Guest Column

US Should Mandate Change in Exchange for Sanctions Relief

By Kristine Gould, Larry Dohrs 12 September 2016

It is time for the United States to stop agonizing about economic sanctions against Burma.  However, the answer is not simply to remove all sanctions, but to keep targeted sanctions in place while providing a constructive pathway forward to later eliminate those remaining as Burma continues its process of democratic reform.

While there has been significant progress toward such reform—particularly since the November 2015 elections that brought the National League for Democracy into power—it is not complete, and significant challenges must be overcome before a genuine, federal, democratic Union—as well as true peace—can be established.

The Obama administration started to restructure sanctions against Burma in May 2012, when it relaxed a prohibition on new investment, relieved stringent visa bans and allowed exportation of most financial services. In general, three classes of sanctions remain:

  1. Export of financial services and provision of security services to individuals and organizations related to the Ministry of Defense, state and non-state armed groups, and businesses that are more than 50 percent owned by military organizations.
  1. Import of jadeite and rubies or their finished products.
  1. Investment and business dealings with individuals and organizations identified as Specially Designated Nationals and Blocked Persons, commonly referred to as the SDN list.

Armed conflict between Burma’s defense services and the country’s ethnic armed organizations continues.  Even during the recently convened 21st Century Panglong Conference, the government and the Burma Army refused to issue a temporary ceasefire, and battles raged on in Kachin and northern Shan states while stakeholders discussed peace in Naypyidaw.

Exploitation of natural resources continues, with both private individuals and elements of the armed forces profiting significantly from the unrestricted exportation of jade and other natural resources. The military-drafted 2008 Constitution gives the Burma Army significant political power, regardless of the 2015 election results and its clear message from voters that the armed forces should step aside from politics.

Perhaps most significantly, human rights violations by the armed forces and security services organizations continue unabated. Until these issues and challenges are resolved, the United States should keep targeted sanctions in place, as most recently reaffirmed by the US Congress in May 2016.

Just last month, a Union Solidarity and Development Party (USDP) parliamentarian proposed that Burma’s government should attempt to pressure the United States to lift sanctions. The USDP was formed in 2010 by elements of the former military junta, and it ruled the country under former President U Thein Sein from March 2011 to March 2016.

While the proposal was defeated by a vote of 219 to 151, its discussion by lawmakers indicates the importance and value of lifting sanctions. The key here is not to offer blanket relief but to establish a clear pathway forward to eliminate sanctions tied to reform objectives:

  1. As long as the Burma Army continues its attacks on ethnic armies and human rights violations, the United States should continue restricting export of defense services, including sales of defense articles and military-to-military assistance.

The armed forces receive more than 20 percent of the country’s annual budget, and control two enormous business conglomerates (the Myanmar Economic Corporation and the Union of Myanmar Economic Holdings), which are not accountable to the government.  While these assets continue to support attacks against the people and perpetuate gross human rights abuses, the United States should not provide military equipment.

The United States has already initiated limited high-level military-to-military contacts focusing on the role of the nation’s military forces under a democratic government, the terms of the Geneva Convention and the military’s role in protecting its citizens.

This should continue, and the United States should relax funding restrictions that interfere with scheduling and executing these events. However, participation in International Military Education and Training, Joint Chiefs of Staff exercise programs, and other developmental programs must hinge on ending the country’s armed conflict and developing a military force that is accountable to an elected civilian government.

  1. The Tom Lantos Block Burma JADE Act of 2008 must stay in place until the government cleans up its jadeite and ruby mining practices. An October 2015 report by the London-based NGO Global Witness titled “Jade: Myanmar’s Big State Secret” described a US$31 billion jade industry controlled by a network of military elites, drug lords and crony companies.

Entire mountains in Kachin State housing some of the world’s largest jade deposits have disappeared, with only minimal tax revenue and profits reaching Burma’s citizens.  Only after the government reforms this massive theft of natural resources should the United States consider the recension of the JADE Act.

  1. The United States should review and update the SDN list, as there are individuals and organizations on this list that have demonstrated that they are committed to the reform process. This may prove challenging to the Office of Foreign Assets Control, as there is no definitive and prescriptive legal guidance for removing individuals and organizations from the SDN list.

However, there are individuals and organizations that continue to profit from their past relationships with the military junta, access to confiscated property, the questionable “ownership” of natural resources, or the narcotics trade, which significantly hampers economic reform and equitable distribution of profits from the country’s natural resources.  It is up to the United States to clean up its own administrative system and determine who needs to remain on the SDN list.

Advanced reporting on State Counselor Daw Aung San Suu Kyi’s visit to the United States later this month already indicates that the United States is considering further easing or lifting of sanctions. Above all, the United States should ensure that it protects all of Burma’s citizens in the ongoing reform process by mandating change in exchange for sanctions relief. The United States should avoid a mere emotional gain associated with rewarding Daw Aung San Suu Kyi for incomplete reform.

Kristine Gould is the CEO of PACRIM Research Associates, which conducts research in Southeast Asia. Larry Dohrs is the Chairman of the Board of Directors for US Campaign for Burma.