Indeed, the military regime appears as entrenched as ever. The junta, which has euphemistically named itself the State Peace and Development Council, is dominated by hard-liners led by its chairman General Than Shwe. He consolidated power in 2004 after purging Khin Nyunt, then Prime Minister and a more moderate voice in the government. The NLD is in disarray, and its members—like many opponents of the regime—are routinely killed, detained or forced into exile. Suu Kyi, 60, remains under house arrest, where she has spent 10 of the past 16 years; in December, the junta extended her detention for at least another six months. In 2003, the government announced what it calls a "Roadmap to Democracy," which would eventually lead to new elections, and it intermittently stages a convention to write a new constitution (the latest session began in December). But Suu Kyi and other key members of the opposition have either been excluded or have boycotted the convention, stripping the process of any credibility. Meanwhile, the junta is digging in—literally. The generals are building a new capital at Pyinmana, a town 400 km north of Rangoon, with a massive complex to house government ministries and the army's headquarters, complete with a network of fortified tunnels and bunkers. The generals, says David Steinberg, author of the book Burma: The State of Myanmar, "have the idea that they can go it alone forever."

The natural resources at their disposal have clearly made it easier for the generals to cling defiantly to power. Burma boasts sizable reserves of natural gas near three fast-growing, energy-hungry nations: China, India and Thailand. While most major oil companies are barred by sanctions from investing in Burma's energy sector, there has been no shortage of foreigners scrambling for a piece of the action. Two existing operations, one managed by France's Total and the other by Malaysian state oil company Petronas, provided Burma with about $1 billion in revenues in 2005, estimates one energy consulting firm. (Total and Petronas wouldn't comment on revenues provided to Burma's government, citing contractual agreements.) Much more is in the pipeline. In 2004, a consortium led by South Korea's Daewoo International and including Korea Gas, India's ONGC Videsh and the Gas Authority of India discovered new gas reserves larger than either of the existing fields. An investment of about $2 billion might be needed to develop the find. Another group of investors, including China National Offshore Oil Corp. (CNOOC), signed six contracts with the Burmese government in June to explore for more fields. India is also planning a $1 billion pipeline to ship natural gas from Burma. "The ability of sanctions to limit investment in energy is probably negligible," says Andrew Symon, an energy-industry specialist at the Institute of Southeast Asian Studies in Singapore.

Other Asian companies have invested in Burmese pearl farms, hotels, truck manufacturers and even pencil producers. Singaporean firms are among the most enthusiastic, putting nearly $1.6 billion into 72 projects in Burma. Cheap wages—possibly the lowest in Southeast Asia—have been a big draw in labor-intensive industries such as textiles. Business deals have involved some of Asia's most powerful people. Thailand's telecom giant Shin Corp., founded by Prime Minister Thaksin Shinawatra, has provided Burma's state phone company with access to Shin's satellites for international phone services and domestic TV broadcasts since 1998. In 2002, Shin expanded phone services to countryside villages and two years later, a Thai state bank granted a $97 million credit line to the Burmese phone company to help it purchase telecom equipment from Shin. Richard Jones, a spokesman for Shin, calls Burma "one of our oldest customers," and says the company's business there "is a way of helping many people in Burma communicate with the outside world for the very first time." The flow of money from around Asia is unlikely to slow. "We have no plans to restrict Japanese business activities in Burma," says Hideaki Mizukoshi, the director of the Asian and Oceanic Affairs Bureau in Japan's Ministry of Foreign Affairs. "Democracy is not the only standard in deciding our relationship with a country."

Executives and diplomats around the region bristle at the suggestion that they are sacrificing human rights for profits. "By engaging Myanmar, that doesn't mean we look at it as just business as usual, as an excuse to do business with them," says Sihasak Phuangketkaew, spokesman for Thailand's Foreign Ministry. "We do recognize there are problems and we want to see progress." Many officials and investors in Asia believe that business and trade have a greater chance than sanctions of fostering political reform by opening up the isolated country. Ruili's Gong argues that China's economic role "helps to push forward economic and political reform in Burma." This thinking led the Association of Southeast Asian Nations (ASEAN), the region's main political forum, to invite Burma to become a member in 1997. James Gulkin, chief executive of Bangkok-based fisheries company Siam Canadian, which does about 10% of its business in Burma, says the idea behind such engagement with the junta is to "kill them with kindness."

In reality, neither engagement nor isolation has converted the generals into upstanding citizens. In a report last February, the U.S. State Department declared that "the government's extremely poor human-rights record worsened" during 2004 with "numerous serious abuses," including forced labor, executions, and the torture and rape of prisoners and political opponents. Nearly 700,000 refugees are currently living in Thailand, Malaysia, Bangladesh and India, having escaped from Burma.

The junta is a hazard to more than just its own people. The U.S. government claims that Burma is the second-largest producer of illegal opium in the world (after Afghanistan), and that it's Asia's primary supplier of methamphetamines. The drug problem is so severe in the border areas around Ruili that, says mayor Gong, Chinese officials employ some 1,000 people to round up addicts and force them into rehabilitation "farms." Human trafficking of Burmese is rampant, with young women forced into prostitution in Thailand and elsewhere. Fueled by this booming trade in drugs and sex, Burma "may be the greatest contributor to new types of HIV in the world," according to a study by New York's Council on Foreign Relations. The report noted that all but one of the AIDS outbreaks in a massive area spanning from Kazakhstan to southern Vietnam can be traced back to Burma.

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	Caught in the Middle [Jul. 19, 2005] Hunted by Burma's military junta and unwanted by Thailand, the Shan are fighting for their lives Hunting the Junta [May. 23, 2005] A new report targets Burma's military rulers for crimes against its minority ethnic groups A Purge in Burma [Oct. 25, 2004] By sacking Prime Minister Khin Nyunt, the junta abandons even the pretense of a more liberal future Stone Age [Apr. 22, 2004] The military strongmen who rule Burma have made the country a global byword for backwardness and brutality More Related Items | Search all issues of TIME Magazine