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Myanmar sanctions-hit junta still captures huge oil, gas profits

A year and a half after the start of a bloody crackdown on the nationwide resistance to the February 2021 coup, huge oil and gas profits have turned into Myanmar's military junta. Opposition and rights groups say it has flowed in and continues to support it.

Joined by a growing number of US lawmakers, they are urging Washington to cut these revenues in hopes that the military will deplete the US dollars it is using for rearmament.

For the military government, "access to foreign currency is extremely important," said Earthrights International, a US-based pressure group that studies Myanmar's energy sector. and legal counsel Ben Hardman said.

"The [military regime] needs access to US dollars or international currency if it wants to purchase weapons, aviation fuel, and those items needed to continue the war against the people of Myanmar." he said.

Since the coup, the United States and other Western powers have targeted some of Myanmar's top commanders, arms brokers and state-owned enterprises believed to be making money for the military. sanctions are imposed repeatedly. But so far they have left the most profitable Myanmar oil and gas companies among them largely untouched.

International aid from the World Bank and Norway before the coup Agency Norad's projections pegged annual oil and gas revenues at around $1.5 billion, using Myanmar government data. Most of it goes to MOGE as royalties and fees, as well as profits earned from shares in a number of gas fields and pipelines that export to neighboring China and primarily Thailand.

These revenues account for about one-tenth of the government's total revenues and half of all foreign cash revenues, according to Hardman. Rising global gas prices and collapsing local economies mean they are likely now accounting for an even larger share of total and foreign revenues, he added.

Hundreds regional groups supported an open letter to US President Joe Biden asking him to sanction MOGE in May. Myanmar's so-called government of national unity, a shadow regime that includes many of the elected officials ousted in the coup, says it has made the same demands of US officials at several meetings.

Targeting remittances

NUG spokesman and international cooperation minister Sasa said MOGE's foreign revenues were important to the junta's counterinsurgency. said.

"It is totally unacceptable that these natural resources will be turned into weapons for genocide against the Rohingya, genocide against the Myanmar minority state, and the post-coup military regime. I killed so many people," he said.

The United States formally labeled the Myanmar military's persecution of the country's Rohingya minority as genocide in March. A report by the United Nations Office for Human Rights that month said military operations since the coup could amount to war crimes and crimes against humanity. The Political Prisoners Assistance Association, a rights group that tracks violence, says the military government has killed more than 2,160 people since the coup.

The regime disputes the figures, claiming it is using proportionate force against "terrorists" to restore peace and order.

Hardman said most of Myanmar's contracts with foreign energy companies specify payment in US dollars. This means that payments must clear US banks at some point. If MOGE is authorized by Washington, these banks will stop clearing remittances, he said.

"So what the sanctions mean is that it is very difficult for payments in US dollars to reach the administration," Hardman said. "It would effectively cut off the flow of dollars."

Sasa said this would paralyze the junta's ability to rearm with its major suppliers, China and Russia. rice field.

"When they go to Russia. To kill more Myanmar people, to buy more fighter planes, they carry US dollars, not Myanmar kyat." "Therefore, it is very important to sanction MOGE as payments to them are mostly made in US dollars."

Myanmar has already started to lose partners in the energy sector. . US energy giant Chevron and France's TotalEnergies announced plans to pull out of Myanmar in January. Total said it completed its withdrawal last month. But sanctions seekers need to block payments from companies that remain (Thailand's PTT and South Korea's POSCO are the two remaining foreign energy giants) or that could replace those that exit. says that there is

``There is always a way to be found''

Their call found support in Washington.

The US House of Representatives passed the Burma Act to call Myanmar by another name, prompting the White House in April to sanction MOGE. The Senate has yet to follow suit. But since the military government executed his four democracy activists on July 23, Senate Foreign Relations Committee Chairman Bob Menendez and Minority Leader Mitch McConnell have each endorsed the idea. rice field.

Publicly, the White House itself neither supports nor rejects the idea. VOA asked Secretary of State Anthony Brinken whether the US will sanction his MOGE. Last week, the top diplomat was in Cambodia for a meeting with Southeast Asian foreign ministers. Blinken said the Biden administration would "consider everything, including additional forms of economic pressure and sanctions," but did not specifically mention MOGE.

sanctions would, in theory, be the most severe financial blow to the military regime from the West since the coup, said Peter Kusik, a sanctions expert and managing director of the Washington office. Stated. American consulting firm Mercury Public Affairs.

He said judging from the decades Myanmar spent under the previous military regime until 2011, it was unlikely that the sanctions would have the impact that callers would like.

"This complicates things, yes. Yes, there is less access to foreign currency. But does it actually make it much harder to rearm? he asked.

"Keep in mind, this was him 10 years ago when blanket sanctions were in place against Myanmar," he added. Neither did Russia at the time.”

Kucik said other countries hit hard by Western sanctions also offered little hope.

"Both Iran and Venezuela have found a way to get paid for their oil," he said. “The sanctions imposed are certainly not without consequences, but they have not strangled the energy sector in either country.”

Sanctions cut off roads to oil, gas or cash , he said, usually another path emerges.

"No matter how difficult it may be, there is a way if there is desire and need," said Kuchiku. "That's how the world works."