Thursday, January 9, 2014

Democratic Voice of Burma

Democratic Voice of Burma


Shot Burmese migrant recovering in Bangkok hospital

Posted: 09 Jan 2014 04:02 AM PST

A Burmese migrant shot and injured three days ago in the midst of anti-government protests in Bangkok is still undergoing treatment at Ramathibodi Hospital in the Thai capital.

Tun Tun Oo, 22, was shot on 6 January around 5am outside the bakery where he works, which is located close to a "Yellow Shirt" rally site. His mother Yin Htwe said it was unclear where the bullet came from.

"My son was shot when he got off the truck to unload the goods – he didn't immediately realise he had been wounded until he tried to run away and couldn't breathe," she said.

The migrant worker sustained a gunshot wound to the right side of his chest, but was said to be in stable condition. The Royal Thai Police found a bullet cartridge near the scene and promised to find the shooter, according to his mother.

Tun Tun Oo, a native of Karen State capital Hpa-an, has been working in Thailand for about two years. He was visited at the hospital by officials from the Burmese embassy who donated 5,000 baht (US$167) to him, according to Kyaw Kyaw Lwin, the labour attaché at the embassy.

"We have made contact with his employer who pledged his full support," said Kyaw Kyaw Lwin.

The Burmese embassy in Bangkok recently put out a warning to all Burmese nationals in Thailand warning them not to get involved in the protests.

Health, education spending to increase in 2014

Posted: 09 Jan 2014 03:11 AM PST

President Thein Sein pledged to increase health and education spending during a budget meeting in Naypyidaw on 7 January.

Addressing the Financial Commission at a 2014-15 fiscal year budget meeting, the president said that the education budget – allotted 5.43 percent last year – will be increased to 5.92 percent, while the health budget will increase from 3.15 to 3.38 percent, according to a statement on the website of the Office of the President.

The government made several other proposals in the union budget draft, which will be submitted to the Union Parliament in the upcoming ninth session. Proposals included free education for mid-level students and increased benefits for civil servants. Among those benefits are a 20,000 kyat (US$21) salary increase, allowances and pensions.

Budget for regional administrative deficits will more than double in the coming year. Aye Maung, chairman of the Rakhine [Arakan] Nationalities Development Party, lauded the new budget plan, saying, "We welcome the doubling of the budget, but it is crucial to spend the extra cash effectively, only on projects that are really necessary."

"There has been expansion of schools and hospitals in ethnic regions, but just building structures will not be enough… they need to be equipped with the necessary facilities like furniture and teachers' quarters," he said.

Burma's total tax revenue for the 2013-14 fiscal year was around 16 trillion kyat (US$16.6 billion), while total government spending reached 19 trillion kyat (US$19.7 billion), creating a significant deficit of nearly three trillion kyat.

Estimated GPD for the coming fiscal year in Burma is around 66 trillion kyat (US$68 billion), according to government figures.

DVB viewers treated to TV news blooper

Posted: 09 Jan 2014 02:50 AM PST

Followers of DVB TV were treated to an unexpected surprise on Wednesday evening when presenter Moe Myint Zin was caught in a TV "blooper". Reading aloud from her news script without realising she was still on air, the news anchor exclaimed dah bae! – meaning "that's it!" – and removed her microphone and ear piece as the cameras rolled on.

While the news segment was not shown live, it was recorded late Wednesday at 8:30pm, and the technician on duty in the editing room had to rush to prepare the segment for the evening reel.

Following a report on a helicopter disaster in the UK, the final news item on Wednesday was about World War II sex slaves, which presenter Moe Myint Zin narrated from a script as a "voice-over" while the footage rolled. Unfortunately, no one in the studio realised the footage had ended and the presenter was left reading aloud, at one point stopping to clear her throat and repeat a line.

As the show wasn't live, the voice-over should have been edited, but in the rush to broadcast no one noticed the oversight.

"I was a little bit shocked when I saw it," said Moe Myint Zin with a laugh.

When the blooper was caught the next morning, embarrassed technicians scrambled to re-edit the news footage and a revised edition was broadcast on Thursday, showing Moe Myint Zin resumed in a poised position.

DVB records six hours of programming daily, which are rotated so that each is broadcast four times in 24 hours.

DVB has an average of five million viewers every day in Burma, plus several thousand outside the country. News is broadcast by satellite from the DVB studio in Chiang Mai, northern Thailand, as electricity, communications and technical support are usually superior to those in Burma.

To view DVB News Blooper, click here.

 

Jatropha fuel plan stalled on road to nowhere

Posted: 09 Jan 2014 01:33 AM PST

Farmers coerced to grow jatropha by Burma's former military junta are now suffering enormous losses after the new government abandoned the project with no apparent exit strategy.

In 2005, Snr-Gen Than Shwe launched a nationwide initiative to promote the production of jatropha, commonly called 'physic nut,' a plant that can be refined into biofuel. Over the following years state media ran an ongoing propaganda campaign urging all citizens to farm the shrub in any unused space, calling it a "national duty". The initiative was meant to be a quick-fix for the nation's dire fuel shortage.

Residents of Rangoon's South Dagon Township said that their jatropha farms, which they began cultivating in 2006 by order of the State Peace and Development Council (SPDC), are now producing the plant in abundance – but it is economically barren because the government dropped the biofuel scheme, leaving farmers with a wealth of crops that have no other practical use.

"We are making no profit at all – [the SPDC] told us to grow jatropha plants and build refineries to produce oil, which we did," said Nu Nu Yi, a farmer in South Dagon Township.

"They said we would be rich," she added.

The jatropha scheme was administered by several members of the new reformist administration, including President Thein Sein, previously a senior military commander.

"My farm was opened in a ceremony by [now-president] Thein Sein, who planted the first shrub. The ceremony was also attended by Maj-Gen Hla Htay Win [now Military Chief of General Staff], and Rangoon Division Governor Myint Swe [now regional Chief Minister]," said U Sint, another jatropha farmer in South Dagon Township.

The farms in Rangoon were originally managed by the Department of Human Settlement and Housing Development, later to be handed over to the Yangon [Rangoon] City Development Committee, which now plans to replace them with the Irrawaddy Low-Cost Housing Project. The farmers were never officially notified of the scheme's dissolution.

"We were never informed about suspension of the project, for which we were given 45-year tenant permits. Now they [Rangoon Region Government] are planning building projects with construction companies without negotiating with us," said U Sint.

The farmers, hoping to be compensated, met with municipal authorities in August 2013, but no action ensued to address their losses.

The 2005 initiative was implemented by employing antiquated clauses of Burma's land management laws, which have since been reformed. However, even the revised land laws of 2012 preserve the government's right to mandate how land is used if deemed to be "in the long-term national interest of the State".

 

Risky business – Burma improving but still ranked low, say analysts

Posted: 08 Jan 2014 09:58 PM PST

Burma has been singled out as the most-improved country in the global business environment for 2014 by UK-based risk analyst Maplecroft in its annual Legal and Regulatory Environment Risk Atlas (LRERA).

The firm said that strides have been made through reforms to address issues such as corruption, rule of law, the regulatory framework, respect for property rights, and corporate governance.

Maplecroft also identified Senegal, Guatemala, Mozambique and Rwanda along with Burma as among the countries with best performance over the last five years, taking into account analysis of 21 risk indices which the London firm says were developed to enable companies and investors to monitor the ease of undertaking business in 173 countries.

"In the last year, the only country to significantly improve its risk profile is Myanmar [Burma], which moved up more than 10 percent in the LRERA scoring system," Maplecroft announced on 8 January. "The government's resolve to improve the business environment means a number of important steps have been taken to enhance investor protection, including the implementation of a new foreign investment law in March 2013, which provides much needed clarity around essential issues, such as foreign ownership limits and land leasing rules."

The aforementioned Foreign Investment Law is currently under review for further revision under the guidance of the International Finance Corporation, a member of the World Bank Group.

"This continued commitment has resulted in a steady climb in the ranking from worst position at the bottom of the ranking in 2012, to 3rd from bottom in 2013 and 5th in 2014. While this appears a modest shift in ranking, it has already resulted in significant improvements for business, and Maplecroft forecasts that if Myanmar sustains its current trajectory it may move out of the 'extreme risk' category in the next 1-3 years," said the report.

But despite this positive medium-term outlook, Maplecroft said that current levels of corruption, lack of rule of law and interference in business by a wide range of powerful and vested interests, including the military, continue to create a very uneven playing field for foreign investors.

The report pointed to a dispute last year over the ownership of Myanmar Brewery Ltd between the military-controlled Myanmar Economic Holdings and Singapore firm Fraser & Neave. "Should arbitration best practice not be followed, investor confidence in Myanmar is likely to be undermined," it said.

"Myanmar's efforts to strengthen the legal and regulatory environment are laudable," stated Maplecroft Senior Analyst, Chris Laws. "But, the country's current lack of effective institutions of governance still raises serious concerns over regulatory enforcement, and it remains a challenging place to do business."

Despite the marked improvement in Burma's status, the country remains rated as an "extreme" risk by Maplecroft, which says the only worse nations are the Democratic Republic of Congo, Turkmenistan, North Korea and Somalia.

The most recent edition of the World Bank's annual "Doing Business" report rated Burma 182 out of 189 countries in relation to the ease of opening of conducting business ventures.

The World Bank also says that Burma's economy is projected to grow to 6.8 percent in 2013/14, rising to 6.9 percent in the medium term. However, it raised concerns about inflation, which hit 7.3 percent in August.

But, according to a recent report by The Economist, unlike the military junta it succeeded, "Mr Thein Sein's government is ready to admit its shortcomings and has vowed to improve. Its ministries are crawling with foreign consultants, lawyers and accountants, dispensing advice on how Myanmar might move up the rankings."

The report noted that the Burmese government is on board with several reform-minded international agreements, such as the New York Arbitration Convention and the Extractive Industries Transparency Initiative (EITI), though it said that "implementing them is another matter, given a chronic shortage of trained lawyers and other professionals" in the country.

But the dearth of professionals is not the only obstacle to the success of these measures; some say that further reforms – specifically related to protection of civilian rights to assembly and expression – are necessary to genuinely improve Burma's business environment.

With regard to the EITI, an international protocol for reporting revenues received by governments for extractive projects like mining, gas and oil, Matthew Smith of Fortify Rights International told DVB that, "There is no room in EITI for a government that criminalises peaceful protest."

Many have criticised the sudden rush of paper-signing, concerned that President Thein Sein's government is paying lip-service to investors, industry assessors and communities affected by sudden changes to the economy and environment.

The measures clearly are improving Burma's image as a potential business partner, as the Maplecroft report indicates. Emma Irwin, a consultant to Burma's EITI implementation process, addressed these concerns in late December, "Obviously, in Myanmar, you can't make things work overnight."

 

The Irrawaddy Magazine

The Irrawaddy Magazine


Wirathu to Discuss Interfaith Marriage Restrictions at Monks’ Conference

Posted: 09 Jan 2014 04:37 AM PST

Nationalist Buddhist monk U Wirathu is greeted with respect at a monks' conference in Rangoon in June 2013. (Photo: Jpaing / The Irrawaddy)

RANGOON — Nationalist Buddhist monk U Wirathu said he will hold another large conference for thousands of monks from across Burma next week. He said the monks would gather in Mandalay and discuss his controversial proposal to restrict marriages between Buddhist women and Muslim men.

In June last year, U Wirathu organized a large gathering of monks in Rangoon, who came out in support of his draft Law for the Protection of Race, Religion and Language.

This proposed law would require any Buddhist woman seeking to marry a Muslim man to first gain permission from her parents and local government officials. Any Muslim man who marries a Buddhist woman is required to convert to Buddhism. The monks said at the time that they would pressure lawmakers into adopting the proposal.

On Thursday, U Wirathu told The Irrawaddy that he expected 5,000 monks to attend his Mandalay conference on Jan. 15 and hold discussions on the perceived threats to Buddhism in Burma.

"Mainly our intention is to protect our race and religion. We will discuss issues of our race and religion," he said. "This meeting is very important for Buddhist people and the result from the meeting will provide complete security for the country."

U Wirathu said he would again lobby for the clergymen's support for his controversial proposal. "We found on the ground in almost every township that there are women who were forced to convert to another religion. We need to have an interfaith marriage law to protect them," he claimed.

U Wirathu hails from a monastery near Mandalay and is considered the leader of a large group of monks belonging to the 969 movement. The group has organized a nationwide campaign calling on Buddhists to shun shops owned by Burma's Muslim minority.

The movement is accused of spreading hate speech and has been linked to growing inter-communal tensions in Burma. In 2012 and 2013, outbreaks of anti-Muslim violence have left more than 200 people dead and displaced about 150,000 people, most of them Muslim.

Last year, U Wirathu's proposal sparked widespread criticism from different corners of Burmese society, with some raising questions about the monks' interference in politics and lawmaking.

The 969 movement has since been campaigning in support of the proposal among Burma's largely rural Buddhist majority, who deeply revere monks. U Wirathu now claims that 4 million people signed a petition in support of the proposed law.

In November, the controversial monk also made headlines by suggesting that the hugely popular opposition leader Aung San Suu Kyi is unfit for the presidency.

His remarks come at a time when Suu Kyi has been stepping up pressure on the ruling Union Solidarity and Development Party and the military to amend the Constitution and remove a clause that prevents her from becoming president.

On Thursday, U Wirathu repeated his claims about the National League for Democracy leader and said that increasing security along Burma's border with its Muslim-majority neighbor Bangladesh was of more importance then discussions about Suu Kyi becoming president

"She should not be our national leader because we cannot rely on her to protect our national interests," he said, adding, "I am with the group who want to build a fence along the border."

The post Wirathu to Discuss Interfaith Marriage Restrictions at Monks' Conference appeared first on The Irrawaddy Magazine.

Rangoon Starts to Control Property Prices, but Rent Is Another Story

Posted: 09 Jan 2014 04:19 AM PST

A bank and office buildings are seen in downtown Rangoon. Companies are struggling to find affordable office space in Burma's biggest city, with property in short supply and rental prices high. (Photo: Steve Tickner / The Irrawaddy)

RANGOON — Realtors say a new tax measure has successful cooled an overheated property market in Burma's biggest city, with sale prices stagnating for high-end properties, but that rental fees have continued to soar.

In October, the Rangoon divisional government applied fixed values for properties to determine the amount owed in property taxes. Last month, realtors reported that property prices and sales had ground to a halt for properties over 1 billion kyats (US$1 million), although demand has continued for lower valued properties.

But even in high-value areas, rentals are a different matter. In commercial areas along streets such as Sule Pagoda Road, Kaba Aye Pagoda Road and Pyay Road, realtors say that at the start of 2014, rental fees are at their highest ever and have more than doubled since 2012.

"On Kaba Aye Pagoda road, the rental fee for an acre of land was 3 million kyats two years ago, but now it's 12 million kyats," Zaw Zaw, manager of Unity real estate agency, told The Irrawaddy on Thursday. "It's because demand is still increasing."

As has been a longstanding problem, supply has failed to keep pace. Since 2005, when development of the construction sector picked up in Rangoon, the number of new residential units in the city has increased by an average of 20,000 units annually, satisfying only about one-third of demand, according to a number of local realtors and construction developers.

"Demand and supply in Rangoon are not in balance, so rental fees are also increasing," said Than Oo, managing director of Mandine real estate agency.

In commercial areas, space has become more coveted because many new car showrooms have entered the city since the government implemented a more liberal car import policy in 2012.

"Many car showrooms need a lot of land along the main roads, but space is very limited in Rangoon, so owners are asking for higher [rental] amounts," said Zaw Zaw of Unity real estate agency. "I heard some car showrooms cannot afford to pay rent in this next year."

Champion Construction Materials, a development company, pays 250 million kyats monthly for a showroom on U Wisara Road, but others have not been so lucky to find a spot, says company manager Khun Htoo. "Foreign companies are now looking for a good location for their businesses, but there are very few offices for them. That's one factor why foreign investment has been delayed here," he said.

"We need more office towers for the future, as well as residential apartments. But until 2015, land prices in Rangoon may continue to soar," he added, saying he did not have confidence in the current government to fix the problem before the next general election is in 2015.

Rental fees are also soaring in residential areas, especially for high-end apartments and homes in townships downtown.

"Rental prices for two homes in one compound in Bahan Township have increased 20 million kyats monthly this year," Zaw Zaw of Unity real estate agency said. In Bahan Township, where many Burmese business tycoons own homes, land values range from about 800,000 kyats to 1 million kyats per square foot.

"Mostly embassies and foreign businessmen used to rent these houses, but now most foreign business people are moving to condos or apartments," he added.

Ma Mitchell, an Ahlone Township resident, said her family's monthly apartment rent has more than doubled since 2012. "My apartment was on the sixth floor and I paid 50,000 kyats, but now that has increased to 120,000 kyats. We cannot afford that price, so we had to move into my mother's house," she said.

The Yangon City Development Committee (YCDC), the administrative body of Rangoon, plans to build more low-cost housing in outskirt townships to help balance supply and demand.

"The best way to reduce the property prices in Rangoon is to implement many housing projects here," Toe Aung, deputy head of the YCDC urban planning department, told The Irrawaddy. "Now we have three [low-cost housing] projects in North Dagon and South Dagon townships."

The YCDC's low-cost apartments were being sold for about 20 million kyats each on privately owned land. "But people are saying it's still expensive," Toe Aung said.

To further reduce prices, he suggested building the housing on government-owned land. "We can't sell any cheaper on privately owned land," he said. "But on land owned by government ministries, apartments can be built and sold for lower prices."

The post Rangoon Starts to Control Property Prices, but Rent Is Another Story appeared first on The Irrawaddy Magazine.

Burma’s Miss Supranational Deemed One of Pageant World’s ‘Most Beautiful Girls’

Posted: 09 Jan 2014 05:21 AM PST

Miss Myanmar Supranational 2013 Khin Wint Wah is pictured. (Photo: The Irrawaddy)

RANGOON — Burmese beauty queen Khin Wint Wah, the 19-year-old winner of Miss Myanmar Supranational 2013, continues to generate Internet buzz, being selected among the top six "Most Beautiful Girls of the Year 2013" by international pageant watcher The Beauties Concept on Wednesday.

"She was chosen in the top six among over 700 beauty queens from all international beauty pageant competitions," Wai Yan Aung, founder of the Miss Golden Land Myanmar organization, told The Irrawaddy on Thursday.

"I am incomparably happy," Khin Wint Wah told The Irrawaddy. "I didn't expect that I would be selected in the top six. I will always remember it."

Wai Yan Aung said there were more than 10 international beauty pageant competitions in 2013 and The Beauties Concept selected an initial 100 nominees from all competitions, before whittling the list down to 50 candidates. From there, The Beauties Concept chose 11 top candidates, with a 12th finalist chosen by popular vote. The final six were also the decision of The Beauties Concept judges.

Miss Myanmar Supranational 2013 Khin Wint Wah at the competition in Belarus. (Photo: Facebook / Miss Golden Land Myanmar)

"There was no voting system for the selection of the top six. The international beauty pageant judges chose the top six from the top 12," said Wai Yan Aung, whose Miss Golden Land Myanmar organized Burma's Miss Supranational competition last year.

He added that another Burmese beauty queen, Burma's 2013 Miss Universe titleholder Moe Set Wine, was the popular vote winner to round out The Beauties Concept's top 12 finalists.

"The video records of candidates' competitions, the activities, the interviews, the photos and also the body were all included in the judging," Wai Yan Aung said.

Khin Wint Wah has also made it into the upper echelons of three other international beauty pageant monitoring websites, placing among the world's top 27 "Most Gorgeous Women" by The Ideal Beauty, the top 40 of The Ideal Miss, and the top 50 of the Global Beauties, he said.

"She is very friendly and her friendship among international competitors and professionals is really strong so people support her both locally and internationally," he said.

Khin Wint Wah, who won the Miss Myanmar Supranational 2013 in August, also took home the People's Choice and the Miss Supranational Internet awards during the Miss Supranational competition in Belarus last year.

The Beauties Concept's "Most Beautiful Girl of the Year" for 2013 was Miss Venezuela Earth, Alyz Henrich. Beauty pageant winners from the Philippines, Serbia and Spain joined Khin Wint Wah in the top six.

The Irrawaddy reporter May Myanmar contributed to this report.

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Car Accidents, Land Mines Blamed for Rising Disabled Population in Burma

Posted: 09 Jan 2014 04:50 AM PST

 

Myanmar, Burma, The Irrawaddy, disabilities, traffic accidents, land mines

Nay Min Aung, 26, who is blind due to a land mine blast sits by a hammock with his daughter in their home in in Kyaukki Township, Pegu Division, on Jan. 25, 2013. (Photo: Reuters / Soe Zeya Tun)

RANGOON — The number of people in Burma living with physical disabilities is on the rise, advocates for the disabled say, with an increase in traffic accidents and land mine explosions to blame.

"Violence and accidents are happening more frequently and because of this, the disabled population in the country is increasing annually," said Aung Ko Myint, a founder of the Myanmar Independent Living Initiative and president of the Myanmar National Association of the Blind.

As the country's road network has expanded and automobile ownership has risen—aided by a lifting of import restrictions for foreign vehicles in October 2011—traffic accidents have more than doubled since 2001, from 4,478 accidents that year to 9,339 in 2012, according to government figures supplied to the World Health Organization. Over that period, injuries from the accidents have risen from 6,938 to 15,720, the data show.

At the same time, decades of civil war have left the ground strewn with land mines in some of the country's ethnic conflict regions. The Landmine and Cluster Munition Monitor said in a report published late last year that nine of Burma's 14 states and divisions were believed to contain land mines. From 1999 to 2012, more than 3,300 people have been injured or killed in land mine blasts, according to the Monitor, an initiative of the International Campaign to Ban Landmines.

"Anyone can find themselves living with a disability, so people need to have discipline to avoid traffic accidents and also need to be educated on health matters," Aung Ko Myint said, adding that the country's underfunded health care system also bore some responsibility for the rising population of people with disabilities.

Soe Maung, a President's Office minister, said in October that 2.3 percent of Burma's population, estimated between 50 and 60 million people, are physically impaired. The figure was based on a National Disability Survey by the Ministry of Health released in 2010.

"All training schools for disabled people are full and many children who are born with a disability and elderly people who are disabled due to disease or an accident are waiting to attend training schools," Aung Ko Myint said, adding that there were about 15 special education training schools for the deaf, blind, physically disabled and intellectually disabled in Burma.

He said up-to-date statistics on Burma's disabled population do not exist, adding that it was hoped that a national census to be conducted later this year would shed light on the true size of the country's disabled population.

"Although the number of disabled persons increases year after year because of land mines and weak health services, the fact is that the actual number of disabled citizens is not well known and is only now coming to light," said Myat Thu Win, chairman of the Shwe Minn Tha Foundation, which focuses on assisting people with disabilities.

He said inadequacies in health care provision led to a high rate of children born with disabilities, often the result of malnutrition while in the mother's womb. Poor health care also leads to handicapping circumstances for elderly patients who are afflicted with medical conditions that would otherwise be perfectly treatable in countries with more developed health care systems, Myat Thu Win said.

"Poverty and disability are directly linked," he said. The Shwe Min Tha chairman said that contrary to the 2010 government data, Burma's disabled were more likely to number in the range of 8 to 10 percent of the total population, or some 5 million to 6 million people.

The Eden Center for Disabled Children echoed that estimate, saying about 10 percent of the population was likely physically disabled to varying degrees.

Advocates like the ECDC say disabled citizens in Burma are in urgent need of basic opportunities in education and employment, and handicap accessibility to buildings and transportation infrastructure must be improved.

An adjustment to popular perceptions might also be in order.

Aung Kaung Myat, a 20-year-old paraplegic, told The Irrawaddy that Burma's disabled are often stigmatized and excluded from society. "We are not getting on well, socially. People think that we will make them unlucky and that we are disabled because of deeds carried out in past lives," he said. "It is used to justify their unwillingness to help us. This superstition is still present."

Burma held its first arts festival for the disabled in October, and next week the capital Naypyidaw will host the 7th Asean Para Games for athletes from Southeast Asia with physical disabilities. Burma plans to send 213 participants to compete.

Burma will also host a regional Asean festival for disabled artists later this year.

The post Car Accidents, Land Mines Blamed for Rising Disabled Population in Burma appeared first on The Irrawaddy Magazine.

Kokang Sowing Seeds for Investment With Industrial Zones

Posted: 09 Jan 2014 03:11 AM PST

Construction is carried out at the site of an industrial zone in the Kokang region of Shan State. (Photo: May Kha / The Irrawaddy)

Industrial zone projects are underway in Shan State's Kokang self-administrative region, say local lawmakers who are inviting foreign investment to the area on the Sino-Burmese border.

Myi Shauk Chan, a member of the Shan State parliament from Kokang, told The Irrawaddy that three industrial zones had already been planned for his region. Construction on one, named "125-mile" has already begun, with that industrial zone covering just over 1,000 acres of land in Laogai District.

"We won't let just China come and invest in our region; we will allow any domestic or foreign investor to do business with us," Myi Shauk Chan said of the projects in Kokang, whose in inhabitants are largely ethnic Han and trace ancestry to southern China.

Initial construction of the 125-mile industrial zone is being carried out by the Shan State administration and a Kokang-owned company.

"We will try to reach a level where we can do packing for our products here. In terms of distribution, we will do it both inside and outside the country. Those who want to export products for international consumption must pay tax but they don't need to do so for domestically [distributed goods]," explained Myi Shauk Chan.

Kyaw Ni Naing, another state lawmaker from Laogai, told The Irrawaddy that so far grading had been done on about 500 acres of the 125-mile project site. Locals, whose sugarcane fields were located in the planned project area, have been compensated to their satisfaction, he said.

"Over 100 villagers have been given about 30,000 yuan [US$4,955] for each acre and they are satisfied," said Kyaw Ni Naing. "We only use Chinese money here so we compensated them with that currency."

The 125-mile industrial zone project will reportedly include factories for tea production, auto parts, walnuts, garments and sugarcane-based products, as well as other food and beverage enterprises.

"We are doing this project for the development of our region and will follow the government's regulations in implementation," Myi Shauk Chan said.

He added that more than 20,000 local residents could potentially be employed by the industrial zones following their completion.

"Over 10,000 Kokang people are working in China, which buys sugarcane and tea from us, packs it and then exports it back to Burma. It will be more convenient for us if we have such factories in our area," said Kyaw Ni Naing.

Currently, locals in Laogai grow largely sugarcane, tea, walnuts and rubber, most of which is bought up by traders from China. These plantations account for about 70 percent of the Kokang region's economy.

The post Kokang Sowing Seeds for Investment With Industrial Zones appeared first on The Irrawaddy Magazine.

Burma, India Officials Discuss Disputed Border Demarcation

Posted: 09 Jan 2014 02:29 AM PST

Myanmar, India, border, dispute, international affairs

Indian Prime Minister Manmohan Singh, left, and Burmese President Thein Sein shakes hands during the Indian leader’s visit to Burma in May 2012. (Photo: The Irrawaddy)

RANGOON — Burma and India held discussions on Wednesday to resolve outstanding differences over the demarcation of the border that separates India's Manipur State and western Burma's Sagaing Division, a Ministry of Foreign Affairs official said.

Deputy director-general Sein Oo said a Burmese delegation, comprising the military's northern commander Gen. Tun Tun Naung and Foreign Affairs officials, met with an Indian delegation in Sagaing's Tamu Township to discuss a disagreement over the construction of an Indian border checkpoint at border pillar No. 78.

Sein Oo said the construction activities began in mid-December and sparked a protest among some 500 Tamu Township residents, who had filed a complaint with local authorities.

During Wednesday's meeting, Indian officials agreed to refrain from further construction work and continue discussions about the delineation of the border. "They told us at the meeting that they will not continue to build any more in areas where the border line is disputed," said Sein Oo.

Burma's government had complained to India about the new border checkpoint in December and May last year, according to state newspaper The New Light of Myanmar. The paper said the Indian project was halted on Jan. 2 and teams from India and Burma carried out a joint land survey in Tamu Township on Jan. 6.

A 1967 Burma-India border treaty established the current border, but both countries disagree about the location of several border pillars in the Kabaw Valley, according to the paper.

Sein Oo said both sides would cooperate to complete joint survey and delineate the disputed border line, although he provided few details of the plans. "We found that they have a wish to solve the problem. There will be no border tension between the two countries over the current dispute and we will try to find a compromise," he said.

In recent months, other disagreements over demarcation of the border have gained attention from the Indian media, which have reported that the Manipur State government is upset over the alleged construction by the Burma Army of a border fence on territory in southern Manipur in August.

A delegation of all political parties in Manipur sent a memo to Indian Prime Minister Manmohan Sing in early December to demand that India's central government investigate the accusations, The Times of India reported.

The post Burma, India Officials Discuss Disputed Border Demarcation appeared first on The Irrawaddy Magazine.

Will the Asean Chair Strain Burma’s Resources?

Posted: 09 Jan 2014 01:45 AM PST

Leaders of the Asean countries pose for a group photo during the 22nd Asean Summit in Bandar Seri Begawan on April 25, 2013. Burma's President Thein Sein stands on the far right. (Photo: Reuters)

Burma's chairmanship of the Association of Southeast Asian Nations (Asean) begins in earnest next week when it hosts its first major regional meeting—a gathering of foreign ministers from the 10 member countries.

The meeting next Wednesday in Bagan will be the first of hundreds of Asean events, including two leaders' summits, during Burma's year-long leadership of the huge trading bloc. And 2014 is a crucial year for the 40-year-old regional grouping, as it moves toward a unified market along the lines of the European Union.

But as Burma itself strives to re-emerge as a viable economy after decades of isolation, how much of a strain will the Asean chairmanship be on a country with limited resources?

"Managing the [Asean] chairmanship will impose extra burdens upon a narrow cohort of able people who are managing the reform process, but who are already grossly overworked. To this extent, the chairmanship could be an unwelcome distraction," economist and Burma expert Sean Turnell told The Irrawaddy while visiting Rangoon.

"On the other hand, the country is receiving assistance in the role from prior chair countries, which is likely to be helpful both for the matter at hand, and perhaps more broadly in terms of public administration."

Some in giant neighbor India have welcomed Burma's prominent role this year in Asean, saying Indian and Burmese businesses will likely benefit from new opportunities.

"Holding of the Asean [leadership] symbolises [Burma's] re-entry to the global community. At the same time, it gives [Burma] another opportunity to demonstrate that it is committed to democracy and wider integration with the world outside," Saroj Mohanty, a strategic analyst at the Indo-Asian News Service (IANS), wrote in a commentary last month.

"However, doubts have been raised about the country's ability to steer a grouping as significant as the Asean in a rapidly changing strategic environment in the region where the US, China, Japan and the EU are intensifying their re-balancing efforts.This has been further compounded by the internal challenges the country faces and its abysmal infrastructure."

Burma's failure so far to improve its dilapidated infrastructure continues to affect economic progress, with poor roads and inadequate electricity supply. Hosting major events draws attention to these problems and makes them worse for local people, critics say.

"During the World Economic Forum, [hosted by Burma in 2013] many infrastructure problems were made glaringly obvious," the Southeast Asia Globe magazine reported.

"For most, travel to the capital, Naypyidaw, involved a long journey by road from [Rangoon] airport. Only a select few were able to land at the capital's airport and, for those lucky enough to alight there, the 30-minute taxi ride into town often cost more than the flight. Upon arrival, many found a shortage of hotel rooms along with poor internet connections and frequent power cuts."

Such a negative experience for high-profile business or political visitors clearly does not help Burma's image, but Turnell, a professor at Macquarie University in Australia and co-editor of the Burma Economic Watch, believes the year-long leadership of Asean will help Burma in more ways than one.

"The chairmanship shines a light on the country in ways that, perhaps, might encourage further reforms and dissuade more negative elements," he told The Irrawaddy this week.

It will be too late for the Asean year and all the many hundreds of comings and goings between Rangoon and Mandalay and Naypyidaw, but plans at least have been drawn up to greatly improve the railway system.

Ironically, perhaps, it is Japan and not Asean countries stepping forward to help improve Burma's infrastructure.

The Japan International Cooperation Agency (JICA) is finalizing arrangements with the Ministry of Rail Transportation for a US$200 million loan agreement to finance modernization of the Rangoon-Mandalay line. The refurbishment is aimed at cutting the journey time between the two commercial cities by half.

Burma's other giant neighbor, China, has so far said little about the 2014 leadership of Asean. This might be a reflection of the allegations that Beijing sought to manipulate the 10-nation bloc's foreign policies during Cambodia's 2012 stewardship.

"In recent years, China's shadow has loomed large over Asean proceedings. In its 2012 stint as chair, Cambodia was heavily criticised for toadying to China over the South China Sea dispute," reported the Southeast Asia Globe.

"If Beijing tries to overplay its hand and push the [Burma] government too hard on Asean matters, it's likely that [Burma] will push back," the Globe quoted Phil Robertson, deputy director of Human Rights Watch's Asia division, as saying. "[Burma] will likely not repeat Cambodia's mistake."

The Asean year will certainly put the international spotlight on Burma, but whether it will bring more business investment into the country will only become clear by the end of 2014.

One foreign company certain to benefit—in prestige terms, at least—from Burma's stewardship is the upmarket carmaker BMW. The German firm is providing almost 100 luxury limousines to the Naypyidaw government to carry Asean VIPs to and from meetings.

The post Will the Asean Chair Strain Burma's Resources? appeared first on The Irrawaddy Magazine.

One Week, 30 People, 300 Images of Burma

Posted: 09 Jan 2014 12:34 AM PST

A man walks in front of one of the largest reclining Buddha images in the world, near Monywa in northern Burma. (Photo: Bruno Barbey / 7 Days in Myanmar)

RANGOON — The latest photography book about Burma to hit bookstores, "7 Days in Myanmar," offers something different.

Unlike other coffee-table books on the Southeast Asian nation, this large-format, 276-page book by Editions Didier Millet publishing group includes photographs not only by well-known international photographers, but also by local photographers.

Twenty-one foreigners from 10 different countries and nine Burmese photographers traveled to every corner of Burma— from major cities to small villages in the country's hilly regions and the southern and western coasts —over seven days in April to May last year. Along the way, they captured images of people, landscapes, industries and traditions in modern Burma, as the country emerges from five decades of isolation from the outside world.

In 300 photographs, the book captures not only Burma's best-known tourist attractions—including the streets of Rangoon and Mandalay, Buddhist monasteries in Bagan and the floating gardens of Inle Lake—but also the daily realities of ordinary people from all walks of life, in all their complexity and diversity, as Burmese historian Dr. Thant Myint-U says in a foreword to the book. The local photographers traveled to areas that are off limits to foreigners, from the jade mines in northern Burma to cities in western Burma's Arakan State that have been difficult to access in recent months due to inter-communal violence. The book also contains images of the Burmese capital, Naypyidaw, as Burma and its athletes prepared for the 27th Southeast Asian Games.

The images are accompanied by an introduction to Burma, written by veteran Associated Press journalist Denis Gray, as well as an essay about 19th-century photography in colonial Burma by historian John Falconer of the British Library. A behind-the-scenes story by the book's general editor, Nicholas Grossman, is a fascinating read that offers insight on the difficulties of documenting a country in such depth over the course of one week.

And there were challenges, as the goal was not to produce typical postcard photographs.

"We wanted to capture fresh angles of the country as seen through the eyes of great lensmen who are well known for their original visions," project director Melisa Teo explains in the book.

With even a quick perusal of the contents, many readers will likely agree that she and the photography team followed through with their aim.

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Beijing Shows Resolve in South China Sea Claims

Posted: 08 Jan 2014 09:45 PM PST

The Crescent Group, part of a larger group of islands known as the Paracels claimed by both China and Vietnam. (Photo: Wikimedia)

BEIJING — In a broadening campaign to enforce its territorial claims, China says it’s beefing up its police powers in the disputed South China Sea and requiring foreign fishermen to ask Beijing’s permission to operate within most of the vast, strategic waterway.

The move, which took effect this month, comes on the heels of the late November announcement of a new air defense zone requiring foreign planes to notify Beijing of flights over a huge swath of the East China Sea, where China is locked in a bitter territorial dispute with Japan.

The steps are prompting concerns that President Xi Jinping’s push to assert China’s role as a regional power could spark a confrontation with neighbors.

"These sort of assertions of sovereignty, or territorial claims, will continue. Xi believes he can’t afford to be seen as soft," said City University of Hong Kong China politics expert Joseph Cheng.

The affected waters account for 2 million of the South China Sea’s 3.5 million square kilometers (1.35 million square miles), a sweeping area encompassing island groups claimed by Vietnam, the Philippines and others — and in some cases occupied by their armed forces. The islands sit amid the world’s busiest commercial sea lanes, along with rich fishing grounds and potential oil and gas deposits.

Philippines Department of Foreign Affairs spokesman Raul Hernandez said Wednesday that the country’s diplomats were seeking more information on the new South China Sea rules. There was no immediate response from Vietnam.

The United States says it doesn’t take sides in the sovereignty dispute but insists on the right to freedom of navigation in the area.

The new rules demand that foreign vessels seek permission to fish or survey within waters administered by Hainan, China’s southernmost island province, which looks out over the South China Sea.

Authorities in the provincial city of Sansha, on an island far south of Hainan, held a joint drill Jan. 1 involving 14 ships and 190 personnel from various border patrol and law enforcement agencies.

"Rampant infringement by foreign fishing vessels" was among the activities targeted in the practice scenarios, law enforcement official Wang Shizhen was quoted as saying by the official China News Service.

Passed by Hainan’s provincial legislature in late November, the new rules say only that permission must be obtained from unnamed "relevant departments" underChina’s Cabinet. Chinese law allows for the confiscation of catches and fishing equipment and fines of up to 500,000 yuan ($83,000) for violators.

While it would be nearly impossible to enforce the rule over such a vast area, the requirement seems to emphasize China’s determination to compel foreign nations to take its sovereignty claims seriously.

Beijing has moved systematically to put teeth behind its island claims, setting up the Sansha city administration in 2012 to administer the scattered, lightly populated region of island groups and reefs.

China has also combined its civilian maritime agencies into a single coast guard to increase effectiveness, and even has cracked down on activity in the area by foreign maritime archeologists.

Farther north, China’s announcement of its air defense zone drew expressions of concern from Japan, South Korea and Australia, all U.S. treaty partners.

The zone is seen largely as a means of strengthening China’s claim to tiny uninhabited East China Sea islands administered by Japan and also claimed by Taiwan. For more than a year, Chinese patrol vessels have aggressively confronted Japanese ships in the area, leading to fears of a clash.

However, Xi is under far less nationalist pressure at home to take a hard line on South China Sea issues, said Cheng, the China politics expert.

Despite the new fishing rules, Beijing will likely seek to avoid increasing frictions by enforcing them too zealously, Cheng said.

"Beijing wants relations with Southeast Asia to be relatively smooth," he said. "They can’t afford to alienate too many neighbors at one time."

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Rodman Sings Happy Birthday to North Korean Leader

Posted: 08 Jan 2014 09:35 PM PST

Dennis Rodman, North Korea, Kim Jong Un

North Korean leader Kim Jong Un (2nd L) watches a basketball game between former US NBA basketball players and North Korean players of the Hwaebul team of the DPRK with Dennis Rodman (R) at Pyongyang Indoor Stadium on Jan. 9. (Photo: Reuters)

PYONGYANG — Dennis Rodman sang "Happy Birthday" to North Korean leader Kim Jong Un before leading a squad of former NBA stars in a friendly game Wednesday as part of his "basketball diplomacy" that has been criticized in the United States as naive and laughable.

Rodman dedicated the game to his "best friend" Kim, who along with his wife and other senior officials and their wives watched from a special seating area. The capacity crowd of about 14,000 at the Pyongyang Indoor Stadium clapped loudly as Rodman sang a verse from the birthday song.

Rodman said he was honored to be able to play the game in the North Korean capital and called the event "historic." Some members of the US Congress, the NBA and human rights groups, however, say he has become a public relations tool for North Korea’s government.

The government’s poor human rights record and its threats to use nuclear weapons against rival South Korea and the United States have kept it a pariah state. Kim shocked the world in December by having his uncle, once considered his mentor, executed after being accused of a litany of crimes including corruption, womanizing, drug abuse and attempting to seize power.

Rodman, 52, has refused to address those concerns while continuing to forge a relationship with Kim, whose age has never been officially disclosed. The government did not say how old he turned Wednesday but he is believed to be in his early 30s.

At the start of the game, Rodman sang "Happy Birthday" to Kim, who was seated above in the stands at the stadium, and then bowed deeply as North Korean players clapped.

To keep it friendly, the Americans played against the North Koreans in the first half, but split up and merged teams for the second half.

The North Korean team scored 47 points to 39 for the Americans before the teams were mixed. Rodman played only in the first half and then sat next to Kim during the second half.

"A lot of people have expressed different views about me and your leader, your marshal, and I take that as a compliment," Rodman told the crowd. "Yes, he is a great leader, he provides for his people here in this country and thank God the people here love the marshal."

Rodman is the highest-profile American to meet Kim. He has carefully avoided getting involved in overtly political activities, saying that he is not a statesman and instead is seeking only to build cultural connections with the North through basketball that may help improve relations between Pyongyang and Washington.

Rodman has been slammed in particular for not using his influence with Kim to help free Kenneth Bae, an American missionary in poor health who is being confined in the North for "anti-state" crimes. In an interview with CNN on Tuesday, Rodman implied that Bae was at fault for being held captive.

Bae’s sister, Terri Chung, said his family couldn’t believe what Rodman said.

"Here’s somebody who is in a position to do some good for Kenneth and refuses to do so," Chung told KOMO Radio in Seattle on Wednesday. "And then after the fact, instead, he decides to hurl these unqualified accusations against Kenneth. It’s clear he has no idea what he’s talking about. I’m not sure who he’s talking to, where he’s getting his information, but he’s certainly no authority on Kenneth Bae."

The US State Department distanced itself from Rodman and said it did not want to "dignify" his activities or comments in Pyongyang by commenting on them. But spokeswoman Jen Psaki said the department was open to speaking with Rodman on his return.

"We have not reached out to him. We’ve said before, if he wants to reach out to us, we’re happy to hear from him and what he has to say," she told reporters.

The game is a new milestone in Rodman’s unusual relationship with Kim, who inherited power after the death of his father in late 2011 and rarely meets with foreigners. He remains a mystery to much of the outside world and until recently, his birthday was also not widely known, though it was quietly observed elsewhere around the capital Wednesday.

Along with Rodman, the former NBA players included ex-All Stars Kenny Anderson, Cliff Robinson and Vin Baker. Also on the roster were Craig Hodges, Doug Christie, Charles D. Smith and four streetballers.

Members of the team, who average in their late 40s, said they came because they believed the game would be a good opportunity to create a human connection with the people of the isolated country. But some said they have been concerned by the negative reaction they have seen from the media and critics back home.

"This was a test of faith. We stepped out into the unknown," said former New York Knicks player Smith, who has played similar games in other countries and has acted as the team’s spokesman to balance Rodman’s famously outspoken character.

Smith said he was gratified to see the North Korean crowd enjoy the game, but he added that he had mixed emotions about the two-hour event.

"Emotionally, I don’t know what to feel," he told The Associated Press afterward. "I’m indifferent. I’m not totally overjoyed."

Smith said he and the other players did not join Rodman in singing the birthday song.

"We always tell Dennis that he can’t sing. He is tone deaf," Smith said. "He did it alone."

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Nauru Hikes Journalist Visa Costs Amid Australian Secrecy on Asylum Policy

Posted: 08 Jan 2014 09:23 PM PST

Nauru has agreed to host a detention center for the thousands of asylum-seekers who attempt to reach Australia by boat. (Photo: Reuters)

SYDNEY — Nauru, the tiny Pacific island that hosts a controversial Australian immigration detention center, is hiking visa costs for foreign journalists by 40 times, fueling concerns over secrecy surrounding Australia's asylum seeker policy.

The steady flow of refugee boats is a hot political issue in Australia, polarizing voters while stoking tension with neighbors such as Indonesia and Sri Lanka over border security policies criticized by the United Nations.

Nauru's decision to increase the cost of applying for a one-visit visa from A$200 (US$180) to A$8,000 makes the rate one of the most expensive in the world.

"I understand the fee is for revenue purposes," government spokeswoman Joanna Olsson said in an e-mail.

Australian Prime Minister Tony Abbott's conservative Liberal-led coalition is under fire for what critics call secrecy regarding its policies to deter asylum seekers making the perilous boat journey.

The government has refused to confirm reports that Australia last month turned a boat carrying asylum-seekers back to Indonesia, in line with its policy of not commenting on "operational matters."

A report by the Australian Broadcasting Corporation (ABC) quoted boat passengers as saying they received only one meal a day during the five-day ordeal and Australian authorities used restraints and physical force against some passengers.

Opposition Labor Party lawmaker Anthony Albanese accused the government of running a "North Korean" style blackout over the issue.

Abbott defended the secrecy, telling Macquarie Radio on Thursday, "The point is not to provide sport for public discussion, the point is to stop the boats."

Rights Group Amnesty International has criticized conditions at the detention centers on Nauru and Manus island in Papua New Guinea, where access to adequate medical facilities and housing have been a major concern.

The majority of those held in Nauru and on Manus have fled from war-torn areas, including Afghanistan, Darfur, Pakistan, Somalia and Syria.

"I don't see the logic of annoying the media," said James Jupp, an adjunct associate professor at the Australian National University in Canberra, adding that Abbott could be telling the public he was fulfilling his election promise of stopping the boats, but was refusing to do so.

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In Worsening Row, India Orders Club Closure, US Delays Trip

Posted: 08 Jan 2014 09:16 PM PST

Supporters of Rashtrawadi Shiv Sena, a Hindu hardline group, shout anti-US slogans during a protest near the US Embassy in New Delhi on Dec. 18, 2013. (Photo: Reuters / Ahmad Masood)

NEW DELHI/WASHINGTON — The US energy secretary on Wednesday postponed a visit to India, while New Delhi ordered the US Embassy to close a club for expatriate Americans, as a worsening diplomatic row exposed fault lines between the world's two most populous democracies.

Furious at the arrest, handcuffing and strip search of its deputy consul in New York last month, India has reacted by curtailing privileges offered to US diplomats. The officer, Devyani Khobragade, was accused by prosecutors of underpaying her nanny and lying on a visa application.

Nearly a month on, the dispute has started to affect the wider relationship between the countries, with two high-level visits by US officials postponed.

US Assistant Secretary of State for South Asia Nisha Desai Biswal has delayed her first visit to India, which was due on Jan. 6, to avoid it becoming embroiled in the dispute.

On Wednesday, an official of the US Energy Department said Energy Secretary Ernest Moniz would no longer travel to India as planned next week, the most serious repercussion yet in the row over Khobragade's arrest.

Both sides have said the relationship is important and will not be allowed to deteriorate—Washington needs New Delhi on its side as US troops pull out of Afghanistan and as a counterbalance to a rising China. Millions of Indians have made the United States their home and bilateral trade is worth about US$100 billion a year.

But the dispute over Khobragade has plunged the two countries into a crisis described by Indian media as the worst since New Delhi tested a nuclear device in 1998.

The aim of Moniz's trip was to promote trade and investment in the energy sector. The talks usually include discussions of civil nuclear trade between India and the United States.

The Energy Department official called the energy partnership a key element of the overall strategic partnership between Washington and New Delhi.

"In view of the importance of these matters to the overall bilateral relationship, we look forward to holding the Energy Dialogue at a mutually convenient date in the near future that will permit both sides to deliver concrete outcomes for both governments and our two peoples," he said.

India and the United States signed an agreement on nuclear energy cooperation in 2009, during the administration of former US President George W. Bush, a high point in a relationship that is widely considered to have drifted since.

"I'm a little worried it may spin out of control," said Lalit Mansingh, a former Indian ambassador to the United States who has also served as India's top diplomat and is now retired.

India stepped up the pressure on Wednesday ahead of a Monday court appearance where Khobragade could be indicted, ordering the US Embassy in Delhi to stop receiving non-diplomats at an embassy club popular with expatriate Americans for its swimming pool, restaurant and bar.

Americans working in the Indian capital have been frequenting the club for decades. An Indian government source said the club should not be offering services to non-diplomats when it has tax-free status.

In Washington, State Department spokeswoman Jen Psaki stressed the importance of relations with India and said the United States "endeavors to always be in compliance with local laws and regulations."

"We are continuing our conversations with the Indian government … with the importance of the broad strategic US-India partnership firmly in mind," she said.

Asked at a briefing if the United States was concerned by the Indian action, she said, "As we have concerns we will express them privately."

India had already curtailed privileges offered to US diplomats to bring them in line with the treatment of Indian envoys to the United States. Since December, the US ambassador in Delhi can be subjected to airport frisking and most consular staff have reduced levels of immunity.

Concrete barriers were removed from a road near the US Embassy last month, apparently in retaliation for the loss of a parking spot for the Indian ambassador in Washington.

India is also preparing to take steps against the embassy school, which it suspects may be employing some staff in violation of visa requirements, a government source said.

Despite an overall improvement in ties since the end of the Cold War, the Khobragade dispute has brought a lingering wariness between the two countries into the open. Over the past year, there has been increasing friction over trade, intellectual property rights and visas for Indian IT workers.

There is also a legacy of mistrust, with some Indian officials whose professional life began when India was a close partner of the Soviet Union still not convinced Washington is a reliable ally.

Despite close security and economic cooperation now, many officials recall US support of India's old enemy Pakistan and some believe Washington sees a strong India as a threat.

"For 50 years we were led to believe that the United States was an adversary. For the last 10 years we have been experimenting with a strategic partnership. It is not a done deal," said Mansingh.

Among some US diplomats, there is a perception that while India insists on respect and friendship, it fails to deliver either in support on issues such as Iran or Afghanistan, or by giving enough commercial access to US businesses.

Ways Out

To defuse the spat, India wants the United States to approve Khobragade's transfer to its UN mission in New York, a move it believes would give her immunity from prosecution.

If that does not happen before the US government begins a preliminary hearing or files an indictment, India could take more retaliatory steps, an Indian government source told Reuters.

US officials hope for a resolution of the row through some sort of plea-bargaining process.

In a column published this week, Indian Human Resource Minister Shashi Tharoor asked whether an era of steadily improving ties had come to an end.

"Indian-American relations had been strengthening owing to both sides' shared commitment to democracy, common concerns about China, and increasing trade and investment," he wrote.

"The Khobragade affair suggests, however, that all this is not enough: Sustaining a strategic partnership requires, above all, mutual respect."

The United States had high hopes that not only would India emerge as a counterbalance to a rising China but as a new growth engine for the US economy.

Frustration has grown, however, among the US corporate lobby. Indian sourcing rules for retail, IT, medicine and clean energy technology are contentious and US firms gripe about "unfair" imports from India of everything from shrimp to steel pipes. In June, more than 170 US lawmakers signed a letter to President Barack Obama about Indian policies they said threatened US jobs.

With general elections due in India in four months, and congressional elections in the United States in November, the fear is that the current dispute will make it harder for both sides to stick their necks out and make progress on thorny issues such as liability for nuclear equipment suppliers.

"There is such a long laundry list of concerns on the American side that seem to be ignored or slow-rolled in India,' said Persis Khambatta at the Center for Strategic and International Studies think tank. "The risk is that this [Khobragade] incident will dig up a lot of frustration that had built up."

Additional reporting by Aruna Viswanatha and Valerie Volcovici in Washington and Joseph Ax in New York and Sruthi Gottipati in New Delhi.

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