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The BurmaNet News February 7, 1997



------------------------ 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

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)

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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)

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