Weekly Business Roundup (June 27, 2009)

by Irrawaddy

Rumors around Secret Russian Mining Project in Shan State

A secretive mining and factory project in northern Shan State involving the Russian heavy industry engineering company Tyazhpromexport is accused of land theft, forced relocation and water pollution.

The highly secret nature of the project is spawning rumors that more than iron ore is involved in the project which involves several open pit mines being cut into a mountain side.

More than 10,000 acres of land have been stolen and as many as 40,000 people will be affected by what is officially described as an iron ore and processing operation near Taunggyi, says the Pa-O Youth Organization (PYO), a non-governmental organization.

Water in the vicinity which normally supplies villages and farmland in the area has already been diverted for the mine operation, and there is concern about pollution when the ore processing work begins, reportedly by the end of this year, said PYO in a study.

“The factory is equipped with underground bunkers and surrounded by two 10-feet cement walls and barbed wire,” says the PYO report. “Extreme travel restrictions and a lack of public information about the project are fueling rampant local speculation that uranium will also be mined on the mountain.”

“They are hiding what they’re doing behind walls and fences,” the report said. India Plans to Open Banking Link in Burma

The state owned United Bank of India plans to open a branch in Burma to improve trading facilities between the two countries.

The plan is further evidence that neither India nor China intend to follow Western countries by tightening economic sanctions in the wake of opposition leader Aung San Suu Kyi’s current trial.

The bank plans to expand overseas following a partial privatization later this year.

“The bulk of the trade between India and Myanmar [Burma] is routed through our bank, so it makes sense to have our presence there,” bank chairman S.C. Gupta was quoted by The Hindu newspaper as saying this week.

Bank representatives have held talks with Burmese officials, but it’s not clear whether any agreement has been reach to move into the country, whose banking system is rigidly controlled by the ruling junta.

Disclosure of United Bank’s plans coincides with news that a double taxation avoidance agreement between the two countries will take effect from April next year.

The agreement is geared to improve investment and technology and services transfers between the two countries—especially important for several Indian infrastructure projects under way or planned in Burma.

The value of business between India and Burma is now running at about US $1 billion a year, according to Burmese official figures.

Burma is 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, the United Nations has said.

The inauguration of the Trans-Asian Railway Network (TARN) was formally confirmed in Bangkok last week with ratification of the plan by China, joining seven other countries including Russia and India who have signed up for the project.

The U.N. 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.

Burma has also failed to sign up for the TARN, said the Economic and Social Commission for Asia and the Pacific (ESCAP).

“The further away you move from the coastal areas [the more] you see development drop off,” ESCAP director Barry Cable said at the inauguration ceremony.

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