Dateline Irrawaddy: ‘Our Economy Will Not Pick Up Unless and Until Economic Sanctions are Lifted’

By The Irrawaddy 17 September 2016

Ye Ni: Welcome to Dateline Irrawaddy. This week, we’ll discuss State Counselor Daw Aung San Suu Kyi’s trip to the United States. U Khine Win, director of the Sandhi Governance Institute and freelance business journalist Daw Yamin Myat Aye will join me for the discussion. I’m editor of The Irrawaddy’s Burmese edition Ye Ni.

Daw Aung San Suu Kyi is traveling to the US via London. This visit to the US is different from her previous visit, when she was welcomed as a champion of democracy. This time, she goes as the state counselor and foreign minister. She is going to the US amid the peace process and a transformation in Burma. Ko Khine Win, what do you think will happen to US economic sanctions against Burma?

Khine Win: Like many people, I expect that the US government will lift some sanctions such as the SDN [specially designated persons] list during the visit. I think this because national reconciliation is one of the economic policy priorities of the National League for Democracy (NLD)-led government. Our economy has been failing to the extent that it will not pick up unless and until economic sanctions are lifted and international investments come in. I think that she will try for this.

YN: Some argue that she used sanctions as a bargaining chip throughout the struggle for democracy and might do it again in building democracy and rebuilding the nation. Ma Yamin, what do you think?

Yamin Myat Aye: I would like to note two things regarding sanctions. One concerns the economy. Burma cannot do bank-to-bank transactions, which impedes trade and foreign investment. This will only be possible when there are no sanctions. Financial sector reforms—including banking reforms—cannot be carried out while there are sanctions. It is necessary to reduce sanctions over time.

Officials from the Central Bank of Burma are accompanying Daw Aung San Suu Kyi on her trip to the US and, as Ko Khine Win mentioned, because the national economic policy seeks national reconciliation, I think she will push for the removal of many of the sanctions. Only then can the country receive foreign investment. Currently, US companies invest in the country, but they do so indirectly through Singapore.

Regarding the Burmese military and cronies, an arms embargo is imposed against the military. To what extent sanctions will be reduced in that regard will depend on the level of trust between Daw Aung San Suu Kyi and the military chief. She has visited the Royal Defense Academy in the United Kingdom, and it is likely that there will be training for military officers and visits between the two armed forces.

As for cronies, I am sure that those who are involved in arms and drug dealings will not be removed from the SDN list. Sanctions may be relaxed to an extent that allows for foreign investment but excludes cronies. But, some cronies may possibly be removed from the list. I have interviewed businessmen following this speculation.

While there are opportunists who accumulated wealth by working hand in glove with the authoritarian regime, there are also businessmen who got rich because of their industrious hard work. Opportunists have crossed the finish line early because they had an early start in the race. Those who did not work hand in glove with the regimes got a late start and therefore struggled.

If all cronies are removed from the list, people will think they can do whatever they like as long as they have money and power. Nobody will want to conduct business fairly and moral values will be undermined. If I were in the shoes of the US government, I would take this into account when deciding to what extent sanctions should be lifted. And I believe the US government will do so.

YN: You have made an interesting point. The Kachin community living in Washington, DC recently released a statement calling on the US to continue its embargo on arms deals and avoid military-to-military engagement until peace is established in Burma. But Daw Aung San Suu Kyi has become closer with military leaders and it is because the military has cooperated that we are seeing changes today. Ko Khine Win, do you think Daw Aung San Suu Kyi will speak for military leaders and ask the US to remove sanctions?

KW: The US government has to take internal politics and geopolitics into account. An Indian commentator wrote that China would perceive it as a threat if Burma’s armed forces and the US get too close. The military-to-military relationship could include things other than military exercises—such as human rights trainings, which the US provides to Burma’s military now. They should provide training about the role of the military under a civilian administration.

Regarding the relationship between the US and China, everyone knows that America is counteracting China. Commentators argue that the US is trying to contain China by cooperating with its adversaries and that it only wants to allow China’s rise within an international liberal order. Our leaders need to find a balance and engage with China since it plays a role in the country’s peace process and national reconciliation. On the other hand, it is also important for them to engage with the international community, including the US, to have economic sanctions and embargoes removed over time. The government has to strike a balance, which is not an easy task.

YN: Ma Yamin, it seems certain now that the US will grant the GSP [generalized system of preferences] to Burmese exports, and that US companies will invest and smooth financial transactions will be facilitated. How can Burmese businessmen make the best use of the GSP?

YMA: If the GSP is granted, duties do not need to be paid when importing things from Burma to the US. So, Burmese products would be more competitive. We can expect lively trade if financial transactions are realized between the US and Burma, but it will also depend on other factors such as the quality of the products and accessibility to the market.

Vietnam has gained considerable market share in the export to the US of agricultural and marine products. Burma could export similar items to the US. But it is necessary to connect the producers to the market and it is important that the products are of good quality. The government must think about how it can subsidize producers.

I would like to highlight the e-government system here. Daw Aung San Suu Kyi recently visited China and I heard that the company Huawei proposed helping Burma introduce an e-government system. The US voiced opposition to the plan. During her trip, she could ask the US to help Burma’s transition to an e-government system—with the help of companies like Google, for instance. Then, online payments could be realized in Burma. This would also create more job opportunities for young people. Daw Aung San Suu Kyi could use her power to get sanctions eased and find a market for agricultural produce.

YN: Ko Khine Win, Ma Yamin, thank you for your contributions!