The issue of Burmese billionaire Tay Zaw’s financial contributions to Myanmar’s military regime that we alerted you to earlier is now becoming public due in part to the leak of a US diplomatic cable. We have been monitoring the activities of Zaw for some time and it is now known that he has been donating tens of thousands of dollars (perhaps millions) to fund military operations that are directly targeting minorities and figures believed to be connected to the Kachin Independence Organization (KIO/KIA).
Zaw’s most recent “donation” was actually made in public and totaled over $80,000. Mr Zaw has massive interests in Kachin State in the form of mining (largely jade) and timber. We have also long been following the trail that leads to his weapons sales directly to the military. These weapons appear to be of Chinese origin and are smuggled across the border under the cover of his various businesses, including one in the aviation industry. A US diplomatic cable from 2009 suggests the same, and we show no signs that that trade has ceased.
What is most significant here is the Chinese connection. The Chinese have massive economic interests in Kachin, and now it is interfering in the military’s conflict with the Kachin peoples. Beijing is professing to be playing the role of mediator between the two sides in an attempt to end a conflict that erupted in 2011 after 17 years of shaky peace. That China is willing to interfere is very significant and demonstrates how important this area is not only to its energy interests in Myanmar to its overall foreign policy objectives.
The situation in Kachin has neared a tipping point in the past several weeks and the military has turned its heaviest weapons on the area and moved in closer to its unofficial borders, taking on the area’s ethnic militia with a renewed vigor. This is both a troubling development for Beijing and an opportunity to send a message to the West, which itself has recently begun pursuing a relationship with Myanmar. The troubling aspect for Beijing is a conflict on its borders, a threat to trade and an influx of refugees from Kachin. The message is this: China is the strategic power here.
We argue that Myanmar is a one of the most significant stages on which a strategic power struggle between China and the US will unfold, and that controlling the country’s vast resources will be the key to controlling this geostrategic venue. So far, China holds the power.