Burma Sanctions—Losing Both Carrot and Stick

By Charlie Campbell 13 April 2012

The rush to lift international trade sanctions on Burma in the wake of pro-democracy icon Aung San Suu Kyi’s stunning by-election victory has surprised even the most resolute reformist. It took the West’s biggest advocate of the crippling economic measures, the United States, until April 4 to announce their easing—just two days after the official results were announced.

And now the European Union (EU)will meet to discuss the lifting of some sanctions on April 23—the very day that Suu Kyi has been invited to enter Parliament for the first time—with a senior diplomat revealing last week that concessions were very likely.

While it may not be surprising that Naypyidaw seeks to guarantee good press as the EU sits down to discuss removing restrictions on Burmese trade, it is transparently opportunistic when the second parliamentary session was originally set for sometime in July—last year it began on Aug. 22.

The looming EU debate may well have been what prompted the United States—famously rebuked by liberal political scientists in 1998 for imposing economic sanctions against half the world’s population—to suddenly become so certain that democracy has taken an irreversible hold in Burma.

And essentially every Western government—including Canada, Australia, New Zealand and the UK—has joined the US and EU in calling for engagement with Burma. Neighboring nations have never sought to isolate the military-dominated country on humanitarian grounds, and Burma’s fast-approaching chairmanship of the Association of Southeast Asian Nations (Asean) in 2014 demonstrates the bloc’s economic inclusiveness.

Not only has Asean called for an immediate end to trade sanctions against Burma in the wake of Suu Kyi’s by-elections victory, but Singapore Prime Minister Lee Hsien Loong told a group meeting in Phnom Penh last week that the punitive measures should never have been imposed in the first place.

“We took the right approach in keeping Myanmar in the family and working with Myanmar rather than try to ostracize and penalize it the way some of the Western countries have tried to do with sanctions,” he said.

The IMF has already sent several delegations to Burma and assisted Naypyidaw with unifying its complex system of multiple exchange rates. The World Bank has similarly been on hand for consultation and ready to assist with investment opportunities in the region.

Of course, observers harbor few doubt over what is prompting the international community to so hastily dispense with restrictive measures.

“Myanmar is a gold mine, any way you look at it—natural resources, gas and oil deposits, spatial dimensions, location between China, India, Southeast Asia,” Craig Steffensen, Burma manager for the Asian Development Bank, told reporters on Wednesday.

“It’s a huge market waiting to happen and growth will come from everywhere, not one specific sector. The boom that’s about to begin has brought people from the four corners of the globe,” he added.

Even some humanitarian groups have joined in the chorus and called for a blanket lifting of international sanctions to push for continued reform.

“Myanmar has turned away from five decades of authoritarianism and has embarked on a bold process of political, social and economic reform,” the International Crisis Group said in a report titled Reform in Myanmar: One Year On, which was released on Tuesday.

“Those in the West who have long called for such changes must now do all they can to support them. The most important step is to lift the sanctions on Myanmar without delay,” it added.

US sanctions against Burma are detailed in five acts by Congress plus four presidential executive orders. These include bans on investment, restrictions on money transfers, asset freezes for key figures of the regime, and the purchase of gemstones originating in Burma.

“The United States is committed to taking steps alongside the Burmese Government and people as they move down the road of reform and development,” said US Secretary of State Hillary Clinton on April 4.

So what changes have been brought about by the April 1 by-elections to see such a remarkable turnaround?

After the ballot, Suu Kyi’s main opposition National League for Democracy (NLD) party now controls 43 out of a total of 664 seats in Burma’s Union Parliament—amounting to 6.5 percent. A quarter of Parliament remains guaranteed for the military while over 75 percent of the legislature is required to enact any change to the widely condemned 2008 Constitution.

By engineering the 2010 general election with a combination of ballot box-stuffing, vote-buying and blatant intimidation, the ruling Union Solidarity and Development Party of former generals, together with the military quota, jointly held 554 out of 664 seats. This amounted to 84 percent of the legislature in what was arguably the second most isolated country in the world.

After allowing Suu Kyi’s NLD to win 43 seats through a generally free and fair election, the same military-backed alliance now controls 77 percent in arguably the most tantalizing nation for investment opportunities around today. Plus it has every senior government position from president down filled from its ranks—the very reason for the by-elections in the first place as MPs vacated seats to take up cabinet positions.

Even the most unwavering junta hardliner would struggle to argue against the logic of this transition.

Indeed, Naypyidaw has not been shy in calling for the rewards of this new “democratic renaissance” to be delivered even more expediently. This is again unsurprising considering the commercial connections which government insiders have with the lucrative export, telecommunications and fossil fuels industries.

“They should do more if they want to see us reaching the mission faster,” presidential adviser Nay Zin Latt told Bloomberg financial news agency in an April 7 email. “The government is doing its job, which is national reconciliation and being a democratic society. This is the time giving more carrots will work more.”

But the main concern of many observers is that, by any international standard, there remains a massive amount to achieve to come anywhere close to a real constitutional democracy with respect for human rights and the rule of law.

An end to ongoing ethnic violence—not only in wartorn Kachin State, but all over country including Karen and Shan areas—as well as repealing draconian legislation such as the Electronics Act, ending human rights abuses, and the release of remaining political prisoners are hardly minor matters of quibbling over policy.

Tom Andrews, a former US Congressman for Maine and president of United to End Genocide, said this week that a recent visit to Kachin State convinced him that to lift sanctions would be a terrible mistake.

“A farmer described being apprehended when he, his wife and father-in-law were harvesting corn,” Andrews said. “They were forced to carry the corn to a military encampment but attempted to escape. His wife was caught and he has not seen her since.”

David Scott Mathieson, an expert on Burma for Human Rights Watch, echoes his views.

“The real danger of the by-elections is the overblown expectations many in the West have cast on them,” he said. “The hard work really does start afterward. Constitutional reform, legal reform, tackling systemic corruption, sustainable economic development, continued human rights challenges … will take many years.”

And so the logical question will remain whether Western nations have left themselves enough carrot to entice more reforms from the Naypyidaw administration.

Admittedly, noises emanating from US President Barack Obama’s administration suggest that it will not seek to lift the JADE (Junta’s Anti-Democratic Efforts) Act of 2008, or other legislative sanctions, in the short term. It will instead start by rescinding executive orders, with further progress on releasing political prisoners and resolving ethnic conflicts necessary before further concessions.

Although Obama may leave the JADE Act and other congressional sanctions for the time being, having the newly impoverished EU chomping on the bit may not give him much room to maneuver—especially if business lobbyists start upping the pressure leading up to November’s US presidential elections.

Of course, the crucial matter remains Burma’s 2015 general elections and whether the NLD will be permitted to form a government should they, as expected, win a overwhelming majority of the 75 percent of seats left in Parliament after the military quota.

The current concern is that the world community oversteps itself in a moment of heady optimism. This may leave no carrot to entice further reform, and no stick with which to threaten as the status quo has already been accepted as satisfactory terms for re-engagement.