Burma Sanctions Assessment

7/31/2019 Burma Sanctions Assessment

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Burma Sanctions Regime: The Half-Full Glass and a Humanitarian MythA Preliminary Assessment of Political and Humanitarian Conditions under Sanctions

Burma Independence Advocates

London.

8 August 2011


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Table of ContentsIntroduction ............................................................................................................................ 5

Objectives ............................................................................................................................... 5

Procedure and Methodology .................................................................................................. 6

Political Developments .......................................................................................................... 7

A Brief Assessment of the Relationship between the BSPP and the International

Community ......................................................................................................................... 7

Political Developments 1988 - 2011 .................................................................................. 9

Socio-Economic Developments, 1988 - 2011 ...................................................................... 19

Assessment of Human Security Areas.............................................................................. 24

Humanitarian Conditions under Military Dictatorship ..................................................... 33

Why Have the Sanctions Failed? ......................................................................................... 36

Conclusions and Recommendations..................................................................................... 40

Assessment Findings ........................................................................................................ 40

The Policy Options: .............................................................................................................. 41

RECOMMENDATIONS ..................................................................................................... 42

Conclusion ............................................................................................................................ 45

Appendix I. Human Security in ASEAN Member Countries .............................................. 47

Appendix II. FDI Flows to Burma by Country of Origin (in US$ Million) ........................ 51

Researchers ....................................................................................................................... 53


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Executive Summary Political developments following the elections of November 2010 have not

significantly improved the lives of the Burmese people.

The Western-imposed sanctions regime is controversial and requires in depth

reassessment.

The authoritative and influential nature of reports by the United Nations makes theorganisation the best-placed to undertake such an assessment. However, given thisreport's comprehensive consideration of all available facts, the overall findings of aUN-led report should not be substantially different from the findings of this report.

This report has considered the political efficacy of sanctions over the past twenty-twoyears by judging the sanction developments against political progress towards theobjectives of the sanctioning countries. The humanitarian consequences are

considered adopting the 'human security' criteria outlined in the UN's SanctionsAssessment Handbook.

International relations with Burma soured following the suppression of 1988's pro-democracy protests, resulting in the imposition of a continuing and substantialsanctions regime by Western nations, particularly the USA, the EU and Canada.

Despite sanctions and diplomatic actions by Japan and the West, victories have beensmall and few in number. Attempts to extend and combine sanctions in 1996 wereundermined by exploration contracts with Western oil producers Total and Unocal.

Further sanctions following the suppression of 2007's Saffron Revolution have donelittle to encourage democratisation or prevent a government crackdown on politicaldissidents. Following the sham election of 2010, the military continues its rule in asuperficial civilian guise.

The Western sanctions most likely to have affected the general population of Burmawere the 1997 ban on new investments and the 2003 Burma Freedom & DemocracyAct on the part of the USA and the 2008 extension of the EU's trade embargo.

In each of the above years, there was an increase in foreign investment into Burma.Foreign investment in the years preceding the sanctions remained lower than at anytime since their implementation.

Despite between 40,000 and 60,000 job losses in the clothing industry as a result ofthe 2003 trade sanctions, Burma's unemployment rate fell that year. Despite punitivetrade measures, a clear downwards trend occurred in the unemployment rate between1992 and 2008.

Despite the EU extending its trade sanctions in 2008, the year reported record exports,part of an exceptional upwards trend since 1989. There is little evidence to suggestthat the Western trade embargoes have led to an economic decline in Burma.


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Key health indicators show continuing improvements in the overall health of thepopulace throughout the period of Western sanctions. Substantial improvements havealso occurred in nourishment, improvements in drinking water and primary education.Access to Internet services has also shown a slight increase in this period.

The condition of Burmas environment has worsened over the past two decades .Deforestation is occurring at an alarming rate, carbon emissions have tripled between1990 and 2008 and there have been strong fluctuations in the amount of ozone-depleting CFCs in use.

Western sanctions have failed to achieve their objectives as they are not pursuedmultilaterally, cooperatively or with sufficient timing. Loopholes in the sanctionshave also harmed their political effectiveness while Asian nations continue to tradesubstantially with the regime.

Since the trade sanctions have come into effect, the ruling junta has spent nearly aquarter of its revenue on the armed forces, with very small sums put towardseducational or health infrastructure. In this year's budget, the two sectors combinedaccount for around 5% of government expenditure.

The approach of ASEAN members and Japan to engage Burma with economicincentives enriches the regime more than the Burmese people. As the Burmesemiddle-classes currently have a vested interest in the regime, economic engagement isunlikely to have a democratising effect in the near future. Instead, the current policyof principled engagement backed with political and economic pressure should bemade more effective than at present.

To close loopholes in the sanctions, all existing investments should be outlawed andcitizens of the sender states should not be allowed to pay taxes to, engage ineconomic-financial transactions with or enter into contracts with any Burmeseindividual. The EU must implement a comprehensive ban on all investments andimports from Burma.

Many who benefit from the regime are not currently subject to financial or visarestrictions and are able to travel to Western nations and benefit from their services.These restrictions should be extended to as many whom benefit from the regime ascan be identified.

Given the difficulty in enforcing trade sanctions when other nations are willing to fillthe resulting trade vacuum, consideration should be given to engaging secondarysanctions against certain nations who trade with Burma.

The reduce the threat to both the people of Burma and the entire region from theongoing civil war, the major refugee crisis and the junta's nuclear ambitions, the UNshould implement a comprehensive arms embargo. This would also benefit theBurmese people as it would significantly reduce the proportion of national incomespent on defence.

The above recommendations are just some of the options available to the sender states. Othernon-violent measures should also be considered.


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Introduction

Burma gained independence from the United Kingdom in 1948 and the country enjoyedcivilian rule until a coup dtat in 1962 which led to the establishment of military rule underthe leadership of General Ne Win. The Burma Socialist Programme Party (BSPP) ruled

Burma until 1988 when a popular uprising brought the dictatorship to its knees. During thisperiod, Burma became increasingly insular, and despite inflicting desperate poverty andsevere human rights abuses upon its people, the military governments relationship with theinternational community remained largely intact. The BSPP continued to receive aid from anumber of countries and international institutions such as the IMF and the World Bank,particularly towards the late 1970s.

The 1988 uprising, brought about by continued economic difficulty and dissatisfaction withthe regime, failed to restore civilian rule within Burma. The mass protests across the countrywere quelled brutally and the State Law and Order Restoration Council (SLORC), commonlyknown as the military junta, was established with General Saw Maung at the helm. While anelection did take place in 1990, its victors, the National League for Democracy (NLD) andtheir leader Daw Aung San Suu Kyi, were denied their rightful place as Burmasgovernment-elect.

The events of 1988 proved to be an important turning point in Burmas relationship with theinternational community. The political situation was firmly in the spotlight and internationalaction geared towards demonstrating its disapproval with the regime. Even Japan, a countryfirmly allied to Ne Wins government, temporarily suspended its financial aid to Burma.

Western governments, particularly the US, Canada and the EU began to introduce sanctionson Burma with a view towards increasing pressure on the regime. The US-led sanctions

against Burma have been deeply controversial for the apparent humanitarian consequencesand failure to induce significant changes in the country.

The debate over Burmas sanctions regime regained its momentum following theinternationally-condemned elections in November 2010 and the release of the imprisonedopposition leader Daw Aung San Suu Kyi. Furthermore, the desultory progress of transitionto civilian rule has intensified the debate over whether the Western-imposed sanctions shouldbe lifted. Although it has been crystal clear that the changes in the name of the junta anddonning of civilian clothes by the governing generals do not constitute genuine politicaldevelopments, the applications of sanctions need to be reviewed and reassessed to evaluatethe extent to which these measures have been effective in their objectives and whether, in

applying them, the international community has indirectly heightened the affliction of theBurmese people.

Objectives

The National League for Democracy (NLD) published a press release on sanctions inFebruary 2011 and called for an analysis by a team of widely-respected professionals on theeffects of sanctions and for the sanctioning countries to reach an agreement on when, how andunder what circumstances sanctions might be modified in the interests of democracy, human

rights and a healthy economic environment. This is an important and excellent proposal by


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the NLD. However, it is crucial for the welfare of the people of Burma that such anassessment is undertaken as urgently as possible.

Among the many institutions, panels of experts and independent studies on sanction regimes,the United Nations is widely considered to produce the most authoritative reviews and

consequently is able to shape the policy of sanctioning countries. It has traditionally andregularly reviewed both its own and external sanctions. Therefore, the United Nations will bean ideal body to conduct such an assessment in the case of Burma.

However, the nature of sanctions imposed require annual review to consider any progresswithin the country and the lifting of these measures are constantly advocated by both theregime and by anti-sanctions groups, which include some political parties within the targetedcountry itself, a number of experts and organisations both within the country and elsewhere,and some members of sanctioning countries. Therefore, an assessment of the political andhumanitarian conditions under the sanctions is urgently needed.

This assessment is undertaken to provide both a policy framework for the sanctioningcountries and a better understanding of the political and socioeconomic impacts of theWestern-sanctions before the formal assessment of the United Nations or another respectableand independent organisation materialises. This assessment will also help facilitate anyassessment undertaken by either the UN or any other institution in a number ways. Althoughit is named as a preliminary assessment, the political impacts and humanitarianimpacts/conditions are assessed as comprehensively as possible using the existing, availabledata. Hence, there will not be a significant difference between its major findings and anyfurther assessment undertaken by either the United Nations or an independent team ofexperts. It is, therefore, strongly suggested that the sanctioning authorities use this assessmentfor their future policy initiatives concerning Burma.

Procedure and Methodology

The political developments and their humanitarian consequences under the sanctions over thepast two decades and before are assessed through two different methods: the political impactsof the sanctions are assessed through historical political analysis; while the possiblehumanitarian implications of the sanctions are assessed based on the concept of humansecurity presented in the UNs Sanctions Assessment Handbook.

Whether the objectives of the sender states, for example the progress of fundamental rightsand freedoms, reconciliation between the opposition - including ethnic minorities - and theruling junta, and a transition to civilian rule, are assessed by observing the political eventsfollowing each coercive measures imposed by the Western nations over the past twenty-twoyears.

The humanitarian implications of the sanctions are assessed upon the methodology presentedin the United Nations handbook. The handbooks methodology is founded upon the conceptof human security and certain factors of its core cluster, namely health, food and nutrition,water and sanitation and education, and the systemic cluster, which includes governance,

economic status, the physical environment and the demography of Burma.


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Political Developments

A Brief Assessment of the Relationship between the BSPP and the InternationalCommunity

In order to fully assess the political and humanitarian impact of sanctions upon Burmabetween 1988 and the present day, it is important to first gain an overview of the relationshipof the Burma Socialist Programme Partys (BSPP) regime with the international communityprior this period. Following independence from the UK in 1948, Burma became a member ofthe United Nations and was a founding member of the General Agreement on Tariffs andTrade (GATT). Furthermore, in 1952 Burma successfully joined both the InternationalMonetary Fund (IMF) and the World Bank. Its successful inclusion in global institutionscontinued with its joining of the International Financial Corporation (IFC) in 1956, the

International Development Association (IDA) in 1962, and the Asian Development Bank(ADB) in 1973.

Of further importance, bilateral relations with other nations, such as China, Japan and theUSA were established post-independence. Despite having temporarily ceased economicassistance to Burma in 1953, in part due to frictions over the Chinese KMT soldiers incursion into Burmas territory, relations with the USA remained relatively stable until thecrackdown following 1988s protests. Burma was one of the original beneficiaries of theUnited States Generalised System of Preference (GSP) programme in 1976, was grantedMost Favoured Nation status and was supported by the USA in the provision of itsdevelopmental assistance by international financial institutions. Moreover, in September1980, the USA re-established direct economic co-operation and proceeded to sign a new aid

package, albeit of modest proportions.1 Further economic assistance was provided beforethe uprising in 1988 when the USA donated $7 million in development assistance, $5 millionfor an anti-narcotics program and $260,000 worth of training for the Burmese military.2 It isclear from the evidence that in the period between gaining independence and the uprising thatended the rule of the BSPP, the USA acted as a key financial support mechanism for Burma.

Similarly, China, Japan, West Germany and a whole host of others countries providedimportant financial assistance to the BSPP regime. China announced its support for the BSPPregime in 1962 and became Burmas second largest aid donor (after the USA) in 1965.3Although aid was temporarily cut in 1967, following strained relations with the ruling junta,it resumed again in 1971 when relations between the two saw a marked improvement.4 On12 July 1979, the Chinese government signed a Burmese aid programme in Beijing thatconsisted of eight projects. This included the construction of the Rangoon-Syriam Bridge,40,000 spindle yarn-making machines, three rice mills, the supply of water to Moulmein city,and a contribution of 3 million Renminbi-Yuan towards tools and machinery.5

1Denis D. Gray, Burma, Asias hermit, stays on a neutral course, The Lewiston Journal (February 15 1984)

2House Exhorts Burma on Democracy, The Washington Post (September 8 1988)

3Robert Karr McKabe, Ne Wins secret Burma; When china Spits we Swim, Burmese are waiting for a leak in

the boat(February 27 1966)4 Ibid5Chronology of Chinese Burmese Relations, The Irrawady (January 1 2003)


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Japan, meanwhile, has been one of Burmas most consistent financial contributors since the

1950s. When China temporarily withdrew aid in 1967, Japans response was to increase its

aid contribution in order to assist with the completion of the projects initiated by the Pekinggovernment.6 Furthermore, in 1971 Japan agreed to provide a further $71 million in neweconomic aid while in 1976 Japan was the biggest single contributor to the Official

Development Assistance aid (ODA) provided through the Burma Aid Group. By 1988, thishad totalled some $1.42 billion.7 Indeed, Japanese funds provided more than two-thirds of allbilateral aid disbursements to the country. These came in the form of project loans,commodity loans, grant aid, technical assistance and food aid. Between the 1980 and 1988,Burma consistently ranked among Tokyos top ten biggest aid recipients with single yeardisbursements reaching $244.1 million in 1986 and $259 million in 1988 (not inclusive ofpayments made to institutions such as the Asia Development Banks).8 The considerableamount of data available to illustrate the extent to which Japan provided assistance to Burmasimply lends colour to the notion that the BSPP, throughout its 26 year reign, had a decisiveally.

Even countries such as West Germany, the USSR and New Zealand played their part inensuring economic aid was provided to the Burmese government. As with Japan, WestGermany and the USSR increased its contributions following Chinas withdrawal of aid in

19679, while in the 1970s New Zealand provided between $150,000 and $200,000 worth ofaid to Burma each year. Most of this aid was channelled through the Colombo Plan and mostsupported trade training schools (53 Burmese students received technical training in NewZealand under the Plan during the period 1972-76.)10

Furthermore, this support was reinforced by a number of multinational institutions. In 1952,Burma became the 68th Member of the International Development Association (IDA) andwas in receipt of funding from the World Bank between 1976 and 1987. In addition, Burma

was one of the Asia Development Banks largest borrowers in 1980.11 It is therefore clearthat in spite of being a military regime with no constitutional legitimacy, both Western andEastern governments and institutions were not at this stage prepared to apply sanctionsagainst the BSPP regime. Instead, they provided vital economic support to the government,particularly during the latter decade of its rule.

This is not to say that relations between the BSPP regime and the international communityfollowed a completely smooth path during the period of its existence. China cut its aid toBurma in 1967 and, although this was a temporary move, its application is no doubtsignificant as it emphasised that any dissatisfaction would not be tolerated. Furthermore,while aid was restored in 1970, the Chinese government continued to support anti-government rebels, which clearly implies that friendly relations were far from being restored.Similarly, the US provision of economic aid did not signify that relations were strong. Indeedthe US government reacted to the coup of 1962 by ending direct economic co-operation. In

6Peter Boog, Burma Looks Westward After Rift with China, The Blade, Toledo (December 13 1967)

7Zaw OO, Use ODA Carrot to Reform Burma, The Japan Times (March 16 1998)

8Donald M. SeekinsJapans Burma Lovers and the Military Regime Japan Policy Research Institute, Working

Paper no.60 (September 1999)9

Peter Boog, Burma Looks Westward After Rift with China10

Guy Wilson-Roberts Beyond the Rhetoric: New Zealand and Myanmar in Anthony L. Smith (Ed.), Southeast

Asia and New Zealand; a History of regional and bilateral relations (Institute of Southeast Asian Studies 2005)p.26911

Asia Development Bank Worries About Aid Cuts, Sarasota Herald-Tribune (April 30 1981)


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February 1965, the US Congress, suspicious of Burmas links with Communist China and its

intent to subvert the Thai government, commenced an investigation of its aid provision toBurma.12 Additionally, the US terminated an annual aid programme of $27 million in June1971, signifying an important turning point in its relationship with the BSPP regime. Anumber of international institutions similarly marked their disapproval with the BSPP regime

by prohibiting lending to Burma. The World Banks approved no new lending to Burma from1987 when the BSPP regime was still firmly in power. Similarly, while Burma was involvedin the Asian Development Banks Program of Economic Cooperation, the ADB stoppedproviding loans and grants to the country in 1986.

It is also important to note that Ne Wins regime, particularly during the former years of its

rule, purposely turned away international investment and trade and instead attempted to adopta policy of self-reliance. In 1962, the military government ordered the end of aid from privatecompanies and foreign organisations, such as the Ford Foundation. This included an end touniversity scholarships in the belief that they would become a corrupting influence onBurmese social and political culture.13 In 1967, the regime began to soften its stance on

foreign investment allowing negotiations to take place with Japanese companies. It was notuntil early 1980, however, that Burma began to allow free enterprises and to actively seekforeign aid.14

It is clear from that the relationship of the international community with the BSPP regimewas markedly different to that of its current relationship with the government of Than Shwe.While relations were often tense, particularly with countries such as the USA and China, andthere existed clear signs of international disapproval with the regime, problems with theinternational community were to a large extent the result of a conscious policy undertaken bythe regime to isolate itself from the rest of the world. Despite the better relationship with theworld than that of Than Shwe regime, and despite the substantial flows of aid coming fromregional powers and the Western democracies, the BSPP regime led the country to be one ofthe poorest countries in the world, deciding the fate of its citizens through particularly poorgovernance.

Political Developments 1988 - 2011

In the immediate aftermath of the juntas repression of the peaceful demonstrations in Augustand September 1988, the USA introduced punitive measures, suspending its arms sales and

assistance on 23 September 1988. Canada also imposed arms export and non-humanitarianexports to Burma soon after the regime came to power in 1988. Its Official DevelopmentAssistance (ODA) to Burma has been suspended since that time. In April 1989, PresidentGeorge Bush withdrew all GSP (Generalized System of Preferences) benefits as a reaction toits disapproval with the new State Law and Order Restoration Council (SLORC) regime,while in August the following year, Congress passed the Customs and Trade Act whichprovided the President with the necessary powers to impose economic sanctions as hedeemed appropriate. In the same year, the EU imposed an arms embargo against Burma and,

12

Robert S. Allen and Paul Scott, House to Probe Aid to Burma, Sarasota Herald-Tribune (February 21, 1965)13Role of Foreign Aid in U.S Leadership, St. Petersburg Times (March 20 1963)14

President of Burma is Replaces, Bangor Daily News (November 10 1981)


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in 1991, suspended its defence cooperation with the regime, adopting a policy of providingonly strictly humanitarian assistance.

The measures described above are the first known actions to be taken by internationalgovernments in the hope that they would create a catalyst for change in Burma. Washington

resumed its tactics of coercion in August 1990 when Congress passed the Customs and TradeAct. As a response to these measures, the Burmese junta immediately rejected the newlyappointed US ambassador to Burma, Frederick Vreeland.15

The measures moreover failed to prevent or even reduce the pace of the regimes oppression

against dissidents. Opposition leader Daw Aung San Suu Kyi, U Tin U and other senior NLDparty members were arrested in July 1989 in spite of US action against the regime. Althoughthe junta held relatively free and fair multi-party election on 27 th May 1990, the regime brokeits promise to transfer power to the NLD victors on the grounds that a new constitutionrequired drafting.16 The SLORC continued its repression of NLD members and activists,abolished the 1974 constitution and tightened its control across the country.17 Marshall Law

remained and resulted in a complete extinction of political freedom in Burma. The regimescrackdowns on the first anniversary of the 1988 uprising were significant as Buddhist monksin the second largest city, Mandalay, were severely suppressed. From late 1989 to early 1990,the junta forced the relocation of 500,000 people to the outskirts of Rangoon. At the sametime, military operations were increased across the Thai-Burma border in order to clear theethnic rebels and pro-democracy freedom fighters campaigning there. Relations between theUSA, the EU and Burma became increasingly fraught from 1988 and it became clear thatstronger action was needed against the regime. These initial measures, however, did not bringabout any significant political developments.

However, from 1994, US sanctions became more consistent and, by 2003, tougher in nature.

The European Union also strengthened its sanctions through its Common Position in 1996,adopting such measures as an arms embargo, restrictions to travel and trade.

Burma Sanctions Regime (1994-2004)

Country Measures Month/Year Type of MeasureUnitedStates

Burma defined as an International Outlaw State. Thismandated that voluntary U.S. funding for any UN agencywould be automatically reduced if programs wereconducted in Burma.

April 1994 Assistance

Congress passed the Foreign Relations Authorization Actand withheld a portion of U.S. contributions tointernational organizations with programs for Burma,including the United Nations Development Program

(UNDP)

April 1994 Assistance

Burma Freedom and Democracy Act introduced bySenator Mitch McConnell

December 1995 Trade, Assistance andTravel

Burma Sanctions Bill (H.R. 2892) introduced byRepresentative Dana Rohrabacher

January 1996 Additional measures toBFDA; investigation ofBurmas labourpractices, narcotics andenvironmental policies

Clinton signed FY1997 Foreign Operations AppropriationsBill. However, relief and anti-narcotics aid still continue.

September 1996 Assistance, Trade

15

USCB: Policy and advocacy, Labour and employment16 Human Rights Watch Report (1990)17

Ibid


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Country Measures Month/Year Type of MeasureUnitedStates

Congress approved new sanctions on Burma in section 570of the Omnibus Consolidated Appropriations Act, 1997

(P.L. 104-208). This includes a cessation of all non-humanitarian assistance, a ban on the issuance of entryvisas for Burmese government officials, and instructionsfor US representatives for international financial

institutions to vote against loans or funding to Burma. Inaddition, the law required the President to prohibit newinvestments in Burma by US nationals.

September 1996 Assistance, Trade andTravel

Clinton prohibited Burmese government leaders fromentering the US

October 1996 Travel

EuropeanUnion

EU announced it would impose visa ban on officials(The EU Common Position on Burma/Myanmar makes EUpolicy official for the first timethis also bans high-levelgovernmental visits)

October 1996 Travel

Foreign ministers vote to revoke Burmas GSP benefits March 1997 Trade

UnitedStates

Clinton issued Executive Order to ban new investments inBurma

May 1997 Trade

UnitedKingdom

UK suspended trade-promoting activities June 1997 Trade

Canada Canada removed Burmas GSP benefits on agricultural andindustrial produce. It also places Burma on its AreaControl List, requiring export permits for all exports toBurma

July 1997 Trade

EuropeanUnion

Extended six month bans on visa/non-humanitarianaids/military equipments

October 1997 Assistance, Travel

Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary,Iceland, Latvia, Lithuania, Norway, Romania, Slovakiaand Slovenia declared that their national policies wouldconform to the EU Common Position on Burma

November 1997 Assistance, Travel

Extended visa ban as well as export ban to include itemsthat could be used for repression. Also freezes foreignfunds of specific individuals

October 1998 Travel and Financial

'Everything But Arms' initiative launched but Burma

declared not eligible

April 2000 Trade

UnitedStates

Senator Tom Harkin introduced legislation banning allBurmese imports

March 2001 Trade

Canada Burma excluded from Least Developed Country (LDC)Market Access initiative, which eliminates most duties andquotas on imports from the other 48 LDCs. Reasserts thevisa ban on senior regime officials. Places travelrestrictions on SPDC diplomats in Canada travellingoutside Ottawa.

Jan/Jul 2003 Trade and Travel

EuropeanUnion

Renewed existing sanctions for another year April 2003 Travel, Assistance

UnitedStates

Representative Lantos introduced bill banning all Burmeseimports

June 2003 Trade

Bush exptended visa ban to USDA members June 2003 Travel

Senate passed Burma Freedom and Democracy Act June 2003 Trade, Assistance andTravel

EuropeanUnion

Expanded list of targeted individuals June 2003 Travel

Expanded travel sanctions June 2003 Travel

UnitedStates

Bush signed Burma Freedom and Democracy Act July 2003 Assistance, Trade andTravel

Treasury Department expressed concern over Burmesemoney laundering

November 2003

EuropeanUnion

Foreign ministers extended sanctions April 2004 Assistance, Travel

UnitedStates

Bush signed legislation extending the ban on Burmeseimports for another year

July 2004 Trade, Assistance andTravel

European

Union

Expanded travel ban October 2004 Travel

Source: Office of Foreign Assets Control (US), EU, IIE, DFAIT (Canada), DFAT (Australia), Global Affairs


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Between 1994 and 1997, the US failed to impose any new sanctions on Burma, opting only toannually renew the existing measures in place. During this period the EU and countries suchas the UK and Canada began to increase their measures with the latter taking action toremove Burmas GSP benefits on its agricultural and industrial produce. In 1997, Canada

also placed Burma on its Area Control List, requiring permits for all exports to Burma.Actions such as these were intended to apply pressure on the regime by limiting foreign tradeincentives. In 2003, the USA increased its own pressure with the establishment of the BurmaFreedom and Democracy Act. The objective of the Act was to sanction the ruling Bu rmesemilitary junta, to strengthen Burmas democratic forces and support and recognise the

National League of Democracy as the legitimate representative of the Burmese people .18This was significant development in that it both strengthened existing sanctions andintroduced new ones. The new measures included a ban against all trade which supported themilitary regime, a freeze on the assets of the junta in the US, an intention to oppose and voteagainst the extension of financial loans from financial institutions, and an expansion of theexisting visa ban.

Although it is clear that pressure from the international community was heightened duringthis period, it is vital to consider the response of the regime to ascertain whether these actionshad brought about any significant political developments. According to the Freedom HouseIndex of Freedom, Burma has consistently received a rating of 7 (the worst) for politicalfreedom and civil liberties, and has been recognised as a Not Free state since 1988. Thisdemonstrates the extent to which there have been little or no significant political or civildevelopments in over twenty years. Daw Aung San Suu Kyis success in attaining the Nobel

Peace Prize in October 1991 and the juntas announcement of the release of nearly 2,000political prisoners did inspire a glimmer of hope that reforms would be made. Such hopes

were proven premature as the military junta convened a National Convention for the draftingof a Constitution in 199319 and began arresting top NLD members and sentencing them to upto twenty years in prison for distributing anti-SLORC leaflets.20 It appears that the USdefinition of Burma as an International Outlaw State did nothing to quell the actions of the

regime as it continued to arrest dissidents and to hand down long prison sentences.

The USA and the EU began to synchronise the application of their sanctions by 1996, thusproviding a stronger international force against the regime. On 3 October 1996, PresidentClinton banned the regimes top leaders from entering the USA, a move followed by the EU

just three weeks later. Furthermore, between March and October 1997, the USA, the EU, theUK and Canada imposed a series of measures against the junta. A key reason for the

intensification of sanctions during the mid-1990s was the exacerbation of events withinBurma. In 1995, for example, the headquarter of the ethnic Karen rebel group, Manerplaw,fell under the control of the junta troops following a series of offensive military operations. 21It was such provocative behaviour as this that encouraged Western-governments to takecoercive measures against the regime.

The limitations of the effectiveness of such measures can be demonstrated by Japanshandling of the regime. In July 1995, opposition leader Daw Aung San Suu Kyi was released

18Bill to enact the Burma Freedom and Democracy Act of 2003, 108 Congress, 1st Session H.R 2330 (June 4

2003)19

Human Rights Watch: World report 1994 (Burma)20Ibid

21 Mary P. Callahan (Feb, 1996) Burma in 1995: Looking beyond the release of Aung San Suu Kyi


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from house arrest signalling an important development in Burmese politics. There wereclaims that the Japanese government played a crucial role in the release of the personaffectionately known in Burma as the Lady. Prior to her release, a number of Japanesecompanies visited Burma to discuss various projects in the pipeline.22 It has been suggestedthat the Japanese government used the provision of these business opportunities to press for

Daw Aung San Suu Kyis release and it could be argued that this tactic was more effective inprogressing change than was the imposition of sanctions. However, at this point the measuresimposed by Western governments were clearly not tough enough to have any significantimpact. The impact of Japans carrot approach did not last long either, as the regime laterarrested many others of its political opponents. The United States and other western countriesincreased pressure on the regime following the release of Daw Aung San Suu Kyi.

While there is a lot to be said for the Japanese method of change by tactical persuasion, it wasdifficult for Western governments to offer incentives when the regime had continued to

behave so callously. The EUs adoption of the Common Position on 28 October 1996 was animportant measure in both reaffirming existing sanctions and extending them by measures

such as the imposition of visa bans on the junta.23

According to research conducted by thePeterson Institute of International Economics for the period 1989-2006, sanctions against theregime failed to make a discernible difference in 1996. Perversely, oppression againstdissidents, particularly NLD members, increased during this period. When the USA imposedvisa bans on the juntas officials, the junta responded by banning US officials from enteringthe country, highlighting the juntas defiance against US measures. Furthermore, in spite ofmeasures taken in 1996 by the international community, the military junta continued toembark on its programme of harsh oppression against dissidents. In late May, more than 200NLD members were arrested for protesting to mark the 6 year anniversary of their stolenelection victory24; in September of the same year, yet more arrests brought the total numberof detainees to almost 600.25 As a last measure in November 1996, Daw Aung San Suu Kyi

and a number of the NLDs senior members were attacked on the campaign trail by thugsallegedly in the pay of the junta.26

It was brutal action such as this that caused Daw Aung San Suu Kyi to press for internationalsanctions against the regime. This included calls for a tourism boycott, in the belief that mostof the profit from the tourism industry lined the pockets of the junta rather than the citizens ofBurma.27 Critics of this boycott have pointed out that while it cannot be denied that the juntahas benefited financially from the tourism industry, the impact of the boycott would be feltthe hardest by small businesses and those working in the tourism industry, such as hotel staffand owners.28 Nonetheless, it remains clear that without drastic action such as this, the juntawould continue to receive financial gain thus making it even harder to disable the regime and

force political change in Burma. The very fact that 1996 was defined by the junta as a VisitMyanmar Year serves to reinforce the importance of tourism to the financial interests of the

regime. The regime has also infiltrated the tourism industry by sending its intelligenceofficers to the tourist-guide training courses as well as running a few tourism companies inRangoon.

22 Burma Net News (Issue #313) Burma 1995: The Year in Review23 SIPRI (March, 2004): EU Common Position on Burma24Peterson Institute for International Economics: Case studies in sanctions and terrorism: US/EU/Japan V.Burma25 Ibid26

Burma Library: Myanmar opposition leader Suu Kyi27 Tom Mintier (Nov 16, 1996): Protests cost Burma tourist dollars (CNN)28 Burma Campaign UK (March, 2004) The EU and Burma: The case for targeted sanctions


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Despite pleas to the international community by Daw Aung San Suu Kyi and others, there hasbeen a clear failure to impose a uniform method of dealing with the regime. Asiangovernments, institutions and businesses have continually undermined the action undertakenby the USA, the EU and other Western countries. In October 1996 for example, an oilconsortium in negotiation with the Burmese junta signed a memorandum resulting in a deal to

supply oil to Thailand.29

Diplomatically, Burma was initially granted observer status byASEAN in July 1996.30 It is clear from events within Burma in that year that, despite theimposition of Western-sanctions, the military regime continued to both oppress and to denythe basic rights of its people. An important reason for the futility of these measures was thatother, particularly Asian, governments and institutions continued to undercut the impact ofsuch measures by offering trade and business incentives, thus helping to stabilise the regimeand ensure its long-term survival.

In January 1997, top world brands such as Heineken, Carlsberg, Apple, Walt Disney, andPepsi Co announced their complete withdrawal from Burma signalling an importantprogression in the international movement against the regime.31 This action coincided with

increased restrictions placed upon Daw Aung San Suu Kyi and the closure of universitiesfollowing the student protests of December 1996.32 However, in a move that undermined theimportance of this global measure, oil companies Unocal and Total signed new offshore oilexploration contracts with the junta in late January.33 As with the world leaders of politics in1996, world leaders in business have disparate policies to deal with the regime whichtherefore made it harder for boycotts and proscriptions to have anything more than anegligible effect on the actions of the junta.

In May 1997, President Clinton tried to strengthen the impact of these measures by issuing anexecutive order banning any new investments in Burma.34 Existing firms with investmentsin Burma were allowed to continue their business operations, however, providing companies

such as Unocal and Total a loophole with which to progress their deals. This was particularlyproblematic as both the oil and gas sectors created such large revenues for the military regimethat the effects of the brand withdrawal largely went unnoticed by those in power, who tookfurther measures to strengthen their grasp on power and continued to impose harshrestrictions, untouched by the adverse actions of the international community. Such measuresincluded the detaining of family members of Daw Aung San Suu Kyi in August 1997 in orderto mount pressure on the NLD leader.35 In late 1997, the junta moved towards fortifying theirregime by forming a new ruling apparatus named the State Peace and Development Council(SPDC).36

Both the political situation within Burma and international action against it remained

relatively quiet over the next two years. However, the new millennium brought with it a newset of problems. In August 2000, a standoff occurred between Daw Aung San Suu Kyi andtroops of the regime during a campaign trip, which resulted in the harassment of a number of

NLD members. Furthermore on 30 May 2003, Daw Aung San Suu Kyis motorcade was

29 Ibid30 The New York Times: Burmese win Observer Status in Southeast Asian Group 31

Ibid32

Peterson Institute for International Economics: Case studies in sanctions and terrorism: US/EU/Japan V.Burma33

Ibid34

Ibid35 Ibid36 Ibid


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attacked by the regimes militia and a number of senior NLD members, including the Ladyherself, were detained on the grounds of protective custody.37 Hundreds of oppositionsupporters were killed in this incident which became known both nationally andinternationally as the Depayin massacre. In a further act of defiance against the internationaldemands, the NLD Head Office and several others across the country were forced to close in

June 2003. As a result of these actions, the US established the Burma Freedom andDemocracy Act (BFDA) which banned all imports from Burma. The EU also strengthened itsexisting measures by imposing new and additional sanctions against the regime. Canadawhich excluded Burma from its Least Developed Country (LDC) market access initiative inJanuary 2003 imposed visa restrictions against senior members of the regime in July of thesame year.

It would be unfair to suggest that positive political developments were completely absentduring this period, however; rather, some would argue that important progress was made inthe early years of the new millennium. In July 2001, there occurred some dialogue betweenthe junta and Daw Aung San Suu Kyi,38 resulting in her release in May 2002 after 19 months

of house arrest. To add to this significant development, hundreds of other political prisonerswere released just two months later. The regime went so far as to extend an olive branch tothe USA by inviting officials to discuss Burmas political deadlock in February 2003.39Washington however, remained wary, warning that more sanctions would be imposed shouldno further progress be seen. Critics of this move have argued that, had the USA engaged indialogue with the Burmese military leaders, important developments could have ensued. Byremaining hostile to the idea, the US government missed its crucial bargaining position.Nevertheless, Washington acted with the best of intentions and there is no guarantee that apositive outcome would have resulted from further dialogue. This view seems to have beenshared by Daw Aung San Suu Kyi who despite her recent release, advised the internationalcommunity to maintain pressure on the regime as it lacked the will for genuine reconciliation.

It could be further argued that, by raising the pressure on the regime through theestablishment of the BFDA, the US had encouraged dramatic progress in Burmese politics. InAugust 2003, the New Prime minister, General Khin Nyunt announced a roadmap to

democracy and the enactment of a series of political reforms. Though flawed in many ways,

this was perhaps the most important development to have occurred since the regime gainedpower in 1988 and a large reason for this development was the application of tough measuresby the international community.

Though Prime Minister Khin Nyunt was ousted in October 2004, several political prisonersincluding student leader Min Ko Naing, were released in November. Furthermore, according

to a report by Human Rights Watch, the junta released 249 political prisoners in July 2005.Though welcomed by foreign observers at the time, these acts appear to be minimal whencompared with the continued oppression against dissidents.40 One of the worse acts involvedsimultaneous bomb blasts in the Burmese capital, Rangoon, which resulted in the loss ofdozens of lives in May 2005.41 Also in 2005, the junta initiated hostile action against ethnicgroups in Burma. As well as arresting and imposing a sentence of more than fifty years on

37 Ibid38 Ibid39

Ibid40 HRW (Report, 2006)41

Ibid


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key Shan activists, the military government launched a sharp military offensive against ethnicKarens.42

It has been speculated that the fear of foreign invasion motivated the juntas move to its newadministrative capital, Naypyidaw, about 300 km north of Rangoon.43 If such speculation is

deemed to be accurate, it would imply that the regime lives in fear of Western action morethan is clearly apparent. This raises the question, would tougher, more direct action from theWestern community ultimately disable the regime?

According to the same report produced by Human Rights Watch, no progress had been madeon both democratisation and human rights throughout 2006.44 Student leaders Min KoNaing, Ko Ko Gyi and Htay Kywe were arrested in November for issuing a statement insupport of the United Nations Security Council debate on Burma.45 Furthermore, intensemilitary operations in the southern Karen state claimed the lives of almost 30,000 innocentcivilians and were responsible for the destruction of more than 300 villages. 46 The situationin Burma finally made it on to the agenda of the United Nations Security Council briefings in

September 2006. However UNSC action was vetoed by both China and Russia.

47

Theimportance of uniform action among the international community is particularly highlightedby this episode as had UNSC action been fully endorsed, there is little doubt that positivedevelopments would have ensued.

2007 was again a particularly historic year for Burma as it resulted in the biggest publicprotests since the demonstrations of 1988. Following rocketing fuel prices in August,demonstrations became larger and were countered with brutal attacks by the junta.48 Peacefulmarches were initially organised by 88 generation students and eventually Buddhist monks

participated in the event that became known as the Saffron Revolution.49 Thedemonstrations spread to other towns and cities across the country. However, government

crackdowns stepped up and, following midnight raids at several monasteries, up to threethousands monks and others were arrested.50 The opposition claimed that hundreds of peoplewere killed, a figure largely undermined by the junta who claimed that only fifteen peoplelost their lives.51 Subsequent to the brutal clampdown the USA, the EU, Australia andCanada imposed punitive measures which continued throughout 2008.

The year 2008 was the most unfortunate year for Burma of the past few decades as theCyclone Nargis devastated the Irrawaddy delta on 2 May 2008, claiming more than 150,000lives and affecting another 2.4 million people. The junta, in fear of political conditionsattached to international relief measures, initially blocked the Western assistance toemergency relief efforts. As a comprehensive measure by the Burmese authorities failed toemerge in response to the disaster, private individuals and local NGOs stepped in to aid thosein need of desperate relief measures. As the delayed relief to the storm victims most likelycaused an untold number of preventable deaths, the ASEAN ultimately intervened to resolve

42 Ibid43

HRW (Report 2007): Burma: Events of 200644

Ibid45

Ibid46

Ibid47

Ibid48

HRW (World Report 2008) Burma: Events of 200749

Ibid50 Ibid51

Ibid


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the political deadlock between the regime and international actors that was severely retardingrelief measures. Despite substantial devastations in Irrawaddy delta, the regime continued toundertake its constitutional referendum on the new constitution which sought to legitimise themilitarys dominant role in the politics of the country. The new constitution was approvedthrough a referendum which was widely alleged to have been manipulated on 10 May 2008.

Following the disaster in the Irrawaddy delta, many social and political activists whoattempted to deliver aid to affected areas were arrested and sentenced.

The junta continued suppressing the political opponents and the numbers of politicalprisoners reached more than 2,000 in 2009, double the number for 2007. The oppositionleader, Daw Aung San Suu Kyi was also sentenced an additional eighteen months of housearrest in August following the unendorsed trespassing of an American citizen to herresidential compound. While the human rights abuses escalated in the country and theprogress towards reconciliation between the opposition and the regime substantially faltered,the Obama Administration introduced the dual-track policy of engaging the regime whilekeeping the sanctions in place. Although the US has shifted its policy on Burma, the regime

continued its repression of dissidents while steadfastly progressing towards legitimisedmilitary rule as outlined in the seven-step roadmap formulated in 2003.

The first national elections in two decades were held in November 2010 with the regimesproxy party, the Union Solidarity and Development Party (USDP), winning the majorityvotes. The election was boycotted by the NLD victors of the 1990 election and the result wasdenounced as a sham by much of the international community. Despite strong oppositionfrom both inside and outside the country, parliament was convened on 31 January 2011 andthe former prime minister of the ruling junta, Lt. General Thein Sein, who by this time hadretired to civilian life, was elected as the President. Subsequently, the State Peace andDevelopment Council, the ruling junta itself, was disbanded and its head, General Than

Shwe, retired from his position as the commander-in-chief. The events of 2010 and 2011falsely depict a significant change in Burmese politics unless closely scrutinised, with themilitary junta seemingly dissolved and, more importantly, General Than Shwe retired.However, the USDP regime has continued to incarcerate over 2,000 political prisoners whilethe proposed social, economic and political reforms motioned by the ethnic and oppositionparties in the parliament have been rejected. Not only are the parliamentary proceduresundemocratic, but the basic rights and freedoms entitle to the people continue to be infringedupon, despite claim to the contrary by the superficially civilian USDP regime. Today, themilitary continue ruling the country in civilian guise and the dictatorship continues to flourishaside a parliament which rubber-stamps its will.


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Burma Sanctions Regime (2005-2011)

Country Measures Month/Year Type of MeasureEuropeanUnion

Extended restrictive measures for another year April 2005 Trade, Travel andFinancial

United

States

Extended restrictive measures including visa bans and

assets-freeze of military lower-ranking officials

April 2006 Travel, Financial

Representative Tom Lantos introduced a bill renewingsanctions against Burma

May 2006 Trade, Travel andFinancial

Senator Mitch McConnell introduced a resolutioncondemning junta for atrocities against ethnic minoritiesand calling upon USA to lead the effort for a UNSCresolution on Burma

Senator Mitch McConnell proposed extension of BFDAand renewed sanctions

May 2006

US State Department called for a non-punitive UNSCresolution condemning human rights abuses and detentionof Daw Aung San Suu Kyi

May 2006

President Bush signed legislation extending BFDA-2003for three more years

August 2006 Assistance, Trade,Travel and Financial

EuropeanUnion

Renewed assets-freeze April 2007 Financial

UnitedStates

Updated sanctions regulations June 2007

EuropeanUnion

Amended and renewed measures July 2007 Trade, Travel andFinancial

Australia Prime Minister announced implementation of targetedfinancial sanctions

Sept/Oct 2007 Financial

UnitedStates

14 regimes officials were added to SDN September 2007 Financial

Juntas ministers were added to OFACs SDN list (10ministers and Rangoon Mayor)

October 2007 Travel and Financial

EuropeanUnion

Renewed and amended Common Position November 2007 Trade, Travel andFinancial

Canada Regulations regarding Special Economic Measures againstBurma came into force

December 2007 Trade, Travel andFinancial

UnitedStates

Individuals and businesses of regimes associates were

added to SDNFebruary 2008 Travel and Financial

More businesses and individuals close to the junta wereadded to SDN

February 2008 Travel and Financial

Businesses related to regime in Singapore were added toSDN

February 2008 Financial

European

Union

Renewed and strengthened sanctions March 2008 Trade, Travel and

FinancialUnitedStates

Properties and transactions blocked April 2008 Financial

New Burma Executive Order amended as Burmeseproduce such as Gem, Pearl and Timber added to SDN

May 2008 Trade

New Burma general license introduced, allowing NGOs toprovide humanitarian assistance

May 2008

Amendment to general license 14, allowing transfers offunds for humanitarian issues

May 2008

President Bush signed the renewal of import restrictionsand the Tom Lantos Block Burmese JADE Act of 2008:

banning direct and indirect imports of Burmese jadeitesand rubies; expanded list of visa and financial restrictions

July 2008 Assistance, Trade,Travel and Financial


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Country Measures Month/Year Type of Measure

Australia Australia added 45 new names to the list of some 418Burmese individuals named for punishment with financialrestrictions

October 2008 Financial

United

States

US Treasury Departments Office of Foreign Assets

Control froze the assets of 17 enterprises and 26 persons inBurma who were accused of drug-trafficking

November 2008 Financial

Assets of two Burmese businessmen (Win Aung and ZawZaw) and their companies frozen for aiding the militaryrulers of the country.

January 2009 Financial

EuropeanUnion

Common Position (and economic sanctions) on Burmaextended for a further year

April 2009 Trade, Travel andFinancial

UnitedStates

President Barack Obama renewed existing sanctionsagainst Burma

May 2009 Trade, Travel andFinancial

European

Union

Agreement to step up sanctions and further target the

Burmese regime

June 2009

UnitedStates

President Barack Obama signed into law a congressionalresolution extending restrictions on imports from Burmacontained in the Burmese Freedom and Democracy Act of2003


EuropeanUnion

Four state-run media outlets added to the list of Burmesesanctions targets in response to a court ruling against DawAung San Suu Kyi

August 2009

Extended sanctions against Burma April 2010 Trade, Travel andFinancial

United

States

President Barack Obama extended sanctions against

Burma for a further year

May 2010 Trade

UnitedStates

President Barack Obama signed into law a Congressionalresolution renewing economic sanctions (BFDA) againstBurma for a further year


EuropeanUnion

Common Position on Burma extended for a further yearbut visa bans and asset freezes suspended for 5ministers,18 deputy ministers and 1 Chief state minister fora year

April 2011 Trade, Travel andFinancial

UnitedStates

President Barack Obama extended sanctions againstBurma for a further year

May 2011 Trade

Source:Office of Foreign Assets Control (US), EU, IIE, DFAIT (Canada), DFAT (Australia)

Socio-Economic Developments, 1988 - 2011

The Burma sanctions regime consists of targeted measures, with the exception of the US banon all Burmese imports from July 2003 through its Burma Freedom and Democracy Act(BFDA). The majority of the measures in place are targeted financial sanctions against thesenior members of the regime and their associates or travel-related sanctions restricting theseindividuals from entering the sender states. The scope for inadvertent humanitarian

consequences is, therefore, relatively narrow. Only the targeted trade embargoes and the


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withdrawal of aid or assistance from the sanctioning states and other financial institutionsrequire consideration to identify the possible humanitarian impacts.

Nonetheless, the suspension of aid from donor countries and institutions such as the WorldBank and IMF would not fully account for any discernable effects on the ordinary people as

the preceding consideration on the relationship between the BSPP regime and theinternational community has demonstrated that poor governance on the part of the regimegreatly contributed to developments within the country and their impacts on the population asa whole. Such mismanagement of the economy led the country towards extreme povertydespite substantial overseas assistance it received during the BSPP rule. It is therefore notnecessary to assess the humanitarian conditions as an impact of aid suspension from donorcountries and institutions for the period under the post-1988 military regime as the juntacontinues mismanaging the economy same as its predecessor.

The sanctions regime following the military coup in September 1988 consists of armsembargoes and other defence-related measures, targeted travel-related restrictions, targeted

financial sanctions and targeted trade sanctions. The targeted sanctions were devised to avoidunintended humanitarian consequences and, among them, only the trade sanctions are likelyto significantly impact humanitarian conditions.52 Unemployment is the most likelyconsequence of such sanctions for the Burmese people and, therefore, any significant increasein the unemployment rate and any subsequent decline in humanitarian conditions need to beassessed upon the particular sector targeted by the sanctioning authorities. These sectors,therefore, require identification.

Among the post-1988 US measures against Burma, the executive order banning newinvestments, effective since May 1997, and the Burma Freedom and Democracy Act (BFDA)banning all imports from Burma, enacted in July 2003, are the most significant measures to

be considered as all other sanctions have been targeted against members of the regime and itssupporters, state-owned enterprises and the businesses of regime cronies. Although USCustoms and Trade Act enabled the president to impose new sanctions on Burma, PresidentBush declined to do so immediately when it was passed in 1990. The Foreign OperationsAppropriations Bill introduced in 1996 also permitted the US president to determine if andwhen to impose sanctions against Burma. Actual measures, however, did not come into effectuntil President Clinton signed an Executive Order to ban new investments in Burma in 1997and the BFDA was enacted in 2003. Therefore, this study will consider any humanitarianconsequences for the period from May 1997 to the present time with a particular focus fromJuly 2003.

The Executive Order of 1997 banned only new investments after 21st May 1997 and all thosemade prior to that date were exempted including those of US Corporation Unocal and itsshares with the French oil giant Total in Burmese energy projects.53 As existing companiessuch as Unocal were allowed to continue their business, significant unemployment or anyother impact upon the Burmese people would have been limited. Other measures that mighthave inflicted painful circumstances upon the general populace are the suspension ofGeneralized System of Preferences (GSP) benefits from the sender states. The GSP benefitswere withdrawn by the US in April 1989, the EU in March of the same year and Canada inJuly 1997. Burma was then excluded from the LDC Market Access Initiative by Canada in2003. However, the possible humanitarian impact resulting from the suspension of GSP

52UN: IASC: (October, 2004) Sanctions Assessment Handbook

53 CRS report for Congress (10, Oct. 2007) Burma Sanctions: Background and Options


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benefits by the sanctioning states should be minimal in nature compared with those of theselective or comprehensive investment prohibitions and the total ban on all imports.

The USA restricted all Burmese imports from July 2003 and, while the selective investmentban that the EU introduced in 2004 covered only state-owned enterprises at first but it was

later extended in March 2008 to include bans on trading timber, gems and mining produce.There were, however, no noticeable changes in the FDI flows to Burma following theintroduction of these punitive measures. The year 1997 was the peak of inward ForeignDirect Investments (FDIs) to Burma for the period 1989 and 2009 despite the US ban whichcame into effect that year (see Fig 3.1). Furthermore, for the period between 2004 and 2009when the EU introduced its bans, there were not significant decrease in FDIs, rather 2006 sawa rise instead (Fig 3.1). A fluctuating FDI trend can be seen for the past two decades with thelowest investments in 1989 and 1993 (under US$ 100 million) and the highest in 1997 atnearly US$ 900 million. For the ten-year period between 1999 and 2009, there were nosignificant changes in the inward FDI flows with the exception of a rise in 2006 (Fig 3.1).The FDI flows to Burma for the period 1989 to 2009 revealed that the inward FDI flows prior

to the inception of the US and EU bans were significantly lower than for the period when themeasures were in place. Thus, overall humanitarian conditions prior to the imposition ofthese sanctions should have been worse than for the period that the sanctions have been inplace.

Fig. 3.1

Source: UNCTAD: Inward Foreign Direct Investment Flows

Besides opting to comply with the aforementioned investment and import restrictions, manymultinational corporations left Burma due to disinvestment campaigns in their homecountries, particularly in the USA, unsuccessful and unsatisfactory results of theirinvestments and the continuous human rights abuses committed by the ruling junta. Fifty-sixforeign companies ended their businesses in Burma between 1992 and 2000.54 About half of

54The Irrawaddy: Foreign Companies Withdrawn from Burma

0

100

200

300

400

500

600

700

800

900

1000

Year

US$millions

Inward Foreign Direct Investment Flows 1989 - 2009 (in US$ millions at 2010

prices and exchange rates)

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


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these companies pulled out in 1996 and 1997. The possible rise of unemployment in theseparticular periods therefore requires assessment.

The measure to which Burmas unemployment problem in this period has been most widely

attributed is the mass termination of employment in the garment industry following the

enactment of the Burma Freedom and Democracy Act in July 2003 banning all Burmeseimports to the USA. This was noted in a congressional report which calculated that 50,000 to60,000 jobs had been lost, although the US authorities argued that imports to EU memberstates had saved the industry at that time. According to the Bureau of East Asian and PacificAffairs, in the period of March 2003 to September 2003, 40,000 jobs had been lost in Burmaas a result of the US ban. However, the total rate of unemployment for 2003 was lower thanin previous years and the number of unemployed declined steadily from 2003 to 2007 with aslight increase in 2008 (see Fig 3.2). The rate of unemployment for 1996 and 1997, when asmany as twenty multinational companies withdrew their investments, are unfortunately notavailable. Nevertheless, the unemployment figures decreased year on year since 1998 withthe exception of small rises in 2001 and 2002 (Fig 3.2). Overall, the number of unemployed

dropped from 1998 to 2008 (Fig 3.2).

Fig. 3.2

Source: ILO Labour Statistics

Although the BFDA came into effect in 2003, there were no notable surges in unemploymentbetween 2003 and 2008, suggesting that both the US and EU sanctions was not the mostsignificant cause of rising unemployment in these periods. Furthermore, the possibility ofdeliberate misrepresentation of the figures by the junta cannot be ruled out. There wereclaims that the Myanmar Garment Manufacturers Association (MGMA) and the Union of

Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) organised a

0

100

200

300

400

500

600

Unemployment, general level (thousands)

Unemployment, both sexes

1992 1993 1994 1998 1999 2000 2001

2002 2003 2004 2005 2006 2007 2008


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petition calling on the US government to withdraw its proposal of imports ban in 2001. 55Allegedly, the Office of Strategic Studies (OSS) in the Defence Ministry of Burma wasbehind this action.56

In addition, the claim was made that newly-unemployed young women were entering into the

sex industry in desperation as a result of scarce alternative employment opportunities.57

Sucha claim is implausible as prostitution is not the sole alternative employment in Burma. Duringa press briefing in October 2003, the spokesperson for the US State Department, RichardBoucher also argued that nobody was encouraging unemployed young women into suchemployment and there were other work programs for those whose employments in garmentfactories were terminated.58

There are solid reasons to doubt this claim. Traditionally, many Burmese are self-employedand run their businesses through the equal participation of family members. The majority ofpeople across the country, particularly in small towns and rural areas, are involved in privatebusiness activities ranging from selling agricultural products and groceries to running tea-

shops and restaurants. Those who are unable to run either small or medium-sized businessescan earn a subsistence wage by working as a peddler or a hawker rather than as a prostitute.Furthermore, since 60% to 70% of the populace are employed in agriculture, forestry andfishing, with only around 7% to 10% of labour force employed in industry of whichmanufacturing is only one part.59 The impact of redundancies in the textile industry in 2003is unlikely to have induced significant humanitarian consequences.

Burmas total exports for the period from 1989 to 2010 also suggest that there was nonoticeable decline in exports in 2003 from the years either prior to or after the US importsban (see Fig 3.3). In reality, Burmese exports have increased since 1998 and reached theirhighest level in 2008 at about US$ 6.6 billion (Fig 3.3).

55Maung Maung Oo (24 July, 2001) Junta to build garment factory (Irrawaddy)

56 Ibid57

Bureau of East Asian and Pacific Affairs (Oct 27, 2003) Conditions in Burma and US Policy58 Burma Today: US Department of State, Daily Press Briefing59

ASEAN: ASEAN Community in Figures 2009; Myanmar Government Data


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Fig. 3.3

Source: IMF: Direction of Trade Statistics

By considering these key economic indicators, namely inward Foreign Direct Investmentflows, the economic activity the Burmese people are engaged in and continuing trends inunemployment and exports, there is no evidence to support the regimes claims that Western

sanctions have led to an economic decline. Thus, neither the import bans by the US and theEU nor the withdrawal of GSP benefits on Burmese imports can be shown to have unleashedserious impacts on the countrys trade and the general population itself. Such claims

advanced by the regime most likely indicate an official strategy to instigate a rallying-round-the-flag effect against the sanctions.

Assessment of Human Security Areas

According to the UN Sanctions Assessment Handbook, humanitarian conditions should beassessed in several human security areas; however, in the case of Burma, certain datanecessary to undertake a comprehensive assessment is unavailable. Not only is the accessibledata inconclusive but much of the most important and relevant information, such as theCommon Country Assessment (CCA) is entirely unobtainable. The UN sanctions assessmentcriteria and humanitarian indicators depend upon the CCA and its publication prior to acomprehensive assessment is vital to gain a systematic and detailed assessment ofhumanitarian implications of sanctions in Burma understanding of the humanitarianconditions in the country. Nonetheless, given the situation in the country, the UnitedNations have published the Country Paper as an alternative to the CCA .60

60UNDG: Myanmar Coordination Profile: Comments

0

1000

2000

3000

4000

5000

6000

7000

Year

US$millions

Exports to World

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


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Of the CCA indicators of particular importance is the Conference and Convention indicatorson Governance and Civil and Political Rights61 which must be focused and assessed by theUnited Nations in order to identify the progress towards democracy and good governance inthe country. Although certain data relevant to such an assessment is not available, humansecurity areas should be assessed for particular periods based on whatever data is available.

The limited availability of data for certain areas and periods does not, however, impedesignificantly upon the outcome of an assessment as the limited nature of sanctions in placeand the ongoing economic and political situation of Burma, particularly the absence ofdemocratic and accountable governance for over two decades, have already limited thepotential for severe humanitarian consequences arising as a result of sanctions.

When the health sector is assessed as one of the core human security areas, a steady declinecan be seen in the mortality rate for children under five-years-old for the period 1980 to 2009(Fig 3.4 and Fig 3.5). However, the overall maternal and infant mortality rates have notchanged since 2005 despite a continuous downward trend from 1990 to 2004 (Fig 3.6 and Fig3.7). The estimated percentage of one-year-old children immunised against measles from

1990 to 2008 also saw a few rises and falls (Fig 3.8). Fewer than 70% children receivedimmunization between 1990 and 1992 and lower than 75% children were immunized for2001 and 2005. Nonetheless, there was a stable progression from 1993, peaking in 1998 as89% of one-year-olds were estimated to have been immunised against measles. After adecline in 2005, the percentage of immunization has rose up to 82% in 2008, yet it was lowerthan in the years from 1996 to 1998.

Fig. 3.4

Source: UNICEF: Under-Five Mortality Rankings: The Progress of Rate

61UN: Common Country Assessment (CCA) Guidelines

0

20

40

60

80

100

120

140

160

1980 1985 1990 1995 2000 2009

Value

Under -five Mortality Rate Progress

Under-five Mortality Rate

Progress


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Fig. 3.5

Source: The World Bank: Annual Number of Under-Five Deaths (per 1, 000)

Fig. 3.6

Source: The World Bank: Maternal Mortality Ratio

68

69

70

71

72

73

74

75

76

77

78

2005 2006 2007 2008 2009

Mortality rate, under-five (per 1, 000)

Mortality rate, under-five

(per 1, 000)

0

50

100

150

200

250

300

350

400

450

1990 1995 2000 2005 2008

Maternal Mortality Ratio (modelled estimate, per 100, 000 live

births)

Maternal Mortality Ratio(per 100, 000 live births)


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Fig. 3.7

Source: The World Bank: Infant Mortality Rate (under 1 year-old)

Fig. 3.8

Source: UN: Millennium Development Goals Indicators

0

10

20

30

40

50

60

70

80

90

100

1985 1990 1995 2000 2005 2006 2007 2008 2009

Mortality rate, infant (per 1, 000 live births)

Mortality rate, infant (per

1,000 live births)

0

10

20

30

40

5060

70

80

90

100

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

One-Year-Old Children Immunized against Measles, Percentage

(estimate)

Percentage of Children


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With regards to another core human security area, food and nutrition, a constant decrease ofundernourishment between 1991 and 2005 was estimated (see Fig 3.9 and Fig 3.10).

Fig. 3.9


Fig. 3.10


In a third human security area, water and sanitation, the proportion of the population with

access to improved drinking water source is estimated to be rising slowly from 1990onwards. Nonetheless, there was neither a rise nor a fall for the period of 2005 to 2008 (see

0

5

10

15

20

25

30

35

40

45

50

1991 1996 2001 2006

Population Undernourished, Percentage (estimate)

Population Undernourished,

Percentage

0

2

4

6

8

10

12

14

16

18

20

1991 1996 2001 2005

Population Undernourished, millions (estimate)

Population Undernourished,

millions


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Fig 3.11). On the other hand, it was estimated that the proportion of the population usingimproved sanitation facilities increased significantly in the decade from 1995 to 2005. Therewas, however, neither an increase nor a decrease for the period from 2005 to 2008 (Fig 3.12).

Fig. 3.11


Fig. 3.12


The final core human security area, education, was assessed upon two indicators, namely the

percentage of pupils starting Grade 1 who reached the last Grade of primary education andthe number of internet users per population. The percentage of pupils starting Grade 1

0

10

20

30

40

50

60

70

80

1990 1995 2000 2005 2008

Proportion of Population Using an Improved Driking Water Source

(estimate)

Proportion of Population

Using an Improved Driking

Water Source

0

10

20

30

40

50

60

70

80

90

1995 2000 2005 2008

Proportion of Population using an Improved Sanitation Facility(estimate)

Proportion of Population

using an Improved

Sanitation Facility


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completing primary education was about 55% in 2000, climbing to 69% in 2003 nearly a15% increase in three years; however, there was minimal progress between 2005 and 2007(Fig 3.13). With regards to internet users, the number per one hundred people rose from 0.1in 1999 to 0.9 in 2006 (Fig 3.14).

Fig. 3.13


Fig. 3.14

Source: UN: Millennium Development Goals Indicators; ITU estimates for 2006

0

10

20

30

40

50

60

70

80

2000 2001 2002 2003 2005 2006 2007

Percentage of Pupils Starting Grade 1 who reach Last Grade of

Primary, both Sexes

Percentage of Pupils Starting

Grade 1 who reach Last

Grade of Primary, both Sexes

0

0.1

0.2

0.3

0.40.5

0.6

0.7

0.8

0.9

1

1999 2000 2001 2002 2003 2004 2005 2006

Internet Users Per 100 Population

Internet Users Per 100Population


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Most of the data required for the assessment of systemic human security areas remainunavailable; however, the particular indicators for one of the systemic human security areas,the environment, are able to be assessed for certain periods. These indicators include theproportion of land area covered by forest, the total carbon dioxide emissions andconsumption of ozone-depleting Chloro Fluro Carbons (CFCs) in Ozone Depleting Potential

(ODP) metric.

An assessment of the proportion of land area covered by forest pointed out that nearly 60%was forested in 1990 but, by 2005, only 49% remained so, raising concerns that the countrywill face severe environmental consequences if such a high rate of deforestation continues(Fig 3.15). In 2011, Indo-Burma, a biodiversity hotspot which includes Burma along withother countries in the region, is listed as one of the top ten most endangered forests in theworld by Conservation International.62

Fig. 3.15


While Carbon dioxide emissions continuously rose between 1990 and 2007 (Fig 3.16), therewas an unstable trend in the consumption of ozone-depleting CFCs for the period 1994 to2005 (Fig 3.17). Although the consumption of CFCs was relatively low at 2.1 metric tons in1994, it rocketed up to 49.5 in 1995. From 1996 to 1998 and 2001 to 2003, the consumptionof CFCs was significantly high but remained in the range of 15 and 30 metric tons for 1999,2000, 2004 and 2005 (Fig 3.17).

62Conservation International: The Worlds 10 Most Threatened Forest Hotspots

0

10

20

30

40

50

60

70

1990 2000 2005

Proportion of Land Area Covered by Forest, Percentage

Proportion of Land Area

Covered by Forest,

Percentage


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Fig. 3.16


Fig. 3.17


The outcome of assessing these critical areas of core and systemic human security reassurethe near negligible adverse humanitarian impact of sanctions. Furthermore, the overall

assessment of humanitarian conditions in ASEAN member countries reveals that the military

0

2000

4000

6000

8000

10000

12000

14000

16000

Carbon Dioxide Emissions (CO2), thousand metric tons of CO2

(CDIAC)

Carbon Dioxide Emissions (CO2), thousand metric tons of CO2 (CDIAC)

0

10

20

30

40

50

60

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Consumption of ozone-depleting CFCs in ODP metric tons

Consumption of ozone-

depleting CFCs in ODP metric

tons


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junta along with other authoritarian governments in the region has done little to provide basicservices to the people, particularly in health and education (see Appendix I).

Humanitarian Conditions under Military Dictatorship

Assessing the humanitarian conditions reveals that the consequences that have arisen as a

direct impact of sanctions are negligible; however, there is strong evidence that humanitarian

conditions have deteriorated under the military dictatorship. Despite lucrative investments

from both sanctioning states and regional countries, the government has failed to provide a

sufficient level of essential and basic services to the people and the majority of the

impoverished populace live in dire circumstances, particularly in rural areas. It is not

surprising that the country has had Least Developed Country status for several decades as the

regime has spent substantial and disproportionate amounts of money strengthening its

military power.

The regime has spent 23% of central government expenditure on defence compared with a

mere 13% on education and 3% on health between 1998 and 2008 (see Fig 4.1). According to

the government gazette released on March 2011, 23.6% of the government budget is

allocated for the military and only 4.13% for education and 1.3% for healthcare is allocated

for the current year, 2011 (Fig 4.2).

Fig 4.1

Source: UNICEF: Statistics for Myanmar (Burma)

3

23

13

Percentage of Central Government Expenditure (1998 - 2008)

Health

DefenceEducation


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Fig 4.2

Source: Burmese Government Gazette, March, 2011.

The military regime has spent excessively on strengthening its military power over the pasttwo decades. The Military expenditure in 1991 was about US$ 2.5 billion and it has increased

sharply ever since, stretching to over US$5.6 billion by 2001 (see Fig 4.3 and Fig 4.4).

Defence spending reached over US$7 billion in 2003 and fluctuated between US$ 6 billion to

US$7 billion until 2007 (Fig 4.4). The active military manpower of the regime has also

significantly increased since it came to power in 1988. There were 200,000 armed forces in

1989, rising to over 400,000 since 1997 (Fig 4.5). The regime enjoyed its peak of military

strength in 2004 and 2005 when the total active military manpower reached nearly 500,000

(Fig 4.5).

1.3

23.6

4.13

Percentage of Government Budget Allocations for 2011

Health

Defence

Education


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Fig 4.3

Source: CSIS:The Asian Military Balance 2003: A comparative summary of military expenditures;

man power; land, air, and naval; Forces; and arm sales

Fig 4.4

Source: IISS Military Balance Publications

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

1991 1992 1993 1994 1995 1996 1997 1998 1999

US$millions(Constant$in1999)

Military Expenditure 1991 - 1999

Military Expenditure

0

1000

2000

3000

4000

5000

6000

7000

8000

2000 2001 2002 2003 2004 2005 2006 2007

US$m

illions

Military Expenditure 2000 - 2007

Military Expenditure


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Fig 4.5

Source: CSIS:The Asian Military Conventional Balance in 2006, IISS Military Balance Publications

It is clear that the military government has squandered most of the revenues it has acquiredfrom investments by the multinational corporations in the country and its trade with the world

on strengthening its defence capacity rather than providing essential and basic services to the

people.

Why Have the Sanctions Failed?

One failure of the Western sanctions has been their failure to weaken and isolate the rulingjunta. The sanctions could be made successful if they were targeted to cost the regime

significantly;63 however, there are certain crucial factors that help explain why they have not

as yet done so:

The sanctions are not imposed multilaterally, either in a UN context or within ad hoc

coalitions;

Documents

Burma Sanctions Assessment