BURMA: ASEAN PERSPECTIVES - PART I

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 001053

SIPDIS

E.O. 12958: DECL: 09/12/2015
TAGS: PGOV PREL ECON EINV BM RP SN MY BX
SUBJECT: BURMA: ASEAN PERSPECTIVES - PART I

Classified By: CDA Shari Villarosa for Reasons 1.4 (b,d)


1. (C) Summary: Charge's courtesy calls on four ASEAN
Ambassadors revealed differing, but in the end negative,
views on Burma's future. While the departing Malaysian and
Bruneian ambassadors were blunt in their negative assessments
of the current conditions, the relatively new Singaporean
ambassador downplayed problems. Instead he highlighted his
country's investments and assistance programs. The
Philippines ambassador urged USG engagement with Burma's
military as the "most realistic" policy. End summary.

Investment Climate Deteriorating
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2. (C) At September 8 and 12 introductory calls, Charge'
heard generally negative assessments from outgoing Malaysian
Ambassador Dato Cheah Sam Kip and outgoing Bruneian
Ambassador Pehin Dato Haji Hussin. Ambassadors Cheah and
Hussin commented on how shocked they were at the rural
poverty, particularly in Rakhine State, and how unattractive
the climate has become for investment. Amb. Hussin said the
situation "had gone from bad to worse" during his four and a
half years, and that there are no Bruneian investors or
businesses in Burma. His government's negative assessment of
the economic climate led it to ignore the GOB's earlier pleas
for investment and to warn potential investors away. The
only Malaysian investments doing well, according to Amb.
Cheah, are in the oil/gas industry and a couple of light
manufacturing factories. Because the GOB relinquished the
ASEAN Chair and ASEAN moved the 2006 Tourism Forum from
Burma, prospects for Malaysia tourism investments are poor.
Reasons for the economic decline, according to Amb. Cheah,
include the unstable currency, weak banking structure and
unpredictable political situation. He cited the GOB's
declining investment approval figures of over $1 billion in
1995 to $90 million in 2003, as proving the poor investment
climate.


3. (C) Singaporean Amb. Thambynathan Jasudasen has been here
just ten months. Amb. Jasudasen downplayed problems
experienced by Singaporean investors, saying they still
earned decent profits and felt little GOB pressure to
increase the "Burmese stake" in joint ventures. He did admit
investors have difficulty collecting cash up front for the
local partner's (the GOB's Myanmar Economic Corporation)
share of investment. Singapore is Burma's largest trading
partner and investor on the books, though China may have more
money in country if informal activities are counted,
according to Amb. Jasudasen. Singaporean investments are
mainly in tourism, beverages, cigarettes, shipping and
financial services.

Military Turning Inward
--------------

4. (C) Since former PM Khin Nyunt's ouster last October, the
GOB has grown more isolationist and xenophobic, according to
Malaysian Amb. Cheah. The generals, however, do not feel the
suffering of the people and do not care about them anyway, he
said. According to Philippines Amb. Phoebe Gomez, unlike the
Filipinos, who are "flexible like bamboo," the SPDC is
stubborn and "hard as teak wood." Bruneian Amb. Hussin said
that the people are afraid to say anything to the government
about their problems. All acknowledged having minimal access
to government leaders since the downfall of Khin Nyunt.


5. (C) Ambassadors Gomez and Jasudasen criticized U.S.
sanctions policy and urged increased U.S. engagement with the
regime. Amb. Gomez, who has been here five and a half years,
encouraged the USG to engage the next generation of military
officers, since "they are the only ones who are in a position
to continue leading the country." Amb. Jasudasen described
GOS programs that offered training and thousands of
scholarships annually to GOB civil servants and public sector
workers. He claimed nine out of ten return to Burma. He
encouraged the USG to offer more educational opportunities
and English language classes. Amb. Cheah said sanctions were
driving Burma closer to China, which has compelled India to
become more engaged.


6. (C) Charge' noted the contrast with other ASEAN nations
that have invested in their people to raise standards of
living, while the Burmese military spends only on itself.
The Charge' stressed that we need to encourage inclusiveness
and support the crucial role of civil society and political
parties, adding most ASEAN countries have demonstrated
successfully that increased political and economic
liberalization have promoted development. In contrast, the
closed, inward-looking policies of the Burmese military have
impoverished their people.

Comment: Familiarity Breeds Contempt?
--------------

7. (C) Comment: Perhaps because these meetings came a few
days before their departures, the Bruneian and Malaysian
ambassadors were uncharacteristically frank about the bleak
outlook for Burma. With significantly more investment at
stake, it is not surprising that the Singaporean ambassador
focused on the positive. He began the meeting by calling
Singapore America's "best friend in ASEAN", highlighting our
close cooperation on a wide array of issues. Obviously, we
diverge on Burma. Amb. Gomez is content to be the social
director of the diplomatic community as Dean, has no
Philippine interests at stake, and so does not see any need
to disrupt her life. Nevertheless, all of the Ambassadors
acknowledged that the Burmese military was the primary source
of political, economic, and social problems in Burma today.
They just do not believe that they can influence any change
in Burma. Instead they prefer to urge us to change, with the
hope that their investments might then prosper. End comment.
Villarosa