Can oil and gas wealth kickstart Burma's economy?
|
Burma is far behind its Asian neighbors Thailand, India, and China in economic development and growth.
Since 1962 Burma has been isolated economically and politically from the rest of the world. (Read Thant Myint U article and NPR webcast)
Economically isolated, Burma never acquired all the infrastructure that we take for granted in our modern economies.
Telephone systems, electricity generation, roads, sewers, water supplies are all inadequate to support industry and growth in Burma.
Each year Burma has sunk deeper into this economic quagmire of isolation.
Can they pull themselves out of this hole?
Recently, large new oil and gas deposits have been found in the country.
Will the new oil and gas wealth be invested in infrastructure to kickstart Burma's economy?
Nearby Indonesia was also well-endowed with oil wealth but never really benefited much from it.
This is called the "resource curse" that many developing countries suffer from.
Natural resource endowments like oil and gas must help economic growth.
This is logical and makes sense, but actually often not true.
These endowments often have the exact opposite effect, encouraging "internal political corruption, underinvestment in domestic human capital, and a decline in the competitiveness of other economic sectors."
In the end, abundant natural resources like oil and gas often hurt growth prospects. (Source: Wikipedia)
Maybe Burma will be lucky.
Reading questions:
1. What kind of energy resources does Burma have?
2. Who does Burma wish to supply energy resources to?
3. Are most of Burma's oil and gas reserves on land or at sea?
4. What is Burma currently doing that might lead to discoveries in the near future?
5.Which countries are actively engaged in the energy sector of the Burmese economy?
6. What foreign laws have hurt the Burmese economy in the past?
7. How has growth in the oil and gas sector of the Burmese economy overcome the impact of these laws?
8. Has oil and gas wealth trickled down to poorer people in the economy?
9. How has oil and gas wealth been used to benefit the Burmese economy?
kickstart - giving the push needed to start and set in motion (starting a motorcycle with foot)
resource curse - the fact that being well-endowed with natural resources often hurts the growth prospects of developing countries (natural resources help growth is what you'd normally think)
a quagmire - a bad situation difficult to get out of (soft earth that you sink into when you walk over it)
Burma wants to quench Asia's thirst for oil, gas
By Bernice Han (AFP)Singapore — Endowed with vast energy resources, military ruled Burma wants to be a major supplier of oil and gas to its neighbours, a government official said yesterday.
"Our dream is Burma would eventually become a major energy supplier in this region," Soe Myint, director-general with the country’s energy planning department, said at a seminar jointly organised by the Institute of Southeast Asian Studies and Institute of South Asian Studies.
"We hope to become a sort of bridge between Southeast Asia and South Asia," he said.
endowed with - given
South Asian - India, Sri Lanka, Nepal, Bhutan, etc.
Figures given by Soe Myint said the impoverished country has proven crude oil reserves of more than 508 million barrels in onshore areas and 100.8 million barrels offshore.
"For natural gas, the country has almost 15.85 trillion cubic feet of reserves offshore and more than 768 billion cubic feet onshore," he said, adding the search for energy supplies is to intensify next year.
"Next year in 2008, we will have a very busy drilling programme for both onshore as well as offshore," he said.
"With all these drilling programmes both onshore and offshore, we are quite confident that we may have some more discovery in the year 2008 or early 2009."
impoverished - making a country or people poor
crude oil - oil not yet processed or refined
onshore - on land
offshore - in the ocean
natural gas - underground gas, put in tanks for cooking in Thailand, piped into peoples' homes for heating in the west
reserves - supplies stored for future use
intensify - become greater in strength or amount
Soe Myint said 16 foreign companies including Russian, Chinese and South Korean energy firms have signed contracts to drill for energy supplies offshore.
Burma's vast energy resources have proven to be an economic salvation for the impoverished country which has been hit by United States and European economic sanctions imposed over the junta's human rights abuses and the detention of democracy icon Aung San Suu Kyi.
But the impact of the sanctions has been weakened as energy-hungry neighbours such as China, India and Thailand are spending billions of dollars for a share of Burma's vast energy resources to solve their power problems.
Burma's military rulers have awarded a raft of oil and natural gas exploration contracts, following major discoveries by South Korea's Daewoo International.
Daewoo said the blocks in the Bay of Bengal near the border with Bangladesh have been certified to hold up to 219.2 billion cubic metres (7.7 trillion cubic feet) of exploitable gas.
salvation - saving from harm and destruction
economic sanctions - laws that restrict trade with or investment in the country
detention - puit in jail or prison
icon - important symbol
a raft of - a lot of
exploitable - can be mined and used
Impoverished locals have yet to see the benefits of the energy deals.
Most have been left in the dark as blackouts stretch through much of the day, even as reclusive officials in the new administrative capital Naypyidaw in central Burma enjoy an abundance of energy.
But Soe Myint said income earned from energy exports has brought much needed funds to improve the country’s infrastructure and telecommunications network.
"Before, the infrastructure in Burma is so very much limited," he said. "International direct dial telephone service is now available to almost all of the country, and road connections have been extended to remote areas."
Soe Myint said the income from energy sales has also gone towards the building of water reservoirs to aid the country’s agricultural sector, which has raised hopes Burma can again be a rice exporter.
"There are many, many reservoirs now and we are hoping that we will be able to export rice again in the next few years’ time because of the water supply that we are going to enjoy from the new water reservoirs that we constructed out of these earnings."
[Adapted from: Bernice Han (AFP), "Burma wants to quench Asia's thirst for oil, gas," (Bangkok Post, 29-08-07)]
blackouts - period without electricity
reclusive - lives apart from other people, little contact with the outside world
infrastructure -
reservoirs - artificial lake for storing water (drinking water, water for agriculture, etc)
quench - end a desire or need (for example, "quench thirst" or "quench desire")
