The Obama administration’s announcement that it is suspending sanctions on Myanmar, allowing American companies to invest in the formerly rogue nation, has received praise from the business community and skepticism from human rights groups.
Under Myamnar’s current president Thein Sein, the country once considered one of the world’s most isolated, has undergone remarkable progress toward democracy. In April it held its first parliamentary elections in more than 20 years. Aung San Suu Kyi, the democracy activist who spent decades under house arrest, was elected to parliament. As a result of the reforms, the United States is appointing its first ambassador, Derek Mitchell, to the country in more than two decades, along with easing some of the sanctions.
After meeting with the foreign minister of Myanmar, which the administration refers to as Burma, Secretary Clinton told reporters that the U.S. is suspending sanctions, but not lifting them all together. “We will be keeping relevant laws on the books as an insurance policy,” said Clinton. “But our goal and our commitment is to move as rapidly as we can to expand business and investment opportunities.” Among the sectors considered most opportune for investment are agricultural, minerals, and oil and gas.
Clinton stressed that the emphasis will be on responsible investment, and that U.S. companies will be held to “best practice” standards, representing transparency and respect for worker’s rights. Senior administration officials admit that those standards are still being hashed out, and will not be legally enforceable by U.S. law.
Human rights groups complain that it’s still too early to ease sanctions, and that the U.S. needed to establish a legally-binding conduct before the announcement. Activists express concern particularly about the oil and gas sector, which is owned and operated by some of the country’s top military leaders.
“This is a big problem,” John Sifton, the Asia advocacy director for Human Rights Watch, told ABC News. “There are certain activities that are not going to benefit reform and not going to benefit Burmese citizens; that will just benefit the wealthiest, most powerful.”
The State Department maintains that individual “spoilers” and “bad actors” who are found to be prohibiting democratic reforms will still be sanctioned, but in a recent joint letter to President Barack Obama, Human Rights Watch and other organizations noted that the current U.S. Treasury Department list of Special Designated Nationals, individuals and companies implicated in human rights abuses in Burma, had not been updated since 2009.
“Folks gotta’ remember this is … a country that has no independent judiciary system,” said Sifton. Myanmar tied with Afghanistan as the second most corrupt country in the world last year, according to the corruption-tracking group Transparency International. “The corruption is rampant,” said Sifton. “The revenue is completely off the books.”
Human rights groups aren’t opposed to easing some restrictions as a way to help the country continue to progress, but are concerned that, like many countries without strong governance, a boom in oil investment could end up being more of a resource curse for the impoverished nation than a help.
“There are things that can be done that don’t directly benefit the military,” said Sifton. “Invest in agriculture, trading and financial services. But allowing in oil and gas companies is not one of those things.”
American businesses have already expressed interest in doing business in the Asian country, say administration officials. The U.S. Chamber of Commerce, the National Trade Council and the U.S.-ASEAN Business Council issued a joint statement praising the administration’s decision. The groups, whose membership includes some of America’s biggest oil and gas companies such as Exxon, said they support the opening of all of Myanmar’s economic sectors. Australia, the European Union and Canada have all made similar decisions regarding lifting sanctions. China also has a long history of trade with the country, even before the reforms took place.
“A situation where American companies are allowed to invest in certain sectors while excluding others will not prevent those sectors from being developed in Myanmar,” the statement read. “It will simply ensure that our competitors fill the void, as they are already doing, and that jobs which could be given to American workers will go elsewhere.”
Aung San Suu Kyi says the United States is right to suspend the harsh restrictions against her country, but warns that caution is needed.
“This is a possible first step,” said Aung San Suu Kyi via Skype at the Council on Foreign Relations on Tuesday. ”I sometimes feel that people are too optimistic about the scene in Burma. You have to remember that the democratization process is not irreversible.”