Consensus Cracking in US on Burma Policy

US Senator Jim Webb, pictured here at a meeting with Aung San Suu Kyi in Rangoon in 2009, questioned recently whether the Burmese opposition leader should be telling foreign investors which sectors they should invest in. (Photo: Reuters)

US Senator Jim Webb, pictured here at a meeting with Aung San Suu Kyi in Rangoon in 2009, questioned recently whether the Burmese opposition leader should be telling foreign investors which sectors they should invest in. (Photo: Reuters)

WASHINGTON—The rare Washington consensus behind the Obama administration’s policy toward Burma is showing signs of cracks as US businesses grow impatient to invest there and human rights groups push back.

The US is rolling back its long diplomatic isolation of the military-dominated nation, also known as Myanmar, and is looking to ease economic sanctions following democratic reforms there. It’s trying to open up commercial opportunities for US companies in one of Asia’s last untapped markets without losing the high ground on human rights that has driven the US agenda for the past two decades.

In an unusual move, a Democratic senator last week criticized opposition leader Aung San Suu Kyi, a figure revered by both US political parties and key to bipartisan support for administration policy. During a recent trip to Europe, she cautioned against foreign companies entering business deals with Burma’s opaque state and gas enterprise. A prominent Republican echoed her concerns.

Those differences underscore how the administration’s job of keeping broad-based support for its Burma policy is getting more tricky.

The debate is playing out while explosions of communal violence between Buddhists and Muslims in western Burma leave scores dead, and the country’s military continues to clash with ethnic rebels in the remote north—reminders that human rights concerns still loom large.

Broadly, the rare political unity that has coalesced on the administration’s Burma policy endures. Both Democrats and Republicans back the easing of sanctions to encourage further reforms, and the Senate on Friday approved the appointment of Derek Mitchell as the first US ambassador to be based in the country in 22 years. Mitchell has served as a special envoy since last August.

But even within the administration, there are differences of opinion on how to allow US investment without feeding corruption and further entrenching Burma’s military-linked business elite.

For US corporations, time is of the essence. European companies are already free to operate in Burma, and within two or three months its government will open bidding on 18 onshore oil and gas blocks—an opportunity for Western firms to move in on a lucrative sector where China, India and Thailand currently dominate.

The US Chamber of Commerce, which represents more than 3 million businesses and is a powerful lobbying force in Washington, is urging the administration to get going. The chamber has expressed disappointment that seven weeks after Secretary of State Hillary Rodham Clinton urged US businesses to invest in Burma, the administration has yet to issue the necessary regulations.

Democratic Sen. Jim Webb is a longtime advocate of engagement with Burma and has teamed up with a conservative Republican to press for a comprehensive lifting of economic sanctions. He chided Suu Kyi last week, asking whether “an official from any foreign government should be telling us what sectors that we should invest in and not invest in.” It was highly unusual criticism directed at a Nobel Peace Prize winner who spent 15 years under house arrest before she was elected to parliament in April.

On the other hand, Republican Sen. John McCain has endorsed Suu Kyi’s comments, saying her concerns over the lack of accountability and transparency in the Myanmar Oil and Gas Enterprise, or MOGE, must be addressed before letting US companies invest in that sector. “We must prioritize our democratic principles,” McCain said in a statement.

Rights groups say the administration is now prioritizing US commercial interests instead.

“Suddenly there are new objectives competing with the old ones that formed the heart of Burma policy for so many years,” said Tom Malinowski, director of the Washington office of Human Rights Watch. “This is about helping US companies not miss out on the natural gas blocks to be auctioned off in the next few months.”

And judging from US officials’ public statements, there has been a marked shift in recent months, despite the administration’s continued statements of concern over ethnic violence, political prisoners and Burma’s military ties with North Korea.

In early April, when the US announced a “targeted” easing of the investment ban, officials initially spoke of promoting investment in sectors like agriculture, telecommunications and tourism, rather than resource-based industries. But by the time Clinton gave the details six weeks later, she was inviting American businesses to invest across all sectors of the economy, including oil, gas and mining.

That angered activists like Moon Nay Li, coordinator of the Kachin Women’s Association Thailand, who says atrocities by the military are continuing in her native Kachin State in northern Burma. She launched a petition on the Internet that has gained 125,000 signatories in five weeks, demanding legally binding safeguards to ensure that US businesses don’t become complicit in rights abuses.

“Foreign business and extreme violations of human rights are virtually inseparable,” she said by email, charging that investment projects often result in land appropriations and forced relocation of villagers.

The Obama administration has said US companies would be expected to conduct due diligence and will still be barred from doing business with firms owned or operated by Burma’s military. The administration hasn’t said whether US oil and gas companies would be allowed to partner with state monopoly MOGE, a necessity for investing in the petroleum sector.

Patrick Cronin at the Center for a New American Security think tank said excluding US businesses, which are subject to rigorous US anti-corruption legislation when they operate abroad, would not help but hurt the course of reform in Burma, particularly when companies from Europe, Russia, China, India and other Asian countries are free to invest there.

While companies will resist calls for additional reporting requirements—that might, for example, monitor what they pay to Burma’s government—Cronin said that could be the trade-off for investing in a country with major human rights problems.

8 Responses to Consensus Cracking in US on Burma Policy

  1. The writing is clearly on the wall. The US cannot be the only country left in the world still imposing sanctions against Burma. That would make no sense, especially for the US companies.
    It’s election year and as Clinton said: It’s the economy stupid!

  2. Are you surprised that Jim Webb criticised Daw Suu for saying which company/organisation in Burma is transparent or not, and hence suitable to do business with? I am not. We already knew who Jim Webb is. A friend of extremely corrupt dictator Than Shwe.

    Answer for Jim Webb’s question of whether “an official from any foreign government should be telling us what sectors that we should invest in and not invest in.” is yes. Listen! Jim Webb, if you want to do business in Burma, deals with the democratically elected people like Daw Suu. Not Than Shwe or Thein Sein who won the seat from a rigged election. Aren’t you a democrat?

  3. Jim Webb clearly does not know, or worse, does not care, that the illegal Military government uses forced labour for these projects. Laborers are not fed, and when they drop, they die. Children are used for forced labor too.

    ASSK knows what she is talking about, and is aiming to reduce human rights abuses in her country. Jim Webb just wants the money.

  4. Though the US is seeing reforms and political changes in Myanmar, probably Myanmar is not really important for the US so far and they have so much priorities. I would agree to what Daw Aung San Su Kyi said about to take time to think about doing investment in Myanmar from the realistic point of view.

    There are several business people coming to Myanmar for a gold rush.
    Most of them are put off with the prices in Myanmar and could not imagine how they can do investment in Myanmar.

    In Myanmar most of the major businesses are monopolized by the local tycoons and only the big and renowned international companies may be able to do investments here. All the medium to small investments cannot afford to take risk or to compete with the local business groups.

    Speaking of interest on American investments, it all sounded very much unilateral. Myanmar should have option to say ‘No’ to some businesses if we think is not right for the country such as what was on the news last week about soft drinks industry, from which Myanmar will gain nothing unless they intend only to reexport the products made in Myanmar. We can expect to have many interests from different companies, basically due to the mouthwatering sixty two million population and all natural resources, Myanmar should stand firmly and to be selective.

    We don’t owe any foreign investor anything and we don’t need their culture or the lifestyle but something useful for the people so it is necessary to filter the business that they want to do.

  5. I wonder if US will worry if they will left behind and have no business opportunity in Burma. I wonder if they will keep “HUMAN RIGHTS” behind and go ahead do business with the dictators coz money is second GOD.

  6. Because others don’t care about human rights, I The USA will follow them. OK?

  7. Let’s hope the good people of Virginia are not as uninformed and gullible as Senator Jim Webb.

  8. Investment in emergent markets is not like Normandy landing. There is no mass casualties. American companies collect enough intelligence and familiarity with the market place before they jump in with their two feet.

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