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The Globe and Mail

Myanmar pays the price for our lofty principles

Myanmar is not South Africa and Aung San Suu Kyi isn't Nelson Mandela. The release of the woman who the country's military leader, General Than Shwe, prefers to call "the Lady" (her name is taboo in his presence) is unlikely to lead to rapid regime change in one of the world's more backward and repressive societies.

The more likely outcome is a puppet civilian government and business as usual for the generals, with occasional and noisy interruptions from "the Lady." Her release, a week after Myanmar's elections at the beginning of November, was a public relations exercise. The generals hope that the media blitz that enveloped Ms. Suu Kyi after two decades of on-off house arrest may lead to a slight weakening of the economic sanctions imposed by the United States, Canada and Europe on Myanmar. It is carefully staged PR, but that doesn't make it meaningless, nor does it mean that we should keep the sanctions.

For the sake of the Myanmarese, we must concede that the economic boycott has been an embarrassing policy failure for Western countries. Worse still, the sanctions have propelled Myanmar into its new status as something akin to a satellite of China.

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Two decades after the generals stole election victory from Ms. Suu Kyi's National League for Democracy, and after 13 years of U.S. sanctions, the Myanmarese people continue to suffer. Child mortality is one in 10, HIV infection is rife and a country that ought to be a food hamper for Southeast Asia is receiving assistance from the World Food Programme. While peasants scrabble in the dust, the generals and their cronies prosper. A lack of Western investment has hindered the creation of a Myanmarese business class, so military-owned companies loot in partnership with businesses from friendly neighbours: China, Thailand, Malaysia, Vietnam and, recently, India.

The latter is a belated convert to an Asian policy of political engagement. Delhi was once a firm supporter of "the Lady" but it became anxious as China armed the generals and invested in Myanmar, notably its oil and gas resource. India covets an offshore Myanmarese gas field in the Bay of Bengal. Daewoo, the South Korean company, is developing the Shwe field. And CNPC, the Chinese state energy company, has a 30-year contract to buy the gas, but the People's Republic has bigger ambitions: Beijing sees Myanmar as an energy corridor for China. Huge pipe-laying trucks have already started work for CNPC, laying a steel tube that will link a Myanmarese oil port - currently under construction - with a refinery in Yunnan province in southwest China.

The 2,380-kilometre link will be China's fourth oil corridor, the other three being its eastern ports, a pipeline to Siberia and another pipeline to Kazakhstan and the Caspian oil fields. Two-thirds of China's imported oil passes through the Malacca straits, dodging Indonesian pirates in speedboats and armed with AK-47 assault rifles. That route is becoming risky and the solution is the Sino-Myanmar pipeline.

It looks like Myanmarese men in uniform are in the pocket of Chinese men in suits but nothing is ever so simple in the tribal politics of this region. The generals are not entirely comfortable with China, even after $8-billion (U.S.) of investment last year. The discomfort exploded in September, 2009, when 30,000 ethnic Chinese fled Myanmar into Yunnan province. Myanmarese troops crossed the border and shells reportedly fell on Chinese territory, a huge embarrassment for Beijing's policy of appeasing the generals.

China is learning that even satellites can never be taken for granted, especially those run by corrupt dictators. The West, meanwhile, is learning that its writ no longer holds sway east of Suez. Thanks to our self-indulgent human rights policy, it would be fair to say that Myanmar is probably beyond political reach.

But these new spheres of influence have more to do with business than with ideology. In commerce, nothing is permanent. Does it matter that thousands of young Myanmarese women migrate to Thai brothels because the U.S. government won't allow Levi Strauss to employ them in their homeland? We could think again about sanctions or we could live by our elevated principles and wash our hands one more time.

Carl Mortished is a Canadian financial journalist based in London.

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