Myanmar has raked in $3.8 billion in foreign investment in the nation’s key energy sector as key Asian oil firms continue to do business with the military regime despite efforts to reduce cash flows to the junta since the February 2021 coup.
Earlier this month, independent research group the Institute for Strategy and Policy (Myanmar) reported that the junta had attracted U.S. $3.8 billion to Myanmar’s energy sector between its Feb. 1, 2021, takeover and Oct. 30, 2022, or nearly 68% of all foreign investment over the same period.
The report was based on numbers provided by the junta’s Directorate of Investment and Company Administration and comes despite a concerted effort by Western governments to cut off funding to the military regime through sanctions, citing its role in violence that has claimed the lives of at least 2,525 civilians since the coup.
It’s a substantial cash infusion for the junta, which observers expected would be starved of money 20 months after seizing power as foreign companies fled political turmoil and economic mismanagement by the regime. Since December, five major players in the country’s energy sector have announced their departure, including France’s Total, U.S.-based Chevron, Australia’s Woodside, Japan’s Mitsubishi and Malaysia’s Petronas.
However, Soe Thura Tun, minister of energy and electricity for Myanmar’s shadow National Unity Government, questioned the accuracy of the junta’s numbers, which he said only accounted for the total amount of investment without addressing losses incurred from foreign companies leaving the country.
“The reality is that $1 billion came in as new investment while $1 billion of old investment pulled out,” he said.
“But the junta won’t include loss of investment in its calculations and showed only the total figure. I don’t believe that they have as much investment as they claim.”
‘Selfish opportunists’ ignore crisis
Despite the departures since December, companies such as Thailand’s PTTEP, South Korea’s POSCO, India-based ONGC, Nippon Oil of Japan and China-owned CNPC continue to operate in Myanmar and have become the major players in the country’s energy sector, expanding their presence to make up for the gaps.
Soe Thura Tun said that the shadow government is working with the international organizations to cut off that energy sector revenue and other sources of income, which rights groups allege is being used by the junta to crack down on pro-democracy civilians.
The junta, meanwhile, has ignored calls to seek a political compromise, prompting condemnation and sanctions from the global community.
Ko Ye, spokesman for the Blood Money Campaign, which seeks to shut down junta access to foreign income and international business, told RFA that the kind of foreign investment that has entered since the coup is “not good … for countries like Myanmar.”
“This kind of investment at this time of chaos in our country is the work of selfish opportunists,” he said. “Reputable and unbiased investments are hard to come by these days.”
According to Ko Ye, much of the new investment obtained by the junta in 2022 involved fuel, including for aircraft, and electricity production.
The National Unity Government and NGOs such as Blood Money Campaign estimate that as much as 50% of Myanmar’s total revenue comes from the energy and oil and gas sectors, and despite their efforts to reduce how much of that flows to the junta, they have a long way to go.
Junta Deputy Information Minister Maj. Gen. Zaw Min Tun acknowledged in May that while energy sector production had seen a “pause” as the result of foreign investment withdrawals, Russia was expected to make up the difference with investments of its own “in the near future.”
Russia, China and ASEAN
A Myanmar-based economist, who spoke to RFA on condition of anonymity, said that while Western sanctions have been effective, China, Russia, and some of Myanmar’s fellow Association of Southeast Asian Nations member states are continuing to prop up the regime with foreign investment.
“The NUG’s attempts to cut off the junta’s sources of income won’t have much of an impact on Russia and China, because those counties have always supported the military regime,” they said.
Than Soe Naing, a political analyst, said Myanmar’s neighboring nations should know how the junta rule has impacted the country more than most.
“We are dealing with selfish neighbors that prioritize their national interest above anything else,” he said.
“That’s why we have seen oil and gas companies from Thailand replace western corporations that pulled out, such as Chevron and Total Energy.”
Myanmar’s Myanma Oil and Gas Enterprise, which is estimated to generate U.S. $1.5 billion in annual revenues – or half the country’s foreign currency reserves – signed a deal with Thailand’s PTTEP in August 2014 to cooperate on U.S. $72 billion-worth of energy projects.
Last week, the Blood Money Campaign issued a statement urging Thailand, which recently hosted the Asia-Pacific Economic Cooperation (APEC) forum, to stop investing in Myanmar’s energy sector.
Translated by Myo Min Soe. Written in English by Joshua Lipes.
This content originally appeared on Radio Free Asia and was authored by By RFA Burmese.