Stagecraft and Statecraft

A forward-looking approach on Burma

Brahma Chellaney

May 14, 2008

The politicisation of international assistance at a time when Burma’s food bowl, the Irrawaddy Delta, has been devastated by a major cyclone has brought the plight of ordinary Burmese to the fore. This month began with U.S. President George W. Bush announcing yet more sanctions against Burma. Less than 36 hours later, Cyclone Nargis had left a vast trail of death and destruction. Tragedy has come to symbolise Burma in a year marking its 60th anniversary as an independent nation.

Such is the politics of food aid that Western governments and outside relief agencies have insisted on the right to deliver assistance directly to the homeless and hungry. But the regime, fearful that such delivery could be intended to incite a popular uprising at a time when it has put a new Constitution to vote, has blocked the large-scale entry of foreign aid workers. Calls for forcible humanitarian intervention by French Foreign Minister Bernard Kouchner and others have made the junta’s hackles rise.

The regime postponed the constitutional referendum in the cyclone-racked areas until May 24, but held the balloting on schedule elsewhere last Saturday. With the military ensconced in power for 46 years, there are few takers for the junta’s seven-step “roadmap to democracy.” Widening sanctions, in fact, make it less likely that the seeds of democracy will sprout in a stunted economy. Punitive pressure without constructive engagement in a critically weak country, where the military is now the only functioning institution, is counterproductive.

Crucial factor

Distance from Burma has been a crucial factor in determining major players’ approach toward that country. The greater a state’s geographical distance from Burma, the more gung-ho it tends to be. And the shorter a state’s distance from Burma, the greater its caution. At one end of the spectrum is the U.S., which has followed an uncompromisingly penal approach toward Burma under Mr. Bush. At the other end are Asian states, emphasising a softer approach. The European Union used to be somewhere in the middle, but since 2007 has stepped up its own penal campaign.

The West, with little financial stake left in a country marginal to its foreign-policy interests, can afford to pursue an approach emphasising high-minded principles over strategic considerations, and isolation over engagement. About 95 per cent of Burma’s trade last year was with other Asian countries. By contrast, Burma’s neighbours cannot escape the effects of an unstable Burma. The imperatives of proximity dictate different policy logic. The current situation underscores eight international imperatives.

The need for a course correction. It is vital to carve out greater international space in Burma, rather than shut whatever space that might be left. When an approach bristles with sticks and offers few carrots, results are hard to come by. The sanctions path has only strengthened the hand of the military, with Burma now coming full circle: Its ageing junta head, Than Shwe, has amassed powers to run a virtual one-man dictatorship in Ne Win-style.

An approach predicated on the primacy of sanctions may have been sustainable had Burma been a threat to regional or international security. But Burma does not export terror, subversion or revolutionary ideology. Its focus is inward. If sanctions continue to undermine its economy and impede its regional integration, a dysfunctional Burma could pose a serious transnational security threat.

Target the junta, not the people. The weight of the sanctions has fallen squarely on ordinary Burmese. By targeting vital sectors of the Burmese economy — from tourism to textiles — the sanctions have lowered living conditions without helping improve human rights. An unaffected military has ensured continuing revenue inflows for itself by boosting gas exports to Thailand and signing a lucrative, 30-year gas deal with China.

What objective is served when disengagement blocks the flow of liberal ideas as well as investment and technology?

Recognise that a “colour revolution” is just not possible in Burma. Despite the temptation to portray the monk-led protests of last September as a “saffron revolution” in the making, Burma is unlikely to experience a tumultuous political transformation of the type symbolised by Kyrgyzstan’s “tulip revolution,” Ukraine’s “orange revolution” and Georgia’s “rose revolution.” No colour revolution has occurred in a country bereft of institutions except the military. Burma, with its deep-seated institutional decay, is closer to Sudan and Ethiopia than to the successful democratic-transition cases.

Help build civil society in Burma. It is a growing civil society that usually sounds the death knell of a dictatorship. But years of sanctions have left Burma without an entrepreneurial class or civil society but saddled with an all-powerful military as the sole surviving institution — to the extent that Aung San Suu Kyi’s party says the military will have an important role to play in any transitional government.

The “roadmap to democracy,” however flawed, offers an opening to incrementally prise open the Burmese system. After being in power since 1962, the military has become too fat to return to the barracks. In fact, it won’t fit in the barracks. It has taken the junta more than 14 years just to draft a new Constitution.

With the military determined to hold on to its special prerogatives, the demilitarisation of the Burmese polity can at best be an incremental process. But if that process is not to stretch interminably, it is important for the international community and the U.N. to utilise the new opening, however constricted, to get involved in capacity-building programmes that can help increase public awareness and participation and create a civilian institutional framework for a democratic transition. Although the military is the problem, it has to be part of the solution, or else there will be no transition.

Shift the focus from negative conditionalities to positive conditionalities. To help create incentives for a phased democratic transition, Burma’s rulers should be given a set of benchmarks, with the meeting of each benchmark bringing positive rewards. With sanctions to continue until the junta collapses or caves in, there are at present no incentives, only disincentives.

Indeed, recent penal steps against Burma run counter to the junta’s gestures and concessions — such as facilitating U.N. special envoy Ibrahim Gambari’s three visits in six months; permitting him to meet with Ms Suu Kyi; allowing Paulo Sérgio Pinheiro, a special rapporteur to the U.N. Human Rights Council, to come and investigate the September 2007 violence; and implementing the “roadmap.” Mr. Gambari had sought a time-bound transition plan, but after the junta unveiled just that, Burma has been slapped with more sanctions, undermining the U.N.’s role.

In that light, the latest U.S., EU, Canadian and Australian sanctions suggest a lamentable lack of an incentives-based strategic approach.

Insist on ethnic reconciliation and accommodation. The struggle in Burma has been portrayed simplistically as a battle between Ms Suu Kyi and Gen. Than Shwe; a fight between good and evil; and a clash between the forces of freedom and repression. A complex Burma is actually the scene of four different struggles.

Four different struggles

One conflict rages within the majority Burman community between the mainly Burman military and democracy-seeking urban Burmans. Another struggle is between the military and the non-Burman nationalities, which make up a third of the population. While the Burmans live in the valleys and plains of central Burma (and dominate the cities), the ethnic minorities largely inhabit the rugged areas around the periphery. An inter-religious conflict also rages in Burma.

Then there is a larger unresolved struggle over the state’s political meaning and direction — whether Burma ought to be a true federation that grants wide-ranging local autonomy, or a unitary state. That mirrors the struggle, for example, in Sri Lanka, where the majority ethnic community has sought to give the state a distinct Sinhala imprint, triggering an unending civil war.

Avert a looming humanitarian catastrophe in Burma. The widening sanctions have sought to throttle industries on which the livelihood of millions of Burmese depends. Import bans, investment prohibitions, tourism restrictions and measures forcing foreign companies to disengage have contributed to serious unemployment and poverty.

As far back as 2003, then U.S. Deputy Assistant Secretary of State Matthew Daley had warned in congressional testimony that many female garment workers made jobless by sanctions were being driven into prostitution. Yet, in its 2004 report to Congress, the State Department boasted that U.S. actions had shut down more than 100 garment factories in the previous year alone, with “an estimated loss of around 50,000 to 60,000 jobs.”

Foreign investment and trade boost local employment and wages and exert a liberalising influence on a regime. A weaker Burma will only fall prey to and spawn a range of transnational security threats.

Both carrots and sticks need to be wielded, but not in a way that the sticks get blunted through overuse and the carrots remain distant. Without a more balanced and progressive approach permitting engagement, democratisation is unlikely to progress. International principles need to be anchored in forward-looking pragmatism. There is no logic to Burma being held to a higher international standard.

© Copyright 2008 The Hindu

URL: http://www.thehindu.com/2008/05/14/stories/2008051453141000.htm

Stabilize A Faltering Burma

Brahma Chellaney

Asian Age, May 10, 2008

Cyclone-wracked Burma stands out as one of the world’s critically weak states that could become a transnational security problem without international stabilization efforts. Yet the tide of Western criticism its junta is facing over the cyclone-related relief operations and constitutional referendum rules out an early lifting of the sanctions against Burma. The referendum and national elections in 2010 are part of the junta’s purported seven-step “roadmap to democracy,” whose implementation within a timeframe, paradoxically, had been demanded by United Nations special envoy Ibrahim Gambari.

Burma is a significant state in size, strategic importance and natural resources. It forms the strategic nucleus between India, China and Southeast Asia. Burma is where Asia’s main regions converge — South, Southeast and East Asia. But Burma is also a corrupt, dysfunctional state, although its state machinery, run by a predatory military elite monopolizing power, appears strong enough to wage political repression at home.

Both the annual Failed States Index (FSI) by the Washington-based group, The Fund for Peace, and the Brookings Institution’s new Index of State Weakness in the Developing World list Burma among their top 20 failing states. The Berlin-based Transparency International ranks Burma as the world’s most corrupt state, along with Somalia.

Since the September 11, 2001, terrorist attacks in the United States, it has been increasingly recognized that threats to international peace and security now emanate more and more from the world’s weakest states. Tellingly, two of the world’s critically weak states, North Korea and Pakistan, are members of the nuclear club. It has become routine for the major players to reiterate their commitment to pull critically sick nations back from the precipice of state failure.

It is that argument — to stabilize a failing state — that the Bush administration has used to pour some $11 billion in aid since 9/11 into terror-exporting Pakistan, ranked No. 33 in the Brookings’ Index of State Weakness in the Developing World. The White House now is considering throwing its weight behind Senator Joseph Biden’s call for a $2.5 billion package of additional non-military aid to Pakistan.

Can a different logic or argument be applied to Burma? Or should the stabilization of a failing state only begin when that country actually starts posing — like Pakistan — a threat to international security?

International responses to separate cases of failing states need not be cut from the same cloth because every nation’s situation tends to be different from the others. Still, the undeniable fact is that Burma represents a case of grave state corrosion, with international sanctions having had the effect, however unintended, to lower the living standards of ordinary Burmese.

Another question relates to the extent to which sanctions should be employed. Should punitive actions preclude engagement? Without the Bush administration engaging Pyongyang, to give just one example, would it have been possible to achieve the progress, however tentative it might seem at this stage, on the North Korean nuclear programme? It is nobody’s case that Burma is worse than North Korea.

Foreign trade, investment and tourism exert a liberalizing influence on a regime. External investment helps build private enterprises, boosts employment and wages, and aids civil-society development. But the US-led sanctions against Burma have sought to throttle investment and tourism flows and choke its exports, including textiles, precious gemstones and high-quality tropical hardwoods.

The military has been in power in Burma for 46 long years. But the Western penal approach toward Burma began shaping up only in the 1990s. In fact, it was not until this decade that Burma became a major target of US sanctions, reflected in the congressional passage of the 2003 Burma Freedom and Democracy Act and the enforcement of several subsequent punitive executive orders dating up to May 1, 2008.

Some U.S. measures put in place against the junta before 2003 included a ban on new investment and an American veto on any proposed loan or assistance by international financial institutions. That ban on new U.S. investments was imposed in 1997 — the same year ASEAN admitted Burma as a member. The Clinton administration could take that decision in 1997 because at that time the US had minimal trade with Burma and a total investment of only $225 million.  

Indeed, until the advent of the Bush administration, Burma was not among the key targets of sanctions, with the broadest U.S. sanctions being directed at countries identified as supporting terrorism: Cuba, Iran, Libya, North Korea, Syria and Sudan. But Bush, prodded by his wife, has made Burma key US target.

Laura Bush’s Burma activism — manifest from the unprecedented manner the first lady came to the White House briefing room this week and addressed a news conference on the cyclonic disaster in another country — is tied to the Christian fundamentalist beliefs that have long coloured her and her husband’s thinking. Her ire against a predominantly Buddhist Burma and its military, which sees itself as the upholder of the country’s unity and cultural identity, reputedly has sprung from information from some of the Christian churches that have a sizable number of ethnic-minority adherents in that country and from a meeting with a Karen rape victim.

Laura Bush’s first-ever visit to the White House briefing room was not to announce an aid package for Burma but to hurl insults at its rulers and accuse them of callousness in going ahead with the referendum. Actually, the junta has delayed the vote until May 24 in the cyclone-battered areas, where a third of the population lives. As one American newspaper columnist wrote, when a country has been “laid low by a massive natural disaster, the diplomatic thing to do is to respond with a show of compassion. Not kick ’em when they’re down.”

While the European Union has also slapped sanctions on Burma, especially after the brutal way the September 2007 monk-led protests were suppressed, the blunt fact is that no nation thus far has emulated the extent to which United States has gone in imposing penal actions. In fact, U.S. sanctions against Burma have followed a now-familiar pattern in American policy — first imposing an array of unilateral sanctions against a pariah regime, then discovering that the sanctions aren’t working and, therefore, turning to allies and partners to join in the penal campaign, and finally threatening sanctions against firms from third countries if those nations refuse to toe the U.S. line.

Interestingly, the history of Western sanctions against Burma underscores the manner the penal approach got shaped not by a cause — bringing an end to the military rule — but by the political travails of an iconic personality, Aung San Suu Kyi, the daughter of Burma’s founding father, Aung San, the Japanese-trained commander of the Burmese Independence Army.

Suu Kyi has had close ties with India since her student days. Because her mother, Khin Kyi, became Burma’s ambassador to India in 1960, Suu Kyi studied at a high school and college in New Delhi. Then, in the mid-1980s, Suu Kyi and her British husband, Michael Aris, a scholar in Tibetan and Himalayan studies, were fellows at the Indian Institute of Advanced Studies at Simla.

Burma’s present problems can be traced back to the politically cataclysmic events of 1962, when the military under General Ne Win ousted an elected government and thereafter sought to introduce autarky by cutting off the country from the rest of the world. Yet the West, not unhappy that the military had ousted a founding leader of the non-alignment movement, Prime Minister U Nu, imposed no sanctions on Burma.

More than a quarter-century later, even a bloodbath that left several thousand student-led demonstrators dead or injured in Rangoon did not invite Western sanctions. For the democratic opposition, August 8, 1998 — the day of the bloodbath — symbolized the launch of the Burmese democracy movement. Its 20th anniversary thus will be commemorated on the same day the Beijing Olympics kick off with an opening ceremony that some world leaders are threatening to boycott over China’s brutal repression in Tibet.

When the bloodbath happened, the then UK-based Suu Kyi was in Rangoon to take care of her stroke-stricken mother. Within days, she was addressing her first public meeting. Having been accidentally thrown into the vortex of national politics, Suu Kyi then went on to inspire and mould the Western punitive approach toward Burma.

The junta’s detention of her from July 1989 onward and its refusal to honour the people’s verdict in the May 1990 national elections brought Suu Kyi to the centre of world attention. She received several international awards in quick succession — the Rafto Human Rights Prize in October 1990; the European Parliament’s Sakharov Human Rights Prize in July 1991; and the Nobel Peace Prize in October 1991.

A major trigger in galvanizing international opinion was clearly the junta’s brazen refusal to cede power despite the May 1990 national elections, which gave the detained Suu Kyi’s National League for Democracy (NLD) party 59 percent of the votes but 82 percent of the seats in Parliament. By keeping her in detention for nearly 13 of the past 19 years, the junta has itself contributed to building Suu Kyi as an international symbol of the Burmese struggle for political freedoms.

The personality-shaped nature of the sanctions approach can also be explained by the fact that before Suu Kyi, there was no unifying figure to challenge the military’s domination in all spheres of the state and to lead a national movement for the restoration of democracy. The Nobel Prize greatly increased her international profile and domestic clout. Western aid cut-offs and other penal actions thus began only in the period after the junta refused to honour the results of the 1990 elections.

How a personality can help shape the sanctions approach was further underlined by the way Suu Kyi’s personal rapport with U.S. Secretary of State Madeleine Albright helped spur President Bill Clinton to reluctantly impose a ban in 1997 on new American investments to develop Burma’s resources. That ban was slapped even though international pressure, and the Clinton administration’s own intervention, had made the junta to release Suu Kyi in July 1995 after six years in house detention.

Even Laura Bush cited Suu Kyi this week to justify her Burma activism, announcing that President Bush would soon sign legislation conferring Congress’s highest civilian honour on her, just months after he had personally presented the same prize — the Congressional Gold Medal — to the Dalai Lama.

Not only has the sanctions approach been personality-driven, but also a personality hue has been put on the internal struggle in Burma. That struggle has been portrayed, simplistically, as a battle between Suu Kyi and the junta’s reclusive chairman, General Than Shwe, a fight between good and evil, and a tussle between the forces of freedom and repression. While such a portrayal is useful to draw international attention to a remote country that is peripheral to the interests of all except its neighbours, it helps obscure the complex and multifaceted realities on the ground.

Despite Suu Kyi’s central role in shining an international spotlight for 19 years on the military’s repressive rule, the grim reality is that years of tightening sanctions against Burma haven’t helped loosen the military’s grip on polity and society. If anything, the sanctions have only worsened the plight of ordinary Burmese.

Far from the people gaining political freedoms, an again-detained Suu Kyi’s personal freedom has remained an outstanding issue. While ordinary Burmese have been its main losers, the sanctions-centred approach has proven a strategic boon for China, creating much-desired space for it to expand its interests in and leverage over Burma.

In the period since the West began implementing boycotts, trade bans, aid cut-offs and other sanctions, it has seen its influence in Burma erode. Even as it has become fashionable to talk about better-targeted sanctions, the sanctions instrument, in reality, has become blunter. Sanctions were intended to help the citizens of Burma, yet today it is the ordinary people who bear the brunt of the sanctions.

Because Burma is poor, vulnerable and isolated, it only reinforces its attraction as a sanctions target. Still, Burma has proven an exceedingly difficult case on what the outside world can do, underscoring the limits of securing results through punitive pressures alone.

Building democracy in Burma is vital not only to end repression and empower the masses, but also to facilitate ethnic conciliation and integration in a much divided society that has been at war with itself since its 1948 independence. There is need for greater unity and coordination among the major democracies on adopting a pragmatic Burma strategy. A good idea would to build a concert of democracies working together on Burma, serving as a bridge between the U.S., European and Asian positions and fashioning greater coordination in policy actions.

Without a structured and more-progressive international approach, Burma will stay on the present deplorable path, with the military continuing to call the shots. As American analyst Stanley A. Weiss wrote after recently visiting Rangoon, sanctions against Burma “may feel right, but they have helped produce the wrong results. Encouraging Western investment, trade and tourism may feel wrong, but maybe — just maybe — could produce better results. That might be politically incorrect, but at least it wouldn’t be politically futile.”

In an era of a supposed global village, why deny the citizens of Burma the right to enjoy the benefits of globalization and free trade? A more dysfunctional Burma is not in the interest of anyone.

© Asian Age, 2008.

Promoting Political Freedoms in Burma:
International Policy Options

Brahma Chellaney[*]

(Prepared for presentation at the Burma workshop of the Swedish Institute of International Affairs, Stockholm, May 8-9, 2008.)

In a year that marks the 60^th anniversary of Burma’s independence, the country’s junta is holding a national referendum on a new Constitution, as part of a touted seven-step “roadmap to democracy.” With the military ensconced in power for 46 long years, few believe it will hand over power to civilians after promised elections in two years’ time. It took the military more than 14 years just to draft a new Constitution,[1] which grants wide-ranging powers and prerogatives to the military, including 25 percent of the seats in the federal and provincial legislatures.

U.S. President George W. Bush has not only denounced the Constitutional process as fatally flawed, but also on May 1, 2008, slapped yet more sanctions on Burma. The latest sanctions are targeted at state-owned companies that produce timber, pearls and precious gem — firms that are, in Bush’s words, “major sources of funds that prop up the junta.”[2] The United States earlier had imposed sanctions on companies controlled by private individuals in the airline and hotel businesses in an effort to smother foreign tourism flow to Burma.

Such is the tragedy that Burma symbolizes that, in one week, it has been battered both by new sanctions and a tropical cyclone from the Bay of Bengal that reportedly killed thousands of residents along the southeastern coast. On the one hand, impoverished Burma is economically vulnerable and thus seemingly susceptible to outside pressure. On the other hand, Burma has proven to be a complex and exceedingly difficult case on what the outside world can do.

What role external actors can play in promoting a democratic transition, however, is an issue not limited to Burma. Autocratic rule abounds in the world, including around Burma. International principles and policies deemed appropriate to help bring about democratic transition in Burma should ideally be such that they permit application in other settings, if promotion of democracy is not to be seen as a political tool to target bad autocracies while shielding those that are perceived in one’s self-interest to be good autocracies.

Yet the temptation to look at Burma in isolation, as if it uniquely exists in a tight compartment, has been so overpowering that the country has been held to special standards and subjected to unrelenting demands that are rarely invoked against stronger, more-entrenched autocracies that still flout near-universal human-rights norms. These other autocracies, unlike Burma, actually pose a challenge to the liberal international order. But such selective targeting may be one reason why international efforts to demilitarize Burma’s polity have been a signal failure. It is helpful to look at Burma in a larger regional and Asian context.

Today, a qualitative reordering of power in Asia is challenging strategic stability and reshaping major equations. A new Great Game is underway, centered on building new alliances, ensuring power equilibrium, gaining greater market access, and securing a larger share of energy and mineral resources. From war-games on the high seas to the establishment of exploratory enterprises like the Shanghai Cooperation Organization and the Quadrilateral Initiative, the ongoing developments are a reminder of that high-stakes game. With the center of gravity in international relations clearly moving toward the Asia-Pacific, this Great Game could indeed determine the future world order.

Asia has almost 60 percent of the world’s population spread across a 43.6 million-square-kilometer area. Geographically, Asia comprises 48 separate nations, including 72 percent of the Russian Federation and 97 percent of Turkey, although in popular perception it seems to comprise only the area from the Japanese archipelago to the Indian subcontinent. Asia encompasses very different and distinct areas — from the sub-arctic, mineral-rich Siberian plains to the subtropical Indonesian archipelago; and from oil-rich desert lands to fertile river valleys.

Asia is also very diverse. It has countries with the highest and lowest population densities in the world — Singapore and Mongolia, respectively. It has some of the wealthiest states in the world, like Japan and Singapore, and also some of the poorest, such as Burma, North Korea and Afghanistan. It has tiny Brunei, Bhutan and the Maldives and demographic titans like China, India and Indonesia. The smallest country in Asia in terms of population, the Maldives, also happens to be the flattest state in the world. In sharp contrast to the low-lying states like the Maldives, the Philippines and Bangladesh that are threatened by the potential rise of ocean levels due to global warming, Asia has mountainous nations like Nepal, Afghanistan and Kyrgyzstan.

Parts of continental Asia are extraordinarily resource-rich. The desert lands of West Asia, the barren wastes of Central Asia, the Russian shelf in Asia and the Burma’s Bay of Bengal coast together hold nearly 60 per cent of the world’s proven oil and gas reserves. Burma, rich in natural resources, sits on potentially vast quantities of natural gas. There are vast coal reserves in China and the Russian Far East. Siberia holds ores of almost all economically valuable metals, including some of the world’s largest deposits of nickel, gold, lead, molybdenum, diamonds, silver and zinc. The belt running down from the Malay Peninsula to Indonesia contains huge deposits of tin.

Asia, however, is largely a water-stressed continent. Large parts of Asia depend on monsoon precipitation and on the glacially sourced water reserves of the Himalayas and Tibetan highlands, the riverhead of Asia’s waters. Climate change will have a significant impact on the availability and flow of water resources in Asia and thus become an important factor in the national-security calculus of several states, including the world’s two most populous countries — China and India. The geopolitical importance of the Tibetan plateau, whose forcible absorption in 1950 brought the new Chinese state to the borders of India, can be seen from the fact that most of the great Asian rivers originate there. If the demand for water in Asia continues to grow at the current rate, the interstate and intrastate disputes over water resources could potentially turn into conflicts in the years ahead.

Another area of sharpening Asian geopolitics is energy. Competition over oil and gas resources, driven by rapid economic growth in Asia, indeed constitutes one key dimension of the emerging Great Game. The ongoing global shifts in economic power are manifest from the changes occurring in the energy and materials sectors, with the growth in demand moving from the developed to the developing world, principally Asia. Energy prices are going to stay high and volatile for the foreseeable future, given these shifts and the soaring demand in countries like China and India, which together are projected to double their oil demand between 2003 and 2020.

Despite the total consumption of energy in the Asia-Pacific having grown by 70 percent between 1992 and 2005, per capita energy consumption is still relatively low by international standards: 749 kg of oil equivalent in 2005, compared with the global average of 1,071 kgoe. Not only will per capita consumption grow sharply in Asia, “on the supply side, Asia’s strong demand environment for energy and basic materials, coupled with its low labor costs, means that the region will increasingly become a global producer of aluminum, chemicals, paper, and steel.”[3]

Slaking the tremendous thirst of the fast-growing Asian economies and meeting the huge demands of the old economic giants in the West are at the core of the great energy dilemma facing the world in the 21^st century. Finding an energy “fix” has become imperative if the Asian and other emerging economies are to continue to grow impressively and if the prosperous countries are to head off a slump. Such a “fix” would have to be rooted in three essential elements: low-cost, preferably, renewable alternatives to fossil fuels; greater energy efficiency; and minimizing or eliminating greenhouse-gas emissions. The ongoing structural shifts in global energy markets carry important long-term political and economic implications, besides challenging the stability of these markets.

Employing their large oil and gas resources, energy-rich countries have positioned themselves as key players in the Asian Great Game. Russia, for example, has used its oil and gas exports to revive its fortunes, succeeding in becoming an important geopolitical player again. But for its huge oil and gas wealth, Iran would not have been able to play its nuclear card in defiance of the United Nations Security Council resolutions. In a more modest way, Burma has been able to use gas deals with Thailand and China to earn hard cash in the face of tightening international sanctions. External players like the United States, the European Union and Turkey have sought to influence the pipeline politics in Asia. The United States has not only strengthened its military arrangements in West Asia, but also set up new bases or strategic relationships stretching from the oil-rich Caspian Sea basin to Southeast Asia. In this larger picture, southern Asia (of which Burma is a part) is a strategic gateway between the Gulf and the Far East, and between Central Asia and the Indian Ocean rim.

In the coming years, the voracious appetite for energy supplies in Asia is going to make the geopolitics murkier. The present geopolitical maneuvering is an indicator of that. What is striking is that the new flurry of alliance formation or partnerships in Asia is being led by Asia’s rising powers, not by the United States, which has policed Asia since the end of World War II. In this larger context, Asian cooperation and security will be very much influenced by the equations between and among the major players. The need to secure stable energy supplies will drive the major players in Asia to increasingly integrate their energy policy with foreign policy, as they consciously promote diplomatic strategies geared toward seizing energy-related opportunities overseas.

Energy-driven competition should not be allowed to aggravate interstate rivalries in Asia. Mercantilist efforts to assert control over oil and natural gas supplies and transport routes certainly risk fuelling tensions. Given the lack of regional institutions in Asia to avert or manage conflict, the sharpening energy geopolitics makes the need for Asian energy cooperation more pressing. A challenge for states in Asia is to manage their energy needs through more efficient transport and consumption and more cooperative import policies. Multinational cooperation on the security of sea-lanes is essential to avert strategic friction in Asia. Where maritime claims overlap, the answer to any such dispute cannot be unilateral drilling or production by one side. Disputes over what are legitimate zones of energy exploration in open seas need to be managed through an agreed code of conduct.

Multilateral energy cooperation in Asia indeed can pave the way for establishing a common Asian market and distribution network for petroleum products, with an Asian benchmark crude oil (similar to Europe’s Brent blend) to serve as a pricing yardstick for other types of crude. Multilateral cooperation can also help to both regulate the competition to buy foreign energy assets and to hedge risks in the event of any supply disruption, whether politically induced or accidental, like a major refinery fire. And just as Europe wants Russia to open its energy industry to European investment to create a two-way relationship, the major oil-and-gas exporters and the major Asian importers should invest in each other’s energy infrastructure.

It is against the larger Asian landscape that one should examine Burma because no country or sub-region can be tightly compartmentalized and seen in isolation. Energy-rich states almost everywhere tend to have non-democratic governments, many of them repressive autocracies. In that sense, Burma is not an exception.

Even though it has significant gas reserves that are coveted by its neighbors, a sanctions-hit Burma has not reaped the energy dividends that most other autocratically ruled energy-rich states have. Also, it is nobody’s case that Burma’s curtailment of basic rights is worse than Saudi Arabia’s.

While it is easy to criticize Thailand for boosting the Burmese junta’s revenues through gas imports and to condemn China for signing a 30-year gas deal with Burma, it should be remembered that no democracy has compunction in buying oil from Saudi Arabia, even though such purchases help fatten the House of Saud, which played a lead role in fanning the spread of Islamist ideology in the world. It bankrolled jihad as part of its aggressive export of the medieval theology of Wahhabism, named after the revivalist movement founded by Muhammad Ibn’Abd al-Wahhab in 1744.

Burma’s resources and vantage location

Burma is a significant state in size and strategic importance. Bordered by Bangladesh, China, India, Laos and Thailand and by the Andaman Sea and the Bay of Bengal, Burma comprises an area of 678,000 square kilometers, making it the country with the largest landmass in the Indochina belt. It currently has a population of nearly 58 million, with a large and capable workforce.

Few can overlook Burma’s strategic location. It forms the strategic nucleus between India, China and Southeast Asia. In other words, Burma is where Asia’s main regions converge — South Asia, Southeast Asia and East Asia.

Projects to establish an ‘Asian Highway Network’ and a ‘Trans-Asian Railway’ have only underlined Burma’s strategic-bridge role. It is a country that geographically bridges Asia’s major economies. In the Asian highway project, Burma will help connect five important countries – India, China, Bangladesh, Laos, and Thailand. The Asian Development Bank has been negotiating a cross-border transport agreement among the six Mekong River-linked countries – China, Thailand, Laos, Cambodia, Vietnam and Burma.

Burma’s bounteous natural resources include natural gas, precious metals and gems, high-quality tropical hardwoods, and marine fisheries. Given that profile and position, Burma can hardly be ignored.

With major rivers and bountiful rainfall, Burma has fertile soil. But for recurrent flooding and cyclones, shortages of fertilizers and pesticides, and general mismanagement by the military-run government, its agricultural output could be much higher. Agriculture, including fisheries, forestry, livestock, rice and sugarcane, made up almost 57 percent of its GDP in 2005.[4] In the past decade, Burma has emerged as a major exporter to India, for instance, of lentils, which — rich in protein — are an integral part of the diet of vegetarians. India has the world’s highest concentration of vegetarians. Last year, Burma supplied around one million tons of lentils, or half of India’s total imports, according to official data.

Burma is a significant producer of antimonial lead, copper matte, nickel speiss, and precious gemstones. Much of the copper exports go to Japan. It also produces barite, carbonate rocks, chromite, clays, coal (lignite), copper, feldspar, gold, gypsum, lead, natural gas, nickel, silver, tin, tungsten and zinc. Among processed mineral products, Burma produces polished precious gemstones, refined gold, refined lead, petroleum products and crude steel. Minerals, however, constitute a tiny fraction of its GDP.

With its exports totaling $3.1 billion and imports adding up to $3.5 billion in 2005, Burma’s main trading partners are its neighbors — Thailand, China, India, Singapore and Malaysia. In merchandise trade, Thailand ranks No. 1. But if the opaque arms trade (for which no reliable figures are available) and services are included, China is perhaps Burma’s largest trading partner.

Through sanctions and officially encouraged disengagement, Burma has become marginal to the foreign-policy interests of the West, thus reinforcing the Western approach emphasizing high-minded principles over strategic considerations, and isolation over engagement. Today, the West has little financial stake left in Burma. About 95 percent of Burma’s trade in fiscal 2007-08 was with other Asian countries. The West also doesn’t have to live with the consequences of its actions. Burma’s neighbors, however, will not escape the effects of an unstable Burma. The imperatives of proximity thus dictate a different policy logic. That has spurred criticism that Asia is helping Burma beat sanctions. [5]

Rich in natural gas, Burma — according to one estimate by Alexander’s Gas & Oil Connections (a site for the gas, oil and affiliated industry) — has recoverable onshore and offshore reserves of 2.46 trillion cubic meters. But with greater foreign investment in exploration, more rich gas deposits could be discovered, especially in Burma’s offshore areas in the Bay of Bengal.

In January 2008, the state-owned China National Petroleum Corp (CNPC) signed production-sharing contracts with the Burmese Ministry of Energy covering deep-sea blocks off Burma’s western Rakhine coast. CNPC is about to begin construction of a trans-Burma pipeline to take the gas from the Shwe field in Rakhine to China’s Yunnan province and beyond. Burma is already exporting natural gas worth $1.2 billion a year to neighboring Thailand from the Gulf of Martaban.

Daewoo International, the South Korean company, is the largest investor in the Shwe gas site. Two Indian energy firms, ONGC Videsh Ltd. and Gas Authority of India Ltd. (GAIL), own a minority stake in that Burmese field, A-1, and in the adjacent A-3 block. This Indo-Korean consortium of Daewoo, ONGC Videsh and GAIL had earlier discovered additional gas deposits in the Shwe site, and consequently revised the Block A1’s total gas estimates to 566 billion cubic meters.

Burma, however, took India unawares by signing an accord with CNPC to export gas to China from the A-1 and A-3 fields over a 30-year period. To New Delhi’s acute embarrassment, Burma first disclosed its intent to sell the gas to China no sooner than India had announced an agreement-in-principle with Beijing to jointly cooperate on securing energy resources overseas, so as to prevent the Sino-Indian competition from continuing to drive up the international price of such assets in third countries.

In recent years, Burma has stepped up piped gas exports to Thailand from its two offshore fields in the Gulf of Martaban — Yadana and Yetagun. But the new rich gas finds in the Bay of Bengal will help generate far more revenue for Burma than the current gas flow from the Gulf of Martaban. According to provisional data, gas exports to Thailand from the Gulf of Martaban fields were estimated to be worth $1.2 billion in fiscal 2007-08 that ended March 31. But because the official exchange rate pegs the kyat, Burma’s currency, to an artificially low rate of 6 to 1 against the U.S. dollar (when the black-market rate is in the vicinity of nearly 1,000 kyat to a dollar), the gas-export earnings are much underreported in the public accounts in kyat — nearly 200 times below the unofficial exchange rate.[6]

France’s Total S.A. (with a 31.24 percent holding) is the main operator at the Yadana gasfield, and its other partners are Chevron Corp. of USA (with a 28.26 percent stake), Thailand’s PTT Exploration and Production Public Company Limited (25.5 percent), and the state-run Myanmar Oil and Gas Enterprise (MOGE) (15 percent).

In the Yetagun gasfield, the main operator is Malaysia’s Petronas (40.91 percent), with MOGE (20.45 percent) and Thailand’s PTTEP and Japan’s Nippon Oil Exploration (19.32 percent each) as its partners. Gas imports from Burma are critical to Thailand’s power generation, with one-fifth of Bangkok’s electricity supply coming from that source.

Interestingly, the United States, while prohibiting new investment by American citizens or entities, has protected the business interests of Chevron Corp., which acquired a stake in the Yadana gas project in Burma when it bought Unocal Corp. in 2005. Because Unocal’s investment in the project predated the imposition of U.S. sanctions, Chevron has used a grandfather clause to stay put in Burma — one of the few large Western companies left there.

On the gas front, Burma has shown that interstate pipeline politics can be played not only by strong states but also by weak states. The junta in Burma has deftly played pipeline politics to keep the veto-empowered China on its side at the United Nations Security Council. Since the early 1990s, the junta has relied on China’s veto power to shield itself from international intervention. It was China that helped beat back an early 2007 U.S.-led attempt to impose a Security Council diktat on the junta to improve its human-rights record.[7]

The junta then proceeded to thank Beijing for torpedoing that sanctions move by withdrawing the status of India’s GAIL as the “preferential buyer” on the A-1 and A-3 blocks, and signing production-sharing contracts with China’s CNPC instead. For India, this was a discomforting diplomatic setback for two reasons: (i) it had sought to sweeten the deal both with a US$20 million “soft credit” and by proposing to construct a power plant in Burma; and (ii) the A-1 and A-3 are partly owned by two Indian state-run companies.[8]

Burma also has some onshore and offshore oilfields, with reserves estimated to be 3.2 billion barrels of recoverable crude oil. It produced 8.133 million barrels of crude oil in 2005, compared with 7.160 million barrels in 2004.[9] At least three oil companies from neighboring countries, including India’s privately owned Essar, are presently exploring for additional oil finds in Burma by conducting feasibility studies involving collection and analysis of geologic and seismic data.

Foreign investment in Burma’s energy sector, however, has not been too significant compared to the sector’s actual potential. Had Burma not been an isolated, sanctions-hit country, the picture would have been different, with international oil majors seeking exploration and production rights there. Sanctions have actually prevented Burma (like Iran) from accessing liquefaction technology to become a major exporter of liquefied natural gas (LNG). That has left Burma largely with one choice: to export natural gas by pipeline. And to whom can it sell natural gas by pipeline? Naturally, to its immediate neighbors, as it is currently doing to Thailand and is going to do to China once the new pipeline is complete. India till date has failed to secure a single production-sharing contract to buy Burmese gas.

Burma’s vantage location has also added its energy-related importance in a different way — at least for China. In addition to importing Burmese gas, China is setting up an energy corridor through Burma involving an oil pipeline to transship crude oil it imports from the Middle East and Africa. In other words, Burma is both a source of energy as well as a transshipment route for China. China presently is finalizing technical details for the construction of the oil pipeline, which — running the length of Burma — will go at least up to Chongqing, a new province carved out of Sichuan, according to one report.[10]

This energy pipeline is part of a strategic corridor — the Irrawaddy Corridor — that China is setting up to link its southwestern provinces with the Bay of Bengal and the Indian Ocean through Burma. The corridor establishes road, river, rail and energy links from China’s Yunnan and Chongqing provinces to Burma’s Chinese-built harbors at Kyaukypu and Thilawa. Along with Beijing’s onshore and offshore strategic assets in Burma, this corridor signifies an enlarging Chinese footprint in that country.

The energy pipeline and strategic corridor through Burma need to be seen in the context of the other Chinese moves and actions in southern Asia that have far-reaching strategic implications for India, Japan, the United States, Australia and other players in the Indian Ocean rim region. Besides the intent to transfer Gulf and African oil for its consumption by cutting the transportation distance and minimizing its exposure to U.S.-policed sea-lanes, China has important strategic objectives in mind in fashioning new transportation routes.[11] A fourfold Chinese strategy is currently being implemented:

1. The north-south strategic trail that the Irrawaddy Corridor represents, granting China access to the Bay of Bengal and the Indian Ocean.

2. A second strategic corridor in a north-south axis being fashioned in southern Asia is the trans-Karakoram corridor stretching from western China down to Pakistan’s new, Chinese-built Gwadar port, at the entrance to the Strait of Hormuz, through which 40 percent of the world’s oil supply passes. Opened in the spring of 2007, the deepwater port at Gwadar represents China’s first strategic foothold in the Arabian Sea. China’s plan is to make Gwadar a major hub transporting Gulf and African oil by pipeline to the Chinese heartland via Xinjiang. Such piped oil would not only cut freight costs and supply time but also lower China’s reliance on shipping lanes through the Malacca and Taiwan Straits. Pakistan has already signed a memorandum of understanding with Beijing for “studies to build the energy corridor to China.”

3. China is shoring up an east-west strategic corridor in Tibet across India’s northern frontiers, as illustrated by the $6.2 billion China-Tibet railway from Gormu to Lhasa that opened in July 2006. Beijing is now extending the Tibetan railway to the Nepalese capital of Katmandu and also to two other points: the tri-junction of the India-Bhutan-Tibet frontiers (in the Chumbi Valley) and the intersection of the India-Burma-Tibet borders.

4. China’s incremental efforts to build a “string of pearls” along the Indian Ocean rim symbolize Beijing’s desire for a fourth strategic corridor. It seeks to assemble this “string of pearls” — a term first used in a report for the Pentagon by U.S. defense contractor Booz Allen Hamilton — through forward listening posts, naval-access agreements and Chinese-built harbors stretching from Pakistan and Sri Lanka to Bangladesh and Burma. The Chinese interest in the Indian Ocean rim now extends to the Seychelles.

For China, Burma is a critical entryway to the Bay of Bengal and the Indian Ocean. Chinese strategic positioning in Burma also needs to be seen against the backdrop of Burma overlooking vital sea lanes of communication through the Strait of Malacca. Not unsurprisingly, the Irrawaddy Corridor has brought Chinese security personnel to Burmese sites close both to India’s eastern strategic assets and to the Strait of Malacca. With the Irrawaddy Corridor stretching to the Bay of Bengal, Chinese security agencies have positioned personnel at several Burmese coastal points, including the Chinese-built harbors.

These security agencies already operate electronic-intelligence and maritime-reconnaissance facilities on the two Coco Islands in the Bay of Bengal. India transferred the Coco Islands to Burma in the 1950s, and Burma then leased the islands to China in 1994. Today, despite denials by the Burmese junta, there is documented evidence, including satellite imagery, showing that China operates a signals intelligence (SIGINT) collection facility from the Great Coco Island.

The Irrawaddy Corridor holds important strategic implications for several players in the Indian Ocean rim region. Such transportation and strategic links, for example, give China leeway to strategically meddle in India’s restive northeast, including the state of Arunachal Pradesh, which China claims to be Chinese territory. Operating in India’s northeast through the plains of Burma (which was part of the British Indian empire) is much easier than having to operate across the mighty Himalayas.[12] It is no wonder that during World War II, both the Allied and the Axis powers classified Burma as the “back door to India.” The potential for Chinese strategic interference has to be viewed against the background that the tribal insurgencies in India’s northeast were all instigated by Maoist China, which trained and armed these rebels partly by exploiting the Burma route. Today, India has an 850-kilometer-long porous border with Burma, with insurgents operating on both sides with the help of shared ethnicity.[13] (Continued below)