HRF/81/03

 13 July 2003

Burma: Time to make the generals sweat

In May 2003, following violent clashes in the north of the country, the Burmese military junta did the predictable thing, by grimly marching Aung San Suu Kyi off to an undisclosed location. In the days that followed, so did the international community.

The United Kingdom publicly condemned the detention and urged British American Tobacco (BAT), which has a US$ 16.5 million cigarette factory in Burma, employing 500 people, to pull out of the country. The United States House of Representatives overwhelmingly voted to impose sanctions on Burma by passing the Burmese Freedom and Democracy Act in early July. The Act freezes the regimeâs financial assets in US banks, places a ban on US visas for regime members, creates further trade restrictions, such as a ban on imports from Burma for up to three years, codifies US policy to oppose all loans from international institutions for Burma, and allows for resources to assist democracy activists in Burma. The European Union stepped up its already existing sanctions against the regime, banning visas and freezing the assets of more than 150 top officials in the junta and suspending trade privileges with the country. Norway, in particular, loudly condemned Ms Suu Kyiâs detention and despatched its ambassador in Thailand to Rangoon to convey Osloâs position in person.

Disturbed by these developments, Burmaâs more immediate neighbours spoke up too â louder than usual, but not nearly enough to make the junta flinch. The Association of Southeast Asian Nations (ASEAN) issued a mildly-worded rebuke during its annual ministerial meeting in mid-June. Japan, whose aid payments to Burma in 2001 totalled US$ 78 million making it their largest foreign donor, has suspended all further payments until Ms Suu Kyi is released. Japan has also been attempting some hectic regional diplomacy, by meeting with Burmese representatives and with leaders of other countries in Asia, such as Malaysia, in order to encourage a harder line on Burma from the region. Such diplomacy has succeeded to some extent; ASEAN, led by Malaysia, has now threatened Burma with expulsion if it does not take immediate action on the matter.

However, a disjointed international reaction â with the Western countries quickly slapping economic sanctions and the Asian countries hiding behind the fig-leaf of âconstructive/flexible engagementâ â is likely to result in failure. A more focused approach consisting of smart sanctions coupled with diplomacy is necessary to force the recalcitrant military junta to respond positively.

The Burmese government has faced similar international criticism for the past 15 years. Regardless, Burma has seemed to only become more repressive, particularly after its entry into ASEAN in 1997. So why has nothing succeeded in changing Burma's regime? Although ASEAN's public critique of Burma's actions was a departure from its traditional policy of 'non-interference', the alliance has made it clear that it will not impose economic sanctions simply because the US has insisted it do so. Such an assurance seems to have been all the junta has needed to continue with their repressive policies without fear. More importantly, although the US is one of Burma's major markets, the effects of Western sanctions have consistently been offset by the presence of large and stable markets much closer to home.

The country's ambassador to the UK, Dr Kyaw Win, confirmed this in an interview to the BBC, saying that "[w]e are not worried about US and European sanctions, as trade with India, China and Thailand is already good." The Australian foreign minister echoed this sentiment, criticising the new sanctions by the US and declining to commit Australia to imposing similar sanctions because he doubted "that would make a difference unless China and ASEAN also did." Even the American bill was fortified at the last minute with language that acknowledged these ground realities, criticising China and Thailand in particular for their "economic and political patronage of the Burmese dictatorship." Editorials have repeatedly pointed to New Delhi, which saw visits from the Burmese Foreign Minister in January and July, as also being a key player in supporting the Burmese regime through trade. Regardless of which countries may be the most at fault, it is obvious that the Asian countries' willingness to trade with an illegitimate regime has undermined the effects of Western economic sanctions.

However, a delicate web of economic and political motives governs China, India and Thailand's relationships with Burma, making the prospect of economic sanctions by these countries unlikely. Despite repeated calls to do so from the US, China has not publicly condemned the junta for Ms Suu Kyi's detention. China has historically been Burma's closest ally, and has provided arms and training for Burma's military. Burma's military leaders have made no secret of their wish to further ingratiate themselves with both China and India. In January 2003, General Than Shwe paid a six-day visit to China. Immediately afterwards, Win Aung became the first foreign minister from Burma to visit India in 15 years. Thailand became the first state to meet the new Burmese government in 1988 when it sent then Army Chief of Staff General Chavalit Yongchaiyudh to the country.

The US sanctions have been praised by pro-democracy activists as a "step in the right direction." However, if it is the diversity of political reasons that prevents a unified international response to the crisis in Burma, the US has the potential to provide a very good economic reason to unify regional policy towards Burma. In 1996, President Bill Clinton signed into law the Cuban Liberty and Democratic Solidarity (Libertad) Act, widely known as the Helms-Burton Act, which cemented American policy towards Cuba in several ways. The Act froze the US embargo against trade with Cuba for US firms and firms owned by Americans and closed US borders to officers or controlling shareholders in firms that used property that was formerly owned by Americans in Cuba. Most importantly, the act made companies from other countries using Cuban property once owned by Americans vulnerable to lawsuits in the United States by the former property owners. Such lawsuits could result in damages for up to three times the value of the concerned property.

The Helms-Burton Act was widely criticised, particularly by Mexico, Canada and the EU, for attempting to impose the American political viewpoint on other countries' economies, and the EU even brought a suit against the US in the WTO. However, Burma's current political situation requires strong measures, and the Helms-Burton Act provides a useful model for Burma's Asian trading partners. Other countries - in particular, Burma's Asian neighbours - must be encouraged to model their "flexible engagement" on the lines of the Helms-Burton Act. Japan, for example, in tandem with the US, can use its leverage with international financial institutions to block all loans for Burma, while China, India and Thailand could stop using Burma as a transit point for their trade with each other. International insurance firms should be prevailed upon to deny sureties for vessels used in trade with Burma. The visa restrictions envisaged by the Helms-Burton Act may also be replicated by other countries.

A strong message needs to be sent out to Burma's military junta - an exercise that must involve not just the well-meaning countries but also those that have tended to place their own economic and political interests over and above the pursuit of a democratic government in Burma. It is easier - and safer - to do business with a stable, democratic country than with an autocratic regime. Burma's neighbours appear to have lost sight of this fundamental economic truism.

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