June 21: A large number of U.S. companies have dug in China and are expanding direct foreign investments. For example, General Motors, Motorola, and Coca Cola have been investing heavily in China over the last couple of years.

Along with the new millennium, the global economy and the borderless world, has become a reality in the Southeast Asia region. This new climate of globalization impacts economic developments in the region, which has a relatively large population base, inexpensive labour, and an abundance of natural resources. Accordingly, the region’s international business is changing rapidly, and one primary reason is increased foreign investments and free trade agreements. Indeed, the volume of international trade in this region has increased dramatically over the last two decades, and the economic activity in the region continues to burgeon.
 

Although the issues facing the region have been addressed in the past, one of the important issues should be resolved. It is the ASEAN’s Burma policy. It was derived from the policy of “constructive engagement” initiated in 1991 by the Former Thai Prime Minister Anand Panyarachun as Thailand’s foreign policy towards Burma. This policy was later regionalized as ASEAN’s Burma policy and it has a direct impact on regional development and trade matters.
 

Even though ASEAN leaders tried to convince the region that their policy was working, they acknowledge that it brought in extreme contradictions among its members. Some political leaders in the region have criticized Burma’s regime and said that Burma had used ASEAN as a shield against criticism by members of the international community including the United Nations, EU nations and the United States. The fact of the matter is that Burmese generals are not using ASEAN as a shield it is ASEAN which has allowed the Burmese regime to use it as a shield.
 

While ASEAN leaders are out to cure the Burmese regime’s political schizophrenia, the region is loosing tremendous amount of investments and trade opportunities from western countries. Conversely, China has shown growing foreign investments and has become the biggest economy in the region. Despite a severe economic downturn by its Asian neighbors, its annual GDP growth is about seven percent. At the current growth rate, China is projected to be one of the biggest economies in the world.
 

A large number of U.S. companies have dug in China and are expanding direct foreign investments. For example, General Motors, Motorola, and Coca Cola have been investing heavily in China over the last couple of years. According to the latest data available to the U.S. Embassy in Beijing, General Motors (USD 1.35 billion) — recently opened a USD one billion auto production joint venture in Shanghai. Motorola’s (USD 1.2 billion) — recent investments in China include a USD 500 million semiconductor plant in Tianjin and a new CDMA equipment manufacturing facility in Hanqzhou. Coca Cola (USD 1.1 billion) — Coca Cola, Fanta, Sprite and other products are already produced in approximately two dozen areas throughout China.  Amoco (USD 350 million) — opened an oil project on the South China Sea in March 1996, and recently merged with British Petroleum.
 

The world’s largest retailer, Wal-Mart Stores Inc, said recently its inventory of stock produced in China is expected to hit US $18 billion this year. Last year, the firm bought US $15 billion products from China and half from direct purchasing, the other from the firm’s suppliers in China.
 

Indeed, while trade and investments in Southeast Asia have got a measure of the impact of Burma’s political impasse, major investors from the US and European countries are shifting their investments to China.  The question is: how long will the ASEAN allow the Burmese regime to use it as a shield? How long can ASEAN afford to loose ground?
 

ASEAN’s Burma policy has been a major stumbling block in attracting foreign capital in the region, and it is a deterrent to regional development.  Now, it is time to reassess ASEAN’s policy toward the Burmese ruling junta.
 

(Myat Soe is Research Director of Justice for Human Rights in Burma)