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Dirty business: will British trade with Sudan be a blueprint for Burma?

By inviting representatives of indicted war criminal Omar al-Bashir to London for an event designed to carve up Sudan’s natural resources among British firms, the coalition government effectively made a public statement that its ‘new politics’ doesn’t stretch to include foreign policy.

This was good news for those in attendance at the Opportunities in Sudan event organized by UK Trade & Investment (UKTI), a government body set up to promote ‘free trade’ with Britain. Delegates representing oil firms, private armies, engineering and agribusiness interests must have felt relieved to be told ‘there’s a lot of money to be made’.

It is no coincidence that a recent UK Trade and Investment report on Sudan fails to even mention Darfur or the indictment of the Sudanese President. Mike Gavin of UKTI was recently recorded advising a filmmaker – posing as an entrepreneur offering ‘security in Nigeria’ – that British embassies are effectively acting as a vanguard for the ‘business community’.

This ‘new epoch’ in Britain-Sudan relations could also serve as a blueprint for future rapprochement with the Burmese generals. Britain remains one of Burma’s largest investors, despite sporadic denunciations of the regime from politicians. Through a vast web of private holding companies based in overseas dependencies like the Virgin Islands, Britain offers legal protection to a shadowy network of international ‘consortiums’ wishing to benefit from the country’s vast natural wealth and harsh labour laws.

Burma’s Foreign Investment Law offers incentives by protecting investors from almost all taxes and includes a provision to allow firms to lower the value of property on paper for tax purposes. ‘Why invest in Myanmar?’ the military government’s website asks in a report. ‘To sum up, this law provides every protection to foreign investors.’ Almost as an aside they add: ‘The labour force is yet another plus.’

Successive British governments have professed solidarity with Burma’s ‘democracy movement’ but have shirked pledges to ban investment in favour of badly applied, cumbersome sanctions. In response to this, Westminster would argue that they have invested millions in cross-border aid and ‘democracy promotion’ initiatives since 2004. While this is sometimes beneficial, the investment is insignificant compared with the over £1.2 billion ($1.9 billion) of recorded British trade since the 1988 uprising. If one included undocumented investment, this figure could easily double.

With the recently ‘staged’ election consolidating their grip, the military commanders are now positioned to profit from a ‘democratic’ Burma where basic freedoms are limited, and the consequences of expressing even mild dissent can be terrifying. These freedoms will no doubt be tested again with the release of Aung San Suu Kyi.

It’s shocking though, sadly, not surprising that the acquiescence of British capital in Burma’s tragedy is afforded such little coverage in the media. Especially given its position as one of the few remaining military-administered states, with some of longest running resistance movements in the world.

Another parallel with Sudan springs to mind. A letter from Tony Baldry MP of the All Party Parliamentary Group on Sudan notes that William Hague, British Foreign Secretary who was a key figure at the Sudan networking event, recently said: ‘We should never turn a blind eye to countries which display trappings of democracy while violating basic human rights, or that lay claim to rule of law while lacking the independent courts and proper systems of accountability and transparency to prevent abuses of state power.’

It seems, though, that is exactly what is going to happen, as it did under the Labour government.

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  1. #1 rod hardwick 17 Nov 10

    British investment in Burma

    BVI was indeed a large source of investment for Burma, but to call it 'British capital' is highly misleading.

    Britain only appears on the big shot list becvause of BVI and because sources of Chinese investment are spread into different categories, HK, mainland and.,....BVI where lots of Chinese companies are registered, such as CNOOC who are involved in the gas an oil sector.

    So it really isn't British capital at all thats going into Burma and if there was demand amongst British industry (whats left of it) sanctions or embarrassment or anything like that wouldn't stop them, security of investment in Burma is extremely shaky, a bit like the British economy and its industry.

    But thats not to say that off shore territories are 'good' at all, it is shameful that there is this unnacountable 'shadowy' world of tax havens etc. and we should be asking our govt about that because obv ashcroft et al have done rather well out of them, so keep the fight alive!

  2. #2 Daniel Pye 07 Dec 10

    Reply to Rod Hardwick

    I agree - 'British capital' is an oversimplification and, admittedly, a misnomer. What I'm really referring to is international flows of capital into (and out of) the country via financial mechanisms devised largely in Europe and particularly the City of London.

    BVI was used just as an example, and there are many, not all British by any means. But one point that is so often left out of discussion on investment in Burma, especially when it comes to the argument over ‘Western’ vs. Chinese support, is that even the state enterprises and Chinese ‘joint ventures’ are insured or reinsured by a small number of financial institutions, of which Lloyds of London sits at the apex.

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About the author

Daniel Pye a New Internationalist contributor

Daniel is an independent journalist and editor. In 2008 he reported on the armed conflict in eastern Burma and the implications for human rights in the region. He is a member of Amnesty International, the International Federation of Journalists and Britain’s National Union of Journalists. www.danielpye.co.uk

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