by Bertil Lintner, Asia Times Online, 2 Nov 2007
BANGKOK – For Htet Tay Za, a 19-year-old member of Myanmar’s elite who attends an exclusive and expensive international school in Singapore, life is often a party. A picture recently obtained by the Chiang Mai-based publication The Irrawaddy shows the young man being kissed on the cheek by a bikini clad Caucasian woman.In another portrait, the partying youngster is seen in festive mood beside a male friend puffing on a water pipe. {Pseudonymity: Tay Za’s Son Ridicules US Sanctions}
But the party may be over soon for Htet Tay Za, as his father who pays the bills for his lavish lifestyle, Tay Za, figures prominently in an October 19 executive order from the US Treasury Department that aims to block his assets and make it illegal for US citizens to have any business dealings with him and his private companies.
Earlier US sanctions, first imposed in 1997 and increased following an attack on pro-democracy leader Aung San Suu Kyi and her followers in May 2003, were often criticized because they broadly banned all new investment into and imports from Myanmar. The latter measures forced textile factories to close down or to move across the border to Thailand. Thousands of workers lost their jobs, while the economic impact on members of the ruling junta was minimal.
This time, however, the US has imposed what it is referring to as “smart sanctions” that target specific individuals and companies. The punitive tactic is similar to the one the US applied in September 2005 against Banco Delta Asia in Macau, which the Treasury Department referred to in a statement at the time as “a willing pawn for the North Korean government to engage in corrupt financial activities”.
The move froze US$24 million in assets belonging to companies controlled by the North Korean government and as a result the entire bank almost collapsed. In the end, the money was released and moved to a bank in Russia. But it forced the North Korean government back to the negotiating table to resume the then stalled six-nation talks on Pyongyang’s controversial nuclear program.
The recent action against the Myanmar government and corporate entities still may not force the junta to embark on a serious dialogue with the country’s hobbled pro-democracy movement. Unlike previous US sanctions, however, this time they will certainly hurt the ruling generals and their business cronies more than ordinary Myanmar workers and citizens.
Tay Za is the 42-year-old manager of the Myanmar-based Htoo Trading Company, which among other subsidiaries controls the Singapore-registered Htoo Wood Products, Pavo Trading, and Air Bagan. Through the new sanctions, all of those companies are now blacklisted by the US government. The businessman is known to be very close to junta leader General Than Shwe and when he first launched into business he made a point of employing the children of powerful generals – which presumably paved the way for him to land lucrative government contracts.
Among those currently or formerly on his payroll are Aung Thet Mann, the son of General Shwe Mann, the junta’s third ranking official after Than Shwe and army chief General Maung Aye. According to a 2005 report in The Irrawaddy, Tay Za is also close to Than Shwe’s son, Kyaing San Shwe, whom Tay Za presented with a US-made Hummer, for undisclosed reasons.
Htoo Trading, which is engaged in timber exports, property development, palm oil production, arms deals and aviation, was one of two construction companies granted lucrative contracts to build the new national capital at Naypyidaw, to which the government moved from Yangon in November 2005. Also included on the new US sanctions list is Tay Za’s wife, Thidar Zaw, and another son, Pye Phyo Za, who spends most of his time in a luxury apartment in Singapore.
Junta who’s who
The US Treasury Department’s two new lists, one of which mentions by name 14 generals and government ministers, and the second an additional 11, are all now barred from entering the US and will have any assets they may hold in US financial institutions frozen. Those measures may be mainly symbolic, as few if any of the military officials have assets held in US banks or were likely planning to spend their next holiday in Hawaii or Florida.
But there are other important businessmen affiliated with the junta who could be adversely affected. The US sanction list notably includes Khin Shwe, president of Zaygabar and one of Myanmar’s leading real estate moguls, and Htay Myint, chief executive officer of the Yuzana Company, a large property developer.
Khin Shwe first attracted international attention in 1997 when he hired a US public relations firm, Bain and Associates Inc, in what turned out to be a futile attempt to improve the junta’s image and standing in Washington. Bain and Associates now appears to have washed its hands of Myanmar’s junta. The firm’s homepage, perhaps for good reason, omits Zaygabar among its list of “clients with whom we’ve worked”.
In Yangon, Zaygabar owns industrial parks, a golf and country club frequented by army officers, a hotel and the city’s tallest residential condominium. The fact that Khin Shwe’s daughter, Zay Zin Latt, is married to another of General Shwe Mann’s sons, Toe Naing Mann, some analysts believe may have helped him secure lucrative government contracts and concessions. Outside Myanmar, Khin Shwe is known to have business relations with companies in Japan, South Korea and Thailand. He is currently chairman of the Myanmar-Japan and Myanmar-Korean Friendship Associations and also chairs the Myanmar-Thai Development Corporation.
Htay Myint’s Yuzana is a somewhat smaller company, but has substantial investments in property as well as agricultural and fishery ventures. According to The Irrawaddy, he serves as president of the Construction Owners Association, the Fishing Vessel Owners Association and the Myanmar Project Association, and is the owner of one of Myanmar’s biggest supermarket chains. Htay Myint’s contacts with the junta were strongest with former prime minister Gen Khin Nyunt, who was ousted in a purge in October 2004. But the fact that Yuzana is still doing booming business in Myanmar indicates that he must have other high-level contacts as well.
Not on the US new sanctions list is Tun Myint Naing, also known as Steven Law , managing director of Asia World Company, the country’s biggest and most diversified conglomerate. Asia World was the other main contractor involved in the building of Naypyidaw.
Whether Law and his Asia World will be added to the list remains to be seen, but according to an e-mail received by Asia Times Online from the US State Department, what has been announced so far “is not meant as the final word”. Meanwhile, Asia World maintains close relations with the junta and it recently has been involved in road construction in northeastern Shan State, the renovation of Yangon’s international airport, and the construction of a deepwater port near the old capital. Law is also known to have had business interests in Singapore, including the recently dissolved Kokang Singapore Pte Ltd, and others through his wife, Cecilia Ng, who is a Singaporean citizen.
The effects of the new sanctions were felt within days of their announcement. Tay Za’s Air Bagan has cancelled its international flights to both Bangkok and Singapore and remains basically grounded . Banks in Singapore, the financial center of choice for Myanmar’s generals and junta-affiliated business tycoons, have reportedly become slow in processing any transactions to and from Myanmar.
The reason, some observers suggest, is that Singapore’s banks want to check whether any of their clients are on the US sanctions list – in which case they could face a similar situation to that of Macau’s Banco Delta Asia. Singapore is not legally obliged to uphold the new US sanctions, but its banks are evidently nervous about the adverse publicity the punitive measures could have on their global reputations. Air Bagan’s bank accounts in Singapore have already reportedly been blocked, though it’s unclear if this is a permanent or temporary intervention.
What is clear is that it will be much more difficult for Myanmar’s generals and their business associates to deposit both their legitimate and ill-gotten gains in Singaporean banks. Myanmar workers based abroad, many of whom send remittances to their relatives back home, will notably be less affected by the new measures as they tend to use informal underground banking systems such as “hawala” to avoid unfavorable exchange rates and excessive government taxes.
The new sanctions also likely mean less partying in Singapore for the generals, their cronies and siblings. And because most international bank transfers pass through either the US or Europe, whatever funds the junta already has parked in Singapore will likely need to stay there or risk being frozen or confiscated. The medium-term efficacy of the US’s smarter sanctions is more difficult to ascertain, as the junta will likely seek out new destinations for its funds. But suddenly life just got considerably harder for Myanmar’s ruling generals.
Bertil Lintner is a former correspondent with the Far Eastern Economic Review. He is currently a writer with Asia-Pacific Media Services.
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