clipped from: www.economist.com
Shunned by the West, Myanmar is developing ever closer commercial links with its neighbours, especially China
South-East Asia's biggest proven gas reserve lies in the Shwe field, just off the coast of Ramree Island.
This year work will begin on a pipeline to carry these riches to China. From perhaps as early as late 2009, a parallel pipe will carry Middle Eastern and African oil from a new deep-water harbour at Kyaukphyu, bypassing the Strait of Malacca and fuelling the economy of China's south-west.
India also hoped to buy the Shwe (“golden”) gas, offering the government soft loans and other inducements.
In August India signed a $150m contract for gas exploration further south iN the Gulf of Martaban.
One day India hopes to build its own pipeline into its poor, remote, insurgency-ridden north-eastern states.
In the meantime, Myanmar's biggest export market will remain Thailand. In purchases worth $2 billion a year,
Thailand's electricity authority imports gas from the Yadana and Yetagun fields
Myanmar may soon start conducting all its Chinese trade in the Chinese currency, The rationale would be to avoid Western banking sanctions. American measures introduced after the crushing of monk-led protests last September hurt Burmese financial interests in Singapore.
The new pipelines will follow the route of the old British-built Burma Road, which still carries timber, gold, gemstones and other Burmese raw materials north to China and brings in cheap manufactures. Around 20 Chinese companies are working in Myanmar on scores of projects including hydropower, mining and road-building as well as oil and gas. Ruili, the main border-crossing between northern Myanmar and China's province of Yunnan, has become a seedy boomtown.
Also, the new “Southern Silk Road”, linking India to China across northern Myanmar. Parts of the long-derelict route were first opened by the Allies during the second world war to supply Chiang Kai-shek's Chinese army in its war with the Japanese.
India's determination to develop the north-east
Yunnan needs energy supplies and markets,