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The BurmaNet News, July 8, 1997




------------------------ BurmaNet ------------------------     
"Appropriate Information Technologies, Practical Strategies"     
----------------------------------------------------------     
 
The BurmaNet News: July 8, 1997        
Issue #767

HEADLINES:        
==========   
REUTER: ASEAN DUE TO MAKE JOINT STATEMENT 
JAPAN TIMES: JAPAN TO JOIN EU ACTION AGAINST MASS. LAW
BORDER SOURCE: SITUATION UPDATE
BKK POST: CHETTHA FIRM ON REFUGEE POLICY
BKK POST: CAMP BIRTHS RAISE ALARM
PRESS RELEASE: NATIONAL EDUCATION ASSOCIATION
THE NATION: IDLE BURMESE STUDENTS DREAM
BURMA DEBATE: WAITING FOR WINDFALLS WON'T HELP 
BURMA DEBATE: FOREIGN EXCHANGE CERTIFICATES 
BKK POST: UK CLOTHING FIRM CUTS BURMESE TIES
REUTER: SLORC SAYS YADANA GAS PIPELINE ON SCHEDULE
THE NATION: THAI-BURMESE PIPELINE MAY COST FAR MORE
TT: INTERNATIONAL STUDENTS TO PROTEST ASEAN DECISION
ANNOUNCEMENT: NEW ENGLAND BURMA ROUNDTABLE / JULY
----------------------------------------------------------------- 

REUTER: ASEAN DUE TO MAKE JOINT STATEMENT ON CAMBODIA
July 7, 1997

JAKARTA- The seven members of the Association of Southeast Asian Nations
(ASEAN) were consulting on Monday and were expected to issue a joint
statement on Cambodia, Indonesian Foreign Ministry spokesman Ghaffar Fadyl said.

``We are now in consultations and very soon we will issue a joint
foreign ministers' statement on the Cambodian issue,'' he told Reuters.

Indonesian Foreign Minister Ali Alatas earlier said there was a need for
a quick meeting of ASEAN foreign ministers to discuss the situation in
Cambodia, which many fear is teetering on the edge of civil war.

Cambodia, together with Laos and Burma, was due to be admitted to ASEAN at
an annual foreign ministerial meeting being held in Kuala Lumpur at the end
of this month.

ASEAN groups Indonesia, Malaysia, Singapore, Thailand, Vietnam, Brunei and
the Philippines.

Cambodia's Second Prime Minister Hun Sen appeared firmly in charge of
the capital Phnom Penh and the surrounding area on Monday after ousting
forces loyal to his rival Prince Norodom Ranariddh in two days of
fighting. But Ranariddh vowed from France that he would lead resistance
from inside and outside Cambodia.

*****************************

JAPAN TIMES: JAPAN TO JOIN EU ACTION AGAINST MASSACHUSETTS LAW
July 5, 19997

Japan will join the European Union as early as next week in filing a
complaint with the World Trade Organization about a Massachusetts law 
that denies state contracts to companies doing business in Myanmar, 
government sources said July 4.

"We have so far waited for the United States to reconsider the 
Massachusetts law, but we cannot wait for so long," one of the sources 
said. "We will make a final decision, probably next week, to take the 
case to the WTO unless we receive a firm commitment from the U.S. by 
then to abolish the law."

Last month, the 15-nation EU requested "bilateral consultations" with 
the U.S. in the first stage of the WTO's dispute-settlement procedures. 
The EU can request establishment of a neutral panel to rule on the 
dispute if the consultations fail to resolve the case within 60 days of 
the complaint being filed.

Since the EU lodged the complaint, Japan has been considering whether it 
should take the same step or join bilateral consultations between the EU 
and the U.S. as an "interested third party," the sources said. 
Participation in the bilateral consultations as an interested third 
party would require U.S. approval, the sources said. In addition, the 
status would not grant Japan the right to request establishment of a WTO 
dispute-settlement panel to deal with the case, the sources added.

Since Massachusetts' Myanmar sanctions law, which was signed by Gov. 
William Weld last summer, took effect in January, both Japan and the EU 
have complained to Washington that the law violates a WTO agreement on 
government procurement practices. The accord covers not only central 
governments but also local governments registered in the commitments 
made by WTO members.

WTO replaced the General Agreement on Tariffs and Trade in January 1995 as a
more powerful watchdog on international commerce. The U.S. agreed to put
Massachusetts and some other states under the WTO 
government-procurement accord.

After Tokyo and Brussels complained to the U.S. over the Myanmar 
sanctions law, a group of legislators from Massachusetts sent letters to 
the two capitals in February warning against interfering in the internal 
affairs of their state.

***********************************************

BORDER SOURCE: SITUATION UPDATE
July 7, 1997

REFUGEES ARRIVING AT KANCHANABURI, RATCHABURI, AND 
PROVINCES TO THE SOUTH

KANCHANABURI PROVINCE

Ban Don Yang
This camp, composed of Tavoyan and Karen residents from the former 
Thu Ka population, is now reduced in size because approximately 100 Tavoyans
fled the camp.  Border sources cite the unreasonable demands of Thai militia
guards at the camp as the reason for the refugee group?s flight.  Thai
demands included the supply of young women to ?cook? for the guard post.
These young women were at risk of being sexually exploited.  Certain Tavoyan
leaders were also beaten by the guards.  The group that fled the site is now
in hiding.

The Karen group at the nearby site of Htee Wah Doh (near Halockanee, on the
Burma side of the border), has still not received permission to enter the
Don Yang camp.  This group is very vulnerable as they are in a position
between the Mon camp and SLORC troops.

RATCHABURI PROVINCE

Tham Hin
The population here is reportedly 7,612, with the camp divided into three
sections corresponding to the three original camps.  The residents are still
under plastic sheeting and no school has yet been built.  The 9th Division
has not yet given permission to build the school, claiming that the camp
needs to be consolidated and made secure before building can begin.  NGOs
are prepared to fund the building and arrange for supplies, as soon as
permission is given. Medical NGOs have been asked to build a crematorium.
The refugees are not allowed to bury their dead as is their custom.  

The committee has been told of 12 camp rules.  A notice board will be
erected on the site, in Thai and Karen language, explaining the rules.  The
rules cover every aspect of camp life, including defining the outer limit of
the camp boundary where the refugees are allowed to roam, rules for
visitors, when refugees are allowed to bathe at the stream, and disciplinary
action to be taken against those who break the rules.

No new refugees have been allowed to enter the camp since the beginning of
June, the date set by the 9th Division as the limit for refugees arriving
from Burma.  Due to this policy of denying camp entry, there are still some
34 families (174 individuals) sitting at the border near Meh Pya Kee, behind
the old Bo Wi site.  NGOs cannot officially access these people to help.  So
far only minimal assistance has been provided through private donations to
buy rice and plastic sheeting.  Within the last few days fighting broke out
near the Tenasserim River directly west of the point where the refugees are
staying.  If the fighting were to spread toward the border this group would
be in danger.

PRACHUAB KHIRI KHAN PROVINCE

Huay Satu
As reported in the last update report, this group of refugees have now been
allowed access to NGO assistance for food and medicine.  Attempts are now
underway to stockpile rice for the rainy season when the site will be
totally cut off.  The population is around 1,200.

The site remains unstable with SLORC troops said to be only one day away at
Te Keh.  Under pressure from the 9th Division of Prachuab province, many of
the able-bodied men have returned to the Burma-side of the border, leaving
some women, elderly and sick behind on the Thai side.  If the SLORC troops
threaten them on the Burma side, then they would apparently have permission
to cross back over to Thailand.  The Karen refugees? leaders have made it
clear in writing that it was not their own decision to return to the Burma
side, but that they were asked to do so by the authorities.  

The Mergui Tavoy United Front families have, as previously reported, moved
back to the Burma side of the border.

CHUMPHON PROVINCE
The situation remains stable, much as reported previously.

********************************************

BKK POST: CHETTHA FIRM ON REFUGEE POLICY
July 4, 1997
Sermsuk Kasitipradit

Army Commander-in-Chief Chettha Thanajaro has assured American
Refugee Committee chairman Anthony Kozlowski that no refugees on
the Burmese border will be forcibly repatriated. 
     
Mr Kozlowski called on the commander at army headquarters to thank him 
for the army's supporting role and assistance given to Karen refugees 
seeking shelter in Thailand after Burma's onslaught against the Karen 
National Union.

"Mr Kozlowski says he deeply appreciated the country's generosity in 
providing-humanitarian aid to refugees from Vietnam, Laos, Cambodia 
and Burma during the past decades," said an army officer.

The officer said Mr Kozlowski had voiced support during the meeting to 
Gen Chettha's proposal to relocate Karen refugee camps 10 kilometres 
deep inside Thailand, agreeing that such a move could help provide safety 
for the refugees.

Gen Chettha said earlier that unless Karen refugees located at the border 
area were moved deep inside Thailand it would be difficult for the army to 
maintain security along the Thai-Burma border.

He briefed Mr Kozlowski on the army's stance in sending Karen refugees 
back to Burma.

"The army commander has explained that Thailand is ready to take back 
the refugees if their life is endangered when they return to Burma,"  said 
the officer. 
     
Gen Chettha has urged Mr Kozlowski to help correct misunderstanding 
with other non-government organisations which might harbour 
misconceptions concerning Thailand's policy on Karen refugees.

In late February Amnesty International and several non-government 
organisations strongly criticised Thailand over reports that it forcibly 
repatriated Karen refugees seeking shelter in Kanchanaburi. The army had 
totally denied the allegation.

"The army commander is optimistic that the ARC can help correct such a 
misunderstanding, as the government has no forced repatriation policy," 
said the officer.

Mr Kozlowski reportedly urged Gen Chettha to help negotiate with Burma 
so that the ARC can provide humanitarian aid to refugees staying along 
Burma's border area.

***********************************************

BKK POST: CAMP BIRTHS RAISE ALARM
July 7, 1997
Aphaluck Bhatiasevi 
Ratchaburi

Officials complain of lack of contraceptives

	The rapidly increasing number of Karen refugees living in Ratchaburi's Suan
Phung district is worrying Thai health chiefs.
	They say that the inadequate provision of contraceptives means hundreds of
children are being born, placing an additional strain on already
hard-pressed medical workers.
	The refugee population in Baan Tham Hin refugee camp has increased from
2,500 in March to the present 7,444.
	The district's public health chief Preecha Tuankrua said there were now
more than 300 pregnant women in the camp.
	"We have to do something to control the fertility rate among Karen
refugees, otherwise we will have to bear the burden of the increasing 
population," he said.
	The authorities are now planning to provide contraceptives, as before May
16 only 100 people had been helped. In addition, one-third of the population
of the camp in Suan Phung are children aged under 12. 
	Although local health authorities have been working with the refugees,
non-governmental organisations such as Medicin Sans Frontier (MSF) have been
mainly responsible for dealing with illnesses in the camp.
	More seriously ill patients who cannot be handled by the NGOs are referred
to the district hospital.
	Karen camp doctor, Dr Sunny Ramond, said 100 to 200 patients a day were
treated for minor illnesses.
	He used to work at Htee Hta Hospital in Burma, about 30 kilometres from the
Kanchanaburi border, before fleeing from Burmese troops.
	The doctor said the most common diseases in the camp were malaria,
diarrhoea and respiratory infections, and most children were suffering from
malnutrition.
	The district health centre said that between March and May there were
11,945 refugee visits to the local hospital and 821 people were 
vaccinated.
	Suan Phung Hospital director, Dr Chatchai Thuntham, said more than five
hospital employees were helping the NGOs in the camp.
	Dr Chatchai said although DDT had been sprayed in the area and mosquito
nets had been provided to all the tents at Baan Tham Hin camp, there was
still a high incidence of malaria. Of blood tests performed on 340 
people in the camp, 36 had malaria.
	Health officials have also provided clean water and toilets. Currently 20
families are sharing one toilet.
	Dr Chatchai also urged senior administrators at ministry level to do
something to protect officials who have to travel more than 30 
kilometres to the camp each day.
	"We have problems with a shortage of vehicles and medical equipment. We
have only one pick-up truck which is used as an ambulance," he said.
	Deputy Health Minister Sora-at Klinpratum, who recently visited Baan Tham
Hin camp promised that the refugees would be given shelter until Burma's
internal problems were sorted out.
	He said the fact that the camp had been shifted further into Thailand
indicated the authority's commitment to protecting the refugees. Baan Tham
Hin camp is about 11 kilometres from the border and south of 
Ratchaburi.
	
***************************************

PRESS RELEASE: NATIONAL EDUCATION ASSOCIATION
July 2, 1997

NATIONAL EDUCATION ASSOCIATION SUPPORTS US SANCTIONS UPON MILITARY REGIME OF
BURMA

Atlanta, Georgia, July 2  --- The Peace and Justice Caucus of the National
Education Association (NEA), the largest teachers' Union in the US,
organized a briefing on the "Suppression of Educational Freedom and Rights
of the Children in Burma" at its annual convention attended by 
state and local Association leaders and elected representatives of their
locals all across the US. In his presentation to the briefing, Dr. Thaung
Htun, Representative of the National Coalition Government of the Union of
Burma (NCGUB) for UN Affairs, said, "the Military regime in 
Burma believes that academic freedom poses a severe threat to its
illegitimate rule and has persistently practiced the policy of closing down
of schools and universities at the first sign of protests and has used the
pretext of educational reform as a mean of preventing dissent and 
extending control." Dr. Htun then informed the Convention that "all the
Universities have not been reopened yet since They were closed after the
last students protests in December last year. Without giving any reason, all
schools including primary schools have not been reopened yet even 
though June is the season of reopening schools for the new academic year and
this practice has been seriously damaging to the education of the new
generation".

With regard to the situation of Burmese Children, Dr. Htun pointed out that
the "National Programme of Action proposed by UNICEF in 1993 has not been
translated into sectoral policy and programs at the national and subnational
level with adequate budget allocation. The disparity of budget allocation
between the defense and social sectors has directly effected the lives of
Burma's children. The infant motility rate has increased from 67/1,000 live
births in 1989 to 82/1,000 in 1993. Malnutrition of children under 3
accounts for 36.7%-40%. Child labor, child prostitution, child soldiers and
refugee children in armed conflict -- all need to be urgently 
addressed."

Then, Mr. Chuck Reinhardt, a delegate from New York/ New Jersy, introduced a
resolution that supports economic sanction upon the military regime of Burma
enforced by the Clinton Administration. The resolution was adopted by
consensus. In its rationale to the resolution, NEA said, "The military
regime in Burma continues to violate children's rights, despite the fact
that it has been a party to the Convention on the "Rights of the Child"
since 1991. According to the Human Rights Watch Report, "Children's Rights
and the Rule of Law", children in Burma are used as porters to carry
supplies for the army and unpaid laborers on government construction
projects. Many Burmese girls are trafficked into Thailand, forced to work in
brothels, often in slave-like conditions."

******************************************

THE NATION: IDLE BURMESE STUDENTS DREAM OF LIGHTER PURSUITS
July 7, 1997
Aung Zaw

The periodic closures of education institutions by the government have
driven some Burmese youths to give up on school, reports Aung Zaw.

Burmese female models are attractive. So says Tin Zar Maw, 20, a student of
botany at Hlaing College. Although she is not so certain about their male
counterparts.

"I think they are short," she said. "When they take to the stage they look
ridiculous."

A few months ago, Tin Zar joined a well-known modelling agency in Yankin
township set up by the famous model Tin Moe Lwin. The training will take
three months.

"I'm going to learn about the catwalk and how to dress up," said Tin Zar,
her excitement obvious and understandable.

Burma has been gripped by fashion fever since French designer Pierre Cardin
visited the country a few years ago. A visible result on the street is the
replacement of Burma's traditional longyi with Western-style skirts and pants.

A Rangoon resident admitted that the modelling business is mushrooming in
the capital. "For the rich and the middle class, this is like a new fad."

Burma's famous movie star, Soe Thu, has set up his own modelling agency,
Thunder Shower Group.

But to enter this lucrative business, potential models have to pay a high
sum. New trainees are expected to dole out about 15,000 kyat as enrolment
fees _ approximately five times the average monthly salary in Burma.

But for those who do not have the money, there is an air of uncertainty
among Burmese youth today. Burma's youth are not sure about their future as
the State Law and Order Restoration Council (Slorc) government periodically
shuts down schools and colleges.

Recently, the Education Ministry postponed the opening of schools and
universities indefinitely. The reason, analysts believe, is that military
officials hope to avoid any incidents that could complicate the country's
July induction into the Association of Southeast Asian Nations.

In December, colleges and universities were immediately shut down after a
spate of student unrest. And since the 1988 democracy uprising, schools in
Burma have been shut down a number of times.

"I'm not interested to go back to school," says Win Kyaw from Botataung
College in Rangoon. "They will reopen [the schools] but only for a few
weeks. There will be exams and they will shut them down again."

Now Win Kyaw works at a hotel as a receptionist. But even when schools
reopen the authorities are planning to decentralise the student population.

It is reported that authorities are building more colleges and universities
in Rangoon and Pyi aimed at dispersing the students. According to a former
student activist now in exile, this is a "divide and conquer" method.

Whatever the case, some activists and politically-active students aren't
happy to see the emergence of Burma's "modem youth".

"I think Burmese youth now enjoy going to movies, fashion shows and
concerts," complained a former student leader Moe Thee Zun. "They are not
active in politics anymore."

But Tin Maung, a writer in Rangoon, thinks otherwise. He said, "This
[modelling] is becoming a market - I don't see anything wrong with it. Like
all young people around the world, they [Burmese youth] want to try new
things and enjoy them.

"And while they don't discuss politics all the time, they know what is wrong
and right," he added.

But seasoned analysts in Rangoon suggested that many Burmese youth now are
more eager to do business than to continue their studies.

"They have shown no interest in education. Part of the reason is that
schools have been shut down very often. It is sad," says a former university
lecturer.

Meanwhile, Tin Zar and her friends are on the stage learning the catwalk and
trying on high heels. "We see it [modelling business] as an opportunity to
make money in the feature,' she says.

That's how glossy advertisements by modelling agencies put it. In February
at the Inya Lake Hotel, hundreds of girls turned out to enlist in John
Lwin's three month modelling course.

John Lwin, better known simply as John, is a trainer employed by Living
Colour modelling agency - a business set up by powerful generals' sons and
movie stars.

John, a Burmese, lives in Singapore. His aim is to introduce Burmese models
to the international modelling world where he believes many unknown talents
and beautiful young Burmese models can make it big on the international scene.

Last year, he held a successful fashions show at the Yuzana Garden. He later
established the International modelling Agency.

But modelling is not an option for all young Burmese. Since the schools were
shut down in December, many students have been forced to find odd jobs.

Maung Maung Swe, a first-year zoology student, enjoys working at a foreign
company where his monthly salary is 3,000 kyat plus bonus. Myint Myint Win
who graduated from Rangoon University now sells soft drinks.

Htay Htay, 18, who has just completed her matriculation, sells cigarettes at
tea shops. Like Htay Htay, many young Burmese women are employed by
cigarette companies; to distribute and advertise their cigarettes at tea and
coffee shops. She doesn't like her job but she has no other choice, she says.

Others find it more difficult to survive. As the gap between rich and poor
widens, prostitution in Burma is increasing.

In Rangoon and Mandalay, the nightlife is flourishing. Foreign guests at the
well-known hotels in Rangoon are offered photo catalogues of young Burmese
women between the age of 16 and 20. The price is US$200 per night.

"This [prostitution] is going to be a big business. Both foreigners and
local businessmen like to try Burma's untouched resources," said a Rangoon
resident. (TN)

*****************************************************

BURMA DEBATE: WAITING FOR WINDFALLS WON'T HELP 
CREDITORS
by Louis Kraar
March/June 1997

MONEY MATTERS

"Drug traffickers have become the leading investors in Burma's new 
market economy and leading lights in Burma's new political order.  Drug 
money is so pervasive in the Burmese economy that it taints legitimate 
investment. Since 1988, some 15 percent of foreign investment in Burma 
and over half of that in Singapore has been tied to the family of narco-
trafficker, Lo Hsing Han." 
? Robert S. Gelbard, U.S. Assistant Secretary for International Narcotics 
and Law Enforcement Affairs 
February 28, 1997

With little visible means of support, Burma's sick economy bumps along.
Hotels are rising in Rangoon with more rooms than can be filled with
tourists, while shops sell imported liquor and other luxury goods. Part of
this frothy activity is evidently fueled by repatriated profits from the
drug trade, but the military regime also taps another source of funds --
OPM, Other People's Money. This hoard helps the State Law and Order
Restoration Council (known by the initials SLORC) muddle through, even
though it cannot repay over $6 billion in other known international debts.
China, for instance, provides substantial undisclosed credits for purchases
of weapons. Other imports are being financed by Burma's neighbors and 
the foreign oil companies that are its most significant outside investors, 
Total of France and UNOCAL of the U.S.

SLORC has a strong appetite for money, but little means of repaying loans.
The chances of its new creditors getting repaid soon, in fact, are bleak.

Like most activities of the secretive regime, its pinched financial
condition is shrouded in opaque government accounts and misleading
government statements. SLORC's newspaper mouthpiece, The New Light 
of Myanmar (September 13, 1995) claimed that Burma "will earn about 
$40,000 a day" -- equivalent to $164 million a year from anticipated 
exports of natural gas to Thailand. General David Abel, Minister for 
National Planning and Economic Development, claims the economy is 
growing briskly, but the U.S. Embassy in Rangoon reports that the legal 
economy provided an average income last fiscal year of only $113 per 
person -- "far lower than was observed even in the world's poorest 
countries."

Penetrating the mysteries of Burma's financial condition requires looking
beyond its own accounts to those of reputable international organizations.
The Burmese government publishes nothing about its external debts, which 
can be seen more clearly in the World Bank's annual World Debt Tables 
published in 1996 and the International Monetary Fund's staff report of 
January, 1997.

External loans to Burma have steadily increased from a low of $61 million 
in 1991 to $134 million in 1994, according to the IMF. Moreover, Burma 
can no longer obtain the easy credit from development loans with 20-year 
terms and effect interest rates of almost zero. Instead, Burma is getting 
tougher seven-year loans at near - market interest rates, apparently from 
government export-financing agencies of such major trading partners as 
China, Taiwan, Thailand, Malaysia, and Singapore. The World Bank 
tables show that the Burmese government accumulated $450 million of 
accumulated export credit through 1994. Concludes an analyst who has 
studied the data: "It seems that trade credits from the governments of 
Asian trading partners are Burma's main financiers."

Burma has gained some debt relief from the Japanese government's 
Overseas Development Assistance. In the process, Tokyo conveniently 
ignored the charter of its own aid agency, which stipulates that loans 
should not be granted to governments with excessive defense spending. 
SLORC spends nearly half of its government outlays on Burma's bloated 
military, while restraining investment in education and health. Nonetheless 
Burma got the debt relief, which is put into an account that its government 
can use for imports.

Burma's apparent policy is to make some interest payments only on debt 
owed to multilateral financial institutions. In 1994, the latest year for 
which figures are available, the Burmese government paid $173 million in 
external debt service. About $125 million of that nominal payment went to 
the Japanese and came back as debt relief from which Burma can import 
goods. The remaining $48 million just covered obligations to the Asian 
Development Bank and the World Bank. This suggests that trade creditors 
from neighboring Asian countries will have to wait their turn to be paid 
back, some day. How Asian creditors justify such loans to their own 
legislatures is an intriguing question that no one in the region seems to be 
asking, at least aloud.

Thailand, however, is beginning to worry about how its private traders 
with Burma will be paid. On a visit to Rangoon in May, Thai Prime 
Minister Chavalit Yongchaiyndh urged Burmese officials to protect Thai 
traders from foreign exchange risks. Those business people have 
complained about the risks inherent in having to deal with dual exchange 
rates: an official rate of 6 kyat per dollar and the more realistic rate of 170 
kyat per dollar. Bangkok wants Burma to ease foreign exchange risks by 
moving toward a genuinely convertible currency.

Supposedly Burma will obtain plenty of cash once the offshore Yadana 
natural gas field starts exports to Thailand. Foreign investors and creditors 
are having a tough time now, but are being told to just hang on for another 
year or so. They probably must wait a lot longer than that. Even the start of 
gas flowing through the pipeline will not generate enough hard currency 
earnings to bail out Burma. Exactly how much hard currency the pipeline 
will deliver to Burma and when are far from clear, but many observers cite 
$400 million a year as the eventual net effect of the Yadana project on 
Burma's balance of payments. That figure, however, is not money that 
SLORC can bank on. It may include the import-substitution effects from an 
electric-generator and urea fertilizer facility that are yet to be worked out 
and financed, much less built.

SLORC, in fact, has already mortgaged much of its immediate earnings 
from the gas pipeline. Burma borrowed $7 million from UNOCAL in order 
to finance imports of urea fertilizer and must repay the American 
company, with interest. Likewise, Thailand has reportedly supplied 
millions of dollars worth of oil against Burma's future earnings. In
addition the state-owned Myanmar Oil and Gas Enterprise reportedly has an 
option to buy 10% to 15% of the Yadana consortium's equity, and may pay 
for that investment from the Burmese government's first three years of 
receipts from a production-sharing agreement on the natural gas.

Consequently Burma may not gain anything close to $400 million a year 
until beyond the year 2001, and that sum would still be far from enough to 
cover its chronic balance of payments deficit. It totaled an estimated $575
million last fiscal year ending in March. The largest and fastest growing
factor in that current account deficit is a merchandise trade deficit.
Burma, of course, could severely restrict imports for five years until the
Yadana windfall starts, but the government has limited ability to do that.
So far SLORC simply ignores the balance of payments problem, hiding it 
in understated official statistics. Says one informed observer,"The SLORC
appears to lack either the will or the political legitimacy to sustain an
austerity campaign."

Not since the days of Indonesia's Sukarno regime in the 1960s has 
Southeast Asia seen such a profligate government with little capacity for 
rational economic management. No windfalls from either a gas pipeline or 
narcodollars can bail out Burma.

Louis Kraar is a senior editor of Fortune magazine. The views expressed 
here are those of the author.

***************************************************

BURMA DEBATE: FOREIGN EXCHANGE CERTIFICATES -- WHO 
REALLY BENEFITS? 
March/June 1997
By Kyi May Kaung 

Visitors to Burma notice that everyone, even trishaw peddlers, want to be
paid in U.S. dollars -- or coupons called FECs, or Foreign Exchange
Certificates. After all, the local currency known as kyat is hyper-inflated
and loses value almost daily. As one Burmese told the author, the 
successful mohinga [soup with noodles] seller down the street "buys gold 
every evening because she's afraid of the money." The FECs are an attempt 
by the ruling State Law and Order Restoration Council (SLORC) to 
overcome that lack of confidence in the currency -- and provide a linchpin 
for a supposedly"open -market economy" as a medium of exchange and a 
store of value.

Like much in the Burmese economy, these paper certificates are merely a
gimmick and not a solution for a chronic shortage of foreign exchange and 
a glut of kyats. In short, FECs are supported by little more than the
government's ability to keep printing them and getting people to accept 
them as a proxy for U.S. dollars

This paper game started with economic reform in February 1993, when the
regime allowed exporters to set up foreign-currency accounts in Burmese
banks and use them to buy foreign goods as well as scarce local 
commodities. The aim was to create an exchange rate determined by the 
market, rather than using an official rate that greatly overvalues the kyat. 
To carry out this reform, the government began issuing FECs, which trade 
at 160 or 170 kyat per dollar vs. the official rate of about six kyat per 
dollar. According to an official source, the reason behind establishing the 
FECs was to promote tourism and to allow Burmese citizens to hold some 
sort of foreign exchange.

Each FEC note bears the claim that it is equivalent to a certain number of
dollars, but that's not exactly true. The certificates are convertible only
into local currency, not dollars. Private ownership of foreign currency, in
fact, largely remains illegal. Instead, SLORC promises that once the
certificates are deposited into a dollar-denominated bank account, they can
be used to import foreign goods and services.

The few who are able to benefit from this scheme can import luxury cars or
electric power generators that come in handy in a capital city with frequent
blackouts. The elite who live in Rangoon and rent private homes to
foreigners can deposit that money into foreign exchange accounts and -- 
with government permission -- buy such scarce goods as cement with 
FECs. They cannot use the foreign exchange to travel abroad or pass it on 
to someone else. In short, the FECs simply represent private freedom to 
import -- once the holder gets government approval.

As SLORC's foreign exchange reserves have dried up, it has become
increasingly difficult to cash in FECs. Indeed last August Burma's foreign
exchange reserves fell to less than $200 million, just enough to cover one
month of the country's merchandise imports. In response to the shortage of
hard currency, the government simply printed more kyat and used them to 
buy more dollars from local private business people at the market exchange 
rate. The FECs, on the other hand, has traded at parity with the US dollar -
- therefore holding its value far better than the local currency. Holders of
the certificates, however, have to wait much longer to get permission to use
them for imports. How long can the regime sustain the value of paper
certificates that are increasingly hard to use for imports? Many observers
believe that SLORC has created a bubble that will burst eventually.

No one knows exactly how many FECs have been issued. Late last year the
official word in Rangoon was that FECs made up nearly three percent of 
the currency that circulated at the market exchange rate. There are 
unofficial reports that SLORC may have printed more than twenty times as 
much of those paper certificates. Whatever exact numbers, Burma is in the 
paradoxical position of using FECs -- a currency backed only by the 
freedom to import?while restricting the freedom to import. Does this 
make economic sense?

Kyi May Kaung holds a Ph.D. in Political Science from the University of
Pennsylvania. She is a writer and poet and is currently a broadcaster at
Radio Free Asia in Washington D.C.

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BKK POST: UK CLOTHING FIRM CUTS BURMESE TIES
July 5, 1997
AFP

London - British High Street clothes retailer Burton has ordered its
suppliers to stop using factories in Burma after a report connected the
factories with the Burmese military, the BBC said on Thursday.

The Newsnight programme, using hidden cameras, uncovered evidence that
workers in factories making clothes destined for the West earned $2 a day,
but had to give $1 a day back to the Burmese army.(BP)

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REUTER: SLORC SAYS SEES YADANA GAS PIPELINE ON 
SCHEDULE
July 4, 1997 [abridged]

BANGKOK, July 4 (Reuter) - Burma said on Friday that a project to lay a
pipeline to transport natural gas from the offshore Yadana field overland to 
Thailand would be completed by the end of May or the beginning of June 
1998, as scheduled. 

``Everything is going well and so far 95 percent of the total works on the
Burmese side is completed. I'm certain that supply could start from July 1 
next year with no delay,'' said visiting Burmese Energy Minister Khin 
Maung Thein. 

Many in the industry had feared that the controversial pipeline project
might be delayed because a section of it passes through a southern area 
controlled by Burmese Karen and Mon guerrillas fighting for autonomy 
from the military government. 

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THE NATION: THAI-BURMESE PIPELINE MAY COST FAR MORE
July 7, 1997

THE cost of the controversial Thai-Burmese gas pipeline project could
increase by between Bt4 billion and Bt5 billion if the baht-settles at Bt30
to the US dollar, said Piti Yimprasert, president of PIT Gas.

Piti said the baht depreciation has severely affected many PTT projects. It
will eat into the returns of the projects and increase project costs. Higher
costs incurred because of missed project deadlines have not yet been
calculated, he said.

The baht depreciation is also projected to increase the cost of PTT's third
submarine pipeline project by between 10 and 20 per cent. (TN)

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THAILAND TIMES: INTERNATIONAL STUDENTS TO PROTEST ASEAN DECISION
July 7, 1997

BANGKOK: The Student Federation of Thailand (SFT) and representatives from
universities in neighboring countries will join a three-day hunger strike in
the next two weeks in protest against ASEAN' s decision to admit Burma as a
member of the regional grouping. 
 	Aphatsara  Pongpanit, secretary-general of the SFT, said yesterday that
the SFT and other Thai organizations will stage the protest outside
Government House while Burmese students living in the country may gather in
front of the Malaysian Embassy between the 23rd-25th of this month, the same
dates that ASEAN holds its annual meeting in Kuala Lumpur.
	She added that students in  Australia, Malaysia and New  Zealand will also
join  the protest in their countries at the, same time.
	The SFT, the Committee of  Natural Resource Environment Conservation of 16
Institutes and the Student  Organization of Thammasat University yesterday
distributed leaflets to the public at Victory  Monument and Mah Boonkrong
Center denouncing ASEAN's decision to admit Burma to its  fold.
	Moreover, these  organizations have  combined to  organize an anti-SLORC
campaign week starting tomorrow in order to provide information and exchange
opinions in  connection with ASEAN's action with the Thammasat University,
she said. SLORC is an acronym  for the State Law and Order Restoration
Council  which rules Burma.
     	She added that several interesting discussions such as  "ASEAN: Burma,
Progress or  Crisis?" and "Human  Right situation in ASEAN" will be on the
agenda.

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ANNOUNCEMENT: NEW ENGLAND BURMA ROUNDTABLE / JULY

NEW ENGLAND BURMA ROUNDTABLE: ACTION ALERT
July 7, 1997

JAPAN TO JOIN EUROPEAN WTO SUIT AGAINST 
MASSASCHUSETTS BURMA LAW
  [Please see BurmaNet News Issue 764 - Announcement: EC to take
Massachusetts Law to WTO! for actions taken by residents of Massachusetts,
the United States and those living outside of the US]

July 2, 1997
1. July Roundtable Meeting June Roundtable Meeting: Tuesday, July 8, 7pm 

Unitarian Universalist Service Committee, 130 Prospect Street, Cambridge.
Take the Redline to Central Square T stop, or the Number 1 bus. The UUSC
office is on the corner of Prospect and Harvard streets, a 2-block walk from
Central Square. Use the buzzer outside the front door to gain entry into the
building; take the elevator to the first floor.

Agenda: Chris Cox, Boston Herald reporter and author of Chasing the Dragon,
a book about the drug trade in Burma will be the featured speaker.

T-SHIRTS

The T-shirts sold by Burmese students to benefit their democracy
organization sold like...sticky rice! However, the 100% cotton, M, L and XL
shirts ($12 apiece, plus mailing) may be available soon. Call 617-388-0038
for sales and information.

Send us your news and we?ll publish it here for all to admire and emulate!

Simon Billenness
* for the New England Burma Roundtable *
Franklin Research & Development
711 Atlantic Avenue, Boston, MA 02111
(617) 423-6655 x 225
(617) 482-6179 fax
sbillenness@xxxxxxxx

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