News / Asia

Burmese Reforms Raise Questions About Economic Sanctions

US Secretary of State Hillary Clinton and Burma pro-democracy leader Aung San Suu Kyi shake hands before dinner at the US Chief of Mission Residence in Rangoon, Burma, December 1, 2011.
US Secretary of State Hillary Clinton and Burma pro-democracy leader Aung San Suu Kyi shake hands before dinner at the US Chief of Mission Residence in Rangoon, Burma, December 1, 2011.

Although U.S. Secretary of State Hillary Clinton says economic sanctions against Burma will not be lifted until certain policies of the Burmese government change, there is debate among analysts over the effect of Washington’s trade restrictions and the role they play in promoting political reform.

The United States has gradually tightened trade restrictions on Burma for more than two decades to promote reform and punish the country's military leaders for their human rights violations - abuses, activists say, that continue unabated.

But with pro-democracy leader Aung San Suu Kyi agreeing to reenter politics, and Burma's new government taking steps to reform, what role should economic sanctions continue to play?

U.S. firms stay out

Maung Zarni, a Burmese researcher at The London School of Economics and Political Science, said one thing sanctions have done is to keep U.S. companies from becoming important players in Burma's economy.

"The Chinese, the South Koreans, even Japan and the Indians have stepped into the place that has been vacated by U.S. investors.  Economically, sanctions, per se, do not have much of an impact on the behavior of the Burmese generals," said Zarni.

After nearly five decades of military rule, Burma is one of the region's poorest economies. The country is rich in natural resources, though, which are needed by neighboring China and other countries in the region.

Carlyle Thayer, an Asia analyst at The University of New South Wales in Canberra, Australia, said, "Sanctions really don't work, unless everybody cooperates; there are ways of evading it. And that country has a long track record of self-imposed isolation from the outside world and leaders who had a world view that won't be changed by what Washington would like them to do."

Encouraging dialogue

As Western countries tried to isolate Burma, the Association of Southeast Asian Nations, or ASEAN, took a different route, engaging Burma's military leaders and allowing the country to become a member in 1997.

Last month, ASEAN approved a decision to allow Burma to become its chair in 2014, after a flurry of reforms by the country's government that is now led by a retired general, President Thein Sein.

In recent months, the government has relaxed media controls, passed laws that allow for labor unions and the right to protest, released more than 200 political prisoners and held direct talks with Suu Kyi.

Analyst Thayer said that unlike Western sanctions, Burma's participation in ASEAN helps accelerate reforms.

"When ASEAN holds its ASEAN related summits twice a year, there's a gathering momentum for things to take place around that time," said Thayer.

Earlier this year, the European Union broke ranks with the United States, approving the temporary removal of some sanctions against Burma. The move was the first reversal of punitive measures put in place by Western governments.

President Barack Obama calls Burma's recent reforms "flickers of progress," but there is no sign that Washington will end sanctions soon.  The Obama administration says it wants to see more political and economic reforms.

Counterbalancing Chinese influence

Zarni said that although he advocated the lifting of sanctions in the past because of their effect on the Burmese people, the situation has changed now that Burma is seeking more engagement with Washington.

"Without the sanctions in place, the regime would not have even made whatever gestures or superficial gestures that they have made to date, much less bring Aung San Suu Kyi onboard," said Zarni.

Analysts add that the flood of small- and medium-sized Chinese businesses into northern Burma, and a wide array of investment projects from China, are another reason why Burma's wants more engagement with Washington and why sanctions still can help promote reforms.

"The Burmese regime wants to basically counterbalance China's growing power and influence in the country. I think that's where the sanctions and the role of the United States all of a sudden takes on a new dimension of significance," said Zarni.

Zarni said that one way the United States might use this leverage is by taking a more critical stance when it comes to issues such as the Burmese military's continued operations against the country's ethnic minorities. He said the United States also should get the Burmese government to acknowledge that it holds and tortures political prisoners.

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