News / Asia

Rights Groups Cautious About Easing Burma Sanctions

A truck loaded with teak logs runs on a road in Rangoon, Burma. U.S. Secretary of State announced the US will ease its import ban on Burma, Sept. 27, 2012.
A truck loaded with teak logs runs on a road in Rangoon, Burma. U.S. Secretary of State announced the US will ease its import ban on Burma, Sept. 27, 2012.
Ron Corben
— Rights groups have cautiously welcomed U.S. moves to lift trade sanctions against Burma. The measures recognize the country’s reforms, but analysts say there are still serious concerns about legislative reforms and land rights.

The lifting of the trade sanctions, announced Wednesday by Secretary of State Hillary Clinton, follows earlier steps to ease financial restrictions and came during an official visit to the United States by President Thein Sein.

Reaction

Aung San Suu Kyi, who is also visiting the united States, expressed support for an easing of the ban, saying Burma no longer remains reliant on external pressure to ensure moves towards democracy.  U.S. officials have said they want to experience tangible benefits of the reform process currently underway.

Sean Turnell, associate economics professor at Australia’s Macquarie University, says it will still take time before the lifting of sanctions comes into effect. “That is the last remaining big economic sanction on Burma.  [However,] You can’t have it immediately because that particular import ban is a Congressional act rather than an executive order, so the president can wave it;  but, to have that sanction removed completely it would have to be a vote of the Congress," he explained. "So that won’t happen until after the election.”

Investments

Washington had earlier cleared the way for U.S. companies and “private agencies” to provide financial services and invest in Burma - also known as Myanmar.  Major U.S. corporations, such as Coca-Cola and Pepsi Co., have indicated they are planning to invest in Burma.

The country has been flooded by a wave of foreign investors as international sanctions have been eased.  China is the largest investor with $13 billion in Burma, followed by Thailand with $9 billion. Japan is also believed to be planning to strengthen investments.

Phil Robertson, Deputy Asia Director for Human Rights Watch, says a key concern for the moment is the issue of land seizures. “One of the things that we’re seeing coming up all over Burma is land problems, seizures of land - unauthorized taking of land by well-connected wealthy people," he said. "Burma is starting to see similar areas that previously were not considered very important all of a sudden are starting to look valuable and people with connections are displacing farmers and others.”

Reforms

The Alternative ASEAN Network say further legislative reforms should be in place to support property rights of minority groups and individuals and protection of workers’ labor rights.

Other concerns lie in corruption and poor regulations. In 2011 Burma was ranked as the 180th best nations for corruption by watchdog Transparency International’s index.

Asian Development Bank (ADB) economist, Cyn-Young Park, says the economy needs further reform to press forward, including regulatory framework and a strengthening of human capital and education. “A weak legal and regulatory framework is always a barrier to foreign investment. I mean investors always look at whether or not the country is actually with a clear transparent sort of legal laws and regulation and do they actually have clear ownership, property rights in terms of corporate governance,” Park stated.

Park says Burma’s government is “working very hard” to address these issues to attract direct foreign investment. The ADB says, if Burma can sustain reforms - including economic changes - growth could reach eight percent and lead to a tripling in per capita income by 2030.

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