News

As Sanctions Begin Easing, Burma's Economy Under Scrutiny

A man uses an ATM machine at KBZ bank's head office in Rangoon, March 14, 2012.
A man uses an ATM machine at KBZ bank's head office in Rangoon, March 14, 2012.

The election success of Burma's opposition has led to the easing of some sanctions imposed by the United States and pressure from neighboring countries to drop them entirely. Although there is a surge in interest in Burma's economy from foreign investors, analysts warn there remain major economic and political challenges.

Key Facts About Burma

  • Adopted a political system based on democratic principals in 2011 after almost five decades of military rule.
  • The new government is made up mostly of retired or serving generals.
  • Population is estimated at 55 million people.
  • The largest ethnic group is Burman, 68 percent of the population.
  • 89 percent of the population is Buddhist.
  • The military moved the capital from Rangoon to the newly-built city Naypyitaw in 2005.
  • At least 2 years military service is compulsory for men and women.

This week, the United States dropped travel bans against some senior Burmese officials and eased restrictions on some U.S. investment and financial services.

Positive reaction

The moves were welcomed by the chief executive of the investment house Leopard Capital, Douglas Clayton.

"We’re very bullish on the development and we believe that this is the beginning of Myanmar’s [Burma's] transformation into a modern economy and that there will be a role for foreign investors to play in that. Sanctions in the past should be unwound because the reasons for sanctions have been largely met," he said.

Although the United States has said it is preparing to nominate an ambassador to the country, Secretary of State Hillary Clinton says the reform process still has a long way to go.

ASEAN divided

That position remains at odds with Burma’s neighbors in the Association of Southeast Asia Nations, who has called for an end to all sanctions.

Despite that show of support from ASEAN, not all members are in agreement.

ASEAN politicians within the ASEAN Inter-parliamentary Myanmar Caucus say the lifting of all sanctions could be premature, inviting instability within the country.

Kraisak Choonhavan, Thailand representative within the Caucus, says ending fighting in ethnic minority regions should be the priority before sanctions are fully lifted.

"These pressures [to ease sanctions] are strong and much stronger still, as it is represented by the ASEAN call for the lifting of sanctions to please the regime - which remains very much a vicious and undaunting regime on the maintenance of its absolute power over Shan State, Karen State, Kachin State [and] Mon State," said Kraisak Choonhavan.

Human rights

The Burmese government has been holding ceasefire talks with the Kachin and Karen in recent days. Rights organizations say on-going military operations have led to human rights abuses and attacks on civilians in Kachin state in recent months.

Kraisak fears the NLD, Burma's main opposition party, having secured seats in the national parliament in the by-election, may turn its back on ethnic minority communities’ concerns.

Other pro-democracy groups say sanctions should be lifted only after all political detainees are released. The Thailand based Assistance Association for Political Prisoners (AAPP) says there are still 900 political prisoners in jail.

Human Rights Watch, in a release, called for caution in any easing of sanctions, saying while positive steps by Burma’s government should be matched by the European Union, there should be no “wholesale withdrawal of sanctions”.

The rights group says a further easing on visa bans and increases in humanitarian and development assistance should be considered by European Union foreign ministers.

While the sanctions may remain for now, there already has been a surge in tourism from foreigners eager for a first hand look at the country.

Sean Turnell, an associate professor of economics at Australia’s Macquarie University, says Asian investors are already trying to capitalize on the foreign interest.

"Asian investors have always been there of course. But some of them are getting excited about potential Western interest in the sense that if they see a great advance of Western tourists into the country then I think there’s a lot of Asian investors interested in hotels and tourist infrastructure," said Turnell.

Burma’s economy in recent years has grown up with the sanctions, which has led to pain for some industries but benefits for others.

Uneven benefits

Academics and rights workers have argued the trade and financial sanctions hit workers in export-oriented industries such as textiles, forcing many who would prefer factory jobs into informal sectors such as entertainment or the sex industry.

Aung Zaw, editor of the newsmagazine The Irrawaddy says there are many businessmen and state-owned enterprises that have benefited from the restricted economic competition resulting from the foreign sanctions.

"There are some tycoons, those ministers, whose [business] is not competitive; particular those billionaires inside the country," he said. "They are not competitive enough and they don’t want to see sanctions being lifted because they are enjoying so much with the monopoly - they monopolize everything."

But all analysts agree Burma faces major challenges and opportunities as it tries to rebuild an economy long mismanaged after five decades of military rule.

Timeline of major political events in Burma

Loading...
This forum has been closed.
Comment Sorting
Comments
     
by: Jacvques
April 06, 2012 4:43 PM
Imeant to say the Us should negotiate a trade treaty with Burma that way the Myanmar govt woudl know what we waant and we would learn what they want. hence the american legislator could be fast tracked to repeal the sanctions.....

by: Jacques
April 06, 2012 4:38 PM
An analyst said the sanctions on Burma where off a legislative nature and would be hard to lift. Great op for state dept to send a team to wrk with Myanmar legislators and set up a transparent business climate where internationall trade could flourish within an acceptable legal environment Quid pro quo sanctions for a structured business environment.

by: Cả Thộn
April 06, 2012 6:25 AM
Money starts coming in and corruption starts coming out. Burmese must be in control or corruption will take the center stage there. Don't let what happening in Vietnam, happen in Burma

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Turkey's Main Opposition Party Hopes for Election Breakthroughi
X
May 22, 2015 10:23 AM
Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Turkey's Main Opposition Party Hopes for Election Breakthrough

Turkey’s main opposition Republican People’s Party has sought an image change ahead of the June 7 general election. The move comes after suffering successive defeats at the hands of the Islamist-rooted AK Party, which has portrayed it as hostile to religion. Dorian Jones reports from the western city of Izmir.
Video

Video Europe Follows US Lead in Tackling ‘Conflict Minerals’

Metals mined from conflict zones in places like the Democratic Republic of Congo are often sold by warlords to buy weapons. This week European lawmakers voted to force manufacturers to prove that their supply chains are not inadvertently fueling conflicts and human rights abuses. Henry Ridgwell reports from London.
Video

Video Class Tackles Questions of Race, Discrimination

Unrest in some U.S. cities is more than just a trending news item at Ladue Middle School in St. Louis, Missouri. As VOA’s Kane Farabaugh reports, it’s a focus of a multicultural studies class engaging students in wide-ranging discussions about racial tensions and police aggression.
Video

Video Mind-Controlled Prosthetics Are Getting Closer

Scientists and engineers are making substantial advances towards the ultimate goal in prosthetics – creation of limbs that can be controlled by the wearer’s mind. Thanks to sophisticated sensors capable of picking up the brain’s signals, an amputee in Iceland is literally bringing us one step closer to that goal. VOA’s George Putic reports.
Video

Video Afghan Economy Sinks As Foreign Troops Depart

As international troops prepare to leave Afghanistan, and many foreign aid groups follow, Afghans are grappling with how the exodus will affect the country's fragile economy. Ayesha Tanzeem reports from the Afghan capital, Kabul.
Video

Video Poverty, Ignorance Force Underage Girls Into Marriage

The recent marriage of a 17-year old Chechen girl to a local police chief who was 30 years older and already had a wife caused an outcry in Russia and beyond. The bride was reportedly forced to marry and her parents were intimidated into giving their consent. The union spotlighted yet again the plight of many underage girls in developing countries. Zlatica Hoke reports poverty, ignorance and fear are behind the practice, especially in Asia and Africa.
Video

Video South Korea Marks Gwangju Uprising Anniversary

South Korea this week marked the 35th anniversary of a protest that turned deadly. The Gwangju Uprising is credited with starting the country’s democratic revolution after it was violently quelled by South Korea’s former military rulers. But as Jason Strother reports, some observers worry that democracy has recently been eroded.
Video

Video California’s Water System Not Created To Handle Current Drought

The drought in California is moving into its fourth year. While the state's governor is mandating a reduction in urban water use, most of the water used in California is for agriculture. But both city dwellers and farmers are feeling the impact of the drought. Some experts say the state’s water system was not created to handle long periods of drought. Elizabeth Lee reports from Ventura County, an agricultural region just northwest of Los Angeles.
Video

Video How to Clone a Mammoth: The Science of De-Extinction

An international team of scientists has sequenced the complete genome of the woolly mammoth. Led by the Swedish Museum of Natural History in Stockholm, the work opens the door to recreate the huge herbivore, which last roamed the Earth 4,000 years ago. VOA’s Rosanne Skirble considers the science of de-extinction and its place on the planet
Video

Video Blind Boy Defines His Life with Music

Cole Moran was born blind. He also has cognitive delays and other birth defects. He has to learn everything by ear. Nevertheless, the 12-year-old has had an insatiable love for music since he was born. VOA’s June Soh introduces us to the young phenomenal harmonica player.

VOA Blogs