Suspending Sanctions on Myanmar: A Mistake

by Ivan Boekelheide on May 23, 2012

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There is ample reason for hope in Myanmar. The November 2010 presidential elections ushered in political and economic reforms that improved basic rights, and the April by-elections brought Nobel Laureate Aung San Suu Kyi back into politics, creating a semblance of democracy. These changes have led the international community to revisit its policies toward Myanmar. In particular, governments are reevaluating their sanctions on Myanmar: on May 17,the United States suspended sanctions barring investment in Burma. This is a mistake. While both elections signify progress, the path to full democracy is steep and uncertain. Myanmar’s checkered past demands international patience and caution. Continued sanctions offer the best hope to further the reform process.

The brutal history of Myanmar’s government is well known. Half a century of repressive rule crushed all optimism for democratic change. Political protest against the government in 1988 resulted in hundreds of deaths. Elections won by Aung San Suu Kyi and her National League for Democracy party were thrown out in 1990, leaving the country under illegitimate military rule. Most recently, scores of monks were slaughtered in 2007, a date remembered as “The Saffron Revolution” for the color of the monks’ robes. Violence and repression have defined the military’s rule since 1962. However, current President Thein Sein has indicated that he intends to change course. The release of political prisoners, including Aung San Suu Kyi, along with improved civil and political rights signal the government’s intentions to remake its tarnished reputation.

Still, the international community, especially the United States, is removing pressure too quickly. The sanctions regime punished the Burmese leadership by applying economic constraints. It is true that sanctions, including the prohibition of Burmese exports to America and American investment in Burma, impact the entire Burmese economy and citizenry. With an anemic economy, due in part to sanctions and a selfish ruling class, Burma has the lowest GDP per capita in Asia after war-torn Afghanistan. As a result, American foreign policy needed to figure out how to encourage a reform process that would benefit the impoverished majority without enriching the culpable elite.

Although it would be challenging to support the enhancement of a Burmese economy while actively suppressing it, sanctions remain the most effective tool the U.S. has to compel reform. The United States is not in a position to rebuild Burma — that is the responsibility of the Burmese leadership — but it could have continued to play an active role in checking the historically brutal government through sanctions.

In response to the April 1, 2012 Burmese by-elections, Secretary Hillary Clinton laid out a plan to ease American sanctions. The steps included appointing Ambassador Derek Mitchell to Myanmar, installing an in-country USAID mission, enabling private organizations to set up non-profit programs, allowing travel for Burmese government officials to the United States, and reducing selected bans on the export of U.S. financial services and investment. Since then, the U.S. Treasury Department has permitted specific American financial transactions for not-for-profit activities and has lifted limits on investment. While these policy changes attempt to positively reciprocate Burmese reforms, they go too far.

Unfortunately, the European Union has also agreed to suspend nearly all sanctions on Burma. The Association of Southeast Asian Nations (ASEAN) supports the lifting of all sanctions as well. Still, the United States wields the most influence over Myanmar. With its close relationship to international financial institutions, including the World Bank and the Asian Development Bank, America controls economic assistance to Burma.

By slowly and strategically peeling away layers of sanctions, America could have offered incentives for continued reform in Myanmar. Suspending sanctions this early leaves the United States with few options. Secretary Clinton’s plan is too aggressive. Lifting travel bans and offering American financial services risks benefiting the greatest human rights offenders in the Burmese government. While Secretary Clinton is adamant about maintaining sanctions against the opponents of reform, the implementation of selective sanctions is difficult. The U.S. should not have lifted any sanctions that benefit the Burmese government until substantial and meaningful progress was seen on the ground.

Thus far, Burmese reforms have focused on social rights, and they should continue to do so. Expanded political and civil rights must be firmly entrenched in Burmese society to foster economic growth. However, the Burmese government has a long way to go in providing economic wellbeing to all rungs of society. The right time to lift sanctions would be when greater equality and inclusiveness exist for the Burmese population, including ethnic minorities. While the suspension of sanctions is not permanent, the United States has acted too hastily and ought to consider revising and revamping its new policies.

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