Tuesday, September 27, 2016

Lifting US sanctions: right or wrong? the case for and against dropping economic restrictions on Myanmar

Two weeks ago the Obama administration declared that it will drop all remaining economic sanctions imposed on Myanmar. Since 1997, when the sanctions were established as a response to the gross human rights abuses being committed by the country’s ruling junta, they have prevented any tangible trade between the two countries.

During his meeting with Aung San Suu Kyi, who was visiting Washington for the first time as Myanmar’s de facto leader, President Obama sought to reward the progress the Southeast Asian nation had made towards democracy.

“The United States is now prepared to lift sanctions that we have imposed on Burma for quite some time,” he said, “It is the right thing to do in order to ensure that the people of Burma see rewards from a new way of doing business and a new government.”

But is lifting the sanctions the right thing to do?

The latest round of changes to the sanctions, which the Obama administration began easing in May 2012, will terminate the National Emergencies Act. It defines Myanmar as an “extraordinary threat to the national security and foreign policy of the United States.” This law forms the basis of most remaining sanctions.

By terminating the state of emergency as it applies to Myanmar, the trade ban imposed on 104 individuals and companies cited on the Treasury Department’s Specially Designated Nationals List will cease to exist. Importantly, restrictions designed to block trade with North Korea and curtail the trafficking of drugs and gems will remain in place.

Given that the sanctions targeted those individuals and companies considered to be the most responsible for previous human rights abuses as well as those most threatening to the future peace and stability of Myanmar, lifting them is unsurprisingly contentious. So was this decision the right thing to do?

The case for
The most touted benefit for Myanmar is the increased economic development and preferential trade with the United States. The military-backed conglomerates will certainly benefit from this new arrangement, but so will countless small and medium-sized enterprises. A more immediate task now is to improve quality standards, production facilities and logistics chains in Myanmar. The lifting of the sanctions provides further motivation to make this happen.

A related benefit is that any growth in employment will aid the position of Myanmar’s young democratic government. Given the fragile state of party politics in Myanmar, whereby the only viable alternative to the National League for Democracy is the military-backed Union Solidarity and Development Party, policy changes that fortify the public standing of the ruling party should be encouraged. The windfall that is expected to follow the removal of the sanctions will thus be credited to Aung San Suu Kyi’s government.

Myanmar will also become less economically dependent on China, whose investment is not conditional on respect for civil liberties and political rights. Since the late 1980s, China and the United States have invested approximately US$18 billion and US$248 million, respectively. This imbalance actually encouraged military officials and business cronies to profiteer from China’s investment. The opening of the American market not only offers new opportunities for private and public companies, but support from a country that normatively approves of democracy in Myanmar.

The case against
The most obvious reason not to lift the sanctions is that those individuals linked to the previous military regime would benefit from the decision. This includes prominent business cronies, known criminals and established human rights abusers. Companies linked to the previous military regime would also benefit, especially the Union of Myanmar Economic Holdings and the Myanmar Economic Corporation. Together they dominate the agro-farming, airline, banking, minerals, tourism and trading industries. The removal of the sanctions would therefore benefit the few, not the many.

Another problem, expressed by ethnic civil society organisations, is that ending the sanctions releases pressure on the military to abide by international human rights norms amid ongoing conflict. “There remain a number of pressing issues threatening the stability of the country and its most vulnerable people,” a joint letter stated, “These issues are deeply concerning as they include the severest of human rights abuses, and progress on these dire matters should be required to lift further sanctions.” This appeal evidently fell on deaf ears.

Lifting the sanctions also takes away the leverage they provided the government in its relationship with the military. This is the criticism made by Human Rights Watch: “The sanctions are crucial for pressing the military to end rights abuses and transfer power to a civilian government. They shouldn’t be fully lifted until the democratic transition is irreversible.”

In other words, the sanctions offered a means to get the military to the negotiating table on reforming the 2008 constitution. Without them, it is unclear how to get the military to invest more fully in democratisation.

The right thing?
Dropping the sanctions was the right thing to do. This is because the entire case against doing so is premised on the notion that the sanctions actually worked.

This claim runs counter to a series of devastating critiques offered by Morten Pedersen (2008) and Lee Jones (2015). They reveal how those individuals and companies targeted by the sanctions had actually been able to circumvent their restrictions and displace their costs. The consequences of the sanctions were thus avoided altogether and/or suffered by citizens.

The further claim that, without the sanctions, the military would not feel pressured to comply with international human rights norms is irrelevant. The widespread abuses committed by the military against various ethnic groups easily predate the start of sanctions and will continue to occur with the end of them.

The final claim, that the sanctions provide the government with leverage over the military in the context of reforming the 2008 constitution, fails to account for the real reason why the military abdicated day-to-day control of the government. This extrusion strategy not only remains in place, but the supposed pressure of sanctions are inconsequential to it.

Lee Morgenbesser is a Research Fellow at the Griffith Asia Institute, Griffith University.

This article is a collaboration between New Mandala and The Myanmar Times.

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