PYINMANA: THE EMPEROR'S NEW CAPITAL

C O N F I D E N T I A L SECTION 01 OF 04 RANGOON 000406

SIPDIS

SIPDIS

STATE FOR EAP/MLS; PACOM FOR FPA

E.O. 12958: DECL: 03/13/2016
TAGS: PGOV PHUM ECON PREL BM
SUBJECT: PYINMANA: THE EMPEROR'S NEW CAPITAL

REF: A. USDAO RANGOON BM 361

B. BANGKOK 1625

C. 05 RANGOON 1421

D. 05 RANGOON 1346

E. 05 RANGOON 1325

Classified By: P/E Chief W. Patrick Murphy for Reasons 1.4 (b,d)


1. (C) Summary: Months after announcing the sudden
relocation of Burma's capital, the military regime continues
efforts to build a new city to house thousands of civil
servants who have already moved and are attempting to carry
out government operations at remote, unserviced locations.
There are few signs that top regime leaders, most notably
Senior General Than Shwe, have permanently relocated.
Nonetheless, the SPDC has undertaken efforts to convince the
population that Pyinmana (now officially dubbed "Nyapyidaw -
Seat of the King") is the new capital, including convening
cabinet meetings at the new military complex; appointing a
new mayor; offering new transportation options to get there;
securing reliable power supplies; and even including Pyinmana
in national weather reports ("hot and sunny"). Most Burmese,
however, are cautious about investing in the relocation or
accepting its permanence. They believe the relocation is the
work of a single individual, Than Shwe, and that he undertook
the move to replicate the actions of Burma's ancient kings.
Many Burmese therefore question the staying power of the
bizarre relocation. End Summary.

WE BUILT THIS CITY ON ROCK AND RICE
--------------


2. (U) Four months after the military regime announced the
sudden relocation of the country's capital from Rangoon to
remote Pyinmana in central Burma (ref E),the GOB continues
efforts to support the bizarre move by building an entirely
new city from scratch. The administrative and military zones
that comprise the new capital region are located in an area
that was once little more than rice paddies and forested
hills, devoid of even minimal infrastructure to support the
thousands of civil servants and soldiers who have already
relocated.


3. (SBU) The new capital zone is a massive construction site.
A substantial military complex to the east of Pyinmana is
largely complete, as is an administrative compound to the
west that houses over two dozen ministries. According to
business contacts, however, construction is incomplete on
thousands of housing units, roads, and other infrastructure.
Crony companies continue to carry the weight on construction,
including work on a new Parliament, a presidential residence,
and opulent houses for individual generals and ministers.


4. (SBU) The crony companies building Pyinmana are stretched
thin, operating on paltry GOB advance payments and promises
of acquiring government property vacated in Rangoon. The
regime has advertised widely for workers, especially skilled
craftsmen, as many laborers have abandoned work sites due to
poor working conditions, low wages, and the threat of
malaria. There have been no reliable reports of forced labor
used for construction, but credible sources indicate that the
SPDC has forcibly relocated villagers to make way for new
infrastructure projects. A build-up of security forces in
the greater region has precipitated the flight of hundreds of
ethnic Karen to the Thai border (ref B).


5. (C) Although the private sector is taking some advantage
of opportunities in the new capital region by engaging in
land speculation, new hotel construction, and small
commercial ventures--most Burmese remain extremely cautious
about investing in the relocation or even acknowledging that
the regime has moved the capital. The true motives for the
costly relocation (which sources estimate as high as $2
billion),perhaps unprecedented in its scope and speed,
remain unknown.

MOVE NOW - OR ELSE
--------------


6. (SBU) After an initial mass relocation of government
offices and functionaries in November and December, the GOB
implemented a second wave in January to prepare for an
inspection visit by SPDC Chairman Than Shwe on February 17.
Most of the GOB's 30 cabinet ministries have made the move,
leaving behind in Rangoon only liaison units, key departments
of revenue-earning ministries and state enterprises, and
offices that convinced authorities they would not be able to
carry out vital functions in Pyinmana. Several government
offices--including the Myanmar Port Authority, the Prison
Department, the Fire Service, and portions of the Ministries
of Industry and Education--relocated back to Rangoon once
authorities realized their inability to function at the new
site was harming government operations.

WE'RE ON A ROAD TO NOWHERE
--------------


7. (C) Although top regime leaders have spent considerable
time visiting and inspecting sites in Pyinmana, it does not
appear that they have permanently relocated to the remote
area. Most notably, SPDC Chairman Than Shwe, the man behind
the capital relocation, apparently has no plans to move out
of his Rangoon military compound. Nonetheless, the SPDC has
undertaken several efforts to convince the population that
Pyinmana is not only the new capital, but also an important
crossroads:

--Beginning in late February, the SPDC started holding weekly
cabinet meetings in Pyinmana, requiring many ministers and
regime officials to travel the 225 miles each way for every
meeting;

--For the first time since independence, the regime will skip
Rangoon in marking its annual Armed Forces Day.
Traditionally, the regime devotes considerable resources to
these events, including thousands of parading soldiers,
military band competitions, and state dinners. The regime
will instead celebrate the March 27 national holiday, which
commemorates Burmese resistance against the Japanese
occupation, in Pyinmana. The Ministry of Defense has invited
Rangoon-based foreign military attaches to attend (ref A).
The NLD and other pro-democracy opposition parties, who refer
to the holiday as "Resistance Day," will hold their
traditional commemoration in Rangoon.

--In late February, the GOB appointed Col. Thein Nyunt as
mayor of the new capital. Thein Nyunt will also retain his
current duties as Minister of Progress of Border Areas and
National Races and Development Affairs, a position he has
held since 1997. In its official announcement, the GOB
specified that Thein Nyunt would be mayor of "Naypyidaw,"
which means royal capital or "Seat of the King," the name the
GOB now uses for the new administrative site near the
existing town of Pyinmana. The regime has also reportedly
created a new "Naypyidaw" military command covering the
capital region.

--The GOB has taken steps to ensure that Pyinmana has a
stable power supply. Despite regular electricity shortages
in Rangoon, and an even greater power supply problem in
Mandalay, authorities have tapped power lines that transmit
electricity from northern reservoirs to central and southern
Burma. According to oil and gas industry sources, the regime
is also building a natural gas pipeline to the new capital
from Rangoon.

--The GOB now offers several air and train options as
alternatives to the eight-hour overland trip on the potholed,
two-lane road that connects Rangoon to Pyinmana. According
to the Minister of Rail Transportation, the GOB recently
purchased nearly $30 million worth of used trains and spare
parts from India to improve a daily rail connection; however,
the trip by train still takes about ten hours and there is a
three or four day waitlist to purchase tickets.

--The state-run, and highly unreliable, Myanmar Airways runs
a daily round-trip flight from Rangoon to a new airfield at
Ela, 20 miles south of Pyinmana. Air Bagan, owned and
operated by regime crony businessman and arms dealer Te Za,
offers thrice-weekly one-hour flights. In addition, private
airlines Air Mandalay and Yangon Airways also added several
flights per week.

--The GOB's official news broadcasts and newspapers now offer
regular weather reports on Pyinmana, joining regular coverage
of Rangoon and Mandalay. Like everywhere in Burma at this
time of year, it's hot and sunny in Pyinmana every day of the
week.

COMINGS AND GOINGS
--------------


8. (C) Despite ongoing efforts to create a perception that
Pyinmana is fully operational, access to the new capital
region remains highly restricted. We know of no diplomats,
other than our own Embassy officers (ref D),who have
explored the new capital. Subsequent to our trip in
November, the GOB advised all diplomatic missions and
foreigners to stay away from the new capital region.
Authorities have arrested construction workers, students, and
journalist for taking photographs or videotaping at various
sites. MFA officials have stated that they intend to invite
the diplomatic corps to Pyinmana in April for a tour.


9. (SBU) The capital relocation has involved the transfer of
thousands of soldiers and civil servants. Grumbling about
the relocation reportedly tends to come from senior officers.
Pyinmana may offer, however, a welcome alternative to
deployment to dangerous conflict border areas. Rank and file
soldiers, accustomed to taking orders and to frequent moves,
reportedly have discovered that the new military complex in
Pyinmana has much to offer in the way of recreation and
comfort.


10. (C) The story is considerably different for civil
servants. The GOB has installed phone lines in Pyinmana, but
dozens of office workers share each phone and must queue in
long lines to make official or personal calls to Rangoon.
The regime has prohibited family members from joining
relocated workers and current housing consists of crowded
dormitories and barracks. A Ministry of Foreign Affairs
official told us that Burmese diplomats now eagerly welcome
any overseas assignment, since nothing compares to what she
described as "Pyinmana, the ultimate hardship." We queried
another official if he would return to Pyinmana after a
three-month training program in Brunei. He responded, "I
hope I get more training." We've heard many stories about
officials who have faked serious health issues or opted for
early retirement to avoid relocation.

COMMENT: IS IT SUSTAINABLE?
--------------


11. (C) The various rumors and theories about the capital
relocation share a single common thread: this is the work of
Senior General Than Shwe, and him alone. Most of Burma's
ancient kings attempted to cement their legacy by relocating
the kingdom's capital. Than Shwe's audacious naming of the
new capital as "Seat of the King" suggest to many Burmese
that the move may reflect his illusions of grandeur or is
perhaps another sign of his possible dementia. Burmese with
whom we talk can't make any sense out of the bizarre
relocation and we've heard reports that senior military
officers view the move as an embarrassment to the armed
forces. While there are no visible fissures within the
senior ranks, Burmese officers have never taken besmirchment
of the Tatmadaw lightly.


12. (C) According to these theories on Than Shwe's role in
the capital relocation, should he depart from the power
structure, through natural or other causes, the
sustainability of the move to Pyinmana-Naypyidaw is entirely
uncertain, as it was following the demise of most Burmese
kings. The capital relocation may be a passing whim, that
goes when Than Shwe goes. End Comment.
VILLAROSA