Global Policy Forum

Asian Leaders, Seeking Myanmar's Gas, May Go Soft on Sanctions


By Cherian Thomas

November 20, 2007

Asian leaders meeting in Singapore this week are reluctant to take tough action against Myanmar as they don't want to lose access to its natural-gas reserves, analysts said. Myanmar, run by a military junta which in September launched the biggest crackdown on pro-democracy campaigners in two decades, has 19 trillion cubic feet of reserves, according to BP Plc. That's enough to meet China's needs for a decade.

Gas commands a premium for fuel-hungry Asian nations as crude oil prices inch toward $100 a barrel. Almost a decade of sanctions against Myanmar led by the U.S. has been undermined by Asia, in particular by China's quest for more energy. ``Fuel economics are driving Asia's stand on Myanmar,'' said Subramanyam Chandrashekhar, director at South Asia Analysis Group, a New Delhi-based international affairs research institute. ``If Myanmar has to be reformed, the international pressure should be on China.''

China is Myanmar's closest ally and one of its biggest trading partners. As a permanent, veto-wielding member of the UN Security Council, its support is essential for any international effort to bring about change in the Southeast Asian country formerly known as Burma. China said last week it will reject sanctions on Myanmar at the East Asia summit in Singapore and won't press for a timetable for democratic reforms sought by the U.S. and the United Nations. The summit, which starts tomorrow, brings together the 10-member Association of Southeast Asian Nations, as well as Japan, Korea, India, Australia, New Zealand and China.

China, India

China, the biggest contributor to global growth, last year consumed 1.96 trillion cubic feet of gas, according to BP Plc's Statistical Review of World Energy released in June this year. India, the second-fastest growing economy in the world after China, estimates its demand for gas will more than double to 14 billion cubic feet a day by 2025. Besides China and India, Thailand, South Korea and Japan are also competing for a share as Myanmar discovers more gas reserves. Myanmar has offered about 18 offshore areas to explorers in China, India, Vietnam and Thailand, including China National Petroleum Corp. and India's Oil and Natural Gas Corp.

Thailand was the first country to import gas from Myanmar. China is in an advanced stage to build a pipeline to its southern regions from Myanmar's gas fields. ``Myanmar's market is developing and none want to rock the boat at this early stage,'' said Tony Regan, an energy consultant with Nexant Ltd. in Singapore. ``India is aware that Thailand and China are ahead of them in the pecking order to access to Myanmar's gas -- they aren't going to go too far'' against Myanmar's regime.

Military Crackdown

India's government has made just one statement on Myanmar following September's crackdown on pro-democracy demonstrators, in which more than 100 people died and several hundreds detained, according to the United Nations. ``We are concerned at the situation in Myanmar and are monitoring it closely,'' Indian Foreign Minister Pranab Mukherjee said on Sept. 26. ``As a close and friendly neighbor, India hopes to see a peaceful, stable and prosperous Myanmar, where all sections of the people will be included in a broad- based process of national reconciliation and political reform.''

That's a far cry from the days when India supported the democracy movement of Myanmar's main opposition leader and Nobel laureate Aung San Suu Kyi, who was conferred with India's prestigious Jawaharlal Nehru award in 1993.

Human Rights

Asean, which includes Indonesia, Thailand, Malaysia, Singapore, Brunei, the Philippines, Cambodia, Laos, Vietnam and Myanmar, will today sign a watered-down charter that doesn't explicitly mention penalties for violating human rights. The European Union yesterday tightened sanctions against Myanmar, by toughening visa restrictions and banning imports of Myanmar's gems and precious metals, as Asean prepared to sign the charter. ``Everybody is entitled to do what they want to do,'' Asean's secretary general Ong Keng Yong said referring to Myanmar. ``If you have a problem child in the family, what do you do? Do you send the child to a sanatorium? Asean's tradition is different.''

The United Nations Special Envoy to Myanmar Ibrahim Gambari was yesterday asked to scrap a briefing for Southeast Asian leaders after the nation's junta protested against the plan, Singapore's Prime Minister Lee Hsien Loong said. Only Japan, which lost one of its citizens, a video journalist who was shot by the military in Yangon on Sept. 27 during anti-government protests, has taken action against Myanmar among the Asian countries.

Gas Fields

Japan last month cancelled a 552 million yen ($4.7 million) grant to Myanmar, joining the U.S. and the EU in pressing the junta to stop its crackdown on pro-democracy campaigners. Still, the potential from Myanmar's gas fields are high. Chevron Corp., the second-largest U.S. energy company, last month said it will keep its stake in a natural-gas project in Myanmar even as it risks losing tax benefits from the project under a bill approved by a U.S. congressional committee on Oct. 23.

Chevron has a 28.3 percent stake in the Total SA-operated Yadana project in Myanmar. It obtained the stake through its 2005 purchase of Unocal Corp. The Yadana project sells natural gas by pipeline to Thailand. Natural gas is the largest source of revenue for Myanmar, according to the New York-based Human Rights Watch. Myanmar earned $2.16 billion by selling gas, mainly to Thailand, in 2006, Human Rights Watch estimates. And that amount accounted for half the country's total exports, it said.



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