China's Energy Grab in Burma

Although an ostensibly civilian regime is functioning in Burma and there appear to have been elements of change taking place, with policy splits apparently developing between the top ranks of the civilian government and the hard-line military, there has been little indication yet that the lives of the common Burmese have got any better.

Most of the policy that was formulated by military rulers over the last four decades continues to dominate the government’s agenda in the capital of Naypyidaw, nearly 300 km north of Burma’s old capital city of Rangoon. Foreign direct investment, particularly in the oil and gas sector, is aimed at providing funds for the operation of the regime and the maintenance of a strong military rather than doing anything to improve lives.

A National Human Rights Commission has been established and Aung San Suu Kyi met with government leaders including President Thein Sein in August. The first article in 23 years by the Nobel Peace Prize winner was published in a domestic Burmese publication, which immediately was rapped on the knuckles by the government despite 10 months of negotiations with the government to allow its publication.

However, there is deep skepticism over the human rights commission and whether there is any real chance of reform.

“The international community might have seen an election in Burma last year to pave the way for a democratic regime, but it was simply a farce,” said Dr Tint Shwe, a Burmese political leader living in exile in New Delhi. “The election, in which authorities prevented pro-democracy icon Aung San Suu Kyi and her party National League for Democracy’s participation and the junta-dictated 2008 Burma Constitution can never bring change to Burma.”

Speaking to Asia Sentinel from New Delhi, Tint Shwe argued that all policies related to foreign investment remain the same as those put in place by the former junta, the State Peace and Development Council led by Senior General Than Shwe. The present government has not formulated any policies aimed at reducing poverty and misery because their policy is directed toward such economic activities as the China-sponsored multibillion dollar oil-gas pipeline project, Dr Shwe asserted.

The project, which is expected to be completed by 2013, is designed to pump crude oil and natural gas from the Arakanese coast of Burma to China’s Yunnan Province. The dual oil and gas pipelines, nearly 1,000 km in length -- 800 km inside Burma -- will cross the entire country, passing through more than 20 Burmese townships and many villages. The natural gas is to be pumped from the offshore Shwe gas fields of Arakan (also called Rakhine), whereas the oil will be offloaded from tankers from Middle East and Africa to the port in Arakan and then pumped to a Chinese refinery at Kunming, the capital city of Yunnan.

The rich Shwe gas fields have attracted the attention of oil companies from neighboring countries as well. Taking advantage of the absence of western companies because of international sanctions, Asian corporate giants including Daewoo International (South Korea), Oil and Natural Gas Corporation, Videsh (India), the Gas Authority of India Limited (India) etc have their own stakes in the Shwe fields.

The project is expected to supply around 12 million metric tons of crude and 12 million cubic meters of gas annually to China. Construction started on Burma’s Maday Island in the Indian Ocean during November 2009 over the objections of various human rights and Burma solidarity groups.

The US$ 1.5 billion project, which is a joint venture of Beijing-owned China National Petroleum Corporation and Burmese regime owned Myanmar Oil and Gas Enterprise, is expected to produce about US$1 billion in foreign-exchange annually to the Burmese government for the next 30 years.

“But thousands of families have been displaced due to the laying of pipelines for both oil and gas supply,” said Wong Aung, a Burmese human rights activist based in the northern Thai city of Chiang Mai. “The government has already confiscated huge volumes of farm lands in both the Arakan and Shan states and with the Magwe and Mandalay divisions for the project. We have reports from inside Burma that nearly 20,000 people have abandoned their places along the long pipeline route.”

Farmland and fishing grounds are being confiscated because of the project, Wong Aung said. “They are also being discriminated against in the compensation process. Workers are getting very low payment and the women are facing unequal wages and even vulnerability to the growing sex industry around the project.”

Wong Aung, the head of the Shwe Gas Movement, said the regime is keeping its governmental machinery alive through the oil and gas revenues, with most of the funds going to the defense sector, which sucks out more than 40 percent of its national budget. Shockingly only 2 percent of the budget goes to health and education of the desperately poor 50 million Burmese citizens, some 79 percent of whom live without electricity, according to Wong Aung. Thus the vast amounts of energy in the pipeline are being pumped across the entire country and the Burmese see none of it.

As the government is responsible for the pipeline safety and security, the regime has deployed over 6000 soldiers in 33 battalions along the corridor and on offshore construction facilities. The Army earlier launched series of offensives to neutralize ethnic militias in Kachin and Shan states.

The human rights commission has not brought any satisfaction to activists like Wong Aung, who said that ‘widespread land confiscation to make way for the pipeline corridor is leaving farmers jobless and fishing grounds are now off-limits, contributing to rising migration’.

“Local people are able to secure only low-wage, temporary, and unsafe jobs on the project and are not able to complain about working conditions or wages without retribution,” the young activist added.

A recent report titled Sold Out: Launch of China pipeline project unleashes abuse across Burma, which was prepared by Shwe Gas Movement and released in Bangkok on September 6, argues that the influx of male workers into the (pipeline) project area has increased the demand for sex workers. As the demand rises, the incidence of forced sex work and trafficking for sex work may also rise rapidly, stated in the report.

It also added that ‘if used domestically, the natural gas would address the chronic energy shortages and transform Burma’s failing economy’.