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Energy needs override concern on Myanmar

Energy needs override concern on Myanmar
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First Published: Wed, Oct 03 2007. 12 22 AM IST
Updated: Wed, Oct 03 2007. 12 22 AM IST
Bangkok: or two decades, Myanmar’s neighbours have grappled with how to respond to the unrelenting repression of the country’s people by its ruling generals. In Thailand, the answer comes each time anyone pays an electricity bill.
Natural gas from Myanmar generates 20% of all electricity in Thailand. The gas, which this year will cost about $2.8 billion (Rs11,116 crore), is the largest single export for Myanmar’s impoverished, cash-strapped economy.
Thailand’s gas imports highlight the difficulty facing China, India, Singapore and Malaysia, among other countries, as they vie for Myanmar’s hardwoods, minerals and gems—and access to its market of 47 million people.
At a time of rising energy prices, the prospect of extracting resources appears to override the embarrassment and shame of dealing with a junta that has attracted worldwide condemnation. For that reason, the countries with the most leverage over Myanmar seem the most reluctant to use it, analysts say.
For Myanmar’s generals, the gas purchases by Thailand are only the beginning of what promises to be a significant infusion of cash. Myanmar will soon announce the winner of a concession in the Shwe gas fields off the western coast. Bidders include firms from India, China and South Korea.
In eastern Myanmar, Thai firms are building hydropower plants and have contracts to pay the government billions of dollars for electricity. “For a country that’s used to a hand-to-mouth existence there is suddenly a bonanza of foreign exchange,” said Sean Turnell, a specialist on the Myanmar economy at Macquarie University in Australia.
The cash has allowed the generals who run Myanmar to buy weapons, helicopters, order a nuclear test reactor and construct their new administrative capital north of Yangon. “The natural gas drastically changed the military government’s fiscal position,” said Toshihiro Kudo, director of the Southeast Asian Studies Group at the Institute of Developing Economies, a Japanese research organization.
Myanmar’s gas reserves are small by global standards. Oil firm BP estimates the total at 538 billion cubic metres, far less than the reserves of Malaysia or Indonesia. But the billions of dollars those gas fields will produce are valuable to the generals, whose sources of financing are very limited because of American sanctions.
For Myanmar, the gas fields would mean more cash. Turnell estimated that gas pumped from Shwe platforms would have a value of $2 billion a year.©2007/The New York Times
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First Published: Wed, Oct 03 2007. 12 22 AM IST