The construction of a new capital, Naypyidaw, and the proposed construction of an information technology capital, Yadanabon, along with significant pay raises for civil servants and the military have placed serious pressure on government reserves. The government typically addresses such deficits by printing more money, producing the significant inflationary pressures seen today.
- Economic Factors Behind the Myanmat Protest
The nations economic focus is on the export of it's resources. Burma's lacking domestic refinery capacity just adds to it's vexing need for foriegn currency. The superstitious "decision making process within the junta follows the familiar route of political considerations at the expense of sound domestic economic policy".
Earlier this year, Russian "nuclear equipment export monopoly AtomStroyExport forged an agreement to construct a nuclear research center in Myanmar".
Myanmar purchased 15 Russian MiG-29 Fulcrum fighters for approximately US$150 million in 2001. Furthermore, it is negotiating with Russia's state-controlled arms exporter Rosoboronexport on the establishment of an air defense system using the Tor-M1 and Buk-M1-2 missile systems. These business dealings, with a special emphasis on the energy related deals, are especially important to Russia.
PetroChina beat out India interest, even after "the deal was sweetened with US$20 million in "soft credit" and the proposed construction of a power plant in Myanmar".
Foreign energy trade company Zarubezhneft, natural gas producer Itera, and Silver Wave Sputnik Petroleum are currently producing Myanmar's off-shore oil deposits alongside the Chinese company PetroChina
Demonstrating China's payoff for vetos at the United Nations Security Council, India's (Gas Authority of India Limited or GAIL) "preferential buyer" status was withdrawn from two blocks of Burma's offshore natural gas feilds.
The controlling interests in the two blocks are Daewoo International (60 percent), O.N.G.C. Videsh Ltd (20 percent), GAIL Ltd (10 percent) and Korea Gas Corporation (10 percent).
