EU Officials Discuss Aid, Trade, But Warn Naypyidaw on Arakan Crisis

By Lawi Weng 19 June 2013

RANGOON — Senior EU officials said they met with Burmese government officials this week to discuss the development of EU-Burma trade and investment relations, and the implementation of the union’s large aid program in the coming years.

The officials, however, also warned Burma’s government that its treatment of the Rohingya Muslim population in Arakan State was being viewed as “a test case” of its commitment to reforms and rule of law.

Earlier this week, both sides held the first Burma-EU Forum in Naypyidaw and set up two technical working groups to coordinate the EU programs planned in the country.

David O’Sullivan, Chief Operating Officer of the European External Action Service, told reporters that the EU was throwing its full weight behind Burma’s development and democratic transition process.

“Our overall view of what is happening is extremely positive… what has been achieved in the span of two years,” he said. “There has been a lot of progress in terms of labor standards, child labor, [and] what is happening in the peace process is very encouraging.”

O’Sullivan said the EU would roll out an extensive aid program over the next few years to support Burma’s development. “This will be the largest aid program we have anywhere in Asia… This of course, is all grant aid so it’s completely without costs to Myanmar,” he said, without detailing how much aid money would be spent.

The EU has been quick to re-engage with Burma after President Thein Sein’s nominally civilian government began introducing reforms in 2011. It suspended all EU sanctions against the country in April 2012, before completely lifting the sanctions in April this year.

European Commission President Manual Barroso visited Burma in November and President Thein Sein visited Brussels in March, when the EU promised to implement a multi-year aid program, which includes US $195 million to support democratic reform.

Last week, the EU readmitted Burma to the Generalized Scheme of Preferences (GSP) and allowed it to join the EU’s Everything but Arms initiative, under which products from least-developed countries can be imported to the EU market duty- and quota-free.

In 1997, Burma was banned from the GPS scheme because of its poor democratic and rights record under the then military junta.

The EU’s rapid re-engagement with Burma’s government has also been met with criticism, however. The New York-based group Human Rights Watch said in April that the EU’s scrapping of its sanctions was “premature and recklessly imperils human rights gains made so far.”

The US has only suspended some of its trade sanctions against Burma.

O’Sullivan said the restoration of preferential EU market access would provide a strong boost for Burma’s economic development.

“It not only means that all sorts of Burmese products, textile, agriculture products, can gain full duty-free, quota-free access, but it also means that anyone investing here is able to send their products to Europe quota-free and duty-free,” he said.

O’Sullivan added that the EU had set up a $13 million fund to assist companies looking to export Burmese products to the EU through the scheme.

He said the union would also seek to boost foreign investment in Burma and introduce European business leaders to the country. “I know that quite a few companies might want to relocate production from elsewhere in Asia to Myanmar, given that you have a considerable wage cost advantage for at least a few years to come,” O’Sullivan said.

But amid the discussions of the positive prospects for Burma’s economy, O’Sullivan noted that the EU delegation had expressed serious concerns over the Arakan crisis.

“I made it very clear to the authorities that seeing from the outside, how Myanmar deals with this issue is very much a test case of the government’s commitment to human rights and a rule-of-law based society,” he said.

Some 140,000 people have been displaced by inter-communal violence between Rohingya Muslims and Arakanese Buddhists that broke out one year ago.

Burma’s government has since segregated the communities and imposed a range of restrictions on the Muslim population that has affected their freedom of movement and access to education, income and health care.

O’Sullivan said the government should take steps to restore communal harmony. “We would not want the temporary situation of displaced people to become permanent, to create a sort of permanent segregation,” he said.

Rohingya leader Abu Tahay, of the Union Nationals Development Party, said the EU officials had jointly met with Rohingya and Arakanese Buddhist leaders on Thursday and urged the opposing communities to open a dialogue.

“They said we need a dialogue together to solve this problem,” Abu Tahay said, “They warned that if there is an ongoing conflict in Burma, not many foreign businesses will comes to invest.”

Additional reporting by Paul Vrieze.