US 'Careful' on Easing Burma Investment Ban

By Matthew Pennington 26 April 2012

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.