November 28, 2012

Myanmar - “The Best Unopened Market in the World”

The Daily Reckoning Presents

Chris Mayer Archibald Colquhoun returned from a trip to Myanmar (Burma) enthusiastic about the opportunities in the country. He wrote a book about it all: Burma and the Burmans: Or, "The Best Unopened Market in the World."

Colquhoun writes exuberantly about the oil resources of the country, as well as its jade, gold, copper and coal. There are dense forested hills of teak, unspoiled fisheries and fertile valleys. Nor did he forget the potential for reopening old trade routes connecting China and India.

The thing is, he wrote about all this in 1885.

But Colquhoun was right. By the 1920s, Burma was a regional hub and relatively rich. But after those prewar peaks, Myanmar suffered through a long period of decline and isolation, nurtured by an oppressive government. Today, Myanmar is again in the news as it reforms and opens up to the world outside. It is a market of 60 million people poised to join the global economy. It is a large country, bigger than France, with rich stores of natural resources and much untapped potential.

Consider some points from a recent UBS report by Ian Gisbourne titled "On the Ground in Myanmar." Specifically, consider some comparisons with Thailand, a country it was much the equal of 80 years ago and where the populations are close today:

  • More tourists arrive in Thailand in a single week than arrive in Myanmar in a year
  • There are more hotel rooms in Bangkok alone than in all of Myanmar
  • Current power consumption per capita is only 5% of Thailand's
  • There are only 300,000 vehicles in Myanmar, compared with 5.4 million in Thailand
  • Former capital and biggest city Yangon has only 740 apartment buildings, compared with 15,000 in Bangkok
  • Mobile phone penetration in Myanmar is 1%. In Thailand, 115%. (Some people have more than one.)
  • Life expectancy in Myanmar is 10 years less than in Thailand
  • Fertilizer use is 43 times greater in Thailand than in Myanmar.
As you can see from just this partial list, there are opportunities in tourism, hotels, power generation, cars, mobile phones, health care and agriculture. Myanmar is like a market frozen in time. But things are changing.


The biggest source of foreign investment right now is oil and gas. Natural gas is Myanmar's biggest export. (It supplies Thailand with 21% of its natural gas.) Yet the value of Myanmar's total exports runs to only $9 billion. Compare that with Thailand's total of $225 billion. There is plenty to do on the oil and gas front. Myanmar is actually one of the oldest oil producers in the world. The country exported its first barrels back in 1853.

In agriculture, Myanmar is the world's second-largest exporter of rice. The alluvial deltas of the Irrawaddy River are ideal for growing rice. Scottish journalist Sir James George Scott marveled at the inexhaustible soil and the ease of cultivating it back in 1882. "The laziest farm is swampland," he writes, "where the ordinary rainfall is sufficient to produce the sodden ground requisite for a rice crop." He goes on:
So rich is the soil of [Burma] that it has only to be scratched to burst into plenty... The southwest monsoon, commencing in early June, soon reduces the ground to a soft sea of mud.
Even today, most people in Myanmar work on farms growing over 60 different crops, including wheat, beans, rubber, sugar and oilseeds.

Beyond this, Myanmar has over 1,800 miles of coastline. Beautiful beaches lay almost untouched by human feet. A few developments have just broken ground. (And I had to smile at the quaint regulations, such as one that requires no building be taller than the coconut trees.) There are over 800 unexplored islands in the Andaman Sea. The country is a significant source of fresh fish and shellfish. It is also one of the largest sources of hardwood in the world.

Real estate is a big opportunity. Hotels, I've mentioned. But there has been virtually no development of any kind in Yangon (the old Rangoon). Gisbourne notes that one large shopping center in Bangkok has more retail space than all of Yangon — a city of 4 million people! Similarly, one office building on Sathorn Road in Bangkok has more space than the whole of Yangon.

As the economy develops, the demand for things like hotels and office space and shopping centers will increase manyfold over what exists now. So will the demand for railways and highways, pipelines and refineries, cell towers and power plants.

Of course, predictions like these can go very wrong or take much longer to play out than expected. I read Norman Lewis' classic Golden Earth: Travels in Burma. Lewis is universally celebrated as a great travel writer, but he is prone to the occasional howler. (Beyond the ridiculous romanticizing of poverty-stricken peasant life, at one point he writes that Burma is "free from the damaging myths of color, race and caste that bedevil the internal relationships of so many nations." I can't imagine a more naive statement.)

Anyway, Lewis' book came out in the 1950s. He wrote glowingly about Burma's prospects. Yet a military coup lay less than 10 years in the future, which would send Burma on a near 50-year journey in darkness.

So you never know. Nonetheless, the best time to get interested in places like this is when they just start to open up. That time is now. My hunch is that Archibald Colquhoun's 1885 thesis is back in play. Burma, now Myanmar, is the best unopened market in the world.


Chris Mayer
for The Daily Reckoning


( Written at the request of Editor, )


The Intelligence Bureau (IB), which is presently celebrating its 125th anniversary, and the Research & Analysis Wing ( R&AW), the external intelligence agency which came into being in September 1968, will be having new chiefs for a period of two years from  January 1,2013.

2. The Appointments Committee of the Cabinet, headed by Prime Minister Dr.Manmohan Singh, is reported to have chosen ShriAsif Ibrahim, an IPS officer of the Madhya Pradesh cadre, to head the IB and ShriAlok Joshi, an IPS officer of the Haryana cadre, to head the R&AW.

3.Both are highly experienced and competent officers who will do credit to the two organisations. While the experience of ShriAsif Ibrahim has been in his State and the IB, that of Shri Joshi has been in his State as well as in the IB and the R&AW.

4. The two officers will be heading their respective organisations at a time when they will be implementing the recommendations of the Naresh Chandra Task Force on National Security, submitted to the Prime Minister on May 24 last. The Task Force report contains important recommendations for the revamp and modernisation of our national security set-up, including the various agencies of our intelligence community and the agencies responsible for cyber security.

5. This is the first revamp being undertaken 10 years after the earlier revamp undertaken after the Kargil conflictof 1999. The effectiveness of the new revamp and modernisation will depend on the co-operation between the agencies of the intelligence community in the implementation.Both ShriAsif Ibrahim and Shri Joshi have a well-established reputation as excellent team players and this should help in the smooth implementation.

6. They will be heading their agencies at a time when globally intelligence agencies are re-strategising their charter.For 10 years after 9/11, their focus was largely on counter-terrorism. As a result, the focus on area studies somewhat suffered. There is now an attempt to pay more attention to area studies without diluting the focus on counter-terrorism.

7.Non-traditional threats to national security form an important component of this new strategy under formulation. Cyber security  is one of the non-traditional threats receiving increasing attention. Protection  of our national security and other critical infrastructure from cyber threats orchestrated by State and non-State actors is now an important task of the intelligence community as a whole. Shri Ibrahim and Shri Joshi will be required to pay leadership role in the matter along with their other colleagues in the community. The reported fact that ShriIbrahim , apart from being an expert in counter-terrorism, counter-insurgency and counter-intelligence related intelligence tasks, is also well-versed with cyber security should be of help to the Government in this regard.

8. Shri Ibrahim will be taking over at a time when the exercise for the revamping of our counter-terrorism architecture hasrun into a road-block due to political mishandling of the creation of the National Counter-Terrorism Centre (NCTC). In whatever form the NCTC is ultimately set-up to meet the sensitivities of the State Governments, the Multi-Agency Centre of the IB  set up under the post-Kargil revamp will be an important core of it. Better co-ordination and understanding between the IB and the State Police under Shri Ibrahim's stewardship would be important in this regard.

9. Both the IB and the R&AW have previously been headed by officers belonging to non-Muslim minorities. This is the first time since 1947 that a Muslim officer will be heading the most important agency of the intelligence community. Many countries in the democratic world have been debating for some years now how to give better representation to religious and ethnic minorities and women in the intelligence profession and how to enhance their leadership role.

10.The nomination of Shri Ibrahim to head the IB is not only a recognition by the Government of his record and competence, but but also an acknowledgement that the time has come to give this debate greater prominence and meaning in our country. Not only religious and ethnic minorities, but also women are inadequately represented at leadership levels in our intelligence community. This needs to be rectified. ( 28-11-12)

( The writer is Additional Secretary (Retd), Cabinet Secretariat, Govt. of India. 

November 25, 2012

U.S. Double Standard Towards The Kurds

November 23, 2012 
By Joseph Puder 

 The London based pan-Arab newspaper Asharq Al-Awsat reported on October 29, 2012 that the Obama administration has rejected the notion of an independent Kurdish state. An article by Shirzad Shikhani in the paper headlined: "Kurdish Autonomous Region No-Go – US notes that 'A Kurdish leader, speaking on the condition of anonymity, revealed that the US administration has informed Kurdistan Region President Massoud Barzani that the US and Turkey will not support any efforts, on his part, to announce an independent Kurdish state'."  This raises the curious question as to why the Obama administration supports Palestinian statehood but finds a Kurdish independent state objectionable.

The Obama administration's reasoning according to Shikhani is that Washington supports "dialogue with Baghdad, and recommended that he (Barzani) – along with Iraqi political leaders – seek to overcome this crisis and normalize relations between the Iraqi and Kurdish political forces in order to protect the democratic experience in Iraq." Iraq however is not a Jeffersonian democracy nor could it ever be one, given that Iraq is an inorganic concoction created by the colonial powers post WWI.  Iraq ceased to be a "democracy" of any kind as soon as the U.S. troops departed in 2011. Its Prime Minister, Nuri Al-Maliki, has increasingly assumed the authoritarian nature of other Arab leaders, to the deep dismay of true democrats.
The New York Times in a September 5, 2012 report on Nuri Al-Maliki noted that, "In 2011, as American involvement in his country came to an end, he was viewed as the country's emerging sectarian strongman, whose aggressive actions have raised concerns both at home and in the West, where officials have long been uneasy with the prime minister's authoritarian tendencies."
Modern Iraq has always been ruled by authoritarian leaders.  Its first ruler was the Hashemite King Feisal originally from the Hejaz in Saudi Arabia -a Sunni Muslim ruling over a majority of Arab Shiites-Muslims and Kurds.  Then, in 1958, Col. Abd al-Karim Qasim seized power in coup that deposed the monarchy and murdered the royal family.  The pro-Communist Qasim was deposed and killed in a Ba'athist engineered coup in 1963, that brought Qasim's coup partner, Col. Abdul Salam Arif (Arab Sunni-Muslim) to power. When he died in a plane crash (most likely sabotage) his brother Abdul Rahman Arif became president in 1966.  Another coup in 1968 brought Gen. Ahmed Hassan al-Bakr to power. Al-Bakr stepped down (most likely forced to do so) from the presidency in 1979, and Saddam Hussein, al-Bakr's cousin assumed full dictatorial power in Iraq.  All of these strongmen including Saddam were Arab Sunni-Muslim. Al-Maliki is the first Arab-Shiite to rule Iraq.

The post WW I Treaty of Se'vres, (Aug. 10, 1920), between the victorious Allies and the defeated Ottoman Turkey, provided for an autonomous Kurdistan (and an independent Armenia).  The treaty was rejected however by the new Turkish nationalist regime of Kemal Ataturk, and was replaced by the Treaty of Lausanne in 1923. The Kurds then declared independence in 1927 and established the Republic of Ararat, only to be crushed by the Turks three years later.  Turkey now as then is opposed to any manifestation of Kurdish independence in Iraq or Syria, but champion's Palestinian independence.  This hypocrisy is regrettably endorsed by the U.S.

Britain, post WW I, received a League of Nations Mandate for the administration of Iraq and Palestine, and to consolidate oil resources, stripped the Kurdish area of northern Iraq from Turkey and combined it with the Iraqi oil rich Gulf region in the south.  The Sunni tribal areas lay between these two areas.  But while London sought to confer self-determination on Arab-Palestinians under the 1937 Peel Commission (which the Arab rejected) they have never provided the same opportunity for the Kurds.  Mullah Mustafa Barzani (Massoud Barzani father) became the Kurdish figurehead who sought separatism, autonomy and ultimately independence for the Kurds. In 1946, along Qazi Muhammad, the leader of the Kurdistan Democratic Party of Iran, declared the Independent Republic of Mahabad in northwestern Iran.  It lasted a mere six months and was crushed by overwhelming number of Iranian troops.
Barzani returned to his native Iraq in 1958 following the overthrow of the monarchy.  Barzani's call for Kurdish autonomy brought him into conflict with Qasim and the Arif brothers. A peace deal between the Baghdad government led by Saddam Hussein and the Kurdish Peshmerga under Barzani was signed in 1970.  It recognized Kurdish self-rule in Northern Iraq, and the Kurdish language.  But as the Al-Bakr-Saddam Hussein regime "Arabized," hostilities in the oil-rich Kirkuk area (a majority Kurdish area) resumed.

The Iran-Iraq War that began in 1980 afforded the Kurds in Iraq an opportunity to push back the Iraqi forces in Northern Iraq. In 1983, Saddam ordered his troops into the area around Massoud Barzani's home (now leader of the KDP following his father's death in 1979) and mercilessly killed 8000 Kurds. As the war with Iran was waning, Saddam initiated the "Anfal Campaign" against the Kurds in northern Iraq.  Saddam's cousin-Ali Hassan al-Majid, known as "Chemical Ali," used poison gas to kill 5000 civilians and injure 10,000 in the town of Halabja.
In 1991, soon after the Gulf War, President George H. Bush encouraged the Kurds to launch an uprising against Saddam but when Iraqi planes bombed Kurdish villages the U.S. did nothing.  As a result, a million Iraqi Kurds became refugees. These events prompted the Kurdish Democratic Party, led by Barzani, and the Patriotic Union of Kurdistan, led by Jalal Talabani, to end their civil war and unite.

Considering that Americans are welcomed and safe in Iraqi Kurdistan, and that the Kurdistan Regional Government (KRG) led by Massoud Barzani is the only stable entity in Iraq, where prosperity and democracy are emerging, the question that begs asking is why the Obama administration is not eager to welcome an independent Kurdistan.  Joe Biden as chairman of the Senate Foreign Relations Committee was quoted by Reuters on May 1, 2006 as saying: "Iraq should be divided into three largely autonomous regions – Kurd, Sunni Arab and Shiite Arab – with a weaker central government in Baghdad." Biden, in a NY Times Op-Ed warned against actions by the (George W.) Bush administration, saying: "the Bush administration's effort to establish a strong central government in Baghdad had been a failure doomed by ethnic rivalry that had spawned widespread sectarian violence."  As Vice President and part of the Biden/Obama administration, Biden is complicit in doing exactly what he railed against.

The hypocrisy and double standards of the Obama administration regarding Kurdish independence can be best understood when one reads Obama's Cairo speech of June 2009 in which he said, "For more than sixty years they (the Palestinians) have endured the pain of dislocation. Many wait in refugee camps in the West Bank, Gaza, and neighboring lands for a life of peace and security that they have never been able to lead. They endure the daily humiliations – large and small – that come with occupation. So let there be no doubt: the situation for the Palestinian people is intolerable. America will not turn our backs on the legitimate Palestinian aspiration for dignity, opportunity, and a state of their own."
The Kurds have endured great suffering, indignity, and humiliation over the last 100 years.  The suffering of the Arab Palestinians referenced by Obama has been largely self-inflicted.  Time and again they have rejected offers of peace and compromises.  The 1937 Peel Commission and the 1947 UN Partition Plan offered the Arab Palestinians an opportunity to establish their own state alongside a tiny Jewish State. They chose war and the possibility of destroying Israel instead.  The Kurds unlike the Arab-Palestinians have not engaged in terror, suicide bombing, and aircraft hijacking, and acts of terror by the Kurdistan Workers Party (PKK) have been condemned by most Kurds.  And while there are 22 Arab states who share the same sense of collective nationhood including religion, culture, and language, there is not a single Kurdish state in spite of the fact that the Kurdish nation is 40 million strong, with its own culture and Indo-European language (Kurmanji and Sorani).

It is time the U.S. and the West support an independent Kurdish state comprised of the contiguous areas of Kurdish dominance in northern Iraq and northeastern Syria.  Such support would be an act of true justice and fairness for a forgotten nation - the Kurds.