Myanmar's nutty scheme
to solve energy crisis

PYAW GAN, Myanmar-They may look leafless and lifeless, but Kyaw Sinnt is certain his nuts are the key to Myanmar's chronic energy shortage.

Others are less sure, saying the junta's plan to turn the country into a giant plantation of biofuel-producing "physic nuts" is yet another example of the ill-conceived central planning that has crippled a once-promising economy.

"I think it's a great idea. Everybody can take part and it's good for the environment," Kyaw Sinnt said, standing next to a small patch of the stick-like shrubs in Pyaw Gan, a bamboo hut village typical of the parched "Dry Zone" southwest of Mandalay.

Fortunately for Pyaw Gan's residents, the plants, also known as jatropha, are drought-resistant, and energy experts consider them a very promising source of biofuel since they do not oust food crops such as sugar or corn.

Clearly the former Burma's ruling generals think so too.

In the middle of 2006, the State Peace and Development Council, as the junta prefers to be known, decreed that every farmer with an acre of land had to plant 200 physic nut seeds around the perimeter of their plots.

Even though farmers had to buy the seeds themselves from the government for 800 kyat ($0.60) - about half a day's wages for a manual laborer - the scheme caught on.

Now, jatropha groves can be seen across the country, from deserted roadsides in the central plains to deforested hills near the Chinese border and in window-boxes in the heart of Yangon, the commercial capital.

A year ago, a senior Energy Ministry official was telling oil industry bigwigs in Singapore that 7 million acres of plantation would be "in full swing" by mid-2007 and that biodiesel exports would follow quickly.

This would represent a major turnaround for a country that had to import $600 million of oil products in 2006 and which was forced to slash diesel subsidies last August, triggering the biggest anti-regime protests in 19 years.

The only problem is that nobody knows whether the generals have kept their side of the bargain and built the refining plants necessary to turn sacks of hairy brown nuts into biodiesel.

Several big conglomerates with close ties to the regime have announced plans to get involved, but it is impossible to say how close to actually producing biodiesel they might be.

Analysts believe the answer is "not very", using as evidence a suggestion from one government minister that people simply grind the nuts in their own homes and then pour the resultant oily residue straight into their fuel tanks.

"How these jatropha acreages will be converted into biodiesel has not yet been determined, since Burma lacks anything like the capacity to refine physic nuts into useable fuel," Sean Turnell of Australia's Macquarie University said.

"The whole episode is illustrative of a more profound and pervasive system of centralized and often irrational decision making that lies at the heart of Burmese agriculture," he said.

There certainly doesn't seem to be anything remotely like a processing plant anywhere near Pyaw Gan, which is unreachable by vehicle during the wet season.

"It's a complete waste of time," said one businessman in the town of Nyaung U, 30 km (20 miles) away who did not wish to be named for fear of recrimination.

"There is no processing plant, and if there was, it would cost four times as much as normal diesel. It's all for show - just like our wonderful new irrigation channels that never have any water because they never turn the pumps on," he said.

Doubting the junta's stated motive, ordinary Burmese have come up with their own theories for the nut drive.