Making Sense of the U.S. Announcement on Myanmar Sanctions
Yesterday, the United States announced new steps aimed at easing Myanmar sanctions and allowing U.S. companies to operate in the country (with some conditions). I’ve co-written a piece for the Center for Strategic and International Studies (CSIS) on what this all means, which you can read in full here.
There are three critical points that deserve emphasis. The first is that the measures announced have been taken with caution. So while the Treasury Department issued two general licenses authorizing new investment and exportation of financial services by U.S. companies, there are also several restrictions attached such as bans against doing business with the armed forces and defense-owned entities. U.S. President Barack Obama also inked a new executive order expanding existing sanctions to cover nefarious actors of various kinds, including those undermining reform or participating in the military trade with North Korea, and two new entities were added to a list U.S. companies are not allowed to deal with. Lastly, firms will need to provide detailed reports on their activities there to promote greater transparency.
All these conditions were put in place alongside the easing of sanctions because the Obama administration was trying to balance opening up commercial opportunities for U.S. businesses and rewarding the regime in Myanmar for reforms while also being cognizant of rights and transparency concerns expressed by some (including Aung San Suu Kyi) and the fact that reforms in Myanmar still remain fragile and unfinished. In fact, one reason why it has taken almost two months for the administration to begin to take implementing steps after its announcement that it would suspend sanctions on May 17 was that there was a fierce debate in the administration over how to proceed in general and also whether to treat all industrial sectors equally or not (some were advocating different standards for oil and gas because of specific concerns regarding the state-owned Myanma Oil and Gas Enterprise (MOGE).
The second point is that this has significant implications not only for U.S. Myanmar relations but also Asia policy more generally. The timing of the announcement, which came just as the first U.S. ambassador to Myanmar in 22 years Derek Mitchell arrived in the country and also ahead of a U.S.-ASEAN Business Council delegation there accompanied by two senior officials this weekend, no doubt adds significant momentum to U.S.-Myanmar relations and is a boost for reformers there. In terms of Asia more broadly, this strengthens the case U.S. Secretary of State Hillary Clinton is making on her Asia trip that the U.S. “rebalance” to Asia has a strong economic component too, and is not just military-centric as some in the region have alleged. It also removes a thorn in U.S.-ASEAN relations since some were very frustrated about the glacial pace at which the U.S. was moving on this issue.
The third point is what has been left untouched: an import ban by the United States on goods from Myanmar. It is a known fact that the ban is a clear case of sanctions adversely affecting the population rather than the regime in power, and that it has decimated the garment factor in Myanmar. It is also quite clear that most of the garment factories are owned by non-crony private businesses and that facilitating this industry would create a lot of jobs and help boost the economy. If Washington is truly committed to helping the people of Myanmar, and if reform continues, then it needs to act on this too.
You can read the full piece here.