US ‘Careful’ on Easing Burma Investment Ban

Foreign Affairs' subcommittee chair Donald Manzullo says there is still no rule of law in Burma.

WASHINGTON D.C.—The United States said on Wednesday it will ease its investment ban in Burma carefully, noting that recent democratic reforms are reversible and deplorable rights violations persist.

The top US diplomat for East Asia, Kurt Campbell, said in testimony to the House Foreign Affairs’ subcommittee on Asia and the Pacific that the United States remains troubled by Burma’s military trade with North Korea.

His cautious comments come as human rights groups voice increasing concern that the US, European Union and other nations are moving too fast to relax economic sanctions to reward Burma’s shift from five decades of authoritarian rule.

The subcommittee’s chairman, Rep. Donald Manzullo, R-Ill., said there is still no rule of law in the country, officially known as Myanmar, and corrupt officials and the military stand to reap a windfall from the country’s rich natural resources.

“Have our European and Asian allies gone too far by rushing headlong into suspending all sanctions and immediately boosting assistance?” Manzullo suggested to the hearing. He cautioned that a “reckless” lifting of US sanctions could feed the cycle of corruption.

The EU this week suspended its economic sanctions, and Japan said it would forgive US $3.7 billion in Burma’s debt, following recent special elections that saw democracy leader Aung San Suu Kyi’s party sweep most of the contested seats.

The US has said it will allow export of financial services and American investment in some sectors of the impoverished economy—such as agriculture and telecommunications—but has yet to announce details.

Campbell described the Burma’s political opening as “real and significant” but “fragile and reversible.” In his prepared testimony, he credited economic reforms and said the government has doubled spending on education and quadrupled it in health, but military spending, at 16.5 percent of the total budget, remains “grossly disproportionate.”

He cited fighting and reports of severe rights violations in the northern Kachin State—scene of one of Burma’s most entrenched ethnic insurgencies—and noted “deplorable” discrimination against ethnic Rohingyas in the western Rakhine State.

He also said, despite the releases of more than 500 political prisoners by Burmese authorities since last October, at least several hundred are still behind bars.

Aung Din, of the US Campaign for Burma, alleged that arbitrary detention and torture continues and questioned the significance of recent political reforms.

Although Suu Kyi’s party won all but two of the seats in the recent special elections, it still has less than seven percent representation in Parliament. He said the quick easing of sanctions by the US and other nations meant that “the Burmese government led by President Thein Sein is the real winner” of the vote.

In his prepared testimony, Aung Din complained that US officials had failed to consult with veteran student protest leaders, leaders of Suu Kyi’s party and ethnic minorities before announcing the targeted easing of its bans on investment and financial services.

Campbell said the State Department would proceed “in a careful manner” on easing the sanctions and would work with the Treasury Department to re-examine and refresh its list of sanctioned Burma nationals—principally military officials and their associates.

The US has consulted closely with Suu Kyi, who is widely admired in Congress, as it has engaged with Thein Sein’s government, lending bilateral support for its shift from diplomatic isolation of Burma. Suu Kyi also endorsed the EU’s move to suspend its economic sanctions for a year.


8 Responses to US ‘Careful’ on Easing Burma Investment Ban

  1. Agreed Totally with the US that ” be very careful of easing investment plan” have being writing to sound out to everyone that these reforms seems to me NOT SINCERE at all the other issues have been sidetrack…and the BIG HOOHAA about Burma Opening Up this is all a PR scam seems to be taking notice by the US and some other Smarter thinkers.
    Please look around you is BURMA environment now or even in the next ten years suitable for BIG INvestments…where are the rule of law protecting such businesses or investments are the workforce ready to take on such resopnsibilities, are infrastructure there for you, are the banking systems open and ready, are communications open and ready, is traveling made easy without VISA, MOST importantly of all the military and their CRONIES what are we doing about it…are YOU to join investments with the military or the CRONIES…hey this is a bad and a no no move…nothing will come up with your investments it will all be eaten up…my opinion is DO NOT INVEST IN BURMA NOW…the TIME HAS NOT ARRIVE YET… INVEST AT YOUR OWN RISK…The Odds are investments will turn Sour very quickly.

  2. The Ordinary People of Burma

    The ordinary people of Burma are in complete agreement with the U.S. “that recent democratic reforms are reversible and deplorable rights violations persist” and that ” it will ease its investment ban in Burma carefully.”

    Easing sanctions now is like putting the cart before the shrewed horse.

  3. Burma military rule had been nearly 50 years. Now also ex-military and 25% with unifrom are sitting in parliament, so where is democracy and rule of law. In northern part of Burma human rights violation and war is still fighting on. No peace, how can you say this country is
    suitable for investment. Many cronies are still enjoying in business, so how US and EU is going to make investment with these cronies. The corrupted money is with them, majority are poor class. Many of land were took over by previous government and their cronies, how to solve these problems. All natural resources are oin ethnic areas, not in central Burma where Bama ethnic are majority. Gas is in Arakan State and Mon State. Are these ethnic Mon and Arakanese are geting share, no way. Burma economy will has to take time for investment. Time is not suitable has to wait till rule of law exist.

  4. Investment means MONEY, when you put your money to do business in a country where there is not yet prevail rule of law, how do you feel. The answer is with the investers itself to answer. Burma has to go long way, because the the present Burma constitution itself is undemocratic. The said constituion stated that in case of emergency the army chief can make coup, so coup itself is legalized and written very clearly in the constitution. No daubt Burma is very beautiful and full of natural resources for investment, timing is not given yet to do for investment, so wait for a while when time is OK put your billions of dollars and Euros with trusted business men not military cronies.

  5. This is a discouraging blow to the reformist group in the country. US never was, and will never be, a strong partner of Burma. This is not because people of Burma don’t want it, it is because of their own policies that fail to deliver the promises when the time comes.

    Shame on you, US!

  6. First of all, the US needs to update that ‘SDN List’ (the Specially Designated Nationals), as Mr. Aung Din suggested. Currently the whole world has forgotten what this military regime and their Cronies have done. They have all the corrupted money and assets, but couldn’t make a move. That’s the only reason that opened up for 43 seats for NLD which is only 7% in the parliament that more than 80% are military backed MPs.
    As soon as the sanctions are released & they have their accounts unfreeze & they can move their assets freely, their masks will be off and go back to the same. Currently they are showing off the US, EU and all Western Countries that they are willing to change. These US & EU should need to think a little bit more seriously. This military regime or the dictatorship took control of our country since 1962 in many cruel ways. Now all of a sudden they want to change 180 degree and desire to do for our country & the people. When too many students were shot, arrested, destroyed back in 1988, where was this military regime? What about Saffron Revolution, all our monks from almost the whole country took place on the streets just asked for Peace, and what did they do? Do you think that those are different people from current regime? Please give me a break.
    Now they want to have the Sanctions Lifted, and have foreign investors come in & do business. Currently more than 90% of the top business group/people are only ex-generals/families and their cronies. Only those cronies will get the business contracts. So you start business with them, they can easily wash their hands using foreign investors. What they are trying to do is very smart way of getting their money legalized, another words, this is kind of officially money laundering.

    • To be fair to the internatioonal business people and their agents elected representatives rushing in now, that 180 turn was in fact initiated by Aung San Suu Kyi where her words and her words alone are the highest arbitor for the action of the world community and for the lives of the people of Burma.

      It is high time in the presence of total neglect of intense suffering of the people of Burma under virulent current military action and the total lack of any suggestions or plan for preservation of irreplacable pristine environment and culture which are at stake with this new opening, international communities start to think outside Aung San Suu Kyi however saintly or otherwise she is. Contrary to popular opinion Burma is more than one person even if it is Aung San Suu Kyi.

  7. Aung Din was of course right to assert that the real winner was Thein Sein as the outcome was an integral part of their clever exit strategy with an eye on the real prize – return to normalcy in diplomatic and more importantly business relations with the West. A win win scenario in fact with ASSK in the frame and the end of Western sanctions.

    Donald Manzullo’s caution was crucial and timely. At least the US has not made an undignified headlong jump into bed with the govt notwithstanding Messrs.Webb & McCain. Their Anglo-Saxon cousins over the pond, Messrs. Cameron & Hague on the other hand have no such qualms and done it in unseemly haste.

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