MANDALAY: DIPLOMATIC VIEWS

C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 000290

SIPDIS

SIPDIS

STATE FOR EAP/MLS; PACOM FOR FPA

E.O. 12958: DECL: 02/27/2016
TAGS: PREL PGOV ECON ETRD BM CM IN
SUBJECT: MANDALAY: DIPLOMATIC VIEWS

REF: A. RANGOON 287


B. 05 RANGOON 1279

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


1. (C) Summary: During an Embassy "Outreach Week in
Mandalay" (ref A),the Charge called on the Indian and
Chinese Consuls General to exchange views on local political
and economic developments. Despite the close relationship
that China and India enjoy with the Burmese regime, both
Consuls need permission from local authorities for virtually
any activity. Neither had met any opposition NLD leaders in
Mandalay prior to our visit. In contrast to concerns about
Chinese or Indian expansion frequently offered elsewhere, the
Consuls General did not express any worry about the influence
of each other's country in northern Burma. Instead, they
view the region as a sleepy backwater, despite growing trade,
drug issues, and ethnic disputes along their national
borders. End Summary.

CHINA: EVERYTHING SEEMS FINE
--------------


2. (C) The Charge, joined by P/E chief, called on Chinese
Consul General Duan Zhiquan in Mandalay on February 27.
Duan, a South Asia expert stationed in Mandalay for the past
year, downplayed Chinese investment and commercial activity
in the region, where about 100,000 overseas Chinese reside.
He claimed that other than a joint venture tractor factory,
most investment was in "small scale" trading, but added that
a four-year project to construct a nearby hydroelectric dam
would employ over 100 Chinese technicians and engineers.


3. (C) Duan observed the GOB's recent efforts to centralize
the trade of precious gems sharply cut the presence of
Chinese gem merchants in Mandalay, a hub for gem mining
operations in Upper Burma (ref B). "Now, very few gems cross
the border directly from Mandalay into China," he said,
"Everything must go through Rangoon." Chinese tourists, Duan
added, find it cheaper to travel to Thailand and Singapore
than to visit neighboring Burma, where "there is nothing to
buy and only the scenery to admire."


4. (C) Duan offered his view that the law and order situation
in Burma "seems to be just fine" and that local Burmese "lead
a simple life, but they have plenty to eat." He complained
that electricity supply in Mandalay is poor, so "there is no
night life." He criticized the effectiveness of U.S.
sanctions and questioned motives behind raising the Burma
question at the UN Security Council. "There is no
international security threat and no terrorism here," he said.


5. (C) The Charge responded that Burma's export of narcotics,
diseases, and refugees posed a serious threat to regional
security, including that of China. She also noted that it
was unsustainable for 50 people to decide the future of 55
million in Burma and for the military to keep the lion's
share of the country's resources. Duan conceded that life is
becoming more difficult for average Burmese and said that the
regime's relocation of the capital to Pyinmana created new
land rights problems and increased uncertainty about the
future. He added that the PRC intended to set up a liaison
office in Pyinmana to handle "state visits and other
business."


6. (C) Duan attended the Charge's reception at a local hotel
later that evening, at which he met several NLD members and
NGO workers for the first time. He was keenly interested to
learn whether the Charge had requested GOB authorization to
hold the reception, and initially appeared reluctant to
attend. He noted that he needed regime permission "to do
just about anything" in Mandalay, including most travel
within his consular district. The Charge responded that we
did not in general request authorization, but that we invited
GOB officials to receptions and other Embassy-sponsored
events. Duan was one of the last guests to leave our
reception and he welcomed with a big smile news that we
planned to return frequently.

INDIA: ALL QUIET ON THE EASTERN FRONT
--------------


7. (C) The Charge also met on February 27 with Indian Consul
General Anita Nayar. The Indian CG, who has been at her
assignment for a little over a year, described Mandalay as
"very quiet." In response to an inquiry about the imminent
visit to Burma of the Indian President, Nayer replied "there
is nothing for me to do; his visit to Mandalay is only for a
few hours and I assume the Burmese authorities will be
handling all of the logistics."


8. (C) Nayer complained that it was impossible to do anything
in Mandalay without permission. "We can do what we want,"
she said, "but we must first get authorization from the
regional military commander, who is very cautious." She said
that her Embassy in Rangoon handles requests to the GOB,
adding that she rarely makes any direct inquiries to Mandalay
authorities. Waiting for the combined Indian and Burmese
bureaucracies in Rangoon to respond to simple requests,
however, can take months. She complained, for example, that
she still had not received approval to erect an information
board outside of the Indian consulate.


9. (C) Nayer suggested that increased U.S. activities in
Mandalay should focus on a library and technical and English
language instruction. She acknowledged that India had
announced at the East Asia Summit its intention to increase
language instruction and training in ASEAN countries, but had
no plans to pursue such programs in Mandalay.


10. (C) Nayar estimated about 20,000 Indian families lived in
Mandalay and a total of about 100,000 Indians lived in her
consular district (which consists of Mandalay and Sagaing
Divisions and Chin State, but does not include Kachin State
in northernmost Burma). She acknowledged that local ethnic
Indians, many of whom are unable to obtain Burmese
citizenship, face serious difficulties in gaining access to
state education, buying property, and maintaining legal
residency status. Nayar said, however, that she receives
"only a few" requests for her intervention with the GOB on
behalf of these stateless Indian-Burmese.


11. (C) Nayer described Indian investment in northern Burma
as "minimal." She said there were several "very dated"
Indian government investments in joint ventures, including a
local bicycle factory and a sewing machine factory. "No one
wants to put their money here," she said, adding that most
Indian commercial activity was at the border and focused on
trade of pharmaceuticals, textiles, and beans and pulses.


12. (C) Addressing general perceptions that India's presence
in Burma was designed to counter Chinese influence, Nayer
offered her personal view, based on her years of experience
working on China, that "we don't really have much to worry
about here when it comes to China." She added that she
nonetheless understood New Delhi concerns about China and
described the Indian "Look East" policy in Burma as a shift
"from an ideological approach to a practical one." She
agreed with the Charge that India would be much happier to
have a democratic Burma, rather than an unstable neighbor.


13. (C) Nayer also attended our evening reception, where she
asked the Charge to introduce her to the five divisional NLD
leaders in attendance. She had never met the party leaders
and said she was "absolutely delighted" to have the
opportunity to get to know the democratic opposition and made
arrangements to discuss local issues with them.

COMMENT: OUT OF TOUCH AND UNDER THUMB
--------------

14. (C) China and India have among the closest relations with
the Burmese regime. Even their Mandalay diplomats, however,
need to obtain permission from local authorities for
virtually any activity. Friendship with the GOB, it seems,
offers no better treatment than what the regime accords its
adversaries.


15. (C) We also took note of the scant concern the Indian and
Chinese diplomats had for Sino-Indian rivalries in Burma, in
contrast to more alarmist views offered by their respective
Embassies in Rangoon and in other capitals in the region.
Although Chinese and Indian populations are prominent in
Mandalay, neither Consul General seemed able to respond to
their needs or extend their own influence in the region. To
the contrary, each Consul viewed their district as a stagnant
backwater. They prefer to leave in the hands of their
Embassies the increasing flow of trade goods, refugees,
drugs, and ethnic disputes along both countries' borders.
End Comment.
VILLAROSA