US embassy cable - 05RANGOON1053

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 001053 
 
SIPDIS 
 
E.O. 12958: DECL: 09/12/2015 
TAGS: PGOV, PREL, ECON, EINV, BM, RP, SN, MY, BX 
SUBJECT: BURMA: ASEAN PERSPECTIVES - PART I 
 
Classified By: CDA Shari Villarosa for Reasons 1.4 (b,d) 
 
1. (C) Summary: Charge's courtesy calls on four ASEAN 
Ambassadors revealed differing, but in the end negative, 
views on Burma's future.  While the departing Malaysian and 
Bruneian ambassadors were blunt in their negative assessments 
of the current conditions, the relatively new Singaporean 
ambassador downplayed problems.  Instead he highlighted his 
country's investments and assistance programs.  The 
Philippines ambassador urged USG engagement with Burma's 
military as the "most realistic" policy. End summary. 
 
Investment Climate Deteriorating 
-------------------------------- 
2. (C) At September 8 and 12 introductory calls, Charge' 
heard generally negative assessments from outgoing Malaysian 
Ambassador Dato Cheah Sam Kip and outgoing Bruneian 
Ambassador Pehin Dato Haji Hussin.  Ambassadors Cheah and 
Hussin commented on how shocked they were at the rural 
poverty, particularly in Rakhine State, and how unattractive 
the climate has become for investment.  Amb. Hussin said the 
situation "had gone from bad to worse" during his four and a 
half years, and that there are no Bruneian investors or 
businesses in Burma.  His government's negative assessment of 
the economic climate led it to ignore the GOB's earlier pleas 
for investment and to warn potential investors away.  The 
only Malaysian investments doing well, according to Amb. 
Cheah, are in the oil/gas industry and a couple of light 
manufacturing factories.  Because the GOB relinquished the 
ASEAN Chair and ASEAN moved the 2006 Tourism Forum from 
Burma, prospects for Malaysia tourism investments are poor. 
Reasons for the economic decline, according to Amb. Cheah, 
include the unstable currency, weak banking structure and 
unpredictable political situation.  He cited the GOB's 
declining investment approval figures of over $1 billion in 
1995 to $90 million in 2003, as proving the poor investment 
climate. 
 
3. (C)  Singaporean Amb. Thambynathan Jasudasen has been here 
just ten months.  Amb. Jasudasen downplayed problems 
experienced by Singaporean investors, saying they still 
earned decent profits and felt little GOB pressure to 
increase the "Burmese stake" in joint ventures.  He did admit 
investors have difficulty collecting cash up front for the 
local partner's (the GOB's Myanmar Economic Corporation) 
share of investment.  Singapore is Burma's largest trading 
partner and investor on the books, though China may have more 
money in country if informal activities are counted, 
according to Amb. Jasudasen.  Singaporean investments are 
mainly in tourism, beverages, cigarettes, shipping and 
financial services. 
 
Military Turning Inward 
----------------------- 
4. (C) Since former PM Khin Nyunt's ouster last October, the 
GOB has grown more isolationist and xenophobic, according to 
Malaysian Amb. Cheah.  The generals, however, do not feel the 
suffering of the people and do not care about them anyway, he 
said.  According to Philippines Amb. Phoebe Gomez, unlike the 
Filipinos, who are "flexible like bamboo," the SPDC is 
stubborn and "hard as teak wood."  Bruneian Amb. Hussin said 
that the people are afraid to say anything to the government 
about their problems.  All acknowledged having minimal access 
to government leaders since the downfall of Khin Nyunt. 
 
5. (C) Ambassadors Gomez and Jasudasen criticized U.S. 
sanctions policy and urged increased U.S. engagement with the 
regime.  Amb. Gomez, who has been here five and a half years, 
encouraged the USG to engage the next generation of military 
officers, since "they are the only ones who are in a position 
to continue leading the country."  Amb. Jasudasen described 
GOS programs that offered training and thousands of 
scholarships annually to GOB civil servants and public sector 
workers.  He claimed nine out of ten return to Burma.  He 
encouraged the USG to offer more educational opportunities 
and English language classes.  Amb. Cheah said sanctions were 
driving Burma closer to China, which has compelled India to 
become more engaged. 
 
6. (C) Charge' noted the contrast with other ASEAN nations 
that have invested in their people to raise standards of 
living, while the Burmese military spends only on itself. 
The Charge' stressed that we need to encourage inclusiveness 
and support the crucial role of civil society and political 
parties, adding most ASEAN countries have demonstrated 
successfully that increased political and economic 
liberalization have promoted development.  In contrast, the 
closed, inward-looking policies of the Burmese military have 
impoverished their people. 
 
Comment: Familiarity Breeds Contempt? 
------------------------------------- 
7. (C) Comment: Perhaps because these meetings came a few 
days before their departures, the Bruneian and Malaysian 
ambassadors were uncharacteristically frank about the bleak 
outlook for Burma.  With significantly more investment at 
stake, it is not surprising that the Singaporean ambassador 
focused on the positive.  He began the meeting by calling 
Singapore America's "best friend in ASEAN", highlighting our 
close cooperation on a wide array of issues.  Obviously, we 
diverge on Burma.  Amb. Gomez is content to be the social 
director of the diplomatic community as Dean, has no 
Philippine interests at stake, and so does not see any need 
to disrupt her life.  Nevertheless, all of the Ambassadors 
acknowledged that the Burmese military was the primary source 
of political, economic, and social problems in Burma today. 
They just do not believe that they can influence any change 
in Burma.  Instead they prefer to urge us to change, with the 
hope that their investments might then prosper.  End comment. 
Villarosa