gas pipeline to be constructed at Yadana jointly by the Burmese government, Unocal, and the French company Total ­ is ''an above-board project". ''There have been no human rights violations with regard to the [Yadana] project," Garcia said. ''There's been a lot of misinformation." He said that Unocal has provided access to the area to international journalists, to demonstrate that the site is free of forced labour or other violations. Unocal is confident of the record of labour conditions in all the areas where it does business, he said. That may be beside the point, countered Mike Jendrzejczyk, Washington director for Human Rights Watch/Asia. ''Any foreign investment in Burma right now will benefit from the use of forced labour to build infrastructure, such as hotels and roads," he argued. As a result, the rights group is asking all foreign investors to shun Burma as long as current human rights conditions prevail. The US government, although sharply critical of Burma's record, has distanced itself from making any evaluation of whether US companies should stay away from Rangoon as a rule. ''We don't encourage American investment in Burma," State Department spokesman Nicholas Burns said on Monday in response to Unocal's announcement of expanded gas exploration. ''We don't actively discourage an American company from going in, but we don't encourage it, either ... it's Unocal's decision if it wants to go in." ''Clearly they decided they are going to take the risk," Jendrzejczyk said of Unocal. For many companies, he noted, political repression in Burma has presented a complex dilemma: either they go in, and face poor public relations and political uncertainty, or stay out and see Japanese and other companies rake in potentially lucrative deals. Many companies have had second thoughts in recent weeks as public pressure has mounted against companies dealing with Burma. Several US cities, including Madison, Wisconsin, and Berkeley, California, have enforced ''selective purchasing laws" which forbid city contracts to firms dealing with Rangoon, while a student divestment movement ­ comparable to the one against US investments in South Africa a decade ago ­ has surged. That pressure last week prompted Pepsi to join such companies as Levi-Strauss, Reebok and Macy's in leaving Burma. Left behind in Burma are several oil and gas companies, including Unocal, Total and the US-based Texaco and Atlantic-Richfield Company. But the price of staying has included an increase in criticism directed at them, including charges that their practises are helping the military junta stave off the growing clamour for democracy in Burma. ''The [Yadana] pipeline, when completed, will be the Slorc's single largest source of foreign currency," financier George Soros said last month. ''Nothing would hurt the Slorc more than the oil companies' suspending operations on the Yadana pipeline under the pressure of public opinion from Europe and the United States. The oil companies bear a grave moral responsibility." ************************************ BKK POST: CHETHA UPSET OVER BORDER ATTACKS February 6, 1997 It might be time for the Third Army Region to revamp its military operation along the border area in Tak Province after it was caught off guard when forces from the Democratic Karen Buddhist Army launched cross border attacks last week on three Karen refugee camps in Mae Sot, Mae Ramat and Tha Song Yang districts. Army Commander Gen Chetha Thanajaro was reportedly upset with the incident as local security forces were not aware of the attack which left 10,000 Karens homeless and a Thai villager was accidentally killed during the DKBA assault in Mae Ramat. The area is under direct supervision of the fourth regiment led by Col Suvit Maenmuen. However, no deployment of Thai security forces were made near the refugee camps when DKBA launched its attack. Gen Chetha said the army would not make any excuse for the incident and vowed to take tough measures against the DKBA if they made another cross border attack. Last week's incident was not the first of its kind and several local observers did not think that it would be the last as long as the army commander did not initiate a move to reorganise the 3rd army, led by Lt-Gen Thanom Watcharapuk. When Lt-Gen Thanom was picked by then army commander Gen Wimol Wongwanich in late 1995 to become the Third Army Region commander it caused much surprise to a number of military observers who doubted Gen Wimol's judgment as they did not regard the new commander's ability very highly. The commander was a former military graduate from Chulachomklao Military Academy Class 9 whose key members include Supreme Commander Gen Mongkol Ampornpisith and Gen Chetha. A local observer said Gen Chetha should know well where the problem lies but whether he would dare to make any significant move was another matter. ***************************************************************** KNU REPORT: SITUATION INSIDE BURMA February 5, 1997 From: So_Nou@sala.icn.net (So Nou) When the State Law and Order Restoration Council (SLORC) troops and some Democratic Kayin Budhhist Army (DKBA) raided and set three refugee camps on fire on January 28,1997, the whole world was aware within a few hours but brutal actions like these done in the remote areas in Burma, especially in Karen State, are unknown to the world. The villagers have been suffering silent persecution from their tormentors since the early days of the Civil War in 1949. At midnight on January 29,1997, the Slorc troops of Infantry Battalion 19 and some DKBA raided Maw Thay Der village in Papun district and looted 360 KyatS (Burmese currency) from Naw To Paw Say, 1200 kyats and 10 silver coins from Saw Blaw Pu and 5000 kyats and a radio from Saw Pa Bu. They also arrested five villagers, namely, Saw Pa Meh, Saw Pa Dah, Saw Pa Yoh, Saw Yoh Po and Saw Plaw Htoo, tied them and took them back to Papun, a major town in the area. The Slorc troops in the area and the DKBA are destroying rice fields, setting villagers' barns on fire, forcing villagers to be porters, using villagers as mine sweepers, burning villages and forcibly relocating villagers. The persecution is more than these villagers could bear so they flee to Thailand to seek refuge. On January 29, 1997, 574 villagers from Papun district entered the refugee camps in the north. KNU Information Center ******************************************* ABSDF:REPORT-COMBING OPERATION IN TUNZAN TOWNSHIP February 6, 1997 On 22nd January 1997 one platoon belongs to (269) Burma regiment led by Capt. Win Myint came to Haipi village of Tunzan township around 9:00 a.m. and did combing operation. All the gents including village chief were forced to stand in the open field as punishment and soldiers also did slapping, punching and kicking with jungle boots to them. The reason is that the Burmese Army was very much angry with the villagers for not reporting them about the entry of Chin National Army (CNA) to that very village. The soldiers confiscated 50,000 Kyats from village fund, one tape recorder, one type writer, one amplifier and some paper documents from the church and left the village around 5:00 p.m. After three bomb blasts took place in Tunzan township in the month of January 1997 Burmese Army planned for combing operation through out the Tunzan township. News and Information Unit ABSDF (Western Burma) **************************************** RANGOON RADIO MYANMAR: SLORC HOLDS SEVENTH NEWS CONFERENCE February 1, 1997(translated from Burmese, abridged) The Information Committee of the State Law and Order Restoration Council [SLORC] held its seventh news conference at 0900 today. Speaking at the news conference, Maj. Gen. Aye Kyaw, head of the SLORC Information Committee and information minister, said in accordance with the objectives of the news briefings, the true happenings in the country will be presented at this news conference for the whole world to know. Next, Brig. Gen. Maung Kyi, deputy minister of social welfare, relief, and resettlement, explained matters relating to the 14th UN Session of the Committee on the Rights of the Child held in Geneva, Switzerland. Then, Col. Kyaw Thein, head of department from the Defense Ministry's Strategic Studies explained the ABSDF's underground activities. After that Police Lt. Col. Khan Aung from the CCDAC explained facts on the narcotic drugs destruction matters. Questions posed by Local and foreign journalists were then answered by responsible personnel. Firstly, U Maung Maung from JIJI asked about the situation of the peace talks with the KNU [Karen National Union] and the Foreign Exchange Certificates, FECs, activities concerning the Law Amending the Central Bank of Myanmar Law. Col. Kyaw Thein, head of department from the Defense Ministry's Strategic Studies, replied that they do not have anything positive yet on the peace talks with the KNU. At present some influential persons are holding detailed discussions with KNU leaders at their headquarters and are trying to persuade them to return to the legal fold but the results are not yet known. They have reached the KNU headquarters about three days ago and discussions are still going on. We have to await for the outcome. U Kyi Aye, Governor of the Central Bank of Myanmar, explained the Central Bank of Myanmar has been issuing licenses to dealers in foreign exchange. There are four types of licenses. The first is authorized dealer license. It is issued only to banks which can buy and sell foreign exchange. The second is license for shops which sell their commodities in foreign currency. They can accept foreign currency and then deposit at the respective banks. The third is the license to sell FECs. That allows the licensees to change dollars into FECs. The fourth is FEC changer license for Kyats [Burmese currency]. The licensee can buy and sell FECs in Kyats. The law was amended to enable authorities to take appropriate action against those who carry out illegal foreign exchange transactions. Gary Thomas of VOA asked what the government's reaction was to the U.S. State Department's issue of the Human Rights report. Foreign Minister U Ohn Gyaw replied that they have received an advance copy of the State Department Human Rights report on Myanmar. In as much as what we can assess at the preliminary stage, the report has not been duly substantiated like in the report of last year, it contains many points, and many instances including certain allegations of gross violations of human rights. He said we hope that with the practical and pragmatic approach to the situation in our country of the present American Embassy charge d'affaires, the report issued by the State Department, which is a misleading one, will gradually improve. That is my answer. Mr. Rajan Moses from Reuters News Agency asked about the student unrest that happened last month and ramifications there after, and the pullout of Pepsi Cola and its consequences. Deputy Education Minister Dr. Than Nyunt explained that the suspended classes of some institutions will resume at the appropriate time. Foreign Minister U Ohn Gyaw next replied if Pepsi is determined to withdraw, that is their own problem. It will not affect us and our climate of foreign investment. And I would like to refer to a news item emanating from Bonn, Germany a few days ago. The news reported that German companies defied the pressure put on the companies by the State of Massachusetts in the United States. Of course, this is a step whichever and whatever business circle or any business body would decide. U Sein Win of KYODO then asked about the position of foreign investment and the major investors in Myanmar. U Maung Maung Yi, joint secretary of the Myanmar Investment Commission [MIC] answered that up to the end of January 1997 the MIC has approved 237 foreign-direct-investment projects amounting to US$ 5.36 billion. The largest investor in Myanmar is now Singapore which has invested in 55 projects amounting to US$ 1.21 billion. In answering a question posed by U Aung Shwe Oo of Nippon TV, MIC Joint Secretary U Maung Maung Yi replied that he think he should answer the question with statistics. In the 10-month period from April to January of the last financial year 1995-96, we have approved 35 foreign direct investment projects and the approved amount of investment totalled only US$ 514 million. But for the current financial year from 1 April [1996] to end January 1997, a period of 10 months, we have approved 68 foreign projects and received a total foreign investment of US$ 2.12 billion. In replying to a question by Steve Brookes of ASIA TIMES on the situation of foreign banks in Myanmar and when international banks will be able to set up full branches, Central Bank Governor U Kyi Aye replied that we have now 20 local banks and 44 foreign banks which have opened representative offices in our country. We have allowed foreign banks to open representative offices only. We have envisaged three phases. In the first phase we allow local banks to open and permit foreign banks to open representative offices. We have now come to the second phase where we will allow foreign banks which already have representative offices in our country to establish a joint venture with our local banks. In fact four MoUs [Memoranda of Understanding] to form joint ventures have already been signed -- the first is between Mayflower Bank and the Siam City Bank, the second is between Tun Foundation Bank and the May Bank, the third is between Asia Wealth Bank and the Thai Farmers Bank, and the last one is between Yoma Bank and the Fuji Bank. It is a big combination because Fuji is a very big and famous bank in Japan and the name Yoma is a very famous mountain range in our country. Only in the last and final phase will we allow foreign banks to open full fledged branches. But there is no problems for those foreign investors in our country as most of the investors who come to Myanamr they not only bring their equity or capital but also bring borrowed funds from abroad. In responding to Fuji TV's Mr. S. Moriyama's question about the recent attack on a refugee camp on the Thai side, Col. Kyaw Thein answered that it was just like a feud between two separatist [Karen] factions. Mr. Teiichi Miyauchi of NIHON KEIZEI SHIMBUN posed a question on the investigation concerning the explosion in Kaba Aye Pagoda on 25 December. Col. Kyaw Thein answered that investigations are still being conducted by the Special Investigating Committee formed by the government. Mr. Gary P. Thomas of VOA asked whether there would be any changes in the relations between Myanmar and the U.S. with the new Secretary of State Ms. Albright. Foreign Minister U Ohn Gyaw answered we look forward to further promote the existing relations between the United States of America and Myanmar, and of course we wish her well -- and then, she will be busy with more important issues around the world than dealing with Myanmar, and we have a good charge d'affaires here; he will be taking up most of the responsibilities Ms. Albright will be doing. In reply to Mr. Rajan Moses of Reuters question about Radio Free Asia's plan to start beaming to Burma in early February, Foreign Minister U Ohn Gyaw replied that we have registered our displeasure, and then we protested the establishment of this radio s tation. Thank you. Mr. Alexander P. Tkachev of Novosti posed a question to the foreign Affairs and said not long ago an agreement has been signed between Myanmar and the Russian Federation on combating illegal drug-trafficking and asked whether there are any other areas of cooperation between the two countries. Foreign Minister U Ohn Gyaw replied that Myanmar since 1989 has started to set down a sub-regional strategy particularly in the field of anti-narcotic measures. First with Thailand and then India, and later on with Laos and China. Basically this was on the basis of exchange of information and establishment of pilot projects near the border areas. That is in complementary with our national strategy for total eradication of poppy plantations. And this is one of the main aims as a national duty that have been adopted for eradication of poppy plantations, and the border areas and national races development project. Gradually we expect to sign this agreement with Bangladesh and other countries also. At the same time, in the former Soviet Union, especially the Russian Federation, we have some contacts by exchange of visits and the agreement that we signed is for cooperation and exchange of information in regard to anti-drug measures. Of course, being two friendly countries there could be cooperation in many fields because we are opening up, and there will be investments and exchange of visits will take place and particularly, their concern, I believe, is the drug route towards their country. Of course, as far as we are concerned we would like to help, promote further our participation in the total eradication of poppy plantations. Thank you. ************************************* ASIA TIMES: THE PARTY LINE ON DEVELOPMENT February 6, 1997 Stephen Brookes, Yangon Myanmar officials need to be "judicious" in how they spend limited national funds, and make more concerted efforts to develop the country, the head of Myanmar's ruling State Law and Order Restoration Council said. According to the official media on Tuesday, Senior General Than Shwe told a top-level SLORC meeting on Monday that success could not be achieved with "nominal and perfunctory performance of duties". Priority must be given to commodity production, Than Shwe said, "keeping careful control of funds to see that they are not used unnecessarily or untimely, but systematically and effectively". Exact figures on internal finances, especially foreign currency reserves, are difficult to come by, but the SLORC last year outlined a state budget of 163.9 billion kyat (US$980 million dollars at the unofficial exchange rate) for the financial year ending on March 31, 1997. The budget, which includes earnings and expenditure on state enterprises, forecast receipts of 133.9 billion kyat, to produce a budget deficit of 30 billion kyat. The government claims GDP grew 9.8 percent in financial 1995/96 and set a target for 6.1 percent growth in 1996/97. Set Maung, a key economic advisor to the government, has discussed the inflationary strains that infrastructure development was putting on the government. "It costs a lot of money to build dams and roads," he said. "It's expensive, and we don't get any help from the international community. We have to use our own resources. Naturally, it's a strain on the budget." The budgetary deficit was creating unavoidable inflationary pressure, Set Maung said. "We are looking at inflation as a barometer, and we will allow it up to a certain stage," he said. "More than that, it will feed on itself and become difficult to control." Set Maung said the inflation rate of 25 to 30 percent was acceptable, given the circumstances. "You have to think of whether you're going to have a little inflation and grow, or no inflation and recession. We've got to grow." Than Shwe told SLORC that "as we are building the nation coping with all kinds of situations, it is necessary to carry out assigned tasks exerting physical and intellectual efforts innovatively, with tenacity and goodwill".(AT) ********************************** BKK POST: SMUGGLING DEPRESSES GARLIC PRICE February 6, 1997 Nussara Sawatsawang, Mae Hong Son Mae Hong Son, in common with other northern provinces, faces an influx of smuggled garlic from Burma, but no preventive measures have been taken. Under international trade rules Thailand cannot deny products from Burma, which is also a member of the World Trade Organisation, explained provincial commerce official Taweesak Lertpiyathat. It is difficult to prove the "nationality" of the garlic, Mr Taweesak said. Discriminating against member states is contrary to the WTO's national treatment regulations. Garlic and soybeans are Mae Hong Son's main crops. Tak and Chiang Mai are also unable to stem the flow of smuggled garlic. Local garlic prices have dropped to five baht a kilo, after reaching 18-20 baht last year. In Tak it is reported that Burmese garlic is being brought in at the rate of 20 to 30 tonnes a day. It is expected that garlic production will reach two million tons this year, up slightly on last year's 1.6 million. Mr Taweesak said farmers are growing more garlic because of last year's high prices.(BP) *******************************