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CHINA: Dual Pipelines in Burma to Push Ahead Amid Criticism

Antoaneta Bezlova

BEIJING, Sep 9 2009 (IPS) - Despite fresh international criticism of Beijing’s backing for an unpopular regime as the Burmese junta, China sees its alliance with the country’s military as a matter of simple economic expediency and is determined to forge ahead with controversial joint dual oil and gas pipelines that will ensure greater energy security for its robust economy.

This month sees the first digs on the mammoth infrastructure project that will connect China’s southwestern province of Yunnan with Burma’s western coast.

The proposed gas pipeline will transfer gas from the offshore Shwe gas fields in Arakan state all the way to the capital Kunming of Yunnan province and possibly further inland in China. The twin oil pipeline will be used to transfer oil shipped from the Middle East and Africa bypassing the strategically vulnerable Malacca Strait shipping route.

After Burmese activists released a detailed report Monday on the project forecasting it will trigger social unrest and create a public relations fiasco for the Chinese company involved, a state-run newspaper in Beijing rejected the allegations, saying the project was unlikely to be stopped.

The Shwe Gas Movement, a group of Burmese exiles in Bangladesh, India and Thailand, also said the junta's recent offensive against ethnic rebels near the pipeline route showed that the regime had no concerns about providing stability for investors, which could translate into great security risks for the project undertakers.

"China is not afraid of the threat and criticism," the ‘Global Times’ – a paper published by the state news agency – quoted an anonymous Chinese official familiar with the issue. "When Myanmar (Burma’s official name) was constructing a pipeline to Thailand in the 1990s, Myanmar activists also criticised the government, but the voice is barely heard now."

Outside observers though believe the new pipeline project carries greater potential risks than the pipeline conveying gas to Thailand, which they described as a "vehicle for a proliferation of human rights abuses" during its construction and after – such as the widespread use of forced labour and forced evictions.

"Such practices, in the likelihood they would re-occur with respect to this latest pipeline, could very well be the spark to set off a broader conflict," said Sean Turnell, a Burma expert at Macquarie University in Australia. "Of course, exacerbating matters is the fact that Chinese energy firms have a less than stellar record themselves when it comes to the ruthlessness with which they pursue energy deals."

China's largest oil and gas producer, China National Petroleum Corporation (CNPC), is due to start the construction of the dual pipelines at a total length of nearly 4,000 kilometres in September. The deal is expected to provide the Burmese military, which has ruled the country with an iron grip since a 1962 coup, with at least 29 billion U.S. dollars over 30 years.

Although Burma ranks 10th in the world in terms of natural gas reserves, its per capita electricity consumption is less than 5 percent of neighbouring Thailand and China, as its government exports most of the country’s energy resources.

The Shwe Gas Movement report, titled ‘Corridor of Power’, charges that gas revenues in the past have been lavishly spent by the junta on building a new capital and satisfying the extravagant wishes of its ruling generals.

"People across Burma are facing severe energy shortages, and this massive energy export will only fuel social unrest," said Wong Aung, spokesperson of the Shwe Gas Movement. "These resources belong to our people and should be used for the energy needs of our country."

China – the exclusive buyer of Burma’s Shwe offshore gas reserves — sees the pipelines as one of the pieces in a greater energy domino played by Beijing to secure its energy supplies.

Burma’s pipelines constitute part of CNPC’s four-fold strategy to avoid China’s dependence on imported oil shipped by sea. Since 2004 Beijing has negotiated the construction of overland pipelines in four different directions, connecting Chinese energy buyers with suppliers in Russia, Kazakhstan, Turkmenistan, Uzbekistan and Burma.

"The greatest significance of Burma’s pipelines for China lies with the possibility for solving our reliance on the Malacca shipping route," said Long Changwei, expert at China University of Petroleum. "Once it is built, the pipeline will be a reliable alternative for oil flowing in from the Middle East and Africa. Even if there is a crisis in the Malacca Straits, China’s exposure to it will be greatly minimized."

In addition, the development of a deep sea port on Burma’s western coast will provide China with access to the Bay of Bengal — a strategic advantage in its attempts to expand its sphere of influence over the Indian Ocean.

Yet there are flip sides to this new energy corridor. The proposed pipelines run through the north-eastern Shan State, where as recently as late August, ceasefire ethnic minority armies fought against the regime. The clashes between the Burmese military and the Kokang rebels that sent tens of thousands of refugees fleeing across the Chinese border have raised the possibility that there might be more social strife and armed conflicts if the pipelines project gets underway.

CNPC is going to have to be "very careful," said Macquarie University’s Turnell. "What was once a simple deal to extract cheap gas for China could blow up into a diplomatic crisis should the pipeline aggravate the incipient conflict between ethnic groups long backed by China, and a regime in Burma that was long thought of as likewise a client of China."

In a longer term, China’s willingness to help an unpopular regime stay in power could turn out to be short-sighted as it encourages latent anti- Chinese sentiment. Chinese communities that have worked very closely with military regimes in South-east Asia and become immensely rich in the process have been targeted before, as evidenced by violent anti-Chinese riots in Indonesia when the Suharto regime fell in 1998.

The Shwe Gas Movement report suggests that China would be in a better position to trade with Burma under a stable government. It also argues that the current military rulers’ political roadmap does not aim at bringing peace and political stability to the country.