Myanmar: The case against sanctions

By Nelson Rand, Asia Times, 20 June 2003

BANGKOK—When US Senator Mitch McConnell stood before the Senate last week to propose new legislation that will ban all US imports from Myanmar, he stated bluntly, “It's time for tyrants to fear in Burma.”

But will they?

“Total US imports from Burma are not extensive, about US$356 million in 2002,” said Harry Clark, a US lawyer and expert on export-control laws. “Given the limited trade levels between the United States and Burma, [tougher] sanctions would not have a major impact on the Burmese economy.

“They would presumably have a substantial impact on a relatively few US companies that rely heavily on Burmese imports,” he said.

According to the US Census Bureau, US imports from Myanmar last year totaled $356.4 million. In comparison, Myanmar's natural-gas exports last year were more than double that figure, bringing in $846 million to the cashed-starve junta, according to a recent report in the Chinese People's Daily.

Border trade in timber, gems and seafood with Myanmar's neighbors—mainly China, Thailand and Malaysia—is largely unofficial and is hard to get reliable figures on. The Thai Farmers Bank estimates that Thai imports from Myanmar on border trade alone was worth $389.4 million in the first six months of 2002.

The isolationist regime in Myanmar has never relied heavily on the international community for commerce and trade.

So as Washington and the European Union step up pressure on the generals in Yangon to release opposition leader Daw Aung San Suu Kyi and implement democratic reforms in the country, the question remains: Just how effective will tougher sanctions be against the junta to bring political change to the country?

Proposed new US sanctions, which US President George W Bush is expected to sign into law, would include banning all imports made in Myanmar and companies owned by Myanmar's rulers, freezing assets of Myanmar's rulers in US banks, directing US representatives to international financial institutions to oppose lending to Myanmar, and expanding the visa blacklist on Myanmar's rulers to the United States. This is in addition to the current investment ban and arms embargo implemented by the administration of president Bill Clinton in 1997.

Most analysts and economists agree that unless China, Singapore and Thailand—Myanmar's three largest trading partners—follow Washington's lead and restrict trade, sanctions just won’t deliver the knockout punch to the regime. There is no indication that China, Singapore and Thailand will.

Retired World Bank economist Bradley Babson told the Far Eastern Economic Review for its June 19 edition that Myanmar's generals will not change their behavior because of tougher sanctions. He said the burden would fall mainly on the estimated 350,000 textile workers in the country.

Australian Foreign Minister Alexander Downer also believes that tougher sanctions will be of little effect to bring change in Myanmar. “America has taken the sanctions route in the past,” he told reporters on Wednesday at the Association for Southeast Asian Nations Regional Forum (ARF) in Phnom Penh. “Those sanctions haven’t worked, haven’t changed anything in Burma.”

In the past 10 years, Washington has imposed sanctions on at least 35 countries, which in most cases have done little except to make the situation worse for the people in those countries. Critics say sanctions are incapable of achieving significant results within the timeframe of foreign-policy goals. Just look at Iraq. Thirteen years of sanctions wasn’t enough to topple Saddam Hussein. Only a decisive military invasion accomplished that.

“US unilateral sanctions have a poor record with regard to advancing US foreign-policy goals,” said legal expert Clark. “Current sanctions [on Myanmar] plainly are not ‘working’ in the sense that they have not induced [Myanmar's] military dictatorship to adopt policies and practices that satisfy minimum international human-rights standards.”

So what will tougher US sanctions on Myanmar accomplish? Probably not much of anything, says William A Reinsch, president of the US National Foreign Trade Council, a corporate-backed organization.

He said it's a “lose lose lose” situation for the junta, US companies and the Myanmese people. For US importers, it's more of an inconvenience than anything, he said.

“Burma is not unique. Lots of countries produce their products. If [US companies] can’t buy shoes from Burma, they will say ‘Fine, we’ll try Pakistan or Bangladesh or Thailand.’

“It's the Burmese people I feel sorry for,” he said.

Supporters of sanctions argue that since the junta controls the nation's economy, any restriction on trade hurts the government. Isolation—not engagement—is also the preferred course of action that Suu Kyi urges the international community to take on Myanmar.

Many US giants have pulled out of Myanmar in recent years, including Wal-Mart, Adidas, and Tommy Hilfiger, bowing to pressure from human-rights groups.

“We are hopeful that sanctions will increase pressure on the regime and that other [countries] will also participate in this,” said Steve Lamar, senior vice president of the American Apparel and Footwear Association—a staunch supporter of boycotting Myanmar. “Engagement is preferable, but it is clear that this is a regime that does not respond to the norms of engagement.”

Clark maintains that although the economic impact on tougher sanctions against Myanmar would be minimal, the political impact on such sanctions may be more significant.

“The proposed sanctions represent more of a political gesture than an economic tool,” he said. “At the same time, my sense is that Burma's junta has, at various points, moderated its policies and practices somewhat in response to international pressure.”

For now, as Myanmar's ruling generals remain defiant in the face of international pressure to release Suu Kyi and restore national reconciliation talks, it seems the big losers are still the poverty-stricken people of Myanmar.