Weekly Business Roundup

By WILLIAM BOOT

European Study: Sanctions Strengthen Junta-Linked Business Elite

A leading European independent think-tank says the European Union’s economic sanctions against Burma have been a failure and may have actually strengthened the military government’s position.

The sanctions were “paved with good intentions” but have led to “stronger governmental control of resources and people, and increased interaction with, and influence of, primarily China but also India, Thailand, Russia and other actors, with the marginalization of European interaction and influence.”

The sanctions criticism is in a study by the Institute for Security and Development Policy, based in Sweden.

It calls for a rethink of the EU policy, leading to what it calls a “pro-active approach” to improving human rights in Burma.

The study says sanctions have had a negative impact on ordinary Burmese by stymieing trade and small private business, which in turn has undermined the middle class in favor of the junta elite.

“The sanctioning of products has created perverse effects on the country-of-origin principle where, as one example, raw gems from Myanmar [Burma] are transferred to Thailand and are legally renamed ‘Thai gems’ after they are processed. This weakens the local business in Myanmar in favor of Thai companies that dominate the transit trade.

“Moreover, it reduces the economic development of the middle class in Myanmar and makes political transition more problematic.”

Burma Rice Export Bid Blunted by Poor Quality Complaint

Burma’s bid to again become the “rice bowl” Asia as a major exporter of the crop has got off to a bad start.

Ghana has sent 15,000 bags of what it called inedible rice back to Burma because it was moldy and infested with weevils.

The rejection follows the formation of the junta-backed Myanmar [Burma] Rice Industry Association, which recently trumpeted ambitions to make the country a major rice producer and exporter once again.

Burma used to be the world’s biggest rice exporter but production has progressively declined during decades of military government and is now far behind several other rice-exporting countries in Asia.

However, efforts have been made by wholesaler groups to deliver more to overseas markets.

The junta is targeting 1 million tons of exports per year. The latest official figures claimed that more than half of this target had been achieved halfway through the current financial year, which ends March 31.

Most of Burma’s rice exports go to poor African countries, such as Ghana, and to neighbor Bangladesh, which cannot afford to pay for the higher quality produce of Thailand and Vietnam.

Burma’s export efforts have also been limited due to Cyclone Nargis, which devastated the main rice-growing region of the Irrawaddy delta.

Australia Steps up Aid to Burma, Help for Agriculture Sector

Australia is to increase humanitarian assistance to Burma by at least 40 percent, including aid to try to improve the country’s agriculture industry.

The Australian government will donate almost US $45 million a year for the next three years toward improvements in Burmese agriculture, health and education.

The announcement by Foreign Affairs Minister Stephen Smith comes amid criticism of Australia’s participation in a multinational military exercise in the Indian Ocean with Burmese junta forces.

Australia is currently donating US $27 million a year in aid, primarily in basic health care, including child and maternal health, via UN and Association of Southeast Asian Nations agencies.

But Smith said in a statement this week that isolation and sanctions cannot allow Burma “to completely atrophy to the ultimate disadvantage and cost of its people.

“Australia will accordingly increase its assistance to Burma over the next three years to around A$50 million annually.

“Alleviating humanitarian needs will remain an important goal and focus of this expenditure. But the government has decided that Australia’s program will also include capacity-building elements, addressing the long-term challenges facing the Burmese people.

“This will involve carefully targeted interaction in areas of great need like health, education and agriculture.”

It’s not clear how the money intended for agriculture and education will be used.

A UN report in January said Burma’s post-Cyclone Nargis recovery, especially in its agriculture sector, has been limited because a lot of promised international aid has never materialized.