THE EU AND BURMA: THE CASE FOR TARGETED SANCTIONS
The report has been endorsed by the following organisations:
Actions Birmanie, Belgium
Asienhaus, Germany
Burma Bureau Germany
Burma Campaign UK
Burma Centrum Netherlands
Committee for the Restoration of Democracy in Burma (Germany)
Danish Burma Committee
Finnish Burma Committee
Infobirmanie, France
Norwegian Burma Committee
Swedish Burma Committee
The International Confederation of Free Trade Unions (endorses the recommendations
of this report)
FOREWORD
Burma’s military regime has tested the will of the people of Burma;
despite intimidation and violence, the people’s desire for freedom and
democracy remains strong. Our brothers and sisters in Burma realise that non-violent
resistance does not mean passive resistance. Sadly, tyrants choose not to
understand the language of diplomacy or constructive engagement, but rather
respond only to the action of intense pressure and sanctions.
As in South Africa, the people and legitimate leaders of Burma have called
for sanctions.
In South Africa when we called for international action, we were often scorned,
disregarded, or disappointed. To dismantle apartheid took not only commitment
faith and hard work, but also intense international pressure and sanctions.
In Burma, the regime has ravaged the country, and the people, to fund its
illegal rule. Governments and international institutions must move past symbolic
gestures and cut the lifelines to Burma’s military regime through well-implemented
sanctions.
I maintain my belief that no one or no government should wait to take action;
the journey begins with one step. Businesses and governments have a choice
if they want to do business with the oppressive regime in Burma, or not. Business
with the regime puts weapons in the hands of those who massacred thousands
in 1988; are responsible for creating more than a million Internally Displaced
People who cannot find shelter and security in their own country; those who
systematically rape women. It funds the vast intelligence system, the disgraceful
incarceration and torture of Burma’s freedom heroes, and the egregious
human rights violations perpetrated against Burma’s ethnic nationalities.
Individuals and governments must take a stand against tyranny and those who
protect and fund it.
Apathy in the face of systematic human rights abuses is amoral. One either
supports justice and freedom or one supports injustice and bondage. Let us
not forget that our responsibility is not complete until the people of Burma
are free. At a time when the military is professing promises of freedom, one
should bear in mind that actions speak louder than words. Freedom cannot be
obtained through a process embedded in discrimination and persecution. I am
deeply concerned for my courageous sister, Aung San Suu Kyi, and the more
than 1,000 political prisoners, who have remained steadfast and true to non-violent
principles, but are being kept isolated from the people of Burma and the international
community. Their silenced voices are the most eloquent persuasion that the
time to stand for their freedom is now.
If the people of South Africa had compromised the struggle against apartheid,
we may never have gained our freedom. In Burma, to settle for anything less
than freedom and justice, for the democratic participation of all people,
would be to accept the presence of oppression and to dishonour our brave brothers
and sisters who have dedicated themselves to the future of a democratic Burma.
I believe that truth and justice will prevail. Let a deep sense of faith and
commitment to our principles guide our actions and sustain our hope. Sowing
the seeds of justice may not be easy, but the harvest will be abundant.
The people of Burma will be free.
Archbishop Desmond Tutu
This foreword was written for Ready, Aim, Sanction – Special Report
published by Altsean-Burma in November 2003. We are grateful for the permission
to re-print it.
EXECUTIVE SUMMARY
The political stalemate in Burma will not be broken until the military regime
considers it to be in its own self-interest to commence serious negotiations
with the democratic and ethnic forces within the country. This paper outlines
how the international community can bring about a political and economic situation
which will foster such negotiations.
Burma is ruled by a military dictatorship renowned for both oppressing and
impoverishing its people, while enriching itself and the foreign businesses
that work with it. The regime continues to ignore the 1990 electoral victory
of Aung San Suu Kyi and the National League for Democracy.
The regime has shown no commitment to three years of UN mediation efforts.
It has failed to end the practice of forced labour as required by its ILO
treaty obligations and demanded by the International Labour Organization.
It continues to persecute Burma’s ethnic peoples. It continues to detain
more than 1,350 political prisoners including Aung San Suu Kyi.
Any proposal of a road map to political change in Burma will fail to bring
about democracy in this country unless it is formulated and executed in an
atmosphere in which fundamental political freedoms are respected, all relevant
stakeholders are included and committed to negotiate, a time frame for change
is provided, space is provided for necessary mediation, and the restrictive
and undemocratic objectives and principles imposed by the military through
the National Convention (ensuring continued military control even in a “civilian”
state) are set aside.
Report Findings
1 Approved Foreign Direct Investment to Burma since 1989 was worth USD 6.6
billion, largely for tourist infrastructure and natural resource extraction
projects. Burma’s exports in 2002 were valued at USD 2.98 billion. 1
Both trade and investment have provided significant resources to the regime
and its support base. Since 1988 Burma’s military has expanded from
200,000 personnel to more than 400,000 while the country’s health, education
and public services have almost collapsed.
2 The junta’s support base is comprised of regional commanders, high
and middle ranking military officers and the families and business associates
of the military establishment. This constituency owns and controls much of
the formal economy, which is largely dependent on foreign investment and markets.
Reducing the regime’s ability to keep this constituency satisfied will
foster reform-oriented political pressure within the military establishment.
3 The majority of Burma’s people, especially the poorest, work within
the informal economy, which is generally not dependent on foreign investment
or markets. The impact of sanctions that are targeted at the formal economy
would therefore be minimal for the vast majority of Burma’s people.
4 The attempt by the United States to impact on the economic interests of
the regime and its constituency has been reduced by the inaction of the EU,
Asian states and the UN. There has never been any legal obstacle to Asian
or European companies doing business in or with Burma. There are no EU measures
that effectively challenge the economic interests of Burma’s military
establishment. A European Common Position on Burma has been in place since
1996. This Common Position has failed to include measures that would seriously
threaten the Burmese military regime. It has not been fully implemented with
regard to the bank accounts of the regime's economic entities. European bank
accounts of companies owned by the regime should have been frozen but have
not been.
5 Fifteen years of constructive engagement with the regime have failed to
bring about a single democratic reform. Anti-sanctions advocates have ignored
the uncompromising nature of the regime, the connection between the military’s
economic base and its political support, and the leverage that sanctions would
provide for the NLD in its negotiations with the military. Those opposed to
sanctions ask that we continue to allow the regime to reap financial benefits
through trade and investment – knowing that such benefits will feed
the junta’s constituency and those associated with it. This has been
the prevailing policy and has impeded any movement for reform within the military.
Ultimately the anti-sanctions advocates are asking us to allow the long-term
entrenchment of military rule in Burma with all the oppression and impoverishment
this entails. Implicitly they argue that this is a price worth paying to save
a limited number of jobs in a few targeted export sectors.
6 A combined strategy of weakening the regime’s support base while promoting
a transition process supported by the UN can achieve real political change
in Burma. This paper outlines the role played by targeted sanctions in getting
the Burmese military regime to the negotiating table.
RECOMMENDATIONS
EU:
• To ban all European companies and citizens from investing in Burma;
• To ban the import of goods and services from enterprises owned by
the military, military personnel and their associates;
• To ban the import of strategically important goods from sectors of
the economy under state monopoly, such as gems and timber;
• To ban international financial transfers and transactions either by
a citizen or an entity of an EU state or from the EU;
• Member states to push for UN Security Council mandatory sanctions
as set out below.
UN:
• The imposition of targeted sanctions, including a mandatory arms embargo,
investment ban and a ban on Burmese exports of strategically important goods,
including gas, oil, gems and timber until there is irreversible progress toward
political transition, or until a democratically elected government in Burma
requests that they be lifted; 2
• The UN Secretary General should take the lead in formulating a comprehensive
road map 3 with a specific timeframe (no later than 2006) backed by the force
of a UN Security Council resolution and sanctions.
1. INTRODUCTION
Burma, situated between India, China, Tibet, Laos, Bangladesh and Thailand,
is one of the largest countries in Southeast Asia. For the last forty years
it has been ruled by a military dictatorship with a reputation for brutality.
In 1990 the National League for Democracy (NLD) won a landslide election victory
in Burma. But the result has never been honoured. The NLD, led by Nobel Peace
laureate Aung San Suu Kyi, has urged the international community to impose
economic sanctions against the dictatorship. This document explains why.
2. THE PROBLEM
Burma’s ruling military has an appalling record:
• Rape as a weapon of war against ethnic women and children; 4
• Widespread use of forced labour described by the ILO as a ‘crime
against humanity’; 5
• More than 1,350 political prisoners, many of whom are routinely tortured;
6
• Between 600,000 and one million internally displaced people forced
from their lands; 7
• A continuous exodus of Burmese to neighbouring countries. Thailand
alone absorbs an estimated million or more Burmese in search of better life
opportunities;
• One of the largest armies in Asia despite having no external enemies;
8
• Nearly half of the regime’s budget is spent on the military
and only two to four percent spent on health; 9
• One in ten babies die before their fifth birthday. 10 3. FUELLING
THE OPPRESSION
There is currently no legal barrier preventing European or Asian companies
from fuelling Burma’s dictatorship through investment and trade. The
regime survives through foreign investment, revenue from exports and illegal
narcotics. 11
It is clear that fifteen years of constructive engagement, whereby businesses
and governments cooperated with the regime in the hope that reform would result,
have been a failure. The anti-sanctions advocates have ignored the uncompromising
nature of the regime, the connection between the military’s economic
base and its political support, and the leverage that sanctions provide for
the NLD in its negotiations with the military. 12
One of the most worrying consequences of investment and trade with Burma is
the way it has enabled the regime to expand the armed forces. In 1988 there
were 200,000 personnel, there are now an estimated 400,000. The regime’s
ultimate target is half a million military personnel. 13
Military spending has fluctuated between a third and a half of the regime’s
budget during the 1990s. A country of around 50 million people has one of
the largest armies in Asia, and yet has no external enemies.
Jane's Defence Weekly reported in July 2001 that Rangoon was buying 10 MiG-29
jet fighters from Russia for USD 130 million and that the money was coming
from Thai gas purchases. 14 The down-payment for the MIGs (30 percent of the
total) came in the same week that the state-owned Petroleum Authority of Thailand
paid Burma USD 100 million in royalties for gas due to be piped ashore from
fields in the Gulf of Martaban (operated by Total and Unocal). Before the
Thais made this payment under the terms of a 1995 contract, Burma had almost
depleted its foreign exchange reserves.
According to Robert Karniol, Asia editor of Jane's Defence Weekly, 15 the
Russians were unwilling to sell aircraft to Burma until revenue began to flow
from the Martaban gas-field, which is one of the country's few sources of
significant foreign exchange.
According to the US Department of Commerce, the regime’s ministry of
finance has placed a ten percent tax on exports in foreign exchange. 16 Therefore
in 2001 if Burma’s legal exports were USD 2.782 billion, the regime
could well have benefited by USD 278.2 million in taxation alone. Much more
of the total export figure would have benefited the regime’s support
base.
4. THE COSTS
Military expansion and politically motivated expenditure have been carried
out at the expense of Burma's people. The high proportion of the state budget
spent on the military has resulted in an allocation to education and health
that ignores the needs of Burma’s people (see figure 1). In 2000, the
World Health Organisation ranked Burma near rock bottom, 190 out of 191 countries,
in health care delivery. The people of this resource-rich country are slipping
further into poverty. UNICEF reports that 36 percent of children under five
years in Burma are moderately to severely underweight, 17 while United National
Development Programme (UNDP) reports one in ten babies die before their fifth
birthday. 18
In table 1, Thailand has been chosen for comparison with Burma because of
the nations’ shared history, long border, similar population size and
resource endowment. Also, and though not without considerable problems of
its own, Thailand provides a not unreasonable example of ‘what might
have been’ in Burma. Perhaps surprising in the data of these selected
social indicators is the extent to which Burma trails not only newly industrialised
Thailand but the record of developing countries generally.
Table 1. Comparison between Burma and Thailand
Burma Thailand All Dev. Countries
Infant mortality rate (per 1,000 births) 80 30 65
Infants with Low birth weight (%) 24 6 n/a
Public education expenditure (% GDP) 1.2 4.8 3.8
Public health expenditure (% GDP) 0.2 1.7 2.2
UNDP Human Development Report 2000, and Burma Economic Watch
There can be no doubt that the greatest obstacle to peace and prosperity
in Burma is the military dictatorship itself.
The NLD has asked the world to cut the lifelines that keep the regime alive.
Like Nelson Mandela and the ANC during the Apartheid regime in South Africa,
Aung San Suu Kyi and the NLD have called for economic sanctions.
5. THE IMPACT OF SANCTIONS ON BURMA’S PEOPLE
The nature of Burma’s economy is such that sanctions targeting foreign
investments and international trade will impact on the regime while having
a minimal impact on the majority of ordinary civilians.
Burma is a country with two economies, the informal and the formal. The informal
economy is where the majority of Burma’s people, especially the poorest,
produce, trade and work. In rural Burma (where 75 percent of the population
live) people are largely involved in subsistence agriculture (see figure 2).
In the urban areas, as in the rural, business units tend to be small and based
around the extended family, involved in small production, trade or services.
As economist Alfred Oehlers 19 of Auckland University of Technology observes
regarding the informal economy:
Forms and methods of business organisation and management are not very advanced,
relying principally on established customs, practices and traditions…
In the informal sector, the level of exposure to external markets is extremely
small.
He 20 continues:
As sanctions will primarily affect the cross-border flows of goods, services
and finance, this [informal] sector – with its low level exposure to
external markets – will be relatively insulated from any consequences.
The informal sector is by far the most important for ordinary people in Burma,
around which, most of their lives revolve.
The formal economy is very different from the informal and the two are largely
independent of each other. The formal economy relies much more heavily on
foreign investment and markets. Enterprises in this sector are larger, more
advanced in organisation and management. When classified by the management
body, 80 percent of large-scale enterprises with more than 100 employees are
state-owned or state-affiliated enterprises. 21 They are concentrated in the
extractive industries, manufacturing, tourism, finance and banking. 22 The
formal economy both historically and currently is in the main owned by the
military establishment, their families and their associates. This was the
case when these industries were nationalised after the military coup of 1962
and when they were ‘privatised’ during the 1990s. As Minoru Kiryu
23 notes:
“While deregulation of private investments has encouraged the establishment
of many private enterprises and important export enterprises, many of the
entrepreneurs involved are retired government officials and servicemen.
Therefore it is clear that the sanctions targeting the larger scale formal
economy industries in Burma will impact more directly on the economic interests
of the military and its support base while having a minimal impact on the
vast majority of ordinary people. As Oehlers 24 observes:
Given the highly centralised nature of the ownership of and control within
the Burmese economy, it may reasonably be presumed the negative consequences
arising from sanctions will have greatest impact on the military and its closest
associates. Far from the blunt and indiscriminate tool it is often accused
of being, in the case of Burma at least, sanctions appear to be surprisingly
well targeted and capable of exerting considerable pressure on the military
regime.
Additionally the system of approval of foreign direct investment is such
that the military is able to control who benefits from large scale investment
and investments in key sectors of the economy. Foreign investment that needs
approval under Burma’s Foreign Investment Law is administered by the
Myanmar Investment Commission, in which a majority of the members come from
the military cabinet itself. The practices of the Commission ensure that the
regime is able to direct resources towards the quasi-military companies which
dominate the economy, such as the Union of Myanmar Economic Holdings (UMEH).
25
Finally, the state has a monopoly on exports of rice, teak, petroleum, natural
gas, gems, pearls and a number of other items. The exports of these products
require a permit from the Ministry of Commerce. 26 Imposing sanctions on the
import of these products will therefore have a direct impact on the military
regime.
6. HOW THE REGIME MAINTAINS ITS SUPPORT BASE
The Union of Myanmar Economic Holdings Ltd (UMEH) and the Myanmar Economic
Corporation (MEC) are the two major industrial conglomerates controlled by
the military. They dominate key economic sectors. Shareholders of UMEH are
limited to the military establishment. 27
According to the leaked 1995-96 annual report of UMEH, two of the main objectives
of the UMEH are 'to support military personnel and their families' and 'to
try and become the main logistics and support organisation for the military
by gradually establishing industries.' 28
The UMEH has current investments in banking, tourism, import and export of
foodstuffs, gems and jade mining and sales, construction materials, leasing
of fishing boats, real estate, and general retail. The UMEH has also been
managing the armed forces’ pension funds, giving it a ready source of
financing. By 1999 the UMEH had established nearly 50 joint ventures with
foreign firms. 29
The MEC was established in order to shift defence expenses from the public
to the private sector, i.e. in order to “decrease defence expenditure”
while providing funds for the welfare of military personnel and to cover other
military needs. 30 The MEC is authorised to conduct business in almost any
field of commerce and industry and is not bound by the laws that control other
economic activities in Burma. 31
The activities of UMEH and MEC are intended in part to build the military's
resource base – enabling privileged economic treatment of army officers
and their families. Economic sanctions will make it harder for the military
to maintain its defence expenditures at the current level and will reduce
the size of the 'economic pie' from which the regime can slice pieces for
its patronage networks, and will create hardship for mid-level military families.
32 These form the main base of the junta’s constituency, the people
the regime needs to keep happy. If discontent occurs in this constituency
the pressure for reform will be substantial.
7. THE EU AND BURMA
EU policy on Burma is critical for two reasons, firstly because the EU has
provided much of the investment that has buttressed Burma’s dictatorship,
and secondly because the EU’s role at the UN and its relationship with
ASEAN is key to the prospects for successful diplomatic initiatives on Burma.
EU investment in Burma has increased in importance over the last decade. Though
estimates of Foreign Direct Investment (FDI) inflows to Burma vary according
to different sources, it is clear that in the energy sector EU investment
has been vital. Between 1995/6 and 1999/00 total actual FDI in the oil and
gas sectors accounted for USD 1,531 million of a total actual FDI for all
sectors of USD 2,765 million. 33 In 1999 EU FDI accounted for 43 percent of
all investment in Burma, and in 2000 the figure rose to 71.2 percent. 34
.
Apart from EU investment in Burma, the EU’s trade relations with Burma
have increased significantly over the last decade (see figure 3).
In total European imports from Burma and European investment to Burma between
1988 and 2002 has had a combined value of at least USD 4 billion.
The fact that many European companies remain active in Burma can also be gauged
from looking at the lists of companies with links to Burma maintained by Global
Unions. Of a total of 372 companies mentioned, 104 are European companies.
35
There are growing concerns that where the US has tried to cut off finance
to the regime (see table 2), the EU will continue to be a source of economic
comfort for Burma’s military establishment.
Since the 2003 US ban on remittances, transfers and transactions denominated
in dollars, the regime has increasingly looked to the euro as its currency
for international commercial activity.
One particular action that should be taken is to apply pressure on those service
providing companies that make international financial transactions possible,
such as SWIFT, a business owned by leading financial institutions. In Burma
only a handful of banks are allowed to handle foreign transactions, the Central
Bank and three state-owned banks (the Myanmar Foreign Trade Bank, the Myanmar
Investment and Commercial Bank, and the Myanmar Economic Bank).
By collaborating with Burmese banks, SWIFT is in the process of making it
possible for Burma to conduct international transactions in euros and other
currencies. As in the case with the ban on remittances by the US, international
transfers and transactions by an entity or an individual from an EU state
should in effect be banned.
We recall in this respect that the Financial Action Task Force on Money Laundering
(FATF) has urged its members, which include the 15 EU member states as well
as the European Commission, to impose counter-measures against Burma to enhance
surveillance and reporting of international financial transactions as a consequence
of the country’s failure to co-operate in combating money-laundering.
Table 2. Impact of current US Measures
Current US measures Effect on economic int. of regime/ associates
1997 Ban on new investment Allows pre-97 investors to continue and increase
investment in the country i.e. Unocal. Has prevented an unquantifiable amount
of new US capital to enter Burma.
2003 US import ban Denies the regime and its associates export revenue and
tax revenue.
2003 Ban on remittances Significant impact on import/export businesses with
dollar bank accounts, and on the state run banking system and the business
associates of the regime.
8. THE EUROPEAN UNION’S RESPONSE
Over the last decade the EU has taken a number of measures with regard to
Burma. All of these measures are largely symbolic and have been related to
the EU’s political and aid relationship with Burma – they do not
have the effect or intention of applying severe economic pressure on the regime.
It is therefore wrong to come to the conclusion that sanctions have been tried
and proven to have failed based on the European Common Position – which
has been forwarded as an argument against sanctions per se.
There is nothing in the EU Common Position that threatens the regime’s
economic interests and therefore seriously represents any serious sanction
on the Burmese government (see table 3). The EU Common Position, currently
comprises:
• An arms embargo;
• The expulsion of military personnel attached to the diplomatic representations
of Burma in the EU;
• A ban on non-humanitarian aid;
• A visa ban on all individual members of the SPDC, their families and
some of their business associates;
• A freeze on the personal assets held in Europe by the SPDC, their
families and some of their business associates; 36
• The suspension of high level governmental (ministers and officials
at the level of political director or above) visits to Burma.
The EU has also withdrawn the preferential trading terms that Burma enjoyed
as a developing country under the General System of Preferences, 37 and made
a statement echoing the view of Aung San Suu Kyi that tourism to Burma is
inappropriate.
Table 3. Impact of existing EU measures
Existing EU measures Effect on economic interest of regime so far
An arms embargo None
The expulsion of military attachés None
A ban on non-humanitarian aid Negligible
A visa ban on SPDC and associates None
Assets freeze on SPDC and associates Negligible
Suspension of governmental visits to Burma None
Withdrawal of GSP trade preference Negligible
Furthermore, the EU Common Position has not been fully implemented with regard
to the bank accounts of the regime's economic entities. European bank accounts
of companies owned by the regime should have been frozen but have not been.
For instance, the Common Position calls for an asset freeze for individuals
and entities from Burma. However, attempts have not been made to freeze assets
owned by the UMEH or the MEC.
If Europe is serious about moving Burma beyond a political stalemate it must
deal with the stark facts that European trade and investment have acted to
comfort the regime rather than push it towards reform. If Europe starts to
put its own house in order while pushing for an internationalised diplomatic
effort on Burma, it could bring very positive results.
9. THE UN AND BURMA
In addition to stronger European measures, the EU should increase its efforts
towards the imposition of United Nations Security Council mandatory sanctions
against Burma.
Since 1991 Burma has been the subject of annual resolutions by the UN General
Assembly outlining necessary reforms to move Burma from dictatorship towards
democracy. The human rights situation in Burma has been the object of scrutiny
by the UN Human Rights Commission every year since 1992. In 2000 the International
Labour Organization called upon its three constituencies to review their relationship
with Burma in order to ensure that they do not contribute to the continuation
of forced labour. Time has now come for the EU to work for the enforcement
of these various resolutions.
The UN Special Envoy to Burma and the UN Special Rapporteur on Human Rights
in Burma play a key role in UN efforts to promote change in Burma. However,
during the last three years of UN mediation in Burma the regime has refused
to release all political prisoners, has continued the use of forced labour,
continued the violent persecution of ethnic minorities throughout the country
and refused to start a dialogue with the pro-democracy movement. On 30 May
2003, Burma’s military dictatorship ended any pretense that it was ever
genuine about reform. At a small town called Depayin, 500 miles north of the
capital Rangoon, Aung San Suu Kyi’s motorcade was attacked by the junta’s
paramilitary wing. Aung San Suu Kyi, other NLD leaders and party members were
detained.
Eyewitness accounts tell of women being grabbed from cars, stripped naked
and beaten to death, while others were chased and then killed. Aung San Suu
Kyi’s personnel tried to protect her, and were viciously beaten with
sharpened bamboo staves. Some reports suggest that scores of people were murdered
by the regime. At the time of writing, Aung San Suu Kyi remains under house
arrest for the third time since taking up leadership of the democracy movement
in 1988.
Newly appointed Prime Minister General Khin Nyunt announced a “Road
Map” to democracy on 30 August 2003. This road map outlines seven steps,
based on the reconvening of a National Convention to complete the drafting
of a new constitution for Burma. It does not provide a timeframe for reforms.
Neither does it formally provide a role for the NLD and the non-Burman nationalities
in the country.
The road map refers to the constitution-drafting National Convention which
was convened by the military regime in 1993. In November 1995 the NLD sent
a letter to the military requesting that the proceedings of the National Convention
be liberalised. The NLD began a boycott of the National Convention in December
following the rejection of its appeal by the military. All delegates from
the NLD were subsequently expelled by the military from the National Convention
and the National Convention was suspended in 1996.
The NLD together with participants from non-Burman ethnic groups have also
disagreed over the six objectives, the 104 basic principles and the Detailed
Basic Principles set by the junta that would allow the military to perpetuate
its rule under the guise of a civilian government and even stage a coup if
they felt the country was in danger. 38
The regime has rejected the UN’s mediation role, if not by words then
by deeds. It is now time for a more coherent international response to Rangoon’s
intransigence. In light of the critical situation in Burma, political intervention
from the international community is essential to avert impending confrontation
and bloodshed. The Secretary General, Kofi Annan, has called on the regime
to release Aung San Suu Kyi and begin a "substantive" dialogue with
her. He told the UN General Assembly that
Unless the parties concerned are able to engage in substantive dialogue, the
international community will have to conclude that the home-grown national
reconciliation process no longer exists. 39
In this case, he said the UN would review the situation and decide on further
possible action. Mr Annan has set a deadline of 2006 for a transition to democratic
rule in Burma, but has not outlined how this stated goal will be achieved.
The UN Secretary General should take the lead in formulating a comprehensive
road map 40 with a specific timeframe backed by the force of a UN Security
Council resolution and sanctions under Chapter VII of the UN Charter. It is
clear that essential elements of any UN sponsored roadmap must include the
release of Aung San Suu Kyi and all political prisoners; a nation-wide ceasefire;
freedom to operate for all political parties; and a dialogue between the NLD,
the ethnic nationalities and the regime, as well as an end to forced labour
and to forced relocations. In addition, the restrictive and undemocratic objectives
and principles imposed by the military through the National Convention (ensuring
continued military control even in a “civilian” state) should
be set aside.
10. UN SANCTIONS - CHAPTER VII
Article 39 of Chapter VII of the UN Charter states:
The Security Council shall determine the existence of any threat to the peace,
breach of the peace, or act of aggression and shall make recommendations,
or decide what measures shall be taken in accordance with Articles 41 41 and
42 42, to maintain or restore international peace and security.
The Security Council has the authority to interpret this article, and the
interpretation has historically been broad and political, rather than narrow
and legal. In the cases of Haiti (1993) and Southern Rhodesia (1965), both
countries were said to constitute a threat to international peace and security.
Both cases constitute possible precedents to the UN Security Council taking
up Burma.
The disruption of democracy; the continued detention of Burma’s elected
representatives; the rapid expansion of Burma’s army to the second largest
in Southeast Asia; the continued scorched-earth policy against ethnic peoples
close to external borders; the use of rape as a weapon of war against women
and children; the mass forced displacement of civilian populations close to
external borders producing large refugee flows to neighbouring countries;
the widespread and systematic violation of human rights; the largest use of
child soldiers in the world; the production and export of illegal narcotics
to neighbouring countries; the spread of HIV/AIDS to neighbouring countries;
and the looming humanitarian crisis resulting from the collapse of public
services as resources are directed to military expenditure; all constitute
a risk to internal and regional peace and stability.
The Security Council should recognise the situation in Burma is a threat to
international peace and security and take action under Chapter VII of the
United Nations Charter. The Council should condemn the military regime's egregious
human rights abuses, its non-adherence to humanitarian law, and its refusal
to engage in a substantive political dialogue with the pro-democracy movement
and ethnic groups towards establishing a democratic government.
The momentum for the Security Council to address and take action on the situation
in Burma should not halt merely if Aung San Suu Kyi is released from detention.
The situation in Burma is dire and the plight of the Burmese people as a whole
deserves the Council's attention. 43
11. WHAT WE ARE ASKING THE EU AND UN TO DO
EU:
• To ban all European companies and citizens from investing in Burma;
• To ban the import of goods and services from enterprises owned by
the military, military personnel and their associates;
• To ban the import of strategically important goods from sectors of
the economy under state monopoly, such as gems and timber;
• To ban international financial transfers and transactions either by
a citizen or an entity of an EU state or from the EU;
• Member states to push for UN Security Council mandatory sanctions
as set out below.
UN:
• The UN Security Council should impose targeted sanctions, including
a mandatory arms embargo, investment ban and a ban on Burmese exports of strategically
important goods, including gas, oil, gems and timber until there is irreversible
progress toward political transition, or until a democratically elected government
in Burma requests that they be lifted;
• The UN Secretary General should take the lead in formulating a comprehensive
road map 44 with a specific timeframe backed by the force of a UN Security
Council resolution and sanctions.
SUMMARY: YOUR QUESTIONS ANSWERED
1. What right do we in Europe have to impose sanctions on another country?
The NLD, led by Aung San Suu Kyi, won 82 percent of the seats in Burma’s
1990 election. It has called for international sanctions against the regime.
All the major ethnic leaderships from Burma have whole-heartedly supported
the case for sanctions. The mandate for such sanctions comes from within Burma
and could not be clearer or more legitimate.
2. Won’t sanctions harm the Burmese people?
The sanctions we are calling for will cut off investment to Burma and ban
a limited number of exports, such as gems, from entering the EU. Three quarters
of Burma’s people live off the land, the vast majority do not work in
industries targeted by these sanctions. It is clear therefore that only a
minority of the population will be affected.
A minority of ordinary people will be affected but this has to be weighed
against the plain fact that, every day women are raped, villages are burned,
prisoners are tortured, and Burma’s 50 million people are further impoverished
by this regime. We are faced with a stark choice: allow the regime to obtain
finance that will ensure its survival, thereby condemning Burma to continued
violence and impoverishment; or make a concerted effort to cut the regime’s
financial lifelines while limiting the effects on ordinary people. The first
strategy is a surrender to tyranny; the second is a struggle for the freedom
and prosperity of a whole nation.
What will harm the Burmese people is the lack of will and ability of the international
community to act in a concerted manner and impose sanctions, thus allowing
the Burmese military to perpetuate its rule.
3. Haven’t sanctions already failed to change Burma?
The US is the only country to have imposed tough economic sanctions on Burma.
These sanctions have only been in place since July 2003. Targeted sanctions
by the EU or by the international community as a whole have not really been
tried yet and cannot be said to have failed. Burma’s export of gas,
timber and gems continues to earn vital revenue for the regime. The total
value of exports in 2002 was USD 2.98 billion. 45
4. Isn’t it more effective to engage with the military?
Sanctions are an economic tool employed for political purposes. We are asking
for sanctions in combination with diplomatic intervention in order to apply
the maximum impetus for political reform and prevent the regime from playing
one country against another.
It is a myth that you can’t employ both sanctions and diplomatic engagement
to promote political change in Burma. Over the last two years the US, EU and
Asia held back from taking action against the regime hoping that it would
respond to a softer approach. The regime responded by imprisoning Aung San
Suu Kyi and by massacring a large number of her supporters. 46 There must
be continued efforts to persuade the regime to change, but at the same time
there must be equal effort made to cut its financial lifelines. It is now
time for tough action backed by the UN Security Council and for an international
diplomatic effort led by the UN Secretary General.
5. How will sanctions influence the generals?
The regime depends on foreign investment and foreign trade for a substantial
part of its income. It is essential to cut those lifelines in order to force
the regime to the negotiating table. As long as the regime and its associates
are financially secure they have no incentive to reform. Sanctions will affect
the regime’s own support base far more acutely than they will affect
the majority of Burma’s people.
6. Shouldn’t we be trying to strengthen the pro-democracy forces in
Burma?
The extension of economic sanctions provides critical bargaining leverage
to Burma’s democrats. The NLD has consistently supported stronger economic
sanctions by the international community. In a situation where the NLD has
only principles and popular support, the power to reduce the burden of international
sanctions is a significant bargaining chip. 47 Sanctions are one way to strengthen
Burma’s democrats and should be accompanied by other efforts to support
their struggle, in consultation with the NLD.
The Burmese people are suffering from the mismanagement of their country’s
resources and the dictatorship’s unwillingness to prioritise basic needs
in health and education for the population over its own needs and survival.
Again, we are not asking for sanctions isolated from other political instruments.
Sanctions targeting the regime should also be combined with efforts to assist
the people of Burma thus in effect empowering them to be part of an effort
to bring democracy to Burma.
7. Surely Europe and the West don’t have influence because they don’t
have significant trade or investment in Burma?
During 1990-2000 Western countries disbursed 65 percent of total actual foreign
direct investment to Burma. 48 Some of the regime’s most significant
business partners have been Western multinationals including, Total (French),
Unocal (US) and British American Tobacco (UK) . 49
8. Don’t we need to be sure that sanctions will work before imposing
them?
We have to be clear what we mean by ‘work’. Some European governments
have placed a unique condition on any sanctions policy for Burma; that sanctions
on Burma should only be imposed if we can first be sure that they will ‘work’.
There are in fact relatively few domestic or foreign policy decisions that
demand a policy is absolutely guaranteed to work before implementation. European
states have supported EU trade sanctions against other states which certainly
don’t fulfil this criteria. Most policies are formulated out of a rational
analysis of the issue at hand, with an understanding of the limitations of
what they can reasonably be expected to achieve.
Furthermore Burma’s democracy movement does not see sanctions as a quick
fix for regime change. Sanctions are but one vital tool necessary to force
the regime to the negotiating table. Sanctions – combined with a vigorous
diplomatic initiative – will assist the pragmatists in Burma’s
military and amongst its associates to push for change.
9. If the EU pulls out and closes its markets, won’t Asian companies
and Asian markets just fill the gaps?
It is often reported that the majority of investment in Burma comes from the
Asian region. Again, however, this is only true in terms of commitments to
invest, with Asian countries committing approximately USD 4.26 billion, or
about 60 percent of total commitments since 1990. In the last ten years Western
countries only committed about USD 2.89 billion. However, Western countries
disbursed more than 80 percent of the investments that they committed. Asian
countries only disbursed about 31 percent of committed investment. 50
While European investments have been some of the strategically most important
to the regime, the recent exodus of companies as well as the decision of many
not to invest in Burma, provides an opportunity to further undermine the regime's
support base. Asian investors have not flooded into the investment gap. Instead
many have taken a cautious approach to investment in Burma as a result of
the regime's mismanagement of the economy. However, their attitude may well
change and this is why Europe must, in addition to applying an EU investment
ban, push for UN mandatory sanctions on Burma. Until such UN sanctions can
be put in place, the EU can ensure that no major European company tips the
economic balance of power further towards the regime's advantage.
10. Won’t Burma’s neighbours like China and India break any embargo?
UN Security Council sanctions are legally binding, and would have to be respected
by all of Burma’s neighbouring countries. In the absence of UN measures,
EU sanctions could ban investment in Burma from EU countries and the import
of certain commodities into the EU.
If China looks carefully at the situation in Burma, it will see that its key
interests are not well served by the current military regime. China’s
military security may be served by maintaining good relations with the military
government in Rangoon. But increasingly Burma also poses some real problems
for China, and particularly Yunnan province. The Burmese regime’s position
is unsustainable in the longer run with the threat of instability and civil
unrest becoming a real possibility; drugs and HIV/AIDS are crossing the border
into China, and Burma’s economy is flagging. It is no longer a promising
market for Chinese produce, nor can it be a driving force for the regional
economy, particularly for Yunnan and neighbouring provinces. The regime offers
China less than may be assumed, and China’s self interest is becoming
less well served by the ruling military in Rangoon.
Footnotes:
1. Xinhua News Agency. 9 April 2003.
2. For a detailed outline of possible United Nations Security Council measures,
see Burma UN Service Office, National Coalition Government of the Union of
Burma and The Burma Fund. October 2003.
The Crisis in Burma: An Agenda for the United Nations Security Council?.
Online at www.ncgub.net/NCGUB/The%20Crisis%20in%20Burma%20An%20Agenda%20for%
20United%20Nations%20Security%20Council.pdf
3. National Coalition Government of the Union of Burma and National Council
of the Union of Burma. 20 August 2003. Building a Roadmap towards Democracy
and Federalism in Burma, A “Framework of Ideas” on Scenarios,
Issues and Negotiation Options for Dialogue and National Reconciliation.
Online at www.ibiblio.org/obl/docs/NCGUB-roadmap-short.htm.
4. Shan Women’s Action Network and Shan Human Rights Foundation. May
2002. Licence to Rape. Chiang Mai: SWAN and SHRF. Online at www.shanwomen.org
and www.ibiblio.org/obl/docs/License_to_rape.pdf.
5. ILO Commission of Inquiry. July 1998. Forced Labour in Myanmar (Burma).
Report by the Commission of Inquiry appointed under article 26 of the International
Labour Organization to examine the observance by Myanmar of the Forced Labour
Convention, 1930 (No. 29).
Online at www.ilo.org/public/english/standards/relm/gb/docs/gb273/myanmar.htm.
For updated information on the practice of forced labour in Burma, please
see CEACR 2002. Observations Concerning ILO Convention No. 29, Forced Labour
(1930) – Myanmar, online here.
6. Amnesty International. 22 December 2003. Public Statement: Amnesty International's
Second Visit to Myanmar. AI Index: 16/037/2003.
Online at web.amnesty.org/library/Index/ENGASA160372003?open&of=ENG-MMR
7.Global IDP Database. Updated November 2003.
Available online at www.db.idpproject.org/Sites/idpSurvey.nsf/wCountries/Myanmar+(Burma)
8.The junta has expanded the military from 200,000 in 1988 to about 400,000
today. See Andrew Selth. 2002. Burma’s Armed Forces: Power without Glory.
Norwalk: Eastbridge, pp. 77-79.
9.Figures from UNICEF cited in Oehlers, Alfred and Alice Khin Saw Win. November
2003. “The Crisis in Burma’s Public Health System”. Unpublished
document.
10.United National Development Programme: Human Development Report 2003.
Online at www.undp.org/hdr2003/
11.The Ministry of Defence is likely to account for a significant proportion
of the central government’s consumption of imported goods and services,
without this being accounted for in national accounts.
See Andrew Selth. 2002. Burma’s Armed Forces: Power Without Glory. Norwalk:
EastBridge, pp. 136-137.
12.Philip S. Robertson: "Sanctions Are Working in Burma”. Online
commentary, Irrawaddy, 26 August 2003. Online at www.irrawaddy.org/com/2003/com31.html.
13.Andrew Selth. 2002. Burma’s Armed Forces: Power Without Glory. Norwalk:
EastBridge, pp. 77-79.
14.Bertil Lintner. “Rangoon free to spend gas money on anything it wants;
Purchase of MIGs a total separate deal”. Bangkok Post, 17 July 2001.
15.Bertil Lintner. “Rangoon free to spend gas money on anything it wants;
Purchase of MIGs a total separate deal”. Bangkok Post, 17 July 2001.
16.US Dept. of Commerce. Burma Country Commercia Guide FY2002.
Online at: <www.ibiblio.org/obl/docs/CCG2002.pdf />. Cited in Altsean
Burma. 2003. Ready, aim, sanction. Special Report. Online at www.altsean.org/ReadyAimSanction112003.pdf
17.UNICEF: At a Glance: Myanmar. Online at www.unicef.org/infobycountry/myanmar.html
18.United National Development Programme: Human Development Report 2003.
Online at www.undp.org/hdr2003/.
19.Alfred Oehlers. 2003. Sanctions and Burma: Revisiting the Case Against.
Unpublished paper.
20.Alfred Oehlers. 2003. Sanctions and Burma: Revisiting the Case Against.
Unpublished paper.
21.Minoru Kiryu. 1998. ASEAN and Japanese Perspectives on Industrial Development
and Reforms in Myanmar: A Survey of Selected Firms. A Report by the Sasakawa
Peace Foundation. Bangkok: White Lotus Press.
22.Alfred Oehlers. 2003. Sanctions and Burma: Revisiting the Case Against.
Unpublished paper.
23.Minoru Kiryu. 1998. ASEAN and Japanese Perspectives on Industrial Development
and Reforms in Myanmar: A Survey of Selected Firms. A Report by the Sasakawa
Peace Foundation. Bangkok: White Lotus Press.
24.Alfred Oehlers. 2003. Sanctions and Burma: Revisiting the Case Against.
Unpublished paper.
25.Burma Economic Watch. June 2001. Foreign Direct Investment and the Garments
Industry in Burma.
Online at www.ibiblio.org/obl/docs/FDI_&_Garments_Industry_in_Burma.htm
26.US Dept. of Commerce. Burma Country Commercial Guide FY2002.
Online at: www.ibiblio.org/obl/docs/CCG2002.pdf.
27.According to the leaked 1995-96 annual report of UMEH, this conglomerate
was formed April 27, 1990
as a 'special public company, with shareholders limited to the Directorate
of Defence Procurement, Ministry of Defence, Defence Regimental Institutes,
and other bodies of the Defence Services and War Veterans.'., cited in Philip
S. Robertson: "Sanctions Are Working in Burma”. Online commentary.
Irrawaddy, 26 August 2003.
Online at www.irrawaddy.org/com/2003/com31.html.
28.Philip S. Robertson: "Sanctions Are Working in Burma”. Online
commentary, Irrawaddy, 26 August 2003.
Online at www.irrawaddy.org/com/2003/com31.html.
29.Andrew Selth. 2002. Burma’s Armed Forces: Power Without Glory. Norwalk:
EastBridge, p. 147.
30.Maung Aung Myoe. 1999. The Tatmadaw in Myanmar since 1988. An Interim Assessment.
Working Paper No. 342. Canberra: Strategic and Defence Studies Centre, RSPAS,
p.13. Cited in Andrew Selth. 2002. Burma’s Armed Forces: Power Without
Glory. Norwalk: EastBridge, p. 147.
31.Andrew Selth. 2002. Burma’s Armed Forces: Power Without Glory. Norwalk:
EastBridge, p.147.
32.Philip S. Robertson: "Sanctions Are Working in Burma”. Online
commentary, Irrawaddy, 26 August 2003. Online at www.irrawaddy.org/com/2003/com31.html.
33.International Monetary Fund. 1997. Myanmar: Recent Economic Developments,
Statistical Appendix. Table 39. Source data provided by Myanmar authorities.
Available at netec.mcc.ac.uk/BibEc/data/imfimfscr1.html
34.International Monetary Fund and Burma Economic Watch tables.
Online at www.ibiblio.org/obl/docs/Tables%20and%20Data.htm.
35.Online at the Global Unions Website www.global-unions.org/burma/.
36.No evidence has been provided by the European Commission suggesting that
the regime has any significant assets in Europe.
37.After overwhelming evidence of the existence of forced labour was found,
the European Commission
recommended on 18 December 1996 that the Council of Foreign Ministers suspend
Burma’s trade preferences under the GSP for industrial products. On
24 April 1997 GSP privileges for industrial and agricultural products were
withdrawn from Burma in a unanimous vote of the European Council of Ministers.
GSP benefits provided 2-5 percent discount on EU import tariffs and saved
Burma no more than USD 365,000 in 1995.
38.See Euro-Burma Office. Highlights – The military constitution –
Burma. Undated and unpublished document.
39.See The Human Rights Situation in Myanmar. Report of Secretary-General
to United Nations General Assembly. A/58/325. Dated: 28 August 2003.
<//ods-dds-ny.un.org/doc/UNDOC/GEN/N03/482/57/PDF/N0348257.pdf?OpenElement
or www.ibiblio.org/obl/docs/SGreportA-58-325.pdf
40.National Coalition Government of the Union of Burma and National Council
of the Union of Burma. 20 August 2003. Building a Roadmap towards Democracy
and Federalism in Burma, A “Framework of Ideas” on Scenarios,
Issues and Negotiation Options for Dialogue and National Reconciliation.
Online at www.ibiblio.org/obl/docs/NCGUB-roadmap-short.htm.
41.Article 41 states that “The Security Council may decide what measures
not involving the use of armed force are to be employed to give effect to
its decisions, and it may call upon the Members of the United Nations to apply
such measures. These may include complete or partial interruption of economic
relations and of rail, sea, air, postal, telegraphic, radio, and other means
of communication, and the severance of diplomatic relations.”
42.Article 42 states that “Should the Security Council consider that
measures provided for in Article 41
would be inadequate or have proved to be inadequate, it may take such action
by air, sea, or land forces as may be necessary to maintain or restore international
peace and security. Such action may include demonstrations, blockade, and
other operations by air, sea, or land forces of Members of the United Nations”.
43.Burma UN Service Office, National Coalition Government of the Union of
Burma and The Burma Fund. October 2003. The Crisis in Burma: An Agenda for
the United Nations Security Council?.
Online here
44.National Coalition Government of the Union of Burma and National Council
of the Union of Burma. 20 August 2003. Building a Roadmap towards Democracy
and Federalism in Burma, A “Framework of Ideas” on Scenarios,
Issues and Negotiation Options for Dialogue and National Reconciliation.
Online at www.ibiblio.org/obl/docs/NCGUB-roadmap-short.htm.
45. Xinhua News Agency. 9 April 2003.
46. On May 30, 2003 the regime’s paramilitary forces attacked a motorcade
carrying Aung San Suu Kyi and her supporters. Up to 100 NLD supporters were
beaten to death in the attack.
47. Philip S. Robertson: "Sanctions Are Working in Burma”. Online
commentary, Irrawaddy, 26 August 2003. Online at www.irrawaddy.org/com/2003/com31.html.
48. See Foreign Direct Investment and the Garments Industry in Burma. Burma
Economic Watch, June 2001. Online at www.ibiblio.org/obl/docs/FDI_&_Garments_Industry_in_Burma.htm
49. On 6 November 2003, BAT announced it was pulling out of Burma.
50. Burma Economic Watch. June 2001. Foreign Direct Investment and the Garments
Industry in Burma. Online at www.ibiblio.org/obl/docs/FDI_&_Garments_Industry_in_Burma.htm.