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Leading article: Business with Burma must benefit both sides


When Burma's democracy leader, Aung San Suu Kyi, was released after more than 20 years under house arrest, David Cameron led the way in making sure this great event was celebrated in the world with the gusto that it merited.

 And it was a measure of Ms Suu Kyi's gratitude to Britain for our steady support for her cause that, on regaining freedom, she honoured Britain with one of her first foreign visits – an event that culminated in a historic address to both Houses of Parliament. Part of the warm feeling that Ms Suu Kyi evinced for Britain reflected her acknowledgement that, by championing the restoration of democracy in Burma during the long night of the generals' rule, the UK had undoubtedly sacrificed important investment opportunities.

The news that Shell and BP are hurrying through Burma's now open door with the backing of government ministers, therefore, is likely to be met with mixed feelings. It is true that Burma is no longer wholly un-free and that in these new, more fluid political circumstances British investors don't just have a right but almost a duty to add a new economic dimension to our political commitment to Burma. Given Burma's large oil reserves, it was equally inevitable that energy companies would want to lead the charge. At the same time, if we are not to sacrifice our good name with Burma's democrats, we should remember Ms Suu Kyi's very nuanced words of welcome on the subject of foreign investors.

Last month, on the eve of her visit to the UK, she said that while supporting the EU's decision to lift most sanctions, Burma's friends need to think carefully before investing in a country that a military regime still partly controls. With that in mind she called for "ethically responsible investment" and, when talking specifically about the prospect of BP and Shell investing in Burma, added: "It depends on the way they do it." What the country needed was "democracy-friendly development that will empower the people".

Some oil companies come with a reputation. They don't have much of a track record in empowering the right sort of people in authoritarian states, or in highly corrupted semi-democracies, where the main points of contact for the companies are the men in government. Several academics go so far as to call oil bonanzas a curse for democracy in the developing world. The theory is that oil exploration often actively holds back the democratisation of un-free or partly-free countries by funnelling vast amounts of money into the hands of generals and "presidents for life", increasing their patronage networks and entrenching them. Perhaps this is pessimistic and Burma is beyond this point. But we need to remember that it is still not a consolidated democracy but a country in which the military nominate 25 per cent of the seats in parliament, where several hundred political prisoners remain in various jails and where, as last week's round-up of student activists showed, marking the 50th anniversary of the military takeover in 1962 remains risky.

No one is suggesting that UK-based oil companies should not go into Burma. And it is right for Burma to look to free commerce as a means of bringing money into the country. At a time when the whole world wants a slice of the Burmese cake, and there is talk of a "tsunami" of money heading in that direction, oil is going to be part of the mix. It is a question of balance and of ensuring that big oil companies do not end up as the face of Britain in Burma. As it blesses the oil companies in their Burmese ventures, the Government has an opportunity to show it can break with bleak track records, confound cynics and show that ethics can play a part in such trade. Let us hope that the visitors heed Suu Kyi's call for "democracy-friendly development".