The Irrawaddy's weekly business roundup

By WILLIAM BOOT / BANGKOK
The Irrawaddy News

Burma Uses Singapore Banks to Dodge Sanctions

Burmese businesses are exporting large quantities of rice to neighboring Bangladesh using a payment system through Singapore that seeks to avoid economic sanctions, according to reports.

The military regime has given the green light to the export of up to 400,000 tones of rice. Much of it will be transported by sea from Sittwe on the Arakan coast to the Bangladesh port of Chittagong.

Burma is cashing in on the ongoing food shortages suffered by its neighbor in the wake of the devastating cyclone which wrecked large swathes of Bangladeshi rice cropland.

However, the exporters have told Bangladeshi buyers they will not accept letters of credit as payment, according to The Nation newspaper in Dhaka. This is because they fear interference from extended financial sanctions imposed by the United States and European Union countries, the paper said.

Burma’s ministry of commerce has told the Bangladeshi authorities that payments for rice should be made by bank transfers via Singapore—illustrating that the squeaky clean city state is still condoning business with the Burmese junta.
Bangladesh has recently made overtures to the Burmese regime to improve relations, including business links. Dhaka last month approached Naypyidaw about buying Burmese gas to make up for looming energy shortages in Bangladesh and said in return it could barter agricultural fertilizer.

Money Laundering Warning Issued on Tay Za

Reports that Burmese tycoon Tay Za may have been buying ships in South Korea have surfaced as a leading regional anti- money laundering expert urged caution in dealing with the businessman or his companies.

No one should deal with Tay Za—labeled by the U.S. Treasury Department as a “key financial front man” for the Burmese regime—without “seeking appropriate professional advice as a matter of some urgency” says Peter Gallo, who heads Pacific Risk, a Hong Kong-based consultancy on countering money laundering activities.

Tay Za heads up a list of businesses and associates put on a sanctions list earlier this month by the U.S. Office of Foreign Assets Control.

The new sanctions against Tay Za, who heads up the Htoo Group, and seven other Burmese named as close to the military regime—including Khin Lay Thet, the wife of the No.3 in the hierarchy, Gen. Shwe Mann—“could have further implications for any companies continuing to deal with Tay Za’s known associates, particularly in relation to his interests in aviation and the supply of aircraft parts.”

Thai Govt Moving Forward on Burma Hydro Dams

Suggestions that Thailand’s new government is having second thoughts about supporting major hydro-electric projects on key Burmese rivers are “rather unlikely,” according to energy industry analysts.

The Bangkok Post and some news agencies reported that the government of Prime Minister Samak Sundaravej had “put on hold” two large controversial hydroelectric schemes on the Salween River in northeast Burma.

The multibillion dollar projects, involving Chinese companies, have been mired in controversy over environmental damage risks and human rights abuses including forced evictions of people. Most of the anticipated 8,000 megawatt generating capacity— more than five times Burma’s current total capacity—is earmarked for Thailand.

“Thailand has already programmed these projects into its future energy needs,” said industry analyst Sar Watana in Bangkok this week. “And this government is more pro-business and less environmentally concerned than its predecessor.

The new prime minister has already stirred environmental controversy by proposing to siphon off water from the Mekong River to irrigate Thailand’s northeast.

Gold Prospectors Probe Deeper into Kachin

Along with news of yet another gems auction planned for Rangoon—the third in the last six months—comes disclosure that elements of the Burmese military are expanding gold mining in northern Kachin state.

Environmentally damaging gold prospecting has been going on around the town of Putao, but reports now say that possible rogue officers of the Northern Command have sanctioned digging higher up the Kasang River.

Methods of gold prospecting in Burma generally cause water and land pollution through the use of mercury to flush out the precious metal.

A report last year said that the number of gold mining sites in Kachin’s Hugawng Valley had increased to 31.

Now, new sites are being prospected within about 60 kilometers of the Chinese border in the vicinity of Naw Mung, says the Kachin News Group.

The report named a Col. Khaing Soe as heading up what it termed “illegal prospecting.”

The human rights NGO Alternative Asean Network on Burma says in an earlier report: “Large areas of land are deforested in order to make way for mining and building necessary infrastructure. The gold mining industry exposes local people to serious long-term risks from mercury poisoning.”