BURMA: BUSINESSES PARTICIPATING IN RELIEF EFFORTS

C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 000338

SIPDIS

STATE FOR EAP/MLS, SES-O, INR/EAP
DEPT PASS TO USAID/OFDA
PACOM FOR FPA
TREASURY FOR OASIA

E.O. 12958: DECL: 05/08/2018
TAGS: ECON EAID EFIN PGOV PREL BM
SUBJECT: BURMA: BUSINESSES PARTICIPATING IN RELIEF EFFORTS

REF: A. RANGOON 337

B. RANGOON 335

C. RANGOON 334

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Classified By: Economic Officer Samantha A. Carl-Yoder for Reasons 1.4
(b and d)


1. (C) Summary. In response to the GOB's limited response
to Cyclone Nargis, private Burmese businesses have stepped up
to the plate, providing both relief and recovery assistance
to thousands of Burmese. Staff from several of Burma's
largest companies volunteered to lead Rangoon's clean up
efforts, and many private doctors are providing free health
treatment to Burmese living in Rangoon and the Irrawaddy
Delta. Myanmar Egress Group, a consortium of connected and
successful Burmese businessmen, secured approval from the
military to bring in diesel fuel from Malaysia to sell on the
local market. While most private efforts focus on providing
food and water to those affected by the storm, several
companies have joined together to provide no-interest loans
to the poorest families in Rangoon, enabling them to recover
their livelihoods. Businesses realize that it will take a
coordinated effort from the private sector, government, and
NGOs to rebuild the country. End Summary.

Private Sector Leading the Charge
--------------


2. (C) The GOB's response to Cyclone Nargis has been slow,
Burmese businessman Zaw Naing complained to us. The
Ministries do not coordinate. Instead of tackling many
problems at one time - such as lack of food and water, lack
of shelter, and possibility of disease outbreaks - the regime
focuses on one issue at a time. The relief effort is not
even a top priority, rather the GOB wants to ensure that the
recovery efforts do not interfere with its referendum, he
declared. Tired of waiting for the government to make a
concerted effort, the Burmese business community in Rangoon
has begun to help those most affected by the storm.
Companies including oil company MPRL, Credent Technology,
Micro Computer, Ocean Crown Freight Services, and Universal
Trading, have distributed hundreds of bags of rice (69 lbs
each) and thousands of bottles of water to the poorest
neighborhoods of Rangoon, Zaw Naing said.


3. (C) While some of the recovery assistance has been
obvious - such as Tay Za donating two cranes to clear trees
from his wealthy neighborhood streets and "volunteering" Air
Bagan staff to do clean up - most of the assistance has been
provided quietly, Min Oo, Finance Director of Micro Computer
Company, told us. Many businesses donated to religious
organizations and monasteries, particularly those in poor
areas where homeless Burmese have sought shelter. Rice
millers have provided free rice to many Burmese families, or
have made rice available at below-market rates.
Additionally, several engineering companies have volunteered
their services to the government, willing to assist with
mechanical repairs around the city. PSI Country Director
John Hetherington told us that many of PSI's clinic doctors
are providing free health services in Rangoon to those in
need, while nine PSI staff doctors have traveled to the
Irrawaddy Delta to reestablish clinics and provide free
medical care.


4. (C) Several companies have taken assistance to the next
level, Zaw Naing told us. Myanmar Egress Group, a consortium
of well-connected businessmen, met with BSO 5 Commander Major
General Myint Swe to discuss how to best assist the Burmese.

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According to Zaw Naing, Myint Swe on May 6 verbally gave
Myanmar Egress Group permission to import diesel, which it
will sell to the Burmese people at market prices, currently
8,000 kyat ($7.27) a gallon (Ref B). Even without an import
permit, the company secured a diesel shipment from Malaysia,
paying $220 a barrel for fuel. The ship should arrive at the
mouth of the Rangoon River on May 8; diesel will be
transferred to a barge and brought to the MITT port by May 10
(Ref C),he explained. With Myint Swe's consent, Myanmar
Egress Group will bring in two diesel ships a week. He
stressed that the fuel was for the people, and that the
military government, which has its own fuel reserves, would
not seize it at the port.


5. (C) Zaw Naing also told us that Myint Swe agreed to allow
the consortium to import corrugated tin sheeting and nails.
The company plans to sell roofing materials at below-market
prices, working with community leaders in Hlainthaya and
Shwepyitha to provide materials to those most in need. Zaw
Naing emphasized that the group was not out to make a profit,
and pledged to prevent community leaders from engaging in
price gouging. He was not sure when the materials would
arrive in Burma, but estimated that they would be available
by mid-May.

Focusing on Recovery
--------------


6. (C) In addition to relief efforts, Myanmar Egress Group,
with the support of Myint Swe, has begun working on recovery
efforts in Rangoon. Several private businessmen, including
Zaw Naing, have established micro-credit programs, loaning
money to poorer families at two percent interest so that they
can start rebuilding their lives. Zaw Naing told us he
provided 19 families with $150 dollars each out of his own
pocket since May 3, and others in the Myanmar Egress Group
have provided similar sums to others. Recognizing that the
government lacks the funds and ability to assist the Burmese,
the consortium plans to establish a formal micro-credit
program to provide loans of up to $200 to 1500 families in
Hlainthaya and Ywathagyi (poorer areas of Rangoon).
Consortium members will petition other successful Burmese
businessmen, international companies, and foreign embassies
to contribute to this microcredit program, Zaw Naing stated.


7. (C) The Prime Minister's office, working with the
Ministry of Home Affairs, will lead the government's recovery
efforts, Zaw Naing and Min Oo asserted. However, the
government has not yet considered how to move forward with
recovery, rebuilding, and development programs. Several
private businessmen met with Home Affairs Minister Major
General Maung Oo on May 7 to push for a coordinated response.
Although the government claims it can handle disaster
response, it lacks the resources, focus, and knowledge to do
so, Min Oo informed us. The government will continue to tap
the private sector for relief funds (Ref A),and the private
sector will play a role in Burma's recovery. Burmese
businessmen will also work with NGOs and international
organizations to best meet the needs of the people, Zaw Naing
concluded.

Comment
--------------


8. (C) Successful Burmese businessmen are tired of the
government's lackluster response to the cyclone, taking it
upon themselves to help those in need. They cannot do it on
their own, however, and must work with NGOs and international

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organizations to ensure that the materials go to those most
in need, rather than into the hands of the government. The
regime appears willing to let the private sector take the
lead in recovery efforts, as long as they foot the bill
rather than tapping the regime's coffers. By encouraging the
business community to take the lead, the regime is promoting
the development of civil society. Thus, the regime is making
itself less relevant by its ineffectiveness, which will
ultimately cause it to lose power.
VILLAROSA