Crony Capitalism And Burma's Power Woes

It is an open secret in Burma that the key to business success in the country is close ties to the ruling generals. But it is less well understood just how much this chronic cronyism affects the lives of ordinary Burmese.

Recently, however, the junta's habit of awarding lucrative contracts to regime-connected companies has been blamed for the ongoing failure of efforts to improve Rangoon's access to electricity. Officials say that a plan to build a pipeline from the Gulf of Martaban to Burma's former capital and largest city has stalled due to quality-control issues. The pipeline project, which is estimated to be worth about US $500 million, is being carried out by IGE Co Ltd, run by Nay Aung and Pyi Aung, sons of Minister of Industry 1 Aung Thaung.

IGE is a major supplier of substation and transmission line materials, oil and gas, and CNG filling stations for government projects.

With an election coming later this year, the regime promised to boost Rangoon's power supply by the end of April. For this reason, Minister of Energy Lun Thi pushed IGE to conclude the pipeline project one month ahead of its original deadline. Now accused of shoddy quality control in its work on the project, IGE is blaming Lun Thi for the problems it is now facing.

The delays could not come at a worse time. Burma is experiencing its most severe heat wave in years, straining the city's limited resources, including its access to water, which requires electric pumps to ensure an adequate supply.

"It's like living in hell," said one NGO worker. "The heat is intense, and we can't run our air conditioners or water pumps because of a lack of electricity."

Rangoon's power problems are nothing new. For the past two decades, people living in Burma's major cities have had to get by on just a few hours of electricity a day, while rural residents get even less, if they have any access at all.

While the Burmese regime tries to win support for its upcoming election, most ordinary people say they're more interested in seeing an improvement in their basic living standards. This is why officials involved with the pipeline project have recently vowed to complete the 288-km (179-mile) soon, according to Weekly Eleven, a private journal published in Rangoon.

Meanwhile, the practice of awarding major contracts to junta cronies continues. The regime recently gave exclusive Burmese broadcasting rights for the coming World Cup soccer tournament in South Africa to Yangon Entertainment, owned by Zaw Min Aye, son of the junta's No.5 general, Lt-Gen Tin Aye. This means that all sports journals will have to ask permission from the company to cover World Cup matches.

Besides being a key player in the entertainment industry, Zaw Min Aye manages an import-export firm, including a concession for importing motor vehicles, as well as IT and media businesses.

Zaw Min Aye's Pyae Swan Yee Co is one of richest firms in the country. The company is reportedly involved in business services, electronic components and supplies, printing and publishing. He is also the owner of the Rangoon-based Ecovision weekly as well as the newly licensed journal, Messenger.

The Irrawaddy, published in Chiang Mai, Thailand, has a content-sharing agreement with Asia Sentinel.