US embassy cable - 04RANGOON219

UNCLAS SECTION 01 OF 02 RANGOON 000219 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP/BCLTV, EB, DRL/IRL 
COMMERCE FOR ITA JEAN KELLY 
TREASURY FOR OASIA JEFF NEIL 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: ECON, PGOV, PHUM, EIND, BM, Economy 
SUBJECT: IN SEARCH OF PEACE AND DEVELOPMENT: THANLYIN AND 
KYAUKTAN 
 
1. (SBU) Summary: A recent trip to Prime Minister General 
Khin Nyunt's home region of Kyauktan and Thanlyin (previously 
called Syriam), only a 45-minute jaunt southwest of downtown 
Rangoon, proved once again that kinship in this 
patronage-rich society has its privileges.  The region is 
still very underdeveloped and agrarian, however there are a 
number of incongruous development projects that are 
magnificent and idle memorials to the largesse of its 
favorite son.  Though only a small corner of the country, the 
region displays aspects of the GOB's economic development 
strategy evident countrywide: a "bigger is better" approach 
to infrastructure, pork barrel spending, a pervasive Chinese 
influence, and neglect of existing industries.  End summary. 
 
Thanlyin: The Company Town 
 
2. (SBU) A first stop in Thanlyin, the capital of southern 
Rangoon (Yangon) Division, revealed an aging company town 
with few economic prospects.  Nearly everyone in the city is 
employed by one of several state-owned enterprises -- a glass 
bottle factory, a tin processing plant, a steel processing 
plant, several technical universities, and a GOB garment JV 
with Daewoo.  The largest employer is, and has been for 
nearly a century, an oil refinery -- the second largest in 
Burma.  The refinery, first operated by the British, can 
process about 650,000 gallons per day though it rarely 
operates at capacity.  There is also a large naval shipyard 
and base between Thanlyin and Kyauktan, but locals say that 
it is staffed entirely by naval officials brought in from 
outside the region. 
 
Thilawa Port: Style Over Substance 
 
3. (SBU) The private sector has barely set foot in Thanlyin, 
although it is very close to the capital over a bridge newly 
built by the Chinese and even closer to the country's largest 
container port, Thilawa, located between Thanlyin and 
Kyauktan and completed in 1997 also with Chinese assistance. 
Though able to handle three large container ships at one 
time, a port official admitted that during boom times the 
gigantic and modern facility handles only two ships a month. 
The overgrown train tracks emanating from the port emphasize 
this point.  When we were there a small Bangladeshi grain 
vessel was in port but no activity was visible.  Traders and 
shippers in Rangoon say the ports along Rangoon's river front 
are smaller but far busier and more convenient for access 
into the city and beyond.  The Thilawa port, they claim, is 
too far from any industry or consumers to be a logical option. 
 
Kyauktan: A Pilgrimage to Khin Nyunt's Hometown 
 
4. (SBU) Khin Nyunt's actual birthplace, the riverside town 
of Kyauktan, is still quite rural with an economy based on 
agriculture, shrimp farming, fish drying, and tourism -- a 
famous floating pagoda lies just offshore.  Thanlyin natives 
gripe that since Khin Nyunt rose to prominence in 1988, juicy 
development projects have bypassed the larger town in favor 
of Kyauktan.  Indeed, Kyauktan's roads and public buildings 
are far newer and better maintained than in other small towns 
in the region and a cell phone tower, a very rare commodity 
outside Rangoon proper, dominates the town's skyline. 
 
5. (SBU) Nonetheless, Kyauktan again proves that public works 
projects alone do not make economic development.  Near 
Thilawa port, SPDC favorite Asia World Co. (the conglomerate 
founded in the 1990s by ethnic Kokang drug lord Lo Hsing Han) 
has built a network of well-paved roads with grassy medians 
passing through a vast "development zone."  As far as we 
could tell the zone is currently populated by a single 
unfinished and apparently abandoned wire factory, a number of 
tumbledown huts, and dozens of stray dogs.  Likewise, in town 
we saw a spanking new "e-library" that had been "donated" to 
General Khin Nyunt by sycophants at the Union of Myanmar 
Federation of Chambers of Commerce and Industry.  The library 
building is nice and has five new computers available for 
use.  However, no "e" is available -- neither Internet access 
nor, quite often, electricity.  Would-be computer geeks are, 
however, able to borrow any one of a hundred pirated software 
titles including English and Chinese language CDs and at 
least two "How to be a Hacker" instructional discs. 
 
In Khin Nyunt's House There are Many Mansions... 
 
6. (SBU) Religious harmony, a theme we've noticed elsewhere 
on our travels, appeared to repeat itself in Thanlyin and 
Kyauktan.  Although Buddhist structures were clearly dominant 
and better maintained, Catholic and Protestant churches exist 
alongside mosques and an internationally renowned Buddhist 
meditation center.  At a 400-year old mosque in Thanlyin, one 
Muslim official told us that in the region the majority 
Buddhists get along quite well with the large Muslim 
minority.  There were no incidents of violence here during 
the inter-religious disturbances that flared up in Rangoon 
last October and November. He said that the government fears 
the size and power of the Muslim community in Thanlyin and 
thus does not harass it or enforce laws forbidding the 
renovation of non-Buddhist religious structures. 
 
Comment: One Economic Development Plan Fits All 
 
7. (SBU) The economic situation and various development 
projects in Thanlyin and Kyauktan illustrate some important 
points about the GOB's current development "strategy." 
First, projects like Thilawa port symbolize the GOB's 
obsession with huge infrastructure projects, completed for 
the glory of the country regardless of cost or usefulness. 
Second, the port and the Thanlyin-Rangoon bridge reiterate 
the pervasiveness of Chinese investment and assistance in 
these type of grandiose, but economically questionable, 
projects.  Third, the location of these infrastructure 
projects alongside the Asia World "development zone" and the 
"e-library" show the nature of the pork barrel spending in 
Burma, where the hometowns of the senior leadership get 
priority regardless of appropriateness.  Finally, the sad 
state of Thanlyin's major state-owned, potentially 
profitable, industries is a typical result of SPDC 
development priorities that focus on newness and flash rather 
than strengthening or rationalizing boring old existing 
industries.  End comment. 
Martinez