Myanmar shows the dilemma facing overseas investors

Isolation and sanctions have not forced any change in Myanmar even as investors there claim policies of non interference in domestic issues, just strictly business.

Saffron Revolution: Buddhist monks played key roles during the anti-government protests in Myanmar two years ago. AFP

We're in Myanmar, formerly known as Burma, ostensibly for a holiday. But we have an ulterior motive too. We want to find Ashin Thura, a monk whom my wife met three years ago. Since the deadly 2007 anti-government protests, we have heard nothing from him.

But that is not surprising in a country with no international mobile phone access and very limited internet. Has he moved on, or perhaps been caught up in the military junta's crackdown?

The regime's corruption and brutality, and the charisma of Aung San Suu Kyi, the Nobel Peace Prize-winning opposition leader, put Myanmar on the frontline of campaigns to dissuade investment in countries that violate human rights.

Rich in agricultural land, timber, gemstones, metals, oil and natural gas, it is also a major producer of illegal drugs such as opium.

When it gained independence from Britain in 1948, the country was South East Asia's wealthiest state. Now, 60 years of disastrous policies of economic self-sufficiency, repression of ethnic minorities and corrupt military governments have left it the world's 20th-poorest country.

Yet it is only a flight of an hour or two from success stories such as Singapore, Malaysia, India, China and Vietnam.

Unlike Singapore's high-tech metropolis the travel agents do not have computers, so it takes us a full day to book our flight from the largest city, Yangon, to Thura's home town. Armed soldiers are still stationed around the Sule Paya temple, a focal point in the 2007 demonstrations.

We pass the dictator Than Shwe's walled palace, the grounds of which contain an 18-hole golf course.

Chinese investors and businessmen are everywhere. Japanese and Korean products are also common, but surprisingly, the influence of next-door India is not very visible.

This influx began in the early 1990s when the regime quietly began to seek foreign investment. Companies including Unocal of the US (later bought by Chevron), Total of France and the UK company Premier discovered offshore gas.

But the problems for the companies had only just begun. Pipeline routes to fast-growing Thailand ran through the lands of the Karen people, who have been fighting for autonomy from the central government since 1949.

Allegations surfaced of human rights abuses, of villagers being forced to work without pay on pipeline construction, of soldiers guarding the sites raping and murdering local people.

A number of western non-governmental organisations (NGOs) began campaigns against the companies involved. Premier eventually succumbed to the pressure and sold out entirely.

The larger Unocal and Total are still there, but Unocal was sued in the US and reached an out-of-court settlement in 2005, after eight years of legal battles.

The achievements of these battles mirrored earlier attempts to compel disinvestment from apartheid-era South Africa, and from Sudan over genocide claims, and campaigns against environmental damage linked to Texaco (now also part of Chevron) in Ecuador.

But in 2006, South Korea's Daiwoo and India's state-owned ONGC and GAIL found gas in the Bay of Bengal. Less sensitive to NGO pressure, Myanmar's giant, energy-hungry neighbours showed increasing interest in its resources, with China emerging as winner for the gas exports.

The gas revenues have served to entrench the junta in power. China, with its proclaimed policies of "non-interference" in domestic matters, makes a cosy partner. Democratic India should be more robust in tackling the generals; its moral authority counts for more than a relatively minor energy deal.

NGOs now increasingly consider whether it is better to allow western companies to remain in such countries. At least they are susceptible to public scrutiny and minimum standards of corporate behaviour.

But the ultimate question is whether it is acceptable to engage with such governments in the hope of changing their behaviour or, better still, developing civil society as a step towards democracy. Or are there some cases in which outside investment will just serve to strengthen the regime and make it impervious to criticism?

Even humble tourists face such a quandary. We were keenly aware of the moral issues involved in visiting Myanmar, especially in keeping our cash out of the generals' pockets.

But it seemed more important to show local people that they are not alone, exchange views on the situation and spend money at local small businesses.

We don't recall the monastery's location, so we turn off the main road and wander down dusty streets wreathed with wood smoke. The monks, in their bright saffron and dark russet robes, led the protests in this town and many others.

We ask for Thura at a carved wooden monastery, are directed to the next place down the street - and there he is.

Delighted to see us, he looks distinctly thinner having just returned from the countryside where food was in short supply. If we'd visited slightly earlier we would have missed him.

We take him to a Korean restaurant for a simple bowl of rice. Comfortable that we can't be overheard, we ask about the 2007 demonstrations.

Yes, he was there on the streets. He knows of 50 monks killed in this town alone and 2,000 still in prison. Many more died in Yangon.

To ensure their survival, Than Shwe and his cronies were ready to kill monks, violating the most sacred tenets of Burmese Buddhism and society. Yet isolation and sanctions have not forced change there any more than in North Korea or Cuba.

There were never easy answers to such dilemmas; in an energy-hungry, multipolar world, they are harder than ever to find.

A Robin M Mills is an energy economist based in Dubai, and the author of The Myth of the Oil Crisis and Capturing Carbon