Burma Update

SCMP - Thursday, February 26, 2004
AGENCE FRANCE-PRESSE in Bangkok
Updated at 1.07pm:

Myanmar’s biggest rebel group has concluded three days of “frank” peace talks with the ruling junta, a Karen National Union (KNU) spokesman said on Thursday, but little progress appeared to have been made.

The KNU, which has been fighting for autonomy for 53 years, met with officials from the military government in the Myanmar town of Moulmein, the headquarters for the junta’s southeastern division command.

The talks, which followed a ceasefire agreement reached last month, addressed the relocation of armed forces, delineation of KNU territory and the fate of hundreds of thousands of internally displaced Karen.

“We had frank discussions,” the KNU’s foreign affairs spokesman David Taw said from a rebel base near the Thai border after returning from Myanmar late on Wednesday, declining to describe the negotiations as successful.

“I think we cannot say it’s a failure, but it is in process. We will look at these results and decide whether there is progress or failure,” Taw said.

After a surprise December agreement to cease hostilities, the commander of the KNU’s military wing General Bo Mya in January led a delegation on an historic trip to Yangon which produced a provisional ceasefire deal.

This week’s discussions, which were aimed at cementing the ceasefire, were led by the KNU’s joint first secretary, Htoo HToo Lay, and the junta’s deputy chief of military intelligence Major General Kyaw Win, Taw said.

The peace talks are seen as crucial to the junta as it attempts to line up support from ethnic groups for a democracy “road map” which is due to kick off this year with a national convention to draft a new constitution.

However, many details need to be ironed out including the fate of some 200,000 internally displaced civilians in Karen state, whose lives have been shattered by five decades of fighting.

“Some of their villages have been totally destroyed, and some have been abandoned,” Taw said. “We discussed allowing the villagers to return and the provision of accommodation for those whose homes were destroyed.”

Taw said the ruling State Peace and Development Council (SPDC) proposed the KNU place its central and battalion headquarters on official maps so that troops and civilians can be better aware of the delineation of territory.

The KNU is the largest of a handful of rebel groups still resisting Yangon’s rule. The junta estimates there are 7,000 rebels in the insurgent group which took up arms 53 years ago.

SCMP - Monday, February 23, 2004
PHILIP BOWRING

Last year, foreigners bought a net US$700 billion of American assets, mostly government, agency and corporate debt. Is this not utter folly? When, I ask, do they expect to get their money back? The players in the international money game mostly seem to believe that this is a "pass the parcel" where the music never actually stops. Or, if is does, it is because of one-off commercial accidents, which leave only a limited number of participants holding the likes of Enron debt.

What is not being asked is whether the galloping buildup of US debt is going to cripple the whole system; the dollar-based world which has existed since America unilaterally trashed the Bretton Woods agreement in 1971.

History should teach us to be wary of central bankers as well as governments. Yet the horizons of those who make the bulk of portfolio management decisions, be they investment banks, monetary authorities or fund managers, seldom look beyond 30 weeks, let alone 30 months. As for 30 years, forget it.

But given the state of payment imbalances, any sensible discussion of the future needs to start with a look backwards to at least 30 years ago. It should include an understanding of the psychology of the deeply indebted.

America's net debt to the rest of the world is approaching US$2 trillion. The buildup has been apparently cheap and painless because of the dominant role of the dollar in the global system. But the persistence of gigantic deficits is not just raising the question of how long and at what price this can be financed. It is beginning to cast a shadow over the whole system, which hinges on confidence in the ability of the US to meet its obligations. It looks increasingly unlikely that it can do so, even assuming that either a major US recession or drastic Asian currency revaluations come soon enough to halt the debt buildup.

Two groups of people are responsible for the impending crisis in international finance, which could prove at least as damaging as that of 1971. First, there is Federal Reserve chairman Alan Greenspan and the ranks of media and political courtiers who surround him. His response to every problem has been ever easier monetary conditions. It was his response to the supposed Millennium bug, the collapse of the Nasdaq in 2000, the failure of the Wall Street insiders' scam know as long-term credit management, September 11, Enron and the mini-recession of 2002, for example.

Easy money naturally leads to debt buildups and bubbles as households are positively encouraged to go out and buy petrol-guzzling sports utility vehicles with 0 per cent finance, or extract equity from their inflated house prices. Meanwhile, President George W. Bush is borrowing hundreds of billions of dollars from the next generation to buy votes and illusions of national security. The other group consists of those who allow this process to continue, the mostly Asian central banks who buy all this debt and the US investment banks with a huge vested interest in selling mountains of dubious debt, and related instruments, to gullible foreigners. Those foolish enough to believe that US government debt is really that safe should examine the record. Foreign investors who believed in the word of the State of Mississippi are still waiting for the redemption of an issue made in 1833.

All right, so that was a state matter not a federal one and preceded the civil war. But fast forward to the 1930s, when president Franklin D. Roosevelt was searching for ways out of the depression. He not only devalued the dollar and took the US off the gold standard, but repudiated all contracts, public or private, which were denominated in gold.

Again, in 1971, president Richard Nixon ended the Bretton Woods system by stopping the exchangeability of dollars into gold. Gold was becoming attractive simply because of lack of faith in a US which was printing money to finance war and a prosperous peace. The net result was a decade or more of high inflation.

I am not suggesting that high inflation will return. But one must assume either a period of artificially low interest rates to enable households and the US government to manage its debt at the expense of the foreign suckers who bought it. Or there is going to be an upsurge in US protectionism as the great promoters of free trade and globalisation find it is not working out as planned. The success of John Edwards' campaign for the Democratic nomination shows the way the wind is blowing. Republicans may in principle be more free-trade oriented, but it is hard to imagine the Bush administration, with its contempt for foreign views, defending free trade.

The third possibility is that there will be some form of dollar crisis which will lead the US to freeze the dollar balances held by foreign central banks, and even private institutions. Perhaps they would continue to earn interest, but the principal would be subject to controls on how and when it could be spent. The world needs the dollar as it premier trading currency. It cannot be replaced, except over many years. But it is possible to imagine a two tier-exchange system which separated the dollar's trading role from that of the disastrous state of the US foreign asset-liability balance.

Some Hongkongers may remember the problems caused by its membership of the sterling area when Britain's own overseas position became too weak to sustain its reserve currency role. Hong Kong kept its fiscal reserves in sterling but following the devaluation in 1967 had to be offered guarantees to ensure it did not switch to dollars, further draining London's reserves.

The dollar problem is different. There is no alternative to the dollar. But the size of the US foreign-debt overhang relative to the economy is vastly greater than it was for Britain.

The crisis may be avoided. But as long as Asian governments continue to bury their heads, fail to look at the facts or history, they will contribute to the demise of a system they claim to be supporting. They are underwriting the Greenspan hubris and in the process leading US households into deep water, and America itself into a debt position which will have dire consequences for its own influence and for the system over which it has presided.

The Irrawaddy On-line Edition

By Aung Naing Oo

February 11, 2004—"Compromise where one can and resist where one must." This should be the policy of pro-democracy and ethnic groups regarding the proposed re-opening of the National Convention. If the groups harbor any hope for positive change in Burma, they have no choice than to join the State Peace and Development Council’s (SPDC) constitution-drafting caucus—which marks the first of the junta’s seven-point "road map to democracy."

The convention has yet to be re-started, but preparations such as logistics have already been made. Given that and Rangoon’s efforts to persuade the ethnic groups to participate, it is clear that it is determined to go ahead. With the Karen poised to enter a truce with the regime and likely to attend the convention, it is only a matter of time before the first step of the road map is implemented. Perhaps within the first half of this year as Burma’s Foreign Minister Win Aung said in Thailand recently.

Not all of the junta’s plans may go well, however. Pro-democracy groups have so far been excluded and not all ethnic groups have pledged support for the regime. There is no indication as yet if Aung San Suu Kyi or the National League for Democracy will be part of the process.

Likewise, one must wonder if the convention can take place without some form of prior negotiation. The proposed constitution is a highly contentious issue and pledges of support can be withdrawn if the SPDC is not prepared to compromise. Furthermore, the drafting process is likely to be a long bumpy ride, made slower and more problematic if there is no prior agreement on what will and can be compromised on.

Reportedly, the Burmese Prime Minister Gen Khin Nyunt assured the Kachin and Karen leaders that they could discuss anything in the convention. All they have to do is to show up and make changes to the 104 principles laid down at the previous sitting of the conference. This could convince a lot of undecided groups to join.

Participants to the convention must have clear trade-offs in mind. If they are armed only with demands, the congress will fail. Opposition delegates must be prepared to perform balancing acts between compromise and principle.

One such area of compromise is the junta’s demand that 25 percent of the seats in all assemblies be set aside for the military under the new constitution. That is too much. But recall that the SPDC has said that this should be considered as a form of power-sharing. The percentage must be reduced to say 15 or 20 percent.

Also, the provision should apply only to national and peoples’ assemblies and not to regional chambers. Whatever agreement is made on military representation, it must not be looked upon as a permanent arrangement. If the SPDC is adamant on 25 percent, the opposition groups must ensure that the clause is amendable at a later date.

Another area that can be compromised on is the military demand for three cabinet portfolios—the defense, home and border areas ministries. This can also be accepted with alterations or amendments to current propositions.

These are just a few examples. There are other areas where trade-offs can be made in order to allay the fears of the Burmese generals. However, compromise must be matched with principle. Put another way; any outrageous military prerogative must be resisted.

First, there is the infamous "Number 6 Guideline," which calls for a constitutional leading role for Burma’s armed forces in the future affairs of the state. This must be opposed. At least, if this is not possible, the opposition groups should not accept it without some form of alteration.

Second, the criteria for the election of the President must be changed—specifically that he is to be elected through an electoral college. In that case no civilian would ever be elected to the highest office, which would cripple progress toward democracy and weaken transparency and accountability.

Third, equally damning is the junta’s call for recognition of a provision that would provide the military with special powers to declare a "state of emergency." The armed forces could then legally overthrow an administration any time it wished. The inclusion of such a provision in the constitution must be opposed.

Fourth, any other attempts by the SPDC to make the military independent of civilian control must be resisted at all cost. In the proposed constitution there is currently no provision for parliamentary oversight of the defense budget. It would also confer special powers on the Chief of Staff of the armed forces.

Other prerogatives should be scrutinized critically. But the convention should be considered as the best hope right now for resolution of the political deadlock.

The success of the conference will be dependent on principled compromise from both sides throughout the process. It is therefore imperative that the SPDC breaks its silence over key policies and indicates how it is prepared to compromise. At the very least, the junta should state whether it really meant what it told the Kachin and Karen leaders. Otherwise, the road map will become a roadblock.

The Burmese opposition groups must come out of the closet and articulate their positions. They should drop the rhetoric, venture out and be prepared to take risks. Uncertainty surrounding the convention must be removed. But they must do so with a combination of compromise and principle. Only then would there be any hope of a resolution.

Aung Naing Oo is a political analyst living in exile.

The Irrawaddy On-line Edition

By Naw Seng

February 11, 2004—The Thai government has ordered that Burmese refugees living in urban areas be relocated to three existing camps near the Thai-Burma border at the end of this month, according to refugee sources.

Khin San Nwe, who lives in Bangkok and is recognized by the UNHCR as a Person of Concern (POC), said the Thai administration’s decision to relocate the urban-living refugees was made last October when it came to an agreement with the Bangkok-based UN High Commissioner for Refugees to move them to the camps by the end of February 2004. The action will affect all POCs and asylum seekers.

The UNHCR office in Bangkok declined to comment on the relocation plans. The agency recognizes more than 1,800 Burmese refugees as a POCs, each of whom receives a monthly allowance from the UNHCR.

In January, at the request of the Thai government, the UNHCR temporarily stopped accepting applications from Burmese asylum seekers. The moratorium on political asylum applications was lifted on February 1.

An NGO worker helping Burmese refugees said that the Thai and US governments had agreed that Burmese refugees already recognized by the UNHCR will be resettled in America.

In January the American embassy in Bangkok started calling Burmese refugees for interviews to determine eligibility for the resettlement program. The embassy has been interviewing about 40 refugees a day for resettlement in America, according to Khin San Nwe.

SCMP - Tuesday, February 10, 2004
SIMON MONTLAKE in Bangkok and AGENCE FRANCE-PRESSE in Phuket

Myanmar's opposition leader, Aung San Suu Kyi, could be freed from house arrest and her party allowed to operate normally ahead of a national convention on the future of the country, Foreign Minister Win Aung said yesterday.

"I think it could change," Win Aung said when asked whether the junta was considering lifting the restrictions on the Nobel peace laureate.

Myanmar has promised to hold a national convention later this year to discuss its constitution and possible elections as part of a road map to democracy. But critics say it would only be a charade without the full participation of Ms Suu Kyi's National League for Democracy (NLD).

Speaking on the sidelines of a regional meeting in Phuket, Thailand, Win Aung said the restrictions on the NLD, which was effectively shut down after unrest last May, would be lifted as part of confidence-building measures.

"The government is doing all it can to normalise the situation. It's something that will take place ... That's the atmosphere we would like to see," he said.

However, activists based in Thailand say there is no sign yet that political repression is easing.

Instead, they point to stiff controls on the movement of opposition politicians, including Ms Suu Kyi who is under house arrest in Yangon, and her deputy, U Tin Oo, who is in jail. "When you have all the top leaders in detention, it's quite clear that there's no easing of restrictions," said Debbie Stodhard of Altsean, a human rights group.

The junta has tried in recent months to win support from the country's ethnic factions to take part in a constitution-writing convention. Activists say the NLD's role remains doubtful, given the hostility of key junta members to Ms Suu Kyi and other popular leaders.

"If the national convention happens, it will not involve the participation of the NLD, this is clear," said Soe Ong, an exiled democracy activist.