Weekly Business Roundup (November 23, 2007)

Burma’s Yuzana in India-China Road Link Deal

A Burmese businessman in particularly good favor with the regime has been awarded a contract to redevelop most of the country’s section of the so-called Stilwell Road that linked northeast India with China during WWII.

U Htay Myint’s Yuzana Company, which is engaged in a several infrastructure projects as well as retailing and agriculture, will develop a 120-mile stretch of the road through the northeastern tip of Burma, according to the Kachin News Group.

India recently agreed with China to redevelop the road, which had fallen into disrepair and disuse owing to border tensions between the two countries.

The 1,000-mile road once connected Ledo in Assam with Kunming, capital of China’s Yunnan province.

It became known as the Stilwell Road after wartime US Gen. Joe Stilwell, who first pushed its development as a supply route to aid the Chinese who were fighting Japanese occupation forces.

China has already renovated much of its section of the road.

India was until recently reluctant to develop its section out of concern it would benefit drug smugglers and breakaway insurgents who hide across the border in Burma. But New Delhi’s ‘Look East’ economic policy has changed this attitude.

The Yuzana Company has been awarded a 30-year deal to collect a transport tax on its section of the road, according to the Kachin News Group, but it’s unclear how this fits into agreements with India and China on the functioning of the international road. 

Indian ‘Look East’ Trade Policy Hits Problems

The Indian federal government’s hopes of expanding trade east via Burma has again fallen foul of local bureaucracy and petty disputes.

Because of a transportation dispute, imports of all goods except a few items on an exemption list of perishable farm produce have been banned by the Indian state of Mizoram, bordering Burma, for two months from November 20.

Traders on the Burmese side of the border object to a monopoly on transport by bus owners and transport union workers in the Champhai district of Mizoram, said a statement by the Champhai area government, citing some obscure local right to close the border crossing to trade in a dispute.

Earlier this year, the Zokhawthar-Champhai border crossing was closed for a number of weeks because Mizoram suspected drugs and weapons might be smuggled in freight.

This border pettiness mirrors similar trade holdups on the only other cross-border trade crossing between the two countries, at Moreh in the neighboring Indian state of Manipur.

Only a few weeks ago, New Delhi finalized an agreement with the Burmese regime for a US $100 million modernization of the Burmese port of Sittwe, at the mouth of the Kaladan River which flows from Mizoram.

As part of the Sittwe development, India hopes to make the river more navigable to bigger boats and so to improve cross-border trade.

China Takes Thailand’s Stake in Salween Hydro Project

China’s grip on Burma’s energy resources has tightened with a Chinese state company acquiring a controlling stake in the planned US $6 billion hydroelectric dam project at Tasang on the Salween River.

The China Gezhouba Water & Power Group was awarded a 51 percent shareholding by the military government in place of Thailand’s shadowy MDX Group.

Reports say MDX had found it difficult to comply with the development program for the project, which envisages a 7,100 megawatt electricity generating capacity.
MDX will maintain a reduced interest in the project, which also involves the Electricity Generating Authority of Thailand.

Under the original MDX-led scheme, at least half of the electricity was earmarked to be sold to Thailand. It’s not clear if this will remain so, or whether more power will instead be pumped into China’s energy-hungry Yunnan province.

The China Gezhouba Group was the lead developer of the world’s largest hydropower dam project, the Three Gorges system on China’s Yangtze River.

Once hailed as a marvel of engineering achievement, the Three Gorges has in the last few weeks been revealed as an environmental nightmare.

More than 1 million people were forcibly moved to build the huge reservoir behind the dam, and now a similar number may have to be relocated due to collapsing shorelines, water- poisoning algae infestations and other unforeseen calamities due to the size of the project.