Myanmar's generals hit where it
hurts By Bertil Lintner
BANGKOK - For Htet Tay Za, a 19-year-old
member of Myanmar's elite who attends an exclusive
and expensive international school in Singapore,
life is often a party. A picture recently obtained
by the Chiang Mai-based publication The Irrawaddy
shows the young man being kissed on the cheek by a
bikini clad Caucasian woman.
In another
portrait, the partying youngster is seen in
festive mood beside a male friend puffing on a
water pipe. But the party may be
over
soon for Htet Tay Za, as his father who pays the
bills for his lavish lifestyle, Tay Za, figures
prominently in an October 19 executive order from
the US Treasury Department that aims to block his
assets and make it illegal for US citizens to have
any business dealings with him and his private
companies.
Earlier US sanctions, first
imposed in 1997 and increased following an attack
on pro-democracy leader Aung San Suu Kyi and her
followers in May 2003, were often criticized
because they broadly banned all new investment
into and imports from Myanmar. The latter measures
forced textile factories to close down or to move
across the border to Thailand. Thousands of
workers lost their jobs, while the economic impact
on members of the ruling junta was minimal.
This time, however, the US has imposed
what it is referring to as "smart sanctions" that
target specific individuals and companies. The
punitive tactic is similar to the one the US
applied in September 2005 against Banco Delta Asia
in Macau, which the Treasury Department referred
to in a statement at the time as "a willing pawn
for the North Korean government to engage in
corrupt financial activities".
The move
froze US$24 million in assets belonging to
companies controlled by the North Korean
government and as a result the entire bank almost
collapsed. In the end, the money was released and
moved to a bank in Russia. But it forced the North
Korean government back to the negotiating table to
resume the then stalled six-nation talks on
Pyongyang's controversial nuclear program.
The recent action against the Myanmar
government and corporate entities still may not
force the junta to embark on a serious dialogue
with the country's hobbled pro-democracy movement.
Unlike previous US sanctions, however, this time
they will certainly hurt the ruling generals and
their business cronies more than ordinary Myanmar
workers and citizens.
Tay Za is the
42-year-old manager of the Myanmar-based Htoo
Trading Company, which among other subsidiaries
controls the Singapore-registered Htoo Wood
Products, Pavo Trading, and Air Bagan. Through the
new sanctions, all of those companies are now
blacklisted by the US government. The businessman
is known to be very close to junta leader General
Than Shwe and when he first launched into business
he made a point of employing the children of
powerful generals - which presumably paved the way
for him to land lucrative government contracts.
Among those currently or formerly on his
payroll are Aung Thet Mann, the son of General
Shwe Mann, the junta's third ranking official
after Than Shwe and army chief General Maung Aye.
According to a 2005 report in The Irrawaddy, Tay
Za is also close to Than Shwe's son, Kyaing San
Shwe, whom Tay Za presented with a US-made Hummer,
for undisclosed reasons.
Htoo Trading,
which is engaged in timber exports, property
development, palm oil production, arms deals and
aviation, was one of two construction companies
granted lucrative contracts to build the new
national capital at Naypyidaw, to which the
government moved from Yangon in November 2005.
Also included on the new US sanctions list is Tay
Za's wife, Thidar Zaw, and another son, Pye Phyo
Za, who spends most of his time in a luxury
apartment in Singapore.
Junta who's
who The US Treasury Department's two new
lists, one of which mentions by name 14 generals
and government ministers, and the second an
additional 11, are all now barred from entering
the US and will have any assets they may hold in
US financial institutions frozen. Those measures
may be mainly symbolic, as few if any of the
military officials have assets held in US banks or
were likely planning to spend their next holiday
in Hawaii or Florida.
But there are other
important businessmen affiliated with the junta
who could be adversely affected. The US sanction
list notably includes Khin Shwe, president of
Zaygabar and one of Myanmar's leading real estate
moguls, and Htay Myint, chief executive officer of
the Yuzana Company, a large property developer.
Khin Shwe first attracted international
attention in 1997 when he hired a US public
relations firm, Bain and Associates Inc, in what
turned out to be a futile attempt to improve the
junta's image and standing in Washington. Bain and
Associates now appears to have washed its hands of
Myanmar's junta. The firm's homepage
(http://www.bainpr.com/), perhaps for good reason,
omits Zaygabar among its list of "clients with
whom we've worked".
In Yangon, Zaygabar
owns industrial parks, a golf and country club
frequented by army officers, a hotel and the
city's tallest residential condominium. The fact
that Khin Shwe's daughter, Zay Zin Latt, is
married to another of General Shwe Mann's sons,
Toe Naing Mann, some analysts believe may have
helped him secure lucrative government contracts
and concessions. Outside Myanmar, Khin Shwe is
known to have business relations with companies in
Japan, South Korea and Thailand. He is currently
chairman of the Myanmar-Japan and Myanmar-Korean
Friendship Associations and also chairs the
Myanmar-Thai Development Corporation.
Htay
Myint's Yuzana is a somewhat smaller company, but
has substantial investments in property as well as
agricultural and fishery ventures. According to
The Irrawaddy, he serves as president of the
Construction Owners Association, the Fishing
Vessel Owners Association and the Myanmar Project
Association, and is the owner of one of Myanmar's
biggest supermarket chains. Htay Myint's contacts
with the junta were strongest with former prime
minister Gen Khin Nyunt, who was ousted in a purge
in October 2004. But the fact that Yuzana is still
doing booming business in Myanmar indicates that
he must have other high-level contacts as well.
Not on the US new sanctions list is Tun
Myint Naing, also known as Steven Law, managing
director of Asia World Company, the country's
biggest and most diversified conglomerate. Asia
World was the other main contractor involved in
the building of Naypyidaw.
Whether Law and
his Asia World will be added to the list remains
to be seen, but according to an e-mail received by
Asia Times Online from the US State Department,
what has been announced so far "is not meant as
the final word". Meanwhile, Asia World maintains
close relations with the junta and it recently has
been involved in road construction in northeastern
Shan State, the renovation of Yangon's
international airport, and the construction of a
deepwater port near the old capital. Law is also
known to have had business interests in Singapore,
including the recently dissolved Kokang Singapore
Pte Ltd, and others through his wife, Cecilia Ng,
who is a Singaporean citizen.
The effects
of the new sanctions were felt within days of
their announcement. Tay Za's Air Bagan has
cancelled its international flights to both
Bangkok and Singapore and remains basically
grounded. Banks in Singapore, the financial center
of choice for Myanmar's generals and
junta-affiliated business tycoons, have reportedly
become slow in processing any transactions to and
from Myanmar.
The reason, some observers
suggest, is that Singapore's banks want to check
whether any of their clients are on the US
sanctions list - in which case they could face a
similar situation to that of Macau's Banco Delta
Asia. Singapore is not legally obliged to uphold
the new US sanctions, but its banks are evidently
nervous about the adverse publicity the punitive
measures could have on their global reputations.
Air Bagan's bank accounts in Singapore have
already reportedly been blocked, though it's
unclear if this is a permanent or temporary
intervention.
What is clear is that it
will be much more difficult for Myanmar's generals
and their business associates to deposit both
their legitimate and ill-gotten gains in
Singaporean banks. Myanmar workers based abroad,
many of whom send remittances to their relatives
back home, will notably be less affected by the
new measures as they tend to use informal
underground banking systems such as "hawala" to
avoid unfavorable exchange rates and excessive
government taxes.
The new sanctions also
likely mean less partying in Singapore for the
generals, their cronies and siblings. And because
most international bank transfers pass through
either the US or Europe, whatever funds the junta
already has parked in Singapore will likely need
to stay there or risk being frozen or confiscated.
The medium-term efficacy of the US's smarter
sanctions is more difficult to ascertain, as the
junta will likely seek out new destinations for
its funds. But suddenly life just got considerably
harder for Myanmar's ruling generals.
Bertil Lintner is a former
correspondent with the Far Eastern Economic
Review. He is currently a writer with Asia-Pacific
Media Services.
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