Global Policy Forum

By F. William Engdahl*

There are facts and then there are facts. Take the case of the recent mass protests in Burma or Myanmar, depending on which name you prefer to call the former British colony.
First it's a fact which few will argue that the present military dictatorship of the reclusive General Than Shwe is right up there when it comes to world-class tyrannies. It's also a fact that Myanmar enjoys one of the world's lowest general living standards. Partly as a result of the ill-conceived 100% to 500% price hikes in gasoline and other fuels in August, inflation, the nominal trigger for the mass protests led by saffron-robed Buddhist monks, is unofficially estimated to have risen by 35%. Ironically the demand to establish "market" energy prices came from the IMF and World Bank. The UN estimates that the population of some 50 million inhabitants spend up to 70% of their monthly income on food alone. The recent fuel price hike makes matters unbearable for tens of millions. Myanmar is also deeply involved in the world narcotics trade, ranking only behind Hamid Karzai's Afghanistan as a source for heroin. As well, it is said to be Southeast Asia's largest producer of methamphetamines.

The major actors
The tragedy of Myanmar, whose land area is about the size of George W Bush's Texas, is that its population is being used as a human stage prop in a drama scripted in Washington by the National Endowment for Democracy (NED), the George Soros Open Society Institute, Freedom House and Gene Sharp's Albert Einstein Institution, a US intelligence asset used to spark "non-violent" regime change around the world on behalf of the US strategic agenda. Myanmar's "Saffron Revolution", like the Ukraine "Orange Revolution" or the Georgia "Rose Revolution" and the various color revolutions instigated in recent years against strategic states surrounding Russia, is a well-orchestrated exercise in Washington-run regime change, down to the details of "hit-and-run" protests with "swarming" mobs of monks in saffron, Internet blogs, mobile SMS links between protest groups, well-organized protest cells which disperse and re-form. CNN made the blunder during a September broadcast of mentioning the active presence of the NED behind the protests in Myanmar.

In fact the US State Department admits to supporting the activities of the NED in Myanmar. The NED is a US government-funded "private" entity whose activities are designed to support US foreign policy objectives, doing today what the CIA did during the Cold War. As well, the NED funds Soros' Open Society Institute in fostering regime change in Myanmar. In an October 30, 2003 press release the State Department admitted, "The United States also supports organizations such as the National Endowment for Democracy, the Open Society Institute and Internews, working inside and outside the region on a broad range of democracy promotion activities." It all sounds very self-effacing and noble of the State Department. Is it though?

In reality the US State Department has recruited and trained key opposition leaders from numerous anti-government organizations in Myanmar. It has poured the relatively huge sum (for Myanmar) of more than $2.5 million annually into NED activities in promoting regime change in Myanmar since at least 2003. The US regime change effort, its Saffron Revolution, is being largely run, according to informed reports, out of the US Consulate General in bordering Chaing Mai, Thailand. There activists are recruited and trained, in some cases directly in the US, before being sent back to organize inside Myanmar. The US's NED admits to funding key opposition media including the New Era Journal, Irrawaddy and the Democratic Voice of Burma radio.

The concert-master of the tactics of Saffron monk-led non-violence regime change is Gene Sharp, founder of the deceptively-named Albert Einstein Institution in Cambridge, Massachusetts, a group funded by an arm of the NED to foster US-friendly regime change in key spots around the world. Sharp's institute has been active in Myanmar since 1989, just after the regime massacred some 3,000 protestors to silence the opposition. CIA special operative and former US military attache in Rangoon, Col Robert Helvey, an expert in clandestine operations, introduced Sharp to Myanmar in 1989 to train the opposition there in non-violent strategy. Interestingly, Sharp was also in China two weeks before the dramatic events at Tiananmen Square.

Why Myanmar now?
A relevant question is why the US government has such a keen interest in fostering regime change in Myanmar at this juncture. We can dismiss rather quickly the idea that it has genuine concern for democracy, justice, human rights for the oppressed population there. Iraq and Afghanistan are sufficient testimony to the fact Washington's paean to democacy is propaganda cover for another agenda.

The question is, what would lead to such engagement in such a remote place as Myanmar? Geopolitical control seems to be the answer - control ultimately of the strategic sea lanes from the Persian Gulf to the South China Sea. The coastline of Myanmar provides naval access in the proximity of one of the world's most strategic water passages, the Strait of Malacca, the narrow ship passage between Malaysia and Indonesia. The Pentagon has been trying to militarize the region since September 11, 2001 on the argument of defending against possible terrorist attack. The US has managed to gain an airbase on Banda Aceh, the Sultan Iskandar Muda Air Force Base, on the northernmost tip of Indonesia. The governments of the region, including Myanmar, however, have adamantly refused US efforts to militarize the region. A glance at a map will confirm the strategic importance of Myanmar.

The Strait of Malacca, linking the Indian and Pacific Oceans, is the shortest sea route between the Persian Gulf and China. It is the key chokepoint in Asia. More than 80% of all China's oil imports are shipped by tankers passing the Malacca Strait. The narrowest point is the Phillips Channel in the Singapore Strait, only 1.5 miles wide at its narrowest. Each day, more than 12 million barrels in oil supertankers pass through this narrow passage, most en route to the world's fastest-growing energy market, China, or to Japan. If the strait were closed, nearly half of the world's tanker fleet would be required to sail further. Closure would immediately raise freight rates worldwide. More than 50,000 vessels per year transit the Strait of Malacca. The region from Myanmar to Banda Aceh in Indonesia is fast becoming one of the world's most strategic chokepoints. Who controls those waters controls China's energy supplies.

That strategic importance of Myanmar has not been lost on Beijing. Since it became clear to China that the US was hell-bent on a unilateral militarization of the Middle East oil fields in 2003, Beijing has stepped up its engagement in Myanmar. Chinese energy and military security, not human rights concerns, drives their policy. In recent years Beijing has poured billions of dollars in military assistance into Myanmar, including fighter, ground-attack and transport aircraft; tanks and armored personnel carriers; naval vessels and surface-to-air missiles. China has built up Myanmar railroads and roads and won permission to station its troops in Myanmar. China, according to Indian defense sources, has also built a large electronic surveillance facility on Myanmar's Coco Islands and is building naval bases for access to the Indian Ocean. In fact Myanmar is an integral part of what China terms its "string of pearls", its strategic design of establishing military bases in Myanmar, Thailand and Cambodia in order to counter US control over the Strait of Malacca chokepoint. There is also energy on and offshore of Myanmar, and lots of it.

The gas fields of Myanmar
Oil and gas have been produced in Myanmar since the British set up the Rangoon Oil Company in 1871, later renamed Burmah Oil Co. The country has produced natural gas since the 1970s, and in the 1990s it granted gas concessions to the foreign companies ElfTotal of France and Premier Oil of the UK in the Gulf of Martaban. Later Texaco and Unocal (now Chevron) won concessions at Yadana and Yetagun as well. Yadana alone has an estimated gas reserve of more than 5 trillion cubic feet and an expected life of at least 30 years. Yetagun is estimated to have about a third the gas of the Yadana field.

In 2004 a large new gas field, Shwe field, off the coast of Arakan, was discovered. By 2002 both Texaco and Premier Oil withdrew from the Yetagun project following UK government and non-governmental pressure. Malaysia's Petronas bought Premier's 27% stake. By 2004 Myanmar was exporting Yadana gas via pipeline to Thailand, worth $1 billion annually to the Myanmar regime. In 2005 China, Thailand and South Korea invested in expanding the Myanmar oil and gas sector, with export of gas to Thailand rising 50%.

Gas export today is Myanmar's most important source of income. Yadana was developed jointly by ElfTotal, Unocal, PTT-EP of Thailand and Myanmar's state MOGE, operated by ElfTotal. Yadana supplies some 20% of Thai natural gas needs. Today the Yetagun field is operated by Malaysia's Petronas along with MOGE, Japan's Nippon Oil and PTT-EP. The gas is piped onshore where it links to the Yadana pipeline. Gas from the Shwe field is to come on line in 2009. China and India have been in strong contention over the Shwe gas field reserves.

India loses, China wins
This past summer Myanmar signed a memorandum of understanding with PetroChina to supply large volumes of natural gas from reserves of the Shwe gasfield in the Bay of Bengal. The contract runs for 30 years. India was the main loser. Myanmar had earlier given India a major stake in two offshore blocks to develop gas to have been transmitted via pipeline through Bangladesh to India's energy-hungry economy. Political bickering between India and Bangladesh brought the Indian plans to a standstill. China took advantage of the stalemate. It simply trumped India with an offer to invest billions in building a strategic China-Myanmar oil and gas pipeline across Myanmar from Myanmar's deepwater port at Sittwe in the Bay of Bengal to Kunming in China's Yunnan province, a stretch of more than 2,300 kilometers. China plans an oil refinery in Kumming as well. What the Myanmar-China pipelines will allow is routing of oil and gas from Africa (Sudan among other sources) and the Middle East (Iran, Saudi Arabia) without depending on the vulnerable chokepoint of the Malacca Strait. Myanmar becomes China's "bridge" linking Bangladesh and countries westward to the China mainland independent of any possible future moves by Washington to control the strait.

India's dangerous alliance shift
It's no wonder that China is taking such precautions. Ever since the Bush administration decided in 2005 to recruit India to the Pentagon's "New Framework for US-India Defense Relations", India has been pushed into a strategic alliance with Washington in order to counter China in Asia. In an October 2002 Pentagon report, "The Indo-US Military Relationship", the Office of Net Assessments stated the reason for the defense alliance would be to have a "capable partner" who can take on "more responsibility for low-end operations" in Asia, provide new training opportunities and "ultimately provide basing and access for US power projection". Washington is also quietly negotiating a base on Indian territory, a severe violation of India's traditional non-aligned status. Power projection against whom? China, perhaps?

As well, the Bush administration has offered India a deal to lift its 30-year nuclear sanctions and to sell advanced US nuclear technology, legitimizing India's open violation of the nuclear Non-Proliferation Treaty. At the same time Washington accuses Iran of violating same, an exercise in political hypocrisy to say the least. Notably, just as the saffron-robed monks of Myanmar took to the streets, the Pentagon opened US-Indian joint naval exercises, "Malabar 07", along with armed forces from Australia, Japan and Singapore. The US showed the awesome muscle of its 7th Fleet, deploying the aircraft carriers USS Nimitz and USS Kitty Hawk, guided missile cruisers USS Cowpens and USS Princeton, and no less than five guided missile destroyers.

US-backed regime change in Myanmar together with Washington's growing military power projection via India and other allies in the region is clearly a factor in Beijing's policy vis-a-vis Myanmar's present military junta. As is often the case these days, from Darfur to Caracas to Yangon, the rallying call of Washington for democracy ought to be taken with a large grain of salt.

About the Author:F. William Engdahl is the author of A Century of War: Anglo-American Oil Politics and the New World Order, Pluto Press Ltd. Further articles can be found at his website, www.engdahl.oilgeopolitics.net