Business (August 2009)

Burmese Rice Exports Forecast to Rise despite Nargis Damage

a Burmese rice vendor waiting for customers at a market in Rangoon. (Photo: AFP)

Despite the damage wreaked on rice fields by Cyclone Nargis, Burmese producers say they expect Burma to export as much as 1 million tons this year. The Myanmar Rice and Paddy Traders’ Association says this will be surplus to domestic needs and could fetch a record profit. Only one year ago, emergency food aid was being airlifted into the country to feed tens of thousands of people made homeless by the cyclone which struck the Irrawaddy delta. This year, producers have already exported about 500,000 tons, and this is forecast to double after the next harvest later this year. Rice exports of about 700,000 tons in the 2008-9 financial year ending in March earned about US $200 million, according to the traders’ association. “This is remarkable given the scale of paddy damage in May of 2008, but Burmese producers do tend to go for quantity rather than quality,” said commodities analyst Simon Inphet in Bangkok.

Malaysia Relaxes Foreign Investment Rules

Malaysia has taken steps to liberalize its economy, relaxing a host of restrictions on foreign investment, including a controversial rule requiring businesses to be partly owned by ethnic Malays. Listed companies will no longer be required to allocate 30 percent of their stake to Malays as part of an affirmative action program for the country’s ethnic majority, said Prime Minister Najib Razak. Chinese and Indian ethnic minorities have long chafed against the New Economic Policy (NEP), which Najib has been slowly dismantling since taking office on April 3.

China Seeks Partners to Share Burmese Gas Pipeline Cost

Foreign developers of Burma’s biggest gas field are being invited by the China National Petroleum Corporation (CNPC) to take shares in the 1,200-kilometer pipeline from the Bay of Bengal to southwest China. CNPC was originally slated to build and operate the US $1 billion pipeline itself, but energy industry reports said the Chinese now want to sell a 49.9 percent share to the Shwe consortium, consisting of South Korea’s Daewoo International, Korea Gas and India’s state-owned enterprises onGC Videsh and GAIL. Daewoo, the major Shwe investor and developer, is expected to pick up a 25 percent stake in the pipeline. Industry sources also suggest that the Shwe consortium will have to invest about $3.7 billion to deliver the 200 billion cubic meters of gas confirmed in just two blocks of the field. China has secured sole purchasing rights to the gas.

China Advances to Leading Foreign Investor in Burma

China has emerged as the biggest foreign investor in Burma, accounting for the bulk of the US $985 million of investment flowing into the country in the financial year ended in March. The Chinese spent $856 million, according to the latest state figures. China’s surge in spending is largely accounted for by investment in a major nickel development project of the state-owned China Metal Mining Group in partnership with Burma’s Ministry of Mines. Russia and Vietnam pushed neighboring Thailand into fourth place for incoming investment, Central Statistical Organization figures show. Although Thailand remains Burma’s biggest trading partner because of the large volume of gas it buys each year, China is also fast becoming a key overall trading partner for the junta.

Burma Missing Link in UN’s Trans-Asia Railway Project

Burma is one of the missing links in an ambitious plan to forge a trans- Asian railway for trade, says the United Nations. The inauguration of the Trans-Asian Railway Network (TARN) was formally confirmed in Bangkok recently with ratification of the plan by China, joining seven other countries, including Russia and India that have signed up for the project. The UN agency promoting the project says 106,000 kilometers of the 114,000 km envisaged for the railway—to span 28 countries—is already in existence. But the missing 8,300 km includes track either not yet built or in need of restoration and repair in Burma, Iran, Kyrgyzstan, Cambodia and Laos. Both India and China have offered to help develop new track inside Burma, but the military government has so far stalled.