Burma Sanctions Assessment

Burma Sanctions Regime: The Half-Full Glass and a Humanitarian Myth
A Preliminary Assessment of Political and Humanitarian Conditions under Sanctions
Burma Independence Advocates

London.
8 August 2011
Table of Contents
Introduction ............................................................................................................................ 5 Objectives ............................................................................................................................... 5 Procedure and Methodology .................................................................................................. 6 Political Developments .......................................................................................................... 7 A Brief Assessment of the Relationship between the BSPP and the International Community ......................................................................................................................... 7 Political Developments 1988 - 2011 .................................................................................. 9 Socio-Economic Developments, 1988 - 2011 ...................................................................... 19 Assessment of Human Security Areas.............................................................................. 24 Humanitarian Conditions under Military Dictatorship ..................................................... 33 Why Have the Sanctions Failed? ......................................................................................... 36 Conclusions and Recommendations..................................................................................... 40 Assessment Findings ........................................................................................................ 40 The Policy Options: .............................................................................................................. 41 RECOMMENDATIONS ..................................................................................................... 42 Conclusion............................................................................................................................ 45 Appendix I. Human Security in ASEAN Member Countries .............................................. 47 Appendix II. FDI Flows to Burma by Country of Origin (in US$ Million) ........................ 51 Researchers ....................................................................................................................... 53
Executive Summary
Political developments following the elections of November 2010 have not significantly improved the lives of the Burmese people. The Western-imposed sanctions regime is controversial and requires in depth reassessment. The authoritative and influential nature of reports by the United Nations makes the organisation the best-placed to undertake such an assessment. However, given this report's comprehensive consideration of all available facts, the overall findings of a UN-led report should not be substantially different from the findings of this report. This report has considered the political efficacy of sanctions over the past twenty-two years by judging the sanction developments against political progress towards the objectives of the sanctioning countries. The humanitarian consequences are considered adopting the 'human security' criteria outlined in the UN's Sanctions Assessment Handbook. International relations with Burma soured following the suppression of 1988's prodemocracy protests, resulting in the imposition of a continuing and substantial sanctions regime by Western nations, particularly the USA, the EU and Canada. Despite sanctions and diplomatic actions by Japan and the West, victories have been small and few in number. Attempts to extend and combine sanctions in 1996 were undermined by exploration contracts with Western oil producers Total and Unocal. Further sanctions following the suppression of 2007's Saffron Revolution have done little to encourage democratisation or prevent a government crackdown on political dissidents. Following the sham election of 2010, the military continues its rule in a superficial civilian guise. The Western sanctions most likely to have affected the general population of Burma were the 1997 ban on new investments and the 2003 Burma Freedom & Democracy Act on the part of the USA and the 2008 extension of the EU's trade embargo. In each of the above years, there was an increase in foreign investment into Burma. Foreign investment in the years preceding the sanctions remained lower than at any time since their implementation. Despite between 40,000 and 60,000 job losses in the clothing industry as a result of the 2003 trade sanctions, Burma's unemployment rate fell that year. Despite punitive trade measures, a clear downwards trend occurred in the unemployment rate between 1992 and 2008. Despite the EU extending its trade sanctions in 2008, the year reported record exports, part of an exceptional upwards trend since 1989. There is little evidence to suggest that the Western trade embargoes have led to an economic decline in Burma.
Key health indicators show continuing improvements in the overall health of the populace throughout the period of Western sanctions. Substantial improvements have also occurred in nourishment, improvements in drinking water and primary education. Access to Internet services has also shown a slight increase in this period. The condition of Burmas environment has worsened over the past two decades. Deforestation is occurring at an alarming rate, carbon emissions have tripled between 1990 and 2008 and there have been strong fluctuations in the amount of ozonedepleting CFCs in use. Western sanctions have failed to achieve their objectives as they are not pursued multilaterally, cooperatively or with sufficient timing. Loopholes in the sanctions have also harmed their political effectiveness while Asian nations continue to trade substantially with the regime. Since the trade sanctions have come into effect, the ruling junta has spent nearly a quarter of its revenue on the armed forces, with very small sums put towards educational or health infrastructure. In this year's budget, the two sectors combined account for around 5% of government expenditure. The approach of ASEAN members and Japan to engage Burma with economic incentives enriches the regime more than the Burmese people. As the Burmese middle-classes currently have a vested interest in the regime, economic engagement is unlikely to have a democratising effect in the near future. Instead, the current policy of principled engagement backed with political and economic pressure should be made more effective than at present. To close loopholes in the sanctions, all existing investments should be outlawed and citizens of the sender states should not be allowed to pay taxes to, engage in economic-financial transactions with or enter into contracts with any Burmese individual. The EU must implement a comprehensive ban on all investments and imports from Burma. Many who benefit from the regime are not currently subject to financial or visa restrictions and are able to travel to Western nations and benefit from their services. These restrictions should be extended to as many whom benefit from the regime as can be identified. Given the difficulty in enforcing trade sanctions when other nations are willing to fill the resulting trade vacuum, consideration should be given to engaging secondary sanctions against certain nations who trade with Burma. The reduce the threat to both the people of Burma and the entire region from the ongoing civil war, the major refugee crisis and the junta's nuclear ambitions, the UN should implement a comprehensive arms embargo. This would also benefit the Burmese people as it would significantly reduce the proportion of national income spent on defence.
The above recommendations are just some of the options available to the sender states. Other non-violent measures should also be considered.
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Introduction
Burma gained independence from the United Kingdom in 1948 and the country enjoyed civilian rule until a coup dtat in 1962 which led to the establishment of military rule under the leadership of General Ne Win. The Burma Socialist Programme Party (BSPP) ruled Burma until 1988 when a popular uprising brought the dictatorship to its knees. During this period, Burma became increasingly insular, and despite inflicting desperate poverty and severe human rights abuses upon its people, the military governments relationship with the international community remained largely intact. The BSPP continued to receive aid from a number of countries and international institutions such as the IMF and the World Bank, particularly towards the late 1970s. The 1988 uprising, brought about by continued economic difficulty and dissatisfaction with the regime, failed to restore civilian rule within Burma. The mass protests across the country were quelled brutally and the State Law and Order Restoration Council (SLORC), commonly known as the military junta, was established with General Saw Maung at the helm. While an election did take place in 1990, its victors, the National League for Democracy (NLD) and their leader Daw Aung San Suu Kyi, were denied their rightful place as Burmas government-elect. The events of 1988 proved to be an important turning point in Burmas relationship with the international community. The political situation was firmly in the spotlight and international action geared towards demonstrating its disapproval with the regime. Even Japan, a country firmly allied to Ne Wins government, temporarily suspended its financial aid to Burma. Western governments, particularly the US, Canada and the EU began to introduce sanctions on Burma with a view towards increasing pressure on the regime. The US-led sanctions against Burma have been deeply controversial for the apparent humanitarian consequences and failure to induce significant changes in the country. The debate over Burmas sanctions regime regained its momentum following the internationally-condemned elections in November 2010 and the release of the imprisoned opposition leader Daw Aung San Suu Kyi. Furthermore, the desultory progress of transition to civilian rule has intensified the debate over whether the Western-imposed sanctions should be lifted. Although it has been crystal clear that the changes in the name of the junta and donning of civilian clothes by the governing generals do not constitute genuine political developments, the applications of sanctions need to be reviewed and reassessed to evaluate the extent to which these measures have been effective in their objectives and whether, in applying them, the international community has indirectly heightened the affliction of the Burmese people.
Objectives
The National League for Democracy (NLD) published a press release on sanctions in February 2011 and called for an analysis by a team of widely-respected professionals on the effects of sanctions and for the sanctioning countries to reach an agreement on when, how and under what circumstances sanctions might be modified in the interests of democracy, human rights and a healthy economic environment. This is an important and excellent proposal by
the NLD. However, it is crucial for the welfare of the people of Burma that such an assessment is undertaken as urgently as possible. Among the many institutions, panels of experts and independent studies on sanction regimes, the United Nations is widely considered to produce the most authoritative reviews and consequently is able to shape the policy of sanctioning countries. It has traditionally and regularly reviewed both its own and external sanctions. Therefore, the United Nations will be an ideal body to conduct such an assessment in the case of Burma. However, the nature of sanctions imposed require annual review to consider any progress within the country and the lifting of these measures are constantly advocated by both the regime and by anti-sanctions groups, which include some political parties within the targeted country itself, a number of experts and organisations both within the country and elsewhere, and some members of sanctioning countries. Therefore, an assessment of the political and humanitarian conditions under the sanctions is urgently needed. This assessment is undertaken to provide both a policy framework for the sanctioning countries and a better understanding of the political and socioeconomic impacts of the Western-sanctions before the formal assessment of the United Nations or another respectable and independent organisation materialises. This assessment will also help facilitate any assessment undertaken by either the UN or any other institution in a number ways. Although it is named as a preliminary assessment, the political impacts and humanitarian impacts/conditions are assessed as comprehensively as possible using the existing, available data. Hence, there will not be a significant difference between its major findings and any further assessment undertaken by either the United Nations or an independent team of experts. It is, therefore, strongly suggested that the sanctioning authorities use this assessment for their future policy initiatives concerning Burma.
Procedure and Methodology

The political developments and their humanitarian consequences under the sanctions over the past two decades and before are assessed through two different methods: the political impacts of the sanctions are assessed through historical political analysis; while the possible humanitarian implications of the sanctions are assessed based on the concept of human security presented in the UNs Sanctions Assessment Handbook. Whether the objectives of the sender states, for example the progress of fundamental rights and freedoms, reconciliation between the opposition - including ethnic minorities - and the ruling junta, and a transition to civilian rule, are assessed by observing the political events following each coercive measures imposed by the Western nations over the past twenty-two years. The humanitarian implications of the sanctions are assessed upon the methodology presented in the United Nations handbook. The handbooks methodology is founded upon the concept of human security and certain factors of its core cluster, namely health, food and nutrition, water and sanitation and education, and the systemic cluster, which includes governance, economic status, the physical environment and the demography of Burma.
Political Developments
A Brief Assessment of the Relationship between the BSPP and the International Community
In order to fully assess the political and humanitarian impact of sanctions upon Burma between 1988 and the present day, it is important to first gain an overview of the relationship of the Burma Socialist Programme Partys (BSPP) regime with the international community prior this period. Following independence from the UK in 1948, Burma became a member of the United Nations and was a founding member of the General Agreement on Tariffs and Trade (GATT). Furthermore, in 1952 Burma successfully joined both the International Monetary Fund (IMF) and the World Bank. Its successful inclusion in global institutions continued with its joining of the International Financial Corporation (IFC) in 1956, the International Development Association (IDA) in 1962, and the Asian Development Bank (ADB) in 1973. Of further importance, bilateral relations with other nations, such as China, Japan and the USA were established post-independence. Despite having temporarily ceased economic assistance to Burma in 1953, in part due to frictions over the Chinese KMT soldiers incursion into Burmas territory, relations with the USA remained relatively stable until the crackdown following 1988s protests. Burma was one of the original beneficiaries of the United States Generalised System of Preference (GSP) programme in 1976, was granted Most Favoured Nation status and was supported by the USA in the provision of its developmental assistance by international financial institutions. Moreover, in September 1980, the USA re-established direct economic co-operation and proceeded to sign a new aid package, albeit of modest proportions.1 Further economic assistance was provided before the uprising in 1988 when the USA donated $7 million in development assistance, $5 million for an anti-narcotics program and $260,000 worth of training for the Burmese military. 2 It is clear from the evidence that in the period between gaining independence and the uprising that ended the rule of the BSPP, the USA acted as a key financial support mechanism for Burma. Similarly, China, Japan, West Germany and a whole host of others countries provided important financial assistance to the BSPP regime. China announced its support for the BSPP regime in 1962 and became Burmas second largest aid donor (after the USA) in 1965.3 Although aid was temporarily cut in 1967, following strained relations with the ruling junta, it resumed again in 1971 when relations between the two saw a marked improvement.4 On 12 July 1979, the Chinese government signed a Burmese aid programme in Beijing that consisted of eight projects. This included the construction of the Rangoon-Syriam Bridge, 40,000 spindle yarn-making machines, three rice mills, the supply of water to Moulmein city, and a contribution of 3 million Renminbi-Yuan towards tools and machinery.5
1 2
Denis D. Gray, Burma, Asias hermit, stays on a neutral course, The Lewiston Journal (February 15 1984) House Exhorts Burma on Democracy, The Washington Post (September 8 1988) 3 Robert Karr McKabe, Ne Wins secret Burma; When china Spits we Swim, Burmese are waiting for a leak in the boat (February 27 1966) 4 Ibid 5 Chronology of Chinese Burmese Relations, The Irrawady (January 1 2003)
Japan, meanwhile, has been one of Burmas most consistent financial contributors since the 1950s. When China temporarily withdrew aid in 1967, Japans response was to increase its aid contribution in order to assist with the completion of the projects initiated by the Peking government.6 Furthermore, in 1971 Japan agreed to provide a further $71 million in new economic aid while in 1976 Japan was the biggest single contributor to the Official Development Assistance aid (ODA) provided through the Burma Aid Group. By 1988, this had totalled some $1.42 billion.7 Indeed, Japanese funds provided more than two-thirds of all bilateral aid disbursements to the country. These came in the form of project loans, commodity loans, grant aid, technical assistance and food aid. Between the 1980 and 1988, Burma consistently ranked among Tokyos top ten biggest aid recipients with single year disbursements reaching $244.1 million in 1986 and $259 million in 1988 (not inclusive of payments made to institutions such as the Asia Development Banks).8 The considerable amount of data available to illustrate the extent to which Japan provided assistance to Burma simply lends colour to the notion that the BSPP, throughout its 26 year reign, had a decisive ally. Even countries such as West Germany, the USSR and New Zealand played their part in ensuring economic aid was provided to the Burmese government. As with Japan, West Germany and the USSR increased its contributions following Chinas withdrawal of aid in 19679, while in the 1970s New Zealand provided between $150,000 and $200,000 worth of aid to Burma each year. Most of this aid was channelled through the Colombo Plan and most supported trade training schools (53 Burmese students received technical training in New Zealand under the Plan during the period 1972-76.)10 Furthermore, this support was reinforced by a number of multinational institutions. In 1952, Burma became the 68th Member of the International Development Association (IDA) and was in receipt of funding from the World Bank between 1976 and 1987. In addition, Burma was one of the Asia Development Banks largest borrowers in 1980.11 It is therefore clear that in spite of being a military regime with no constitutional legitimacy, both Western and Eastern governments and institutions were not at this stage prepared to apply sanctions against the BSPP regime. Instead, they provided vital economic support to the government, particularly during the latter decade of its rule. This is not to say that relations between the BSPP regime and the international community followed a completely smooth path during the period of its existence. China cut its aid to Burma in 1967 and, although this was a temporary move, its application is no doubt significant as it emphasised that any dissatisfaction would not be tolerated. Furthermore, while aid was restored in 1970, the Chinese government continued to support antigovernment rebels, which clearly implies that friendly relations were far from being restored. Similarly, the US provision of economic aid did not signify that relations were strong. Indeed the US government reacted to the coup of 1962 by ending direct economic co-operation. In
6 7
Peter Boog, Burma Looks Westward After Rift with China, The Blade, Toledo (December 13 1967) Zaw OO, Use ODA Carrot to Reform Burma, The Japan Times (March 16 1998) 8 Donald M. Seekins Japans Burma Lovers and the Military Regime Japan Policy Research Institute, Working Paper no.60 (September 1999) 9 Peter Boog, Burma Looks Westward After Rift with China 10 Guy Wilson-Roberts Beyond the Rhetoric: New Zealand and Myanmar in Anthony L. Smith (Ed.), Southeast Asia and New Zealand; a History of regional and bilateral relations (Institute of Southeast Asian Studies 2005) p.269 11 Asia Development Bank Worries About Aid Cuts, Sarasota Herald-Tribune (April 30 1981)
February 1965, the US Congress, suspicious of Burmas links with Communist China and its intent to subvert the Thai government, commenced an investigation of its aid provision to Burma.12 Additionally, the US terminated an annual aid programme of $27 million in June 1971, signifying an important turning point in its relationship with the BSPP regime. A number of international institutions similarly marked their disapproval with the BSPP regime by prohibiting lending to Burma. The World Banks approved no new lending to Burma from 1987 when the BSPP regime was still firmly in power. Similarly, while Burma was involved in the Asian Development Banks Program of Economic Cooperation, the ADB stopped providing loans and grants to the country in 1986. It is also important to note that Ne Wins regime, particularly during the former years of its rule, purposely turned away international investment and trade and instead attempted to adopt a policy of self-reliance. In 1962, the military government ordered the end of aid from private companies and foreign organisations, such as the Ford Foundation. This included an end to university scholarships in the belief that they would become a corrupting influence on Burmese social and political culture.13 In 1967, the regime began to soften its stance on foreign investment allowing negotiations to take place with Japanese companies. It was not until early 1980, however, that Burma began to allow free enterprises and to actively seek foreign aid.14 It is clear from that the relationship of the international community with the BSPP regime was markedly different to that of its current relationship with the government of Than Shwe. While relations were often tense, particularly with countries such as the USA and China, and there existed clear signs of international disapproval with the regime, problems with the international community were to a large extent the result of a conscious policy undertaken by the regime to isolate itself from the rest of the world. Despite the better relationship with the world than that of Than Shwe regime, and despite the substantial flows of aid coming from regional powers and the Western democracies, the BSPP regime led the country to be one of the poorest countries in the world, deciding the fate of its citizens through particularly poor governance.
Political Developments 1988 - 2011
In the immediate aftermath of the juntas repression of the peaceful demonstrations in August and September 1988, the USA introduced punitive measures, suspending its arms sales and assistance on 23 September 1988. Canada also imposed arms export and non-humanitarian exports to Burma soon after the regime came to power in 1988. Its Official Development Assistance (ODA) to Burma has been suspended since that time. In April 1989, President George Bush withdrew all GSP (Generalized System of Preferences) benefits as a reaction to its disapproval with the new State Law and Order Restoration Council (SLORC) regime, while in August the following year, Congress passed the Customs and Trade Act which provided the President with the necessary powers to impose economic sanctions as he deemed appropriate. In the same year, the EU imposed an arms embargo against Burma and,
12 13
Robert S. Allen and Paul Scott, House to Probe Aid to Burma, Sarasota Herald-Tribune (February 21, 1965) Role of Foreign Aid in U.S Leadership, St. Petersburg Times (March 20 1963) 14 President of Burma is Replaces, Bangor Daily News (November 10 1981)
in 1991, suspended its defence cooperation with the regime, adopting a policy of providing only strictly humanitarian assistance. The measures described above are the first known actions to be taken by international governments in the hope that they would create a catalyst for change in Burma. Washington resumed its tactics of coercion in August 1990 when Congress passed the Customs and Trade Act. As a response to these measures, the Burmese junta immediately rejected the newly appointed US ambassador to Burma, Frederick Vreeland.15 The measures moreover failed to prevent or even reduce the pace of the regimes oppression against dissidents. Opposition leader Daw Aung San Suu Kyi, U Tin U and other senior NLD party members were arrested in July 1989 in spite of US action against the regime. Although the junta held relatively free and fair multi-party election on 27th May 1990, the regime broke its promise to transfer power to the NLD victors on the grounds that a new constitution required drafting.16 The SLORC continued its repression of NLD members and activists, abolished the 1974 constitution and tightened its control across the country.17 Marshall Law remained and resulted in a complete extinction of political freedom in Burma. The regimes crackdowns on the first anniversary of the 1988 uprising were significant as Buddhist monks in the second largest city, Mandalay, were severely suppressed. From late 1989 to early 1990, the junta forced the relocation of 500,000 people to the outskirts of Rangoon. At the same time, military operations were increased across the Thai-Burma border in order to clear the ethnic rebels and pro-democracy freedom fighters campaigning there. Relations between the USA, the EU and Burma became increasingly fraught from 1988 and it became clear that stronger action was needed against the regime. These initial measures, however, did not bring about any significant political developments. However, from 1994, US sanctions became more consistent and, by 2003, tougher in nature. The European Union also strengthened its sanctions through its Common Position in 1996, adopting such measures as an arms embargo, restrictions to travel and trade. Burma Sanctions Regime (1994-2004)
Country United States Measures Burma defined as an International Outlaw State. This mandated that voluntary U.S. funding for any UN agency would be automatically reduced if programs were conducted in Burma. Congress passed the Foreign Relations Authorization Act and withheld a portion of U.S. contributions to international organizations with programs for Burma, including the United Nations Development Program (UNDP) Burma Freedom and Democracy Act introduced by Senator Mitch McConnell Burma Sanctions Bill (H.R. 2892) introduced by Representative Dana Rohrabacher Month/Year April 1994 Type of Measure Assistance
April 1994
Assistance
December 1995 January 1996
Clinton signed FY1997 Foreign Operations Appropriations Bill. However, relief and anti-narcotics aid still continue.
September 1996
Trade, Assistance and Travel Additional measures to BFDA; investigation of Burmas labour practices, narcotics and environmental policies Assistance, Trade
15 16
USCB: Policy and advocacy, Labour and employment Human Rights Watch Report (1990) 17 Ibid
10
Country United States
European Union
United States United Kingdom Canada
Measures Congress approved new sanctions on Burma in section 570 of the Omnibus Consolidated Appropriations Act, 1997 (P.L. 104-208). This includes a cessation of all nonhumanitarian assistance, a ban on the issuance of entry visas for Burmese government officials, and instructions for US representatives for international financial institutions to vote against loans or funding to Burma. In addition, the law required the President to prohibit new investments in Burma by US nationals. Clinton prohibited Burmese government leaders from entering the US EU announced it would impose visa ban on officials (The EU Common Position on Burma/Myanmar makes EU policy official for the first time this also bans high-level governmental visits) Foreign ministers vote to revoke Burmas GSP benefits Clinton issued Executive Order to ban new investments in Burma
Month/Year September 1996
Type of Measure Assistance, Trade and Travel
October 1996 October 1996
Travel Travel
March 1997 May 1997 June 1997 July 1997
Trade Trade Trade Trade
UK suspended trade-promoting activities

Canada removed Burmas GSP benefits on agricultural and industrial produce. It also places Burma on its Area Control List, requiring export permits for all exports to Burma Extended six month bans on visa/non-humanitarian aids/military equipments Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Iceland, Latvia, Lithuania, Norway, Romania, Slovakia and Slovenia declared that their national policies would conform to the EU Common Position on Burma Extended visa ban as well as export ban to include items that could be used for repression. Also freezes foreign funds of specific individuals 'Everything But Arms' initiative launched but Burma declared not eligible Senator Tom Harkin introduced legislation banning all Burmese imports Burma excluded from Least Developed Country (LDC) Market Access initiative, which eliminates most duties and quotas on imports from the other 48 LDCs. Reasserts the visa ban on senior regime officials. Places travel restrictions on SPDC diplomats in Canada travelling outside Ottawa. Renewed existing sanctions for another year Representative Lantos introduced bill banning all Burmese imports Bush exptended visa ban to USDA members Senate passed Burma Freedom and Democracy Act Expanded list of targeted individuals Expanded travel sanctions Bush signed Burma Freedom and Democracy Act Treasury Department expressed concern over Burmese money laundering Foreign ministers extended sanctions Bush signed legislation extending the ban on Burmese imports for another year Expanded travel ban
European Union
October 1997 November 1997
Assistance, Travel Assistance, Travel
October 1998
Travel and Financial
April 2000 March 2001 Jan/Jul 2003
Trade Trade Trade and Travel
United States Canada
European Union United States
April 2003 June 2003 June 2003 June 2003 June 2003 June 2003 July 2003 November 2003 April 2004 July 2004 October 2004
Travel, Assistance Trade Travel Trade, Assistance and Travel Travel Travel Assistance, Trade and Travel
European Union United States
European Union United States European Union
Assistance, Travel Trade, Assistance and Travel Travel
Source: Office of Foreign Assets Control (US), EU, IIE, DFAIT (Canada), DFAT (Australia), Global Affairs 11
Between 1994 and 1997, the US failed to impose any new sanctions on Burma, opting only to annually renew the existing measures in place. During this period the EU and countries such as the UK and Canada began to increase their measures with the latter taking action to remove Burmas GSP benefits on its agricultural and industrial produce. In 1997, Canada also placed Burma on its Area Control List, requiring permits for all exports to Burma. Actions such as these were intended to apply pressure on the regime by limiting foreign trade incentives. In 2003, the USA increased its own pressure with the establishment of the Burma Freedom and Democracy Act. The objective of the Act was to sanction the ruling Burmese military junta, to strengthen Burmas democratic forces and support and recognise the National League of Democracy as the legitimate representative of the Burmese people.18 This was significant development in that it both strengthened existing sanctions and introduced new ones. The new measures included a ban against all trade which supported the military regime, a freeze on the assets of the junta in the US, an intention to oppose and vote against the extension of financial loans from financial institutions, and an expansion of the existing visa ban. Although it is clear that pressure from the international community was heightened during this period, it is vital to consider the response of the regime to ascertain whether these actions had brought about any significant political developments. According to the Freedom House Index of Freedom, Burma has consistently received a rating of 7 (the worst) for political freedom and civil liberties, and has been recognised as a Not Free state since 1988. This demonstrates the extent to which there have been little or no significant political or civil developments in over twenty years. Daw Aung San Suu Kyis success in attaining the Nobel Peace Prize in October 1991 and the juntas announcement of the release of nearly 2,000 political prisoners did inspire a glimmer of hope that reforms would be made. Such hopes were proven premature as the military junta convened a National Convention for the drafting of a Constitution in 199319 and began arresting top NLD members and sentencing them to up to twenty years in prison for distributing anti-SLORC leaflets.20 It appears that the US definition of Burma as an International Outlaw State did nothing to quell the actions of the regime as it continued to arrest dissidents and to hand down long prison sentences. The USA and the EU began to synchronise the application of their sanctions by 1996, thus providing a stronger international force against the regime. On 3 October 1996, President Clinton banned the regimes top leaders from entering the USA, a move followed by the EU just three weeks later. Furthermore, between March and October 1997, the USA, the EU, the UK and Canada imposed a series of measures against the junta. A key reason for the intensification of sanctions during the mid-1990s was the exacerbation of events within Burma. In 1995, for example, the headquarter of the ethnic Karen rebel group, Manerplaw, fell under the control of the junta troops following a series of offensive military operations.21 It was such provocative behaviour as this that encouraged Western-governments to take coercive measures against the regime. The limitations of the effectiveness of such measures can be demonstrated by Japans handling of the regime. In July 1995, opposition leader Daw Aung San Suu Kyi was released
18
Bill to enact the Burma Freedom and Democracy Act of 2003, 108 Congress, 1 st Session H.R 2330 (June 4 2003) 19 Human Rights Watch: World report 1994 (Burma) 20 Ibid 21 Mary P. Callahan (Feb, 1996) Burma in 1995: Looking beyond the release of Aung San Suu Kyi
12
from house arrest signalling an important development in Burmese politics. There were claims that the Japanese government played a crucial role in the release of the person affectionately known in Burma as the Lady. Prior to her release, a number of Japanese companies visited Burma to discuss various projects in the pipeline.22 It has been suggested that the Japanese government used the provision of these business opportunities to press for Daw Aung San Suu Kyis release and it could be argued that this tactic was more effective in progressing change than was the imposition of sanctions. However, at this point the measures imposed by Western governments were clearly not tough enough to have any significant impact. The impact of Japans carrot approach did not last long either, as the regime later arrested many others of its political opponents. The United States and other western countries increased pressure on the regime following the release of Daw Aung San Suu Kyi. While there is a lot to be said for the Japanese method of change by tactical persuasion, it was difficult for Western governments to offer incentives when the regime had continued to behave so callously. The EUs adoption of the Common Position on 28 October 1996 was an important measure in both reaffirming existing sanctions and extending them by measures such as the imposition of visa bans on the junta.23 According to research conducted by the Peterson Institute of International Economics for the period 1989-2006, sanctions against the regime failed to make a discernible difference in 1996. Perversely, oppression against dissidents, particularly NLD members, increased during this period. When the USA imposed visa bans on the juntas officials, the junta responded by banning US officials from entering the country, highlighting the juntas defiance against US measures. Furthermore, in spite of measures taken in 1996 by the international community, the military junta continued to embark on its programme of harsh oppression against dissidents. In late May, more than 200 NLD members were arrested for protesting to mark the 6 year anniversary of their stolen election victory24; in September of the same year, yet more arrests brought the total number of detainees to almost 600.25 As a last measure in November 1996, Daw Aung San Suu Kyi and a number of the NLDs senior members were attacked on the campaign trail by thugs allegedly in the pay of the junta.26 It was brutal action such as this that caused Daw Aung San Suu Kyi to press for international sanctions against the regime. This included calls for a tourism boycott, in the belief that most of the profit from the tourism industry lined the pockets of the junta rather than the citizens of Burma.27 Critics of this boycott have pointed out that while it cannot be denied that the junta has benefited financially from the tourism industry, the impact of the boycott would be felt the hardest by small businesses and those working in the tourism industry, such as hotel staff and owners.28 Nonetheless, it remains clear that without drastic action such as this, the junta would continue to receive financial gain thus making it even harder to disable the regime and force political change in Burma. The very fact that 1996 was defined by the junta as a Visit Myanmar Year serves to reinforce the importance of tourism to the financial interests of the regime. The regime has also infiltrated the tourism industry by sending its intelligence officers to the tourist-guide training courses as well as running a few tourism companies in Rangoon.
22 23
Burma Net News (Issue #313) Burma 1995: The Year in Review SIPRI (March, 2004): EU Common Position on Burma 24 Peterson Institute for International Economics: Case studies in sanctions and terrorism: US/EU/Japan V. Burma 25 Ibid 26 Burma Library: Myanmar opposition leader Suu Kyi 27 Tom Mintier (Nov 16, 1996): Protests cost Burma tourist dollars (CNN) 28 Burma Campaign UK (March, 2004) The EU and Burma: The case for targeted sanctions
13
Despite pleas to the international community by Daw Aung San Suu Kyi and others, there has been a clear failure to impose a uniform method of dealing with the regime. Asian governments, institutions and businesses have continually undermined the action undertaken by the USA, the EU and other Western countries. In October 1996 for example, an oil consortium in negotiation with the Burmese junta signed a memorandum resulting in a deal to supply oil to Thailand.29 Diplomatically, Burma was initially granted observer status by ASEAN in July 1996.30 It is clear from events within Burma in that year that, despite the imposition of Western-sanctions, the military regime continued to both oppress and to deny the basic rights of its people. An important reason for the futility of these measures was that other, particularly Asian, governments and institutions continued to undercut the impact of such measures by offering trade and business incentives, thus helping to stabilise the regime and ensure its long-term survival. In January 1997, top world brands such as Heineken, Carlsberg, Apple, Walt Disney, and Pepsi Co announced their complete withdrawal from Burma signalling an important progression in the international movement against the regime.31 This action coincided with increased restrictions placed upon Daw Aung San Suu Kyi and the closure of universities following the student protests of December 1996.32 However, in a move that undermined the importance of this global measure, oil companies Unocal and Total signed new offshore oil exploration contracts with the junta in late January. 33 As with the world leaders of politics in 1996, world leaders in business have disparate policies to deal with the regime which therefore made it harder for boycotts and proscriptions to have anything more than a negligible effect on the actions of the junta. In May 1997, President Clinton tried to strengthen the impact of these measures by issuing an executive order banning any new investments in Burma.34 Existing firms with investments in Burma were allowed to continue their business operations, however, providing companies such as Unocal and Total a loophole with which to progress their deals. This was particularly problematic as both the oil and gas sectors created such large revenues for the military regime that the effects of the brand withdrawal largely went unnoticed by those in power, who took further measures to strengthen their grasp on power and continued to impose harsh restrictions, untouched by the adverse actions of the international community. Such measures included the detaining of family members of Daw Aung San Suu Kyi in August 1997 in order to mount pressure on the NLD leader.35 In late 1997, the junta moved towards fortifying their regime by forming a new ruling apparatus named the State Peace and Development Council (SPDC).36 Both the political situation within Burma and international action against it remained relatively quiet over the next two years. However, the new millennium brought with it a new set of problems. In August 2000, a standoff occurred between Daw Aung San Suu Kyi and troops of the regime during a campaign trip, which resulted in the harassment of a number of NLD members. Furthermore on 30 May 2003, Daw Aung San Suu Kyis motorcade was
29 30
Ibid The New York Times: Burmese win Observer Status in Southeast Asian Group 31 Ibid 32 Peterson Institute for International Economics: Case studies in sanctions and terrorism: US/EU/Japan V. Burma 33 Ibid 34 Ibid 35 Ibid 36 Ibid
14
attacked by the regimes militia and a number of senior NLD members, including the Lady herself, were detained on the grounds of protective custody.37 Hundreds of opposition supporters were killed in this incident which became known both nationally and internationally as the Depayin massacre. In a further act of defiance against the international demands, the NLD Head Office and several others across the country were forced to close in June 2003. As a result of these actions, the US established the Burma Freedom and Democracy Act (BFDA) which banned all imports from Burma. The EU also strengthened its existing measures by imposing new and additional sanctions against the regime. Canada which excluded Burma from its Least Developed Country (LDC) market access initiative in January 2003 imposed visa restrictions against senior members of the regime in July of the same year. It would be unfair to suggest that positive political developments were completely absent during this period, however; rather, some would argue that important progress was made in the early years of the new millennium. In July 2001, there occurred some dialogue between the junta and Daw Aung San Suu Kyi,38 resulting in her release in May 2002 after 19 months of house arrest. To add to this significant development, hundreds of other political prisoners were released just two months later. The regime went so far as to extend an olive branch to the USA by inviting officials to discuss Burmas political deadlock in February 2003.39 Washington however, remained wary, warning that more sanctions would be imposed should no further progress be seen. Critics of this move have argued that, had the USA engaged in dialogue with the Burmese military leaders, important developments could have ensued. By remaining hostile to the idea, the US government missed its crucial bargaining position. Nevertheless, Washington acted with the best of intentions and there is no guarantee that a positive outcome would have resulted from further dialogue. This view seems to have been shared by Daw Aung San Suu Kyi who despite her recent release, advised the international community to maintain pressure on the regime as it lacked the will for genuine reconciliation. It could be further argued that, by raising the pressure on the regime through the establishment of the BFDA, the US had encouraged dramatic progress in Burmese politics. In August 2003, the New Prime minister, General Khin Nyunt announced a roadmap to democracy and the enactment of a series of political reforms. Though flawed in many ways, this was perhaps the most important development to have occurred since the regime gained power in 1988 and a large reason for this development was the application of tough measures by the international community. Though Prime Minister Khin Nyunt was ousted in October 2004, several political prisoners including student leader Min Ko Naing, were released in November. Furthermore, according to a report by Human Rights Watch, the junta released 249 political prisoners in July 2005. Though welcomed by foreign observers at the time, these acts appear to be minimal when compared with the continued oppression against dissidents.40 One of the worse acts involved simultaneous bomb blasts in the Burmese capital, Rangoon, which resulted in the loss of dozens of lives in May 2005.41 Also in 2005, the junta initiated hostile action against ethnic groups in Burma. As well as arresting and imposing a sentence of more than fifty years on
37 38
Ibid Ibid 39 Ibid 40 HRW (Report, 2006) 41 Ibid
15
key Shan activists, the military government launched a sharp military offensive against ethnic Karens.42 It has been speculated that the fear of foreign invasion motivated the juntas move to its new administrative capital, Naypyidaw, about 300 km north of Rangoon.43 If such speculation is deemed to be accurate, it would imply that the regime lives in fear of Western action more than is clearly apparent. This raises the question, would tougher, more direct action from the Western community ultimately disable the regime? According to the same report produced by Human Rights Watch, no progress had been made on both democratisation and human rights throughout 2006.44 Student leaders Min Ko Naing, Ko Ko Gyi and Htay Kywe were arrested in November for issuing a statement in support of the United Nations Security Council debate on Burma.45 Furthermore, intense military operations in the southern Karen state claimed the lives of almost 30,000 innocent civilians and were responsible for the destruction of more than 300 villages.46 The situation in Burma finally made it on to the agenda of the United Nations Security Council briefings in September 2006. However UNSC action was vetoed by both China and Russia.47 The importance of uniform action among the international community is particularly highlighted by this episode as had UNSC action been fully endorsed, there is little doubt that positive developments would have ensued. 2007 was again a particularly historic year for Burma as it resulted in the biggest public protests since the demonstrations of 1988. Following rocketing fuel prices in August, demonstrations became larger and were countered with brutal attacks by the junta.48 Peaceful marches were initially organised by 88 generation students and eventually Buddhist monks participated in the event that became known as the Saffron Revolution.49 The demonstrations spread to other towns and cities across the country. However, government crackdowns stepped up and, following midnight raids at several monasteries, up to three thousands monks and others were arrested.50 The opposition claimed that hundreds of people were killed, a figure largely undermined by the junta who claimed that only fifteen people lost their lives.51 Subsequent to the brutal clampdown the USA, the EU, Australia and Canada imposed punitive measures which continued throughout 2008. The year 2008 was the most unfortunate year for Burma of the past few decades as the Cyclone Nargis devastated the Irrawaddy delta on 2 May 2008, claiming more than 150,000 lives and affecting another 2.4 million people. The junta, in fear of political conditions attached to international relief measures, initially blocked the Western assistance to emergency relief efforts. As a comprehensive measure by the Burmese authorities failed to emerge in response to the disaster, private individuals and local NGOs stepped in to aid those in need of desperate relief measures. As the delayed relief to the storm victims most likely caused an untold number of preventable deaths, the ASEAN ultimately intervened to resolve
42
Ibid HRW (Report 2007): Burma: Events of 2006 44 Ibid 45 Ibid 46 Ibid 47 Ibid 48 HRW (World Report 2008) Burma: Events of 2007 49 Ibid 50 Ibid 51 Ibid
43
16
the political deadlock between the regime and international actors that was severely retarding relief measures. Despite substantial devastations in Irrawaddy delta, the regime continued to undertake its constitutional referendum on the new constitution which sought to legitimise the militarys dominant role in the politics of the country. The new constitution was approved through a referendum which was widely alleged to have been manipulated on 10 May 2008. Following the disaster in the Irrawaddy delta, many social and political activists who attempted to deliver aid to affected areas were arrested and sentenced. The junta continued suppressing the political opponents and the numbers of political prisoners reached more than 2,000 in 2009, double the number for 2007. The opposition leader, Daw Aung San Suu Kyi was also sentenced an additional eighteen months of house arrest in August following the unendorsed trespassing of an American citizen to her residential compound. While the human rights abuses escalated in the country and the progress towards reconciliation between the opposition and the regime substantially faltered, the Obama Administration introduced the dual-track policy of engaging the regime while keeping the sanctions in place. Although the US has shifted its policy on Burma, the regime continued its repression of dissidents while steadfastly progressing towards legitimised military rule as outlined in the seven-step roadmap formulated in 2003. The first national elections in two decades were held in November 2010 with the regimes proxy party, the Union Solidarity and Development Party (USDP), winning the majority votes. The election was boycotted by the NLD victors of the 1990 election and the result was denounced as a sham by much of the international community. Despite strong opposition from both inside and outside the country, parliament was convened on 31 January 2011 and the former prime minister of the ruling junta, Lt. General Thein Sein, who by this time had retired to civilian life, was elected as the President. Subsequently, the State Peace and Development Council, the ruling junta itself, was disbanded and its head, General Than Shwe, retired from his position as the commander-in-chief. The events of 2010 and 2011 falsely depict a significant change in Burmese politics unless closely scrutinised, with the military junta seemingly dissolved and, more importantly, General Than Shwe retired. However, the USDP regime has continued to incarcerate over 2,000 political prisoners while the proposed social, economic and political reforms motioned by the ethnic and opposition parties in the parliament have been rejected. Not only are the parliamentary procedures undemocratic, but the basic rights and freedoms entitle to the people continue to be infringed upon, despite claim to the contrary by the superficially civilian USDP regime. Today, the military continue ruling the country in civilian guise and the dictatorship continues to flourish aside a parliament which rubber-stamps its will.
17
Burma Sanctions Regime (2005-2011)

Country European Union United States Measures Extended restrictive measures for another year Extended restrictive measures including visa bans and assets-freeze of military lower-ranking officials Representative Tom Lantos introduced a bill renewing sanctions against Burma Senator Mitch McConnell introduced a resolution condemning junta for atrocities against ethnic minorities and calling upon USA to lead the effort for a UNSC resolution on Burma Senator Mitch McConnell proposed extension of BFDA and renewed sanctions US State Department called for a non-punitive UNSC resolution condemning human rights abuses and detention of Daw Aung San Suu Kyi President Bush signed legislation extending BFDA-2003 for three more years Renewed assets-freeze Updated sanctions regulations Amended and renewed measures Prime Minister announced implementation of targeted financial sanctions 14 regimes officials were added to SDN Juntas ministers were added to OFACs SDN list (10 ministers and Rangoon Mayor) Renewed and amended Common Position Regulations regarding Special Economic Measures against Burma came into force Individuals and businesses of regimes associates were added to SDN More businesses and individuals close to the junta were added to SDN Businesses related to regime in Singapore were added to SDN European Union United States Renewed and strengthened sanctions Properties and transactions blocked New Burma Executive Order amended as Burmese produce such as Gem, Pearl and Timber added to SDN New Burma general license introduced, allowing NGOs to provide humanitarian assistance Amendment to general license 14, allowing transfers of funds for humanitarian issues President Bush signed the renewal of import restrictions and the Tom Lantos Block Burmese JADE Act of 2008: banning direct and indirect imports of Burmese jadeites and rubies; expanded list of visa and financial restrictions Month/Year April 2005 April 2006 May 2006 Type of Measure Trade, Travel and Financial Travel, Financial Trade, Travel and Financial
May 2006 May 2006
August 2006 April 2007 June 2007 July 2007 Sept/Oct 2007
European Union United States European Union Australia
Assistance, Trade, Travel and Financial Financial
Trade, Travel and Financial Financial
United States
September 2007 October 2007 November 2007 December 2007
Financial Travel and Financial Trade, Travel and Financial Trade, Travel and Financial Travel and Financial
European Union Canada
United States
February 2008
February 2008
Travel and Financial
February 2008
Financial
March 2008 April 2008 May 2008
Trade, Travel and Financial Financial Trade
May 2008
May 2008
July 2008
Assistance, Trade, Travel and Financial
18
Country Australia
Measures Australia added 45 new names to the list of some 418 Burmese individuals named for punishment with financial restrictions US Treasury Departments Office of Foreign Assets Control froze the assets of 17 enterprises and 26 persons in Burma who were accused of drug-trafficking Assets of two Burmese businessmen (Win Aung and Zaw Zaw) and their companies frozen for aiding the military rulers of the country.
Month/Year October 2008
Type of Measure Financial
United States
November 2008
Financial
January 2009
Financial
European Union United States European Union United States
Common Position (and economic sanctions) on Burma extended for a further year President Barack Obama renewed existing sanctions against Burma Agreement to step up sanctions and further target the Burmese regime President Barack Obama signed into law a congressional resolution extending restrictions on imports from Burma contained in the Burmese Freedom and Democracy Act of 2003 Four state-run media outlets added to the list of Burmese sanctions targets in response to a court ruling against Daw Aung San Suu Kyi Extended sanctions against Burma
April 2009
Trade, Travel and Financial Trade, Travel and Financial
May 2009
June 2009
July 2009
European Union
August 2009
April 2010 May 2010
United States United States
President Barack Obama extended sanctions against Burma for a further year President Barack Obama signed into law a Congressional resolution renewing economic sanctions (BFDA) against Burma for a further year Common Position on Burma extended for a further year but visa bans and asset freezes suspended for 5 ministers,18 deputy ministers and 1 Chief state minister for a year President Barack Obama extended sanctions against Burma for a further year
Trade, Travel and Financial Trade
July 2010
European Union
April 2011
Trade, Travel and Financial
United States
May 2011
Trade
Source: Office of Foreign Assets Control (US), EU, IIE, DFAIT (Canada), DFAT (Australia)
Socio-Economic Developments, 1988 - 2011

The Burma sanctions regime consists of targeted measures, with the exception of the US ban on all Burmese imports from July 2003 through its Burma Freedom and Democracy Act (BFDA). The majority of the measures in place are targeted financial sanctions against the senior members of the regime and their associates or travel-related sanctions restricting these individuals from entering the sender states. The scope for inadvertent humanitarian consequences is, therefore, relatively narrow. Only the targeted trade embargoes and the
19
withdrawal of aid or assistance from the sanctioning states and other financial institutions require consideration to identify the possible humanitarian impacts. Nonetheless, the suspension of aid from donor countries and institutions such as the World Bank and IMF would not fully account for any discernable effects on the ordinary people as the preceding consideration on the relationship between the BSPP regime and the international community has demonstrated that poor governance on the part of the regime greatly contributed to developments within the country and their impacts on the population as a whole. Such mismanagement of the economy led the country towards extreme poverty despite substantial overseas assistance it received during the BSPP rule. It is therefore not necessary to assess the humanitarian conditions as an impact of aid suspension from donor countries and institutions for the period under the post-1988 military regime as the junta continues mismanaging the economy same as its predecessor. The sanctions regime following the military coup in September 1988 consists of arms embargoes and other defence-related measures, targeted travel-related restrictions, targeted financial sanctions and targeted trade sanctions. The targeted sanctions were devised to avoid unintended humanitarian consequences and, among them, only the trade sanctions are likely to significantly impact humanitarian conditions.52 Unemployment is the most likely consequence of such sanctions for the Burmese people and, therefore, any significant increase in the unemployment rate and any subsequent decline in humanitarian conditions need to be assessed upon the particular sector targeted by the sanctioning authorities. These sectors, therefore, require identification. Among the post-1988 US measures against Burma, the executive order banning new investments, effective since May 1997, and the Burma Freedom and Democracy Act (BFDA) banning all imports from Burma, enacted in July 2003, are the most significant measures to be considered as all other sanctions have been targeted against members of the regime and its supporters, state-owned enterprises and the businesses of regime cronies. Although US Customs and Trade Act enabled the president to impose new sanctions on Burma, President Bush declined to do so immediately when it was passed in 1990. The Foreign Operations Appropriations Bill introduced in 1996 also permitted the US president to determine if and when to impose sanctions against Burma. Actual measures, however, did not come into effect until President Clinton signed an Executive Order to ban new investments in Burma in 1997 and the BFDA was enacted in 2003. Therefore, this study will consider any humanitarian consequences for the period from May 1997 to the present time with a particular focus from July 2003. The Executive Order of 1997 banned only new investments after 21st May 1997 and all those made prior to that date were exempted including those of US Corporation Unocal and its shares with the French oil giant Total in Burmese energy projects.53 As existing companies such as Unocal were allowed to continue their business, significant unemployment or any other impact upon the Burmese people would have been limited. Other measures that might have inflicted painful circumstances upon the general populace are the suspension of Generalized System of Preferences (GSP) benefits from the sender states. The GSP benefits were withdrawn by the US in April 1989, the EU in March of the same year and Canada in July 1997. Burma was then excluded from the LDC Market Access Initiative by Canada in 2003. However, the possible humanitarian impact resulting from the suspension of GSP
52 53
UN: IASC: (October, 2004) Sanctions Assessment Handbook CRS report for Congress (10, Oct. 2007) Burma Sanctions: Background and Options
20
benefits by the sanctioning states should be minimal in nature compared with those of the selective or comprehensive investment prohibitions and the total ban on all imports. The USA restricted all Burmese imports from July 2003 and, while the selective investment ban that the EU introduced in 2004 covered only state-owned enterprises at first but it was later extended in March 2008 to include bans on trading timber, gems and mining produce. There were, however, no noticeable changes in the FDI flows to Burma following the introduction of these punitive measures. The year 1997 was the peak of inward Foreign Direct Investments (FDIs) to Burma for the period 1989 and 2009 despite the US ban which came into effect that year (see Fig 3.1). Furthermore, for the period between 2004 and 2009 when the EU introduced its bans, there were not significant decrease in FDIs, rather 2006 saw a rise instead (Fig 3.1). A fluctuating FDI trend can be seen for the past two decades with the lowest investments in 1989 and 1993 (under US$ 100 million) and the highest in 1997 at nearly US$ 900 million. For the ten-year period between 1999 and 2009, there were no significant changes in the inward FDI flows with the exception of a rise in 2006 (Fig 3.1). The FDI flows to Burma for the period 1989 to 2009 revealed that the inward FDI flows prior to the inception of the US and EU bans were significantly lower than for the period when the measures were in place. Thus, overall humanitarian conditions prior to the imposition of these sanctions should have been worse than for the period that the sanctions have been in place. Fig. 3.1
Inward Foreign Direct Investment Flows 1989 - 2009 (in US$ millions at 2010 prices and exchange rates) 1000 900 800 700 600 500 400 300 200 100 0 Year 1989 2000 1990 2001 1991 2002 1992 2003 1993 2004 1994 2005 1995 2006 1996 2007 1997 2008 1998 2009 1999
Source: UNCTAD: Inward Foreign Direct Investment Flows
Besides opting to comply with the aforementioned investment and import restrictions, many multinational corporations left Burma due to disinvestment campaigns in their home countries, particularly in the USA, unsuccessful and unsatisfactory results of their investments and the continuous human rights abuses committed by the ruling junta. Fifty-six foreign companies ended their businesses in Burma between 1992 and 2000.54 About half of
54
The Irrawaddy: Foreign Companies Withdrawn from Burma
US$ millions
21
these companies pulled out in 1996 and 1997. The possible rise of unemployment in these particular periods therefore requires assessment. The measure to which Burmas unemployment problem in this period has been most widely attributed is the mass termination of employment in the garment industry following the enactment of the Burma Freedom and Democracy Act in July 2003 banning all Burmese imports to the USA. This was noted in a congressional report which calculated that 50,000 to 60,000 jobs had been lost, although the US authorities argued that imports to EU member states had saved the industry at that time. According to the Bureau of East Asian and Pacific Affairs, in the period of March 2003 to September 2003, 40,000 jobs had been lost in Burma as a result of the US ban. However, the total rate of unemployment for 2003 was lower than in previous years and the number of unemployed declined steadily from 2003 to 2007 with a slight increase in 2008 (see Fig 3.2). The rate of unemployment for 1996 and 1997, when as many as twenty multinational companies withdrew their investments, are unfortunately not available. Nevertheless, the unemployment figures decreased year on year since 1998 with the exception of small rises in 2001 and 2002 (Fig 3.2). Overall, the number of unemployed dropped from 1998 to 2008 (Fig 3.2). Fig. 3.2
Unemployment, both sexes

600 500 400 300 200 100 0 Unemployment, general level (thousands) 1992 2002 Source: ILO Labour Statistics 1993 2003 1994 2004 1998 2005 1999 2006 2000 2007 2001 2008
Although the BFDA came into effect in 2003, there were no notable surges in unemployment between 2003 and 2008, suggesting that both the US and EU sanctions was not the most significant cause of rising unemployment in these periods. Furthermore, the possibility of deliberate misrepresentation of the figures by the junta cannot be ruled out. There were claims that the Myanmar Garment Manufacturers Association (MGMA) and the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) organised a
22
petition calling on the US government to withdraw its proposal of imports ban in 2001.55 Allegedly, the Office of Strategic Studies (OSS) in the Defence Ministry of Burma was behind this action.56 In addition, the claim was made that newly-unemployed young women were entering into the sex industry in desperation as a result of scarce alternative employment opportunities.57 Such a claim is implausible as prostitution is not the sole alternative employment in Burma. During a press briefing in October 2003, the spokesperson for the US State Department, Richard Boucher also argued that nobody was encouraging unemployed young women into such employment and there were other work programs for those whose employments in garment factories were terminated.58 There are solid reasons to doubt this claim. Traditionally, many Burmese are self-employed and run their businesses through the equal participation of family members. The majority of people across the country, particularly in small towns and rural areas, are involved in private business activities ranging from selling agricultural products and groceries to running teashops and restaurants. Those who are unable to run either small or medium-sized businesses can earn a subsistence wage by working as a peddler or a hawker rather than as a prostitute. Furthermore, since 60% to 70% of the populace are employed in agriculture, forestry and fishing, with only around 7% to 10% of labour force employed in industry of which manufacturing is only one part.59 The impact of redundancies in the textile industry in 2003 is unlikely to have induced significant humanitarian consequences. Burmas total exports for the period from 1989 to 2010 also suggest that there was no noticeable decline in exports in 2003 from the years either prior to or after the US imports ban (see Fig 3.3). In reality, Burmese exports have increased since 1998 and reached their highest level in 2008 at about US$ 6.6 billion (Fig 3.3).
55 56
Maung Maung Oo (24 July, 2001) Junta to build garment factory (Irrawaddy) Ibid 57 Bureau of East Asian and Pacific Affairs (Oct 27, 2003) Conditions in Burma and US Policy 58 Burma Today: US Department of State, Daily Press Briefing 59 ASEAN: ASEAN Community in Figures 2009; Myanmar Government Data
23
Fig. 3.3
Exports to World
7000 6000 5000 US$ millions 4000 3000 2000 1000 0 Year 1989 2000 1990 2001 1991 2002 1992 2003 1993 2004 1994 2005 1995 2006 1996 2007 1997 2008 1998 2009 1999 2010
Source: IMF: Direction of Trade Statistics
By considering these key economic indicators, namely inward Foreign Direct Investment flows, the economic activity the Burmese people are engaged in and continuing trends in unemployment and exports, there is no evidence to support the regimes claims that Western sanctions have led to an economic decline. Thus, neither the import bans by the US and the EU nor the withdrawal of GSP benefits on Burmese imports can be shown to have unleashed serious impacts on the countrys trade and the general population itself. Such claims advanced by the regime most likely indicate an official strategy to instigate a rallying-roundthe-flag effect against the sanctions.
Assessment of Human Security Areas
According to the UN Sanctions Assessment Handbook, humanitarian conditions should be assessed in several human security areas; however, in the case of Burma, certain data necessary to undertake a comprehensive assessment is unavailable. Not only is the accessible data inconclusive but much of the most important and relevant information, such as the Common Country Assessment (CCA) is entirely unobtainable. The UN sanctions assessment criteria and humanitarian indicators depend upon the CCA and its publication prior to a comprehensive assessment is vital to gain a systematic and detailed assessment of humanitarian implications of sanctions in Burma understanding of the humanitarian conditions in the country. Nonetheless, given the situation in the country, the United Nations have published the Country Paper as an alternative to the CCA.60
60
UNDG: Myanmar Coordination Profile: Comments
24
Of the CCA indicators of particular importance is the Conference and Convention indicators on Governance and Civil and Political Rights61 which must be focused and assessed by the United Nations in order to identify the progress towards democracy and good governance in the country. Although certain data relevant to such an assessment is not available, human security areas should be assessed for particular periods based on whatever data is available. The limited availability of data for certain areas and periods does not, however, impede significantly upon the outcome of an assessment as the limited nature of sanctions in place and the ongoing economic and political situation of Burma, particularly the absence of democratic and accountable governance for over two decades, have already limited the potential for severe humanitarian consequences arising as a result of sanctions. When the health sector is assessed as one of the core human security areas, a steady decline can be seen in the mortality rate for children under five-years-old for the period 1980 to 2009 (Fig 3.4 and Fig 3.5). However, the overall maternal and infant mortality rates have not changed since 2005 despite a continuous downward trend from 1990 to 2004 (Fig 3.6 and Fig 3.7). The estimated percentage of one-year-old children immunised against measles from 1990 to 2008 also saw a few rises and falls (Fig 3.8). Fewer than 70% children received immunization between 1990 and 1992 and lower than 75% children were immunized for 2001 and 2005. Nonetheless, there was a stable progression from 1993, peaking in 1998 as 89% of one-year-olds were estimated to have been immunised against measles. After a decline in 2005, the percentage of immunization has rose up to 82% in 2008, yet it was lower than in the years from 1996 to 1998.
Fig. 3.4
Under -five Mortality Rate Progress

160 140 120 100 Value 80 60 40 20 0 1980 1985 1990 1995 2000 2009 Under-five Mortality Rate Progress
Source: UNICEF: Under-Five Mortality Rankings: The Progress of Rate
61
UN: Common Country Assessment (CCA) Guidelines
25
Fig. 3.5
Mortality rate, under-five (per 1, 000)

78 77 76 75 74 73 72 71 70 69 68 2005 2006 2007 2008 2009 Mortality rate, under-five (per 1, 000)
Source: The World Bank: Annual Number of Under-Five Deaths (per 1, 000)
Fig. 3.6
Maternal Mortality Ratio (modelled estimate, per 100, 000 live births)
450 400 350 300 250 200 150 100 50 0 1990 1995 2000 2005 2008 Maternal Mortality Ratio (per 100, 000 live births)
Source: The World Bank: Maternal Mortality Ratio
26
Fig. 3.7
Mortality rate, infant (per 1, 000 live births)

100 90 80 70 60 50 40 30 20 10 0 1985 1990 1995 2000 2005 2006 2007 2008 2009 Source: The World Bank: Infant Mortality Rate (under 1 year-old) Mortality rate, infant (per 1,000 live births)
Fig. 3.8 One-Year-Old Children Immunized against Measles, Percentage (estimate)

100 90 80 70 60 50 40 30 20 10 0 Percentage of Children
Source: UN: Millennium Development Goals Indicators
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
27
With regards to another core human security area, food and nutrition, a constant decrease of undernourishment between 1991 and 2005 was estimated (see Fig 3.9 and Fig 3.10). Fig. 3.9 Population Undernourished, Percentage (estimate)
50 45 40 35 30 25 20 15 10 5 0 1991 1996 2001 2006 Population Undernourished, Percentage
Fig. 3.10 Population Undernourished, millions (estimate)

20 18 16 14 12 10 8 6 4 2 0 1991 1996 2001 2005 Population Undernourished, millions
In a third human security area, water and sanitation, the proportion of the population with access to improved drinking water source is estimated to be rising slowly from 1990 onwards. Nonetheless, there was neither a rise nor a fall for the period of 2005 to 2008 (see
28
Fig 3.11). On the other hand, it was estimated that the proportion of the population using improved sanitation facilities increased significantly in the decade from 1995 to 2005. There was, however, neither an increase nor a decrease for the period from 2005 to 2008 (Fig 3.12). Fig. 3.11 Proportion of Population Using an Improved Driking Water Source (estimate)
80 70 60 50 40 30 20 10 0 1990 1995 2000 2005 2008 Proportion of Population Using an Improved Driking Water Source
Fig. 3.12 Proportion of Population using an Improved Sanitation Facility (estimate)

90 80 70 60 50 40 30 20 10 0 1995 2000 2005 2008 Proportion of Population using an Improved Sanitation Facility
The final core human security area, education, was assessed upon two indicators, namely the percentage of pupils starting Grade 1 who reached the last Grade of primary education and the number of internet users per population. The percentage of pupils starting Grade 1
29
completing primary education was about 55% in 2000, climbing to 69% in 2003 nearly a 15% increase in three years; however, there was minimal progress between 2005 and 2007 (Fig 3.13). With regards to internet users, the number per one hundred people rose from 0.1 in 1999 to 0.9 in 2006 (Fig 3.14). Fig. 3.13 Percentage of Pupils Starting Grade 1 who reach Last Grade of Primary, both Sexes
80 70 60 50 40 30 20 10 0 2000 2001 2002 2003 2005 2006 2007 Percentage of Pupils Starting Grade 1 who reach Last Grade of Primary, both Sexes
Fig. 3.14 Internet Users Per 100 Population

1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 1999 2000 2001 2002 2003 2004 2005 2006 Internet Users Per 100 Population
Source: UN: Millennium Development Goals Indicators; ITU estimates for 2006
30
Most of the data required for the assessment of systemic human security areas remain unavailable; however, the particular indicators for one of the systemic human security areas, the environment, are able to be assessed for certain periods. These indicators include the proportion of land area covered by forest, the total carbon dioxide emissions and consumption of ozone-depleting Chloro Fluro Carbons (CFCs) in Ozone Depleting Potential (ODP) metric. An assessment of the proportion of land area covered by forest pointed out that nearly 60% was forested in 1990 but, by 2005, only 49% remained so, raising concerns that the country will face severe environmental consequences if such a high rate of deforestation continues (Fig 3.15). In 2011, Indo-Burma, a biodiversity hotspot which includes Burma along with other countries in the region, is listed as one of the top ten most endangered forests in the world by Conservation International.62
Fig. 3.15 Proportion of Land Area Covered by Forest, Percentage

70 60 50 40 30 20 10 0 1990 2000 2005
Proportion of Land Area Covered by Forest, Percentage
While Carbon dioxide emissions continuously rose between 1990 and 2007 (Fig 3.16), there was an unstable trend in the consumption of ozone-depleting CFCs for the period 1994 to 2005 (Fig 3.17). Although the consumption of CFCs was relatively low at 2.1 metric tons in 1994, it rocketed up to 49.5 in 1995. From 1996 to 1998 and 2001 to 2003, the consumption of CFCs was significantly high but remained in the range of 15 and 30 metric tons for 1999, 2000, 2004 and 2005 (Fig 3.17).
62
Conservation International: The Worlds 10 Most Threatened Forest Hotspots
31
Fig. 3.16 Carbon Dioxide Emissions (CO2), thousand metric tons of CO2 (CDIAC)
16000 14000 12000 10000 8000 6000 4000 2000 0
Carbon Dioxide Emissions (CO2), thousand metric tons of CO2 (CDIAC)
Fig. 3.17 Consumption of ozone-depleting CFCs in ODP metric tons

60 50 40 30 20 10 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Consumption of ozonedepleting CFCs in ODP metric tons
The outcome of assessing these critical areas of core and systemic human security reassure the near negligible adverse humanitarian impact of sanctions. Furthermore, the overall assessment of humanitarian conditions in ASEAN member countries reveals that the military
32
junta along with other authoritarian governments in the region has done little to provide basic services to the people, particularly in health and education (see Appendix I).
Humanitarian Conditions under Military Dictatorship
Assessing the humanitarian conditions reveals that the consequences that have arisen as a direct impact of sanctions are negligible; however, there is strong evidence that humanitarian conditions have deteriorated under the military dictatorship. Despite lucrative investments from both sanctioning states and regional countries, the government has failed to provide a sufficient level of essential and basic services to the people and the majority of the impoverished populace live in dire circumstances, particularly in rural areas. It is not surprising that the country has had Least Developed Country status for several decades as the regime has spent substantial and disproportionate amounts of money strengthening its military power. The regime has spent 23% of central government expenditure on defence compared with a mere 13% on education and 3% on health between 1998 and 2008 (see Fig 4.1). According to the government gazette released on March 2011, 23.6% of the government budget is allocated for the military and only 4.13% for education and 1.3% for healthcare is allocated for the current year, 2011 (Fig 4.2).
Fig 4.1 Percentage of Central Government Expenditure (1998 - 2008)
3 13 Health Defence Education 23
Source: UNICEF: Statistics for Myanmar (Burma)
33
Fig 4.2 Percentage of Government Budget Allocations for 2011
4.13
1.3 Health Defence Education 23.6
Source: Burmese Government Gazette, March, 2011.
The military regime has spent excessively on strengthening its military power over the past two decades. The Military expenditure in 1991 was about US$ 2.5 billion and it has increased sharply ever since, stretching to over US$5.6 billion by 2001 (see Fig 4.3 and Fig 4.4). Defence spending reached over US$7 billion in 2003 and fluctuated between US$ 6 billion to US$7 billion until 2007 (Fig 4.4). The active military manpower of the regime has also significantly increased since it came to power in 1988. There were 200,000 armed forces in 1989, rising to over 400,000 since 1997 (Fig 4.5). The regime enjoyed its peak of military strength in 2004 and 2005 when the total active military manpower reached nearly 500,000 (Fig 4.5).
34
Fig 4.3 Military Expenditure 1991 - 1999

5000 4500 US$ millions (Constant $ in 1999) 4000 3500 3000 2500 2000 1500 1000 500 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 Source: CSIS: The Asian Military Balance 2003: A comparative summary of military expenditures; man power; land, air, and naval; Forces; and arm sales Military Expenditure
Fig 4.4 Military Expenditure 2000 - 2007

8000 7000 6000 US$ millions 5000 4000 3000 2000 1000 0 2000 2001 2002 2003 2004 2005 2006 2007 Source: IISS Military Balance Publications Military Expenditure
35
Fig 4.5
Active Military Manpower

500000 450000 400000 350000 300000 250000 200000 150000 100000 50000 0 Active Military Manpower
Source: CSIS: The Asian Military Conventional Balance in 2006, IISS Military Balance Publications
It is clear that the military government has squandered most of the revenues it has acquired from investments by the multinational corporations in the country and its trade with the world on strengthening its defence capacity rather than providing essential and basic services to the people.
Why Have the Sanctions Failed?

One failure of the Western sanctions has been their failure to weaken and isolate the ruling junta. The sanctions could be made successful if they were targeted to cost the regime significantly;63 however, there are certain crucial factors that help explain why they have not as yet done so: The sanctions are not imposed multilaterally, either in a UN context or within ad hoc coalitions; the Burmese sanctions regime is largely imposed by the US and the EU alone;
63
Kaempfer, W H & Lowenberg, A D (2000) A public choice analysis of the political economy of international sanctions in Steve Chan & A Cooper Drury (eds) Sanctions as Economic Statecraft: Theory and Practice
36
There has been a lack of cooperation by the trading partners of the sanctioning states as well as by the trading partners of the targeted regime to sanctions measures; the USA has been the only major state to impose a series of sanctions and the follow-up measures by the EU to accompany these have been less effective and significant; There has been little contribution by the regional organisation ASEAN to the sanctions measures; There has been little contribution by the regional powers, China and India, to the sanctions regime; The existing sanctions measures have loopholes and have been imposed slowly, incrementally and piecemeal.
There have never been UN sanctions against the ruling military junta despite several decades of substantial human rights violations. The regional players such as ASEAN member countries and the regional powers, China and India, have opted against punitive measures and exploited the lucrative commercial opportunities of Burma instead (see Appendix II). On the other hand, the measures taken by both the USA and the EU have not been implemented properly and have been little more than a moral statement. The sanctions have crucial loopholes that benefit both the sender states and targeted regime. It is a disturbing fact that the investment ban introduced by the United States in 1997 excluded the US firms that were already operating in the country and providing major revenue for the regime. For instance, Unocal which later merged with Chevron continues to contribute to the oil and gas sector which is the major income resource for the ruling junta.64 In addition, the EU measures against the regime are far weaker than those of the USA as they are more limited and have allowed French oil giant Total to generate crucial income for the regime. The continuing presence of Western energy companies in the country highlights the schizophrenic way the sanctioning states deal with Burmas crisis. Not only have third-party investments strengthened the military rule, but the investments of the sanctioning states have diluted the measures they themselves have put in place. Europe was the largest investor in Burma between 1995 and 2005 with cumulative FDIs worth US$1.8 billion; in comparison, the total FDIs from ASEAN member countries were about half this (see Fig 5.1). The UK and France were the major investors in Burma for the same ten-year period of 1995-2005 while the USA was top investor from North America (Fig 5.2 and Fig 5.3).
64
Bill Weinberg (Feb, 2007) Unocal still in Burma (World War 4 Report)
37
Fig. 5.1 Cumulative FDI Flows by Source Countries 1995 - 2005

2000 1800 1600 1400 US$ millions 1200 1000 800 600 400 200 0 FDI Source Countries Source: ASEAN Secretariat: Statistics of Foreign Direct Investment in ASEAN (Eighth Edition, 2006) Japan North America Europe Asia ANIEs ASEAN Australasia Central & South America Other Countries
Fig. 5.2 Cumulative FDI Flows From EU 1995 - 2005

1200 1000 US$ millions 800 600 400 200 1.59 0 3.3 8.7 8.1 EU Member Countries 697.71 1133.22
Source: ASEAN Secretariat: Statistics of Foreign Direct Investment in ASEAN (Eighth Edition, 2006)
38
Fig. 5.3
Cumulative FDI Flows From North America and Australasia 1995 - 2005 450 400 350 300 US$ millions 250 200 150 100 50 0 USA Canada Australia New Zealand Source: ASEAN Secretariat: Statistics of Foreign Direct Investment in ASEAN (Eighth Edition, 2006) 61.76 6.91 2.8 Countries from North America and Australasia 406.17
As for the actual measures themselves, better targeted and harsher sanctions came into effect only after two grave events in Burma took place, the Depayin Massacre in 2003 and the 2007 public protests widely known as the Saffron Revolution. The United States introduced Burma Freedom and Democracy Act (BFDA) nearly fifteen years after the military took power and the existing measures were strengthened through the Tom Lantos Block Burmese JADE (Juntas Anti-Democratic Efforts) Act in 2008, a full five years after the BFDA. Similarly, the European Union only introduced an investment ban in the regimes stateowned enterprises in 2004 and the imports and investment restrictions on timber, gems and metals were not added until 2008. Unfortunately, the EU sanctions still fall significantly short of being effective. The measures imposed by Australia are relatively minimal in nature compared with the other sender states while Canadas tougher measures came into force in December 2007. Although Canada introduced tougher sanctions measures only after the regimes brutal crackdown of protests in 2007, its measures have been relatively significant. The measures include a prohibition of its exports to Burma as well as Burmese imports into the country, an assets freeze of the regimes officials and its supporters, their relatives and business entities including the governments enterprises, a ban on new investment in Burma, a prohibition on the provision
39
of Canadian financial services to and from Burma and the export of any technical data to Burma, a restriction on Canadian-registered ships or aircraft from docking or landing in Burma and a restriction on Burmese-registered ships or aircraft from docking or landing Canada and passing through Canada. Although the visa bans and financial sanctions on senior members of the regime and their family members, the cronies and their families as well as their businesses have also been imposed, these targeted measures are not well coordinated among sender states and the list of financial and visa restrictions still needs to be lengthened in order to have a significant impact on the regime and its supporters.
Conclusions and Recommendations

Assessment Findings
The sanctions by Western governments in the last two decades or more have failed to produce anything but a negligible impact on the political situation in Burma. On 7th November 2010, the Burmese electorate took part in the first national elections since the lost election of 1990. While ostensibly this signalled a crucial political development, and can be seen as an important step towards a transition to Burmese democracy, the reality is that the Burmese junta, increasingly aware of its degraded reputation on the international stage, has simply used the 2010 elections as an opportunity to deceive the international community into believing the country is undergoing a genuine transition towards civilian rule. Indeed, the election itself was contested by only a handful of parties and individuals due to high registration fees, campaign restrictions, fear of persecution, and the inevitable vote rigging that could only have ensured the victory of the military party. The resultant parliament is constituted 25% by military officials and the rest is dominated by ex-military officials and civilian loyalists to the regime and is thus completely devoid of democratic representation. Furthermore, laws enacted in March 2010 bar political prisoners from voting whilst the NLD, the victors of the 1990 election, failed to participate due to the perceived futility of the process. The new parliament convened for the first time on 31st January 2011 and it was hoped by the regime that the global community would now look upon Burmese politics not as a military dictatorship but as a civilian-led government. It is clear from subsequent events, however, that the 2010 election and the resulting parliament are simply cosmetic changes to the regime. It is clear that the existing sanctions have been unable to coerce the ruling junta to make necessary and crucial changes in the country to progress towards a genuine transition to democracy.
40
The Policy Options:

Engagement through Economic Incentives The ASEAN states have practiced a policy of constructive engagement with the regime since Burma became a member country. The regional blocs involvement has immunised the regime from the penalties intended by the Western sanctions. This engagement policy has benefited both the regime and the ASEAN countries through better and stronger economic ties over the past two decades while the Burmese people are impoverished and their basic rights and liberties are eliminated. The release of Daw Aung San Suu Kyi in 1995 was largely claimed as a consequence of Japans engagement with the junta through business incentives but the subsequent mass arrests of political opponents, including NLD members, has proven that the regime has little integrity. It is clear that the Burmese authorities are ready to superficially accept any incentives and engage with any parties, yet comply minimally in practice. As they have proven unwilling to make significant concessions in its engagement with ASEAN and Japan, further engagement of the dictatorship through economic incentives is not encouraged. Democratising through Economic Engagement There are claims that economic growth is conducive to democratic transition and the emergence of stronger civil society and the middle class is needed for faster democratisation. Nonetheless, many transitions to democracy elsewhere in the world have proven that economic development is neither a necessary nor a sufficient condition for democratic transition.65 Although economic development and modernisation might sustain and consolidate democracy where successful and genuine transition has taken place, it is not an essential factor in the current political climate of Burma where the old regime has not collapsed and a genuine transition has not taken place. In fact, a study on certain successful democratic transitions by Przeworski and Limongi (1997) has indicated that democracy is not necessarily a product of modernization.66 On the other hand, civil society in totalitarian Burma has barely survived and is under constant scrutiny and harassment, even for its social and charitable activities. Thus, civil society in Burma will never become strong and vibrant as long as the dictatorship flourishes. It is very unlikely that the Burmese middle-class will initiate democratic change in the foreseeable future. As it is not an independent middle-class but which sides with the authorities to maintain the status quo and is thus reluctant to support for a democratic revolution. A considerable part of the middle class is comprised of current or retired military officers and businessmen who benefit from the corrupted mechanisms of dictatorship and thus are unlikely to embrace the idea of democracy. Economic engagement with the regime is therefore strongly opposed.
65
Laothamatas, A (2000) Development and Democratization in Anek Laothamatas (ed) Democratization in Southeast and East Asia. ISEAS/Trasvin/SMP 66 Przeworski, A and Limongi, F (1997) Modernization: Theories and Facts, World Politics, 49.2, PP. 153-155
41
A Dual-track Policy of Pressure and Principled Engagement The United States introduced a dual-track policy, combining sanctions and direct dialogue with the regime in 2009. However, no tangible result has been seen after nearly two years in which the USA has shifted its policy, urging the regime to address core human rights concerns through dialogue. The regime has been defiant against US calls for reform and has repeatedly insisted that human rights and the pursuit of democratic reforms are internal issues.67 The inception of dialogue with the regime while the policy of isolation has yet to be properly implemented and reinforced with additional measures is not encouraging. Advancing both penalties and incentives without first testing either carrot or stick to its upmost capacity is not a wise move on behalf of the USA. In fact, the United States two-track approach has been in effect indirectly since the day the sanctions were imposed against the Burmese regime. Although direct dialogue with the junta was initiated in 2009, the continuous presence of US oil and gas companies as well as other firms not affected by the new investment ban introduced in 1997 has provided a more than ample carrot over the past two decades. Therefore, the United States government needs to revise its Burma policy by ending all US economic ties with the regime, withdraw the dialogue and reinforce the existing sanctions with additional measures.
RECOMMENDATIONS
The governments of both the West and the region should recognise that the recent political changes are simply aesthetic ones and that real change will only take place by crippling the military regime. While sanctions are paramount to achieving this, the level of pressure must be escalated and reinforced with any additional measures necessary in order to ensure that the regime is completely isolated and genuinely weakened. It is crucial that the existing sanctions are reinforced by, but not limited to, the following additional measures. Further actions might also require consideration to ensure that the sanctions regime works to its upmost capacity. (1) Closing the Loopholes The closing of existing sanction loopholes is an absolute must. It is time to implement additional sanctions that have been considered and proposed in the US Congress over the last 20 years. S. 1092 of the 104th Congress would outlaw all existing and new investments by US nationals in Burma68 and S. 2172 of the 110th Congress would also include those investments made prior to 20th May 1997 as well as all payments to the SPDC related to the divestment of assets in Burma.69 Both require implementation. The prohibition of United States persons from entering into economic-financial transactions, paying taxes or performing any contract with Burmese government institutions or individuals, initially included in wording of the
67 68
Joe Yun (June 2, 2011) Hearing on Policy Developments in Burma (IIP Digital) Martin, F. M (January 11, 2011) U.S. Sanctions on Burma (Congressional Research Service) 69 Ibid
42
House of Representatives version of the 2008 JADE Act70, must be added to the existing measures. The European Union and others that have already imposed sanctions against the Burmese regime need to effectively cooperate with the United States on executing further measures. The European Union needs to introduce a comprehensive investment ban prohibiting existing and new investments in Burma by the member countries and prohibit all Burmese imports. It is important that the USA and the EU companies investing in Burma, in particular the firms operating in the oil and gas sector, need to end their business relationships with the regime. It is a first crucial step for the democratic West to ensure that it retains no commercial links with the regime. It is the moral obligation of liberal democracies not to continue supporting the illiberal regime through their economic relationships and thus the prohibition of investments in the country and imports is the first and foremost measure requiring implementation and enforcement. The major financial resources for the regime such as the energy sector and the mining and quarrying sectors need to be targeted in a multilateral context. (2) Widening the Scope of Sanctions The measures that are already in place are not well enough coordinated between the sender states and thus are falling short of achieving their objectives. It is essential to have effective cooperation and coordination between the sender states when formulating, executing and performing sanctions against the Burmese regime. The financial sanctions and travel restrictions/visa bans must be extended to all members of the regime from the most senior members of the government to civil servants, including office clerks of the regimes administration throughout the country. Since the whole machinery of the regime has been operated through rampant corruption and basic services for the people have been provided subject to the bribing of government officials, every last member of the regime, from the lowest level staff members, have become beneficiaries of the ruthless dictatorship which has left the majority of population suffering extreme poverty. Further to this, the much of the membership of the regime - whether military or civilian staff has been circumventing Western travel bans and financial restrictions, travelling the world and providing the best Western education to their relatives at the publics expense. This is totally unjust when most of the populace continue to endure poverty and poor services. Therefore, it is imperative that travel restrictions/visa bans and financial restrictions are broadened to target both civilian and military members of the regime from top to bottom, their family members, business associates and any others who are beneficiaries of the dictatorship.
70
Ibid
43
(3) Multilateral Sanctions A lack of cooperation by the ASEAN member countries, China and India has significantly undermined the Western punitive sanctions against the regime. Strong economic relationships with ASEAN, China and India have encouraged the regime to pose a greater defiance in the face of Western pressure over the past two decades. It is important that the current sender states convince the regional countries to join the sanctions regime. Nonetheless, it is not an easy step for these nations to join a coalition that punishes the regime and thus secondary sanctions should also be considered. The United States has proposed such measures in the past to pressure the countries that are unwilling to join the sanctions regime. S. 1092 would also deny certain trade benefits to countries designed as beneficiary developing countries under Title V of the Trade Act of 1974 (19 U.S.C. 2461 et seq.), as a beneficiary country of the Caribbean Basin Economic Recovery Act (19 U.S.C. 2701 et seq.), or as a beneficiary country of the Andean Trade Preference Act (19 U.S.C. 3201 et seq.) unless those nations entered into an agreement with the United States to cease trade and investment in Burma.71 Adopting this amendment would be a powerful driving force for forming a coalition of sanctioning countries. The existing sanctions should be enforced with either military action against the targeted regime or secondary sanctions against its trading partners in order to deliver a significant and effective impact. After over twenty years of the regional countries diluting the sanctions as third-party suppliers, secondary sanction measures are required to push those nations to end their economic relationships with the regime. It is time for the United Nations itself to consider its own sanctions against the regime as a response to the governments continuing and gross violations of human rights, its staunch defiance to UN General Assembly resolutions and its refusal to ratify important human rights treaties and conventions. (4) UN Mandatory Arms Embargo A universal arms embargo on Burma would be a crucial measure to achieve peace and reconciliation in the country. However, the absence of this allows the regime to spend millions of dollars procuring weapons from countries such as China and North Korea each year, building up its military strength simply to oppress dissidents and ethnic minorities. The military spending has been more than 20% of government expenditure over the past two decades and the regime has allocated Myanmar (Burmese) Kyat 1.8 trillion (US$ 2.04 billion) for defence-spending in 2011. The situation in Burma provides a threat to the entire region. The conflicts between the regime and its armed opponents, predominantly ethnic groups, has lasted for nearly half a century, breaking out before even the BSPP regime came to power in 1962. The conflicts in ethnic regions, particularly in the Karen state in eastern Burma, have forced hundreds of thousands of civilians to flee the country and take refuge in neighbouring Thailand and Bangladesh. Burma was rated the fifth largest source country of refugees in 2010 in a
71
Martin, F. M (January 11, 2011) U.S. Sanctions on Burma (Congressional Research Service)
44
UNHCR report.72 In addition, the alleged intention of the regime to acquire nuclear weapons with support from North Korea has become an even greater concern to the region. There are also allegations concerning the use of chemical weapons by the regime in recent offensives against the Shan State Army (SSA).73 Given such a dire situation on the ground, the United Nations needs to consider a mandatory arms embargo against Burma. A global embargo would facilitate the reconciliation process in the country and ease the pain of the people who have endured civil war for many generations. The deployment of a UN peace-keeping force in the region should also be an option to aid the enforcement of such embargo. Most fundamentally, a UN embargo would limit the excessive and disproportionate defence spending of the regime.
Conclusion
Sanctions remain the best option to push the regime towards a genuine reconciliation process in the country and are to be preferred to the alternative of military intervention which would prove costly not only in terms of finance but also the destruction of the precious human lives of both the targeted state and the interventionists. Thus, a universal embargo as a non-violent solution is to be encouraged in the case of Burma. A further advantage of sanctions is that when correctly applied they may damage the financial strength of the regime rather than the economy of the country. Despite the overlapping nature of the state economy with the consolidated financial strength of the regime, punitive measures should not be constrained. The regime has squandered substantial amounts of revenue on strengthening its military power, in order to maintain its hold on political power; and it has opted to oppress the people rather than to provide essential and basic services. The economy of the state has for too long been dominated by the junta itself, rather than the people. It is therefore imperative that current sanctions are upheld and empowered with the further measures suggested to ensure isolation and undermining of the regime. Burmas unique geography endows it with a tremendous geopolitical importance. For the British colonialists, it provided a buffer between the Raj and French Indochina; for Imperial Japan, straining to bridge the river Kwai, it was the gateway to India, imperative for the defence of their territorial gains; for US Four-Star General Joseph Stilwell, when he abandoned his post to lead a death-or-glory campaign in the jungle, it was the vital artery for the liberation of China; and for the current Chinese, it is a lynchpin in allowing their expanding navy to spread its influence to the Indian Ocean. Just as its rich abundance of
72 73
UNHCR: Global Trends 2010 DVB: Fears mount over chemical weapons use
45
resources were exploited by former invaders, today the exploitation continues, whether by Chinese firms hungry for cheaper timber or Western ones thirsty for cheaper fuel. But Burma is not a playground for empires and multi-nationals, it is the country of millions of impoverished, oppressed and displaced by a despotic regime. Despite its natural assets, it lingers low on the UNDPs Human Development Index; it languishes second to last on Transparency Internationals Corruption Perceptions Index; it hovers near the foot of the Economist Intelligence Units Democracy Index. Foreign aid that should be spurring development is instead spent trying to undo the harm of the ongoing displacement of hundreds of thousands of people which only serves to place a financial strain on Burmas developing neighbours. When Cyclone Nargis struck in 2008, the callous, self-serving nature of the ruling junta was laid bare before the world. With hundreds of thousands dead and millions more affected74, the regimes paranoia saw UN planes seized, US aid rejected and the work of the Red Cross and other NGOs impeded. The regime has shunned the UN General Secretary himself and has shown its unwillingness to engage in constructive dialogue with any party for nearly a generation. Fearing its own vulnerability, it engages in forced labour, persecution and systemic rape. Though it is easy to blame China, India, Japan and Burmas ASEAN partners for doing too little to influence the regime, the West continues to undermine its own sanction regime. This schizophrenic behaviour goes beyond the exploitation of energy resources by Unocal and Total. In 2005, a collaboration between the universities of Harvard, Toronto and Cambridge accused US company Fortinet of being complicit in the regimes internet censorship. 75 In 2007, Amnesty International claimed Burmese attack helicopters were fitted with EUobtained parts and alleged a lack of caution on Europes part. In the same year, the House of Lords Select Committee on Economic Affairs concluded that the current sanctions were insufficient and urged urgent action.76 In the past year, Burma has received a record US$20 billion of foreign investment77, enriching a regime which prefers guns to rice, schoolbooks and medicine. The West has diluted its own glass by withholding investment at the same time as allowing their nationals to enrich the regime. The untrusting and untrustworthy junta have responded by constructing a national myth that Western nations are to blame for the crippling poverty that remains in Burma despite all the foreign aid and investment that continues to pour into the regime. The time is overdue for the Western actors to realise the futility of half-measures and adopt the
74 75
IPS News: Marwaan Macan-Markar (27 July, 2008) Females Hit Worst by Cyclone Nargis - Report Clive Parker and Khun Sam (12 October, 2005) Internet Censorship in Burma Worsening (The Irrawaddy) 76 nd House of Lords: Select Committee on Economic Affairs; 2 Report of Session 2006-2007, The Impact of Economic Sanctions, Volume I: Report (9 May 2007) 77 BBC News (9 June 2011): Burma gets a record $20bn in foreign investment
46
measures necessary to protect the long-term interests of themselves, the region and the embattled people of Burma.
Appendix I. Human Security in ASEAN Member Countries Under 5 Mortality Rate Progress
200 180 160 140 120 Value 100 80 60 40 20 0 1985 1990 1995 2000 2009 Source: UNICEF: Under-Five Mortality Rankings: The Progress of Rate Burma Brunei Darussalam Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam
Maternal Mortality Ratio (modelled estimate, per 100, 000 live births)
1400 Burma 1200 1000 800 600 400 200 0 1990 1995 2000 2005 2008 Source: The World Bank: Maternal Mortality Ratio Brunei Darussalam Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam
47
Mortality rate, infant (per 1, 000 live births)

140 120 100 80 60 40 20 0 1985 1990 1995 2000 2005 2006 2007 2008 2009 Source: The World Bank: Infant Mortality Rate (under 1 year-old) Burma Brunei Darussalam Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam
Population Undernourished, Percentage (estimate)

50 45 40 35 30 25 20 15 10 5 0 1991 1996 2001 2006 Source: UN: Millennium Development Goals Indicators Burma Cambodia Indonesia Laos Philippines Thailand Vietnam
48
Population Undernourished, millions (estimate)

35 30 25 20 15 10 5 0 1991 1996 2001 2006 Burma Cambodia Indonesia Laos Philippines Thailand Vietnam
Proportion of Population Using an Improved Driking Water Source (estimate)

120 100 80 60 40 20 0 1990 1995 2000 2005 2008 Source: UN: Millennium Development Goals Indicators Burma Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam
49
Proportion of Population using an Improved Sanitation Facility (estimate)

120 100 80 60 40 20 0 1995 2000 2005 2008 Source: UN: Millennium Development Goals Indicators Burma Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam
Percentage of pupils starting grade 1 who reach last grade of primary, both sexes
100 90 80 70 60 50 40 30 20 10 0 2000 2001 2002 2003 Source: UN: Millennium Development Goals Indicators Burma Cambodia Laos Philippines Vietnam
50
Internet users per 100 inhabitants

80 70 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 Burma Brunei Darussalam Cambodia Indonesia Laos Malaysia Philippines Singapore Thailand Vietnam
Source: UN: Millennium Development Goals Indicators; ITU estimates for 2006
Appendix II. FDI Flows to Burma by Country of Origin (in US$ Million)
Year Source Country 1995 Japan Total North America USA Canada Total Europe Total European Union Austria Denmark France Germany Netherlands United Kingdom Other Europe Total Asia 0.40 31.00 30.20 0.80 176.50 176.50 86.90 2.00 87.60 3.10 1996 15.60 14.30 14.30 301.70 301.70 3.30 71.80 4.40 222.20 5.20 1997 18.90 32.10 30.60 1.50 492.50 492.50 0.80 201.70 0.20 1.20 288.60 0.40 1998 33.50 162.20 158.30 3.90 294.60 294.60 90.00 1.50 203.10 2.60 1999 18.80 1.20 0.80 0.40 216.60 216.60 33.00 7.00 0.50 176.10 0.03 20.75 48.29 0.27 2000 16.30 37.49 36.43 1.06 69.04 69.04 2001 7.72 46.33 44.70 1.63 56.42 56.42 24.31 32.11 0.52 2002 4.62 92.16 90.84 1.32 52.62 52.56 0.71 26.56 25.29 0.06 4.84 2003 3.30 20.03 20.03 71.11 69.24 35.48 33.76 1.87 2004 0.19 31.12 31.12 89.18 89.18 0.08 76.17 12.93 108.33 2005 0.09 34.32 34.28 31.04 3.24 0.04 34.44
51
Year Source Country China India Other Asia Total ANIEs Republic of Korea Hong Kong Total ASEAN Indonesia Malaysia Philippines Singapore Thailand Total Australasia Australia New Zealand: 2.80 Total Central and South America Panama Other Countries (Not specified) Total 1995 3.10 7.10 1.40 5.70 96.70 5.70 3.10 55.50 32.40 2.80 2.80 1996 2.20 3.00 13.70 0.50 13.20 228.60 10.60 0.40 175.00 42.60 1.60 1.60 1997 0.40 11.20 6.50 4.70 323.30 7.00 5.10 0.10 279.10 32.00 0.40 0.40 1998 2.60 27.80 17.10 10.70 153.90 4.80 12.00 79.10 58.00 0.30 0.30 8.50 1999 0.03 22.60 8.80 13.80 41.20 1.00 15.50 0.20 14.90 9.60 1.30 1.30 2.50 2000 0.27 8.97 4.48 4.49 74.02 7.51 5.91 57.61 2.99 1.91 1.91 2001 0.52 11.89 7.17 4.72 67.36 3.48 2.23 55.69 5.96 1.12 1.12 2002 4.84 12.02 4.27 7.75 25.11 3.43 20.87 0.81 2003 172.51 0.37 172.14 24.28 5.63 0.17 11.52 6.96 2004 108.13 0.20 12.72 5.16 7.56 9.31 4.18 0.04 0.91 4.18 0.28 0.28 2005 34.44 0.95 0.04 0.91 1.96 1.79 0.03 0.14 -
8.50 -
2.50 -
0.65
0.03
580.70
878.80
683.40
304.23
208.00
192.01
191.40
291.23
251.13
71.76
Source: ASEAN Secretariat: Statistics of Foreign Direct Investment in ASEAN (Eighth Edition, 2006)
52
Researchers
Zaw Nay Aung is a Burmese political refugee in the United Kingdom. He studied at Dagon University (Burma), Thames Valley University (University of West London) and Royal Holloway, University of London. He has an MSc in Politics and International Relations from Royal Holloway, University of London and is a member of the International Institute for Strategic Studies (IISS) and the UK Political Studies Association. David M Gibson holds an MA in Asian/African History from the School of African and Oriental Studies, University of London. He also holds a BScEcon, Modern History and Politics from Cardiff University. He has held research internships at the Centre for Policy Studies and the Freedom Association and contributes to various political advocacy websites. In recent years, he has been working in China and has travelled extensively around Asia. Shabana Bhula has a BA History (Hons: 2.1) from Kings College, University of London. She worked for Age Concern Gloucestershire and has held internships at UK Border Agency and Gloucester Labour Party. She also volunteered in India for Platform 2, Global Volunteering Scheme. Jacob Christensen studied at the School of Oriental and African Studies, University of London for MSc in Asian Politics. He received BA in Chinese Studies from Arahus University and worked as a Producer for Super8, a Danish Film Association. He was the producer for several projects and one of his short film won Jyskfilm 2005 Competition and the Talentprize at Arahus film festival.
53

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Burma Sanctions Regime: The Half-Full Glass and a Humanitarian Myth

A Preliminary Assessment of Political and Humanitarian Conditions under Sanctions

Burma Independence Advocates

Procedure and Methodology

Political Developments 1988 - 2011

December 1995 January 1996

Country United States

United States United Kingdom Canada

Month/Year September 1996

Type of Measure Assistance, Trade and Travel

October 1996 October 1996

March 1997 May 1997 June 1997 July 1997

Trade Trade Trade Trade

UK suspended trade-promoting activities

October 1997 November 1997

Assistance, Travel Assistance, Travel

Travel and Financial

April 2000 March 2001 Jan/Jul 2003

Trade Trade Trade and Travel

United States Canada

European Union United States

European Union United States

European Union United States European Union

Assistance, Travel Trade, Assistance and Travel Travel

Ibid Ibid 39 Ibid 40 HRW (Report, 2006) 41 Ibid

Burma Sanctions Regime (2005-2011)

May 2006 May 2006

European Union United States European Union Australia

Assistance, Trade, Travel and Financial Financial

Trade, Travel and Financial Financial

September 2007 October 2007 November 2007 December 2007

European Union Canada

Travel and Financial

March 2008 April 2008 May 2008

Trade, Travel and Financial Financial Trade

Assistance, Trade, Travel and Financial

Month/Year October 2008

Type of Measure Financial

European Union United States European Union United States

Trade, Travel and Financial Trade, Travel and Financial

Assistance, Trade, Travel and Financial

April 2010 May 2010

United States United States

Trade, Travel and Financial Trade

Assistance, Trade, Travel and Financial

Trade, Travel and Financial

Socio-Economic Developments, 1988 - 2011

Source: UNCTAD: Inward Foreign Direct Investment Flows

The Irrawaddy: Foreign Companies Withdrawn from Burma

Unemployment, both sexes

Source: IMF: Direction of Trade Statistics

UNDG: Myanmar Coordination Profile: Comments

Under -five Mortality Rate Progress

Source: UNICEF: Under-Five Mortality Rankings: The Progress of Rate

UN: Common Country Assessment (CCA) Guidelines

Mortality rate, under-five (per 1, 000)

Source: The World Bank: Maternal Mortality Ratio

Mortality rate, infant (per 1, 000 live births)

Fig. 3.8 One-Year-Old Children Immunized against Measles, Percentage (estimate)

Source: UN: Millennium Development Goals Indicators

Source: UN: Millennium Development Goals Indicators

Fig. 3.10 Population Undernourished, millions (estimate)

Source: UN: Millennium Development Goals Indicators

Source: UN: Millennium Development Goals Indicators