India offers large loan and praise for Burma reforms

India promised Burma a $500-million credit line to improve infrastructure on Friday and praised steps towards democracy by its reclusive neighbour, which is tentatively opening up after half a century of harsh military rule.

The money and warm words came as Burma campaigns to shed its pariah status. It began releasing 6 300 convicts on Wednesday in its latest liberalising move, but kept some political detainees behind bars, dampening hopes for a broader amnesty.

It was not clear how many of the country’s estimated 2 000 political detainees were included in the amnesty — one estimate said only 206 of them were freed. But the released included ailing Shan Army commander Hso Hten and comedian Zarganar, who was imprisoned after criticising the government’s response to Cyclone Nargis in 2008.

The former British colony has large undeveloped gas reserves and straddles busy Bay of Bengal shipping lanes, making it strategically important for energy-hungry emerging power neighbours India and China.

Burma President Thein Sein met Indian Prime Minister Manmohan Singh in New Delhi during a four-day state trip, spending two days visiting religious sites.

Hours after the prisoners’ release, Burma’s first civilian president in nearly 50 years flew to India’s Bihar state to pay homage at the site where the Buddha is said to have reached enlightenment.

“The prime minister of India congratulated the president of Burma on the transition towards democratic government and offered all necessary assistance in further strengthening this democratic transition,” they said in a joint statement.

India has long weathered criticism from international partners for its accommodating stance to Burma’s junta, which was dissolved in April. New Delhi feels the signs of reform vindicate its policy of engagement.

The United States, Europe and Australia are unlikely to soften sanctions on Burma unless nearly 2 000 more political prisoners are released. Other Asian countries, however, are keen to access resources in the mainly Buddhist nation.

New Delhi put aside concerns about human rights in the early 1990s for fear of losing access to oil and gas as China stepped in with military assistance and loans to help the regime withstand sanctions.

India’s efforts have only been partially successful, with planned roads and ports behind schedule. India part-owns two natural gas projects off Burma’s coast in the Bay of Bengal but the gas is sold to China.

The $500-million credit line follows a similar $300 million scheme last year. The money will be used on infrastructure projects, particularly irrigation, the statement said.

India buys most of Burma’s agricultural exports and wants its neighbour to raise output further by planting on idle land. — Reuters

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