US Firms Can Push Burma Reform: Hormats

By Lalit K Jha 24 July 2012

WASHINGTON—Pushing for a greater presence of American companies in Burma, a top White House official argued on Monday that the US can facilitate the ongoing economic reform process in the strategically key Southeast Asian nation.

However, to ensure that American businesses play a constructive role, a number of reporting and monitoring steps must be followed, argued Under Secretary of State for Economic Growth, Energy and the Environment Robert Hormats after visiting Naypyidaw and Rangoon on July 14-15.

“We want American companies to go in … we think that American companies by practicing as they do in other parts of the world—social responsibilities, environmental responsibilities, dealing with ethnic minorities in a very constructive way—can actually augment, assist [and] facilitate the reform process and we think that is important,” he told an audience in Washington.

“We also want to be able to demonstrate to the people of that country that we, as we go in, are keeping tabs on what American companies are doing,” Hormats said responding to a question at the prominent Center for Strategic and International Studies think-tank.

Hormats, who led the highest economic and commercial delegation to Burma in more than a quarter-century, said unlike other countries, US companies licensed to do business in Burma have “reporting requirements” on dealings with various people, issues regarding ethnic minority groups as well as environmental and labor practices.

“We are particularly focused on transparency,” he said. “This is critical from our point of view and is critical from the point of Aung San Suu Kyi and that is why we want full disclosure of what our companies are doing, with whom they are doing it and where they are doing it.”

Hormats added that any US companies dealing with the military-linked Myanmar Oil and Gas Enterprise (MOGE) would require a greater degree of transparency. “We are very insistent that any company that deals with MOGE would have to report within 60 days to the US government,” he said.

The Burmese government also sees this as an opportunity to diversify their economic relationship so they do not have to depend on just one or two countries, explained Hormats. “They are very accommodating to this,” he said.

However, Hormats revealed that a timetable for the permanent easing of sanctions on Burma has still not been drawn up, while conceding that any further democratic and economic reform would be matched by the Obama administration. He also expects more political prisoners to be released soon.

For those US companies aiming at doing business in Burma, Hormats cautioned that it remains a complicated fiscal environment. The country not only has very poor infrastructure, but also an education system that lags way behind and armed ethnic minorities who are very concerned about investment in their territory, he said.

“We want American companies to go in, but we want them to be responsible investors, which is to say that they have to do a lot before they make an investment. They have to understand the complexity of the country,” said Hormats, adding that the US government is working to make investment easier.