BURMA: CRONIES TOLD TO REBUILD THE DELTA

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 000400

SIPDIS

DEPT FOR EAP/MLS, DRL, AND IO
PACOM FOR FPA

E.O. 12958: DECL: 05/19/2017
TAGS: PGOV PREL PHUM BM EAID
SUBJECT: BURMA: CRONIES TOLD TO REBUILD THE DELTA

REF: A. RANGOON 371

B. RANGOON 337

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Classified By: P/E Chief Leslie Hayden for Reasons 1.4 (b) & (d)


1. (C) Summary: Nay Win Maung, director of local NGO
Myanmar Egress, shared with pol/econ chief a list of GOB
ministers given responsibility and oversight for the rescue
and rehabilitation of seven townships in the cyclone affected
areas, and the various cronies the government assigned to
finance and support their efforts. According to Nay Win
Maung, the senior generals have ordered the cronies to
rebuild the areas assigned to them, but provided them no
resources to do so. As a result, a number of impromptu
partnerships are forming between the cronies and INGOs: the
INGOs need access to the affected areas, and the cronies need
their relief supplies to meet the government's demands. The
partnership appears to be working out for both parties. End
summary.


2. (C) Lacking the relief supplies to meet the immediate
needs of the cyclone victims, the cronies are turning to
local and international NGOs to supply them, and facilitating
access with the GOB ministers in charge, Nay Win Maung
explained. Nay Win Maung told us Myanmar Egress is acting as
a facilitator between the two groups and organized a May 20
meeting for the cronies and NGOs, which pol/econ chief
attended. Nay Win Maung elaborated that the regime assigned
cronies Tay Za and Zaw Zaw to support the Minister of
Forestry in Bogale; Shwe Kyaing and Aung Thet Mann were
supporting the Minister of Agriculture in Labutta; and Aik
Tun and Maung Maung (Asia World) were supporting the Minister
of Fisheries in Than Lyin and Thonegwa.


3. (C) Nay Win Maung said that NGO Merlin approached Myanmar
Egress to facilitate a relationship with "crony newcomer" Hla
Maung Shwe, who the regime assigned to support Minister of
Hotels and Tourism in the area around the town of Pya Pon.
Hla Maung Shwe is making sure Merlin's employees have the
access they need. NGO Merlin privately confirmed this to us.
Cronies Htay Myint (Yuzana) and Win Aung (Dagon) are the
lead cronies responsible for recovery and reconstruction in
Pya Pon. They briefed INGOs and representatives from the UK
and U.S. Embassies at the May 20 meeting. Win Aung also
greeted the diplomats on the May 17 Delta tour, where Charge
observed Dagon Construction working with the Minister of
Hotels and Tourism. The Australian Ambassador said Steven
Law was working with the Energy Minister in Dedaye outside
Rangoon. Additionally, Save the Children told emboff that it
was quietly working with Surge Pun Associates (SPA) to
facilitate receipt and delivery of incoming relief supplies,
negotiate access for their employees in the Delta, and take
care of their banking needs. This relationship was working
well, they reported, although they asked emboff to keep their
new partnership quiet.


4. (C) According to UK poloff Ruth Bradley-Jones, the UK
Embassy suggested Nay Win Maung organize the May 20 meeting,
and is working with Nay Win Maung and Myanmar Egress to help
them coordinate relief efforts in the Delta. Rangoon DFID
Director Rurik Marsden told pol/econ chief DFID is also
looking at ways to program funding for long-term agricultural
rehabilitation in the affected areas.


5. (C) Nay Win Maung also facilitated a meeting for UK
Ambassador Mark Canning with Minister of Agriculture Htay Oo.
Htay Oo is also head of the regime's mass-member
organization, USDA, and reportedly has good access to Senior
General Than Shwe. Since the cyclone, the UN and many local
and international NGOs reported to us that Htay Oo has
facilitated access for their local staff to the area around
Labutta, which he is responsible for. Ambassador Canning
told Charge that Htay Oo acknowledged the GOB would require
international assistance to cope with the disaster.


6. (C) Nay Win Maung, who also attended the meeting,
elaborated that Ambassador Canning emphasized to Htay Oo that
the UK had no political agenda but was rather trying to

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assist cyclone victims in urgent need. Nay Win Maung said
Htay Oo, who understands the severe scope of the problem and
the implications for Burma's rice crop (Ref A),asked the UK
Ambassador specifically for small tractors to rehabilitate
paddy fields in time for the monsoon planting season.
Canning emphasized the need for access to the Delta to
monitor large assistance packages, but Htay Oo was
non-committal. Nay Win Maung hoped that Htay Oo would use
his access to Than Shwe to deliver Canning's message and push
for him to open up the Delta to foreign relief workers.


7. (C) Nay Win Maung admitted that the cronies were also
looking out for their own interests and were likely to take
advantage of business opportunities that came out of the role
the regime assigned to them. One of their first orders of
business was to band together to break the government's
monopoly over diesel fuel imports. Arguing that fuel
shortages and skyrocking diesel prices had the potential to
destabilize Rangoon, the cronies pressured Rangoon "viceroy"
Myint Swe to allow them to begin importing diesel without the
required permits from Nay Pyi Taw. Next on their list, Nay
Win Maung claimed, was an attempt to convince the government
to allow more cell phone providers with the reason that the
storm had cut off home phone service throughout the city. A
liberalization of the cell phone market would lower prices,
benefit local businesses, and increase access to cell phones
for more Burmese.


8. (C) Nay Win Maung claimed that the Ministers' unfunded
mandate to rebuild the Delta had turned the relationship
between the cronies and the ministers on its head. The
Ministers have no resources to "rebuild the Delta," so turned
to the cronies to provide them. In return, the cronies
expected new and profitable business arrangements, which the
government was granting. The side benefit, Nay Win Maung
claimed, was that the cronies do not have the resources to
provide relief material to the cyclone victims or to rebuild
the Delta, and they do not want to use their own resources.
Therefore, they were willing to use their influence to
negotiate and facilitate access to the Delta for INGOs and
local NGOs.


9. (C) Comment: While the cronies may be taking advantage of
their newfound leverage to craft advantageous business deals,
they are also providing the much-needed role of humanitarian
assistance facilitators. Although speculation persists that
the cronies may be setting themselves up for a land-grab in
the Delta, there is no evidence of this so far. It is
something we need to watch for closely, which is likely why
the UK Ambassador emphasized to the Minister of Agriculture
that any large-scale rehabilitation assistance will require
transparency and close monitoring. End comment.


VILLAROSA