Burma: after the Saffron Revolution - Tom Blass


The European Union, United States and Canada all maintain sanctions against Burma. But has the right balance been struck? Or have they been weakened by vested interests?

On 12 April the Council of the European Union announced that the EU would be renewing, with some caveats, sanctions against the state of Burma (as the ruling regime’s detractors describe the country), or Myanmar. Europe first started to impose sanctions in 1989, after the results of the elections that were contested and won by Aung San Suu Kyi were ignored.

Since then, they have been progressively ramped up, especially since the vicious crackdown on the popular uprisings of 2007 that came to be known as the ‘Saffron Revolution’. Sanctions now include: an embargo on the sale of arms; asset freezes and travel bans for high ranking officials and their families; and selective investment bans.

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UK Foreign Minister William Hague warmly greeted the renewal after it was announced, and said that it was ‘the right decision at the proper time’. He further noted that in February, ‘the UN Human Rights Council [had] condemned in the strongest possible terms systematic violations of human rights in Burma’.

But the EU rules are not the most onerous: by contrast, Canadian legislation, also introduced as a response to the crackdown on the Saffron Revolution, bans the import and export of all goods to/from Burma; bans all new investment in the country; prohibits the provision of financial services; prohibits the docking of Canadian ships in Burma, and vice versa. The United States also forbids any investment, and its sanctions regime is also very much stronger than that of the EU. Meanwhile, while the UN may have condemned human rights abuses in the country, the issue of sanctions has yet to even come up for discussion in the Security Council.

Free trade v human rights

Sanctions, of course, are only one step in a complicated dance between Burma and an international community that is not, on this particular issue, united. On 16 January, a committee of the Association of South East Asian Nations (ASEAN) – of which Burma is a member – urged sanctions-imposing governments to review their policy.

Representing the group, Indonesia’s Foreign Minister Marty Natalegawa argued that the much publicised release of the National League for Democracy (NLD) figurehead Aung San Suu Kyi (whom many Burmese regard as the rightful and elected leader of the country), and the elections held in December, signalled a change of direction for Burma, which (they said) deserved to be encouraged, not punished. They also argued that sanctions were hindering the country’s development and starting to hit even those they were intended to assist.

Indeed, even with the European Union – a bloc that has demonstrated apparent conformity in other areas of foreign policy (including the imposition of sanctions on the Islamic Republic of Iran) – there is disagreement, with Member States responding with varying degrees of alacrity to pressure by business to dilute or remove the sanctions in place.

Thus, as the situation stands there is a polarisation between a human rights lobby that believes current sanctions should be maintained and do not go far enough, and a free trade argument that would do away with them altogether.

As an occasional lecturer in ASEAN economics, Edward Sim, a trade lawyer based in Singapore, understands this conflict keenly. The elections, he told the IBA, ‘though of a dubious nature’, had sparked debate within Asia – and within Burma – as to the continued effectiveness of the sanctions. And, he says, despite international opposition to the regime, regional appetite for trade is growing – and will be increasingly difficult to censure.

‘Western sanctions affect non-Western companies because they either cannot or will not invest in companies which themselves do business with Myanmar – thus Asian companies who wish to maintain good standing with Western companies avoid the country. Nevertheless, there are many Asian companies which are willing to do business with Myanmar.’

Sim adds that since sanctions were first imposed some 22 years ago, a crucial new factor has emerged in the form of increased Indian and Chinese economic power, which provides the Myanmar regime with new sources of investment and market, thus diluting the efficacy of Western sanctions.

Nonetheless, there is almost no doubt that the sanctions already in place – however imperfect – are having an effect on the regime. In September 2009, over a year before the 2010 elections, Burma’s then Prime Minister Thein Sein (now President) said as much, telling the UN General Assembly that ‘immoral’ and ‘indiscriminate’ sanctions, which were in themselves ‘a form of violence’, had been an impediment to development and economic progress in the country.

Supporters of the National League for Democracy also argue that the organisation’s leader is unlikely to have been released otherwise, and that the election – though roundly condemned as a sham by most international observers – was likewise a signal that Burma was responding to pressure; but where government and opposition might differ from each other is in their characterisation of the effects of the various embargoes placed.

Dr Maung Zarni, a Burmese exile and academic, points out that the whole issue of sanctions is complex and multi-faceted. ‘Take the European position for example. For one thing, there is a general lack of appetite for sanctions within the European Commission’s Council for External Affairs. But the other reason is commercial interests, and in particular, energy security.’


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Energy economics

By a significant margin, the largest EU investor in Burma is the French oil company Total, which has been in the country since 1992 producing gas for sale to Thai power company PTT – generating some US$450 million in revenue for the Burmese junta. Total, and other European companies in the energy and oilfield services sector, have never been alleged or imputed to have broken sanctions. But Zarni and Burma opposition supporters generally attribute the failure to include the petroleum sector among those sanctioned by the EU to the French Government’s support for Total’s commercial objectives. Likewise, German companies (including Siemens, which supplies turbines to Total in Burma) have a long track record of trade and investment; while according to Zarni, Spain and Italy are anxious to protect commercial interests in the greater Mekong region, if not in Burma itself.

‘As the former colonial power in Burma, the UK has a very influential role in the debate’
Dr Maung Zarni
Burmese exile and academic


And Zarni adds that Britain’s position towards Burma is less uncompromising than William Hague’s pronouncement cited at the beginning of this article appears: ‘As the former colonial power in Burma, the UK has a very influential role in the debate. On the one hand it is very supportive of Aung San Suu Kyi and the NLD. But it’s playing both sides when it comes to the issue of sanctions. It is now the number one giver of aid to Burma [having recently pledged a commitment of £185 million over the following four years] and this is very valuable to the new generation of generals – it’s a very strategic donation.’

With regard to the recent sanctions review, the British delegation within the EU has always been ‘reluctant’ to push France and Germany on the inclusion of the energy sector, says Zarni, adding, ‘This was true even when Gordon Brown was Prime Minister, despite the fact that Brown was very sympathetic to the opposition cause and to Aung San Suu Kyi personally.’


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European resistance

Mark Farmaner of the UK Campaign for Burma told IBA Global Insight that his organisation’s soundings taken throughout the diplomatic community in Europe had also suggested that the Commission was under significant pressure to show restraint on the sanctions issue from certain Member States. In April, the UK’s Independent newspaper published details of a European trade delegation to Rangoon, which included over 20 companies, among them security firms, jewellery retailers, banks and health care providers.

Farmaner argues that while these companies may not have been breaching the sanctions per se, they do breach the spirit in which they were drafted. But it is also true that shortly after her release, reports emerged that Aung San Suu Kyi had stated that she would listen to all sides of the argument before formulating her position on the sanctions issue, an indication of a divergence of opinion (or, what Ed Sim describes as ‘mixed messages’ within the opposition as to what would best encourage the Burmese Government to move towards further reform).

Indeed, Maung Zarni’s own outlook has changed considerably since he first left Burma. As a student in the US in the mid and late 1990s, he was an instrumental player in the worldwide Free Burma movement. In 2003, he broke ranks with Aung San Suu Kyi, and began to argue for greater engagement with the regime and fewer sanctions. This culminated in his return to the country in 2005 in an attempt to develop a political dialogue with moderates within the regime.

‘Western sanctions affect non-Western companies because they either cannot or will not invest in companies which themselves do business with Myanmar’
Edward Sim
Singapore-based trade lawyer and lecturer in ASEAN economics.


But since then Zarni, who now lives in the UK, says he has concluded that the regime has no interest in dialogue, and hence he has reverted to robustly criticising the Burmese Government. In his conversation with IBA Global Insight he condoned an increase in economic pressure on Burma through sanctions – though he maintains (as does, he points out, the NLD) the belief that a blanket embargo is not the right way forward.

Critics of sanctions will always charge, as indeed they did throughout the apartheid period in South Africa, that they ‘hit’ ordinary people while leaving malefactors unharmed. Then as now, commercial agendas tend to lurk beneath seemingly altruistic policy positions – particularly where those that possess them stand to make money from making them stick. Even if they’re not entirely devoid of validity, the following points do need to be considered.


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Sanctions not to blame for Burma's economic ills

Ninety-five per cent of investment into Burma is made into the oil and gas sector, which is capital intensive and employs few people. It does not generate any significant secondary industry, the oil and gas produced is sold to generate export revenues and very little is employed for the betterment of the Burmese people. There is almost no transparency with regard the destination of royalties, taxes and signature bonuses paid to the state, almost all of which appear to bypass the national budget. One advocacy group, EarthRights International, has estimated that a trans-Burma pipeline operated by Chevron, Total and Thailand’s PPT, earned the regime US$5billion in 2009 – all of which, it says, was held in Singapore banks, mostly under individual accounts.

Says Zarni: ‘Sanctions may be responsible for ten per cent of Burma’s economic misfortune. But the government itself is definitely responsible for the other 90 per cent. If it wanted to, it could create a business-friendly environment, where the rule of law applied and where there was no corruption, to encourage investment from countries not affected by sanctions. It could use some of its oil and gas revenues for education, health and housing. But it has not done any of these things.’

It is of course legitimate to argue that sanctions are not the only form of non-military pressure available for pursuing policy change within a third-party state. There are both more radical – and softer – alternatives available to the international community. Indeed, the EU statement made on 12 April appears to reflect this, making a number of carefully-tailored alterations to the sanctions regime – including a suspension of the asset freeze and visa ban against ‘certain members of the civilian members of the government’. It also lifts the ban on high-level visits to Burma.

These steps are intended to promote dialogue with the government and a new political space. The EU says that in doing so it has ‘listened carefully to a broad range of stakeholders’, and thus it is little surprise that it has arrived at a political fudge. Democracy campaigners would like to see sanctions stepped up, and argue that the European Union should set benchmarks for political progress before considering any further relaxations.

What is clear is that the regime is anxious to be unshackled from sanctions – but according to Maung Zarni, this is not only for economic reasons: ‘The regime has plenty of people it can work with, who can provide capital, investment and so forth: China, the Russians, India. But what it desperately needs is credibility. It is like a Mafia boss who has all the money he could wish for, but now craves respect. That is a very powerful psychological driver.’



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Deploring and condemning but failing to protect and act

While human rights campaigners and Burma watchers commended the European Union for essentially renewing sanctions against the country, there was disappointment that it did not press the United Nations General Assembly (UNGA) to initiate a Commission of Inquiry (COI) into human rights abuses – as was recommended in March 2010 – and again in 2011 by the UN Special Rapporteur, who has reported ‘gross and systematic human rights abuses in the country, potentially amounting to war crimes, and crimes against humanity.’ To date, 12 EU countries have declared their support for a COI, and it was hoped that the EU statement on Burma would back their call.

The International Bar Association will shortly be launching a campaign intended to press the UNGA harder on the issue. IBA Burma project lawyer Shirley Pouget told IBA Global Insight that she believed that the apparent transition to a civilian regime represented a ‘masquerade’ that had been skilfully orchestrated so as to ‘ease international pressure and action’ – and that it was already proving to be effective.

Pouget also outlined some of the reasons why such an inquiry is necessary. State-sanctioned widespread and systematic violations of human rights; including arbitrary killings, forced displacement of civilians, forced labour, rape and grave sexual violence and torture, are well-documented – and became the focus of increased international scrutiny and condemnation in 2007, when the regime brutally cracked down on a wave of public protest (‘the Saffron Revolution’). Since then, says Pouget, the government has initiated a ‘roadmap’ to change, which though ostensibly an indication of engagement with democratic forces and the rule of law, in reality disguises the continuing brutality – and insularity – of the regime.

She notes, for example, that recently released budget figures allot almost 20 per cent of spending to defence – and only 4.57 percent and 1.3 per cent to the ministries of education and health respectively (while transparency campaigners allege that many hundreds of millions of dollars of revenue are siphoned out of the country, and into private banking accounts), and that in November, the regime introduced a law legalising conscription of between two and five years into the armed forces – with strict penalties for non-compliance.

In his most recent report on Burma (which stressed that the elections were neither free nor fair, in the eyes of the international community), the Rapporteur noted that the government had taken a number of steps to limit the freedom of expression for parliamentarians, including prison sentences for those making speeches ‘endangering national security or the unity of the nation’. He also noted that over 2,000 political prisoners remain in detention, and that torture is being used routinely. (A particularly concerning case is that of news editor Nyi Nyi Tun, who, imprisoned for 13 years under an unlawful association law, was tortured for six days in an attempt to extract a confession to a series of bomb attacks. He is currently partially paralysed as a result of multiple beatings and sexual violence.

Speaking on behalf of the International Bar Association Human Rights Institute, Pouget argues that while the international community has responded swiftly to the situation in Libya, in the case of Burma, ‘the same states are content with watching, deploring and condemning,’ but failing to ‘protect and act’.


Tom Blass is a freelance journalist. He can be contacted by e-mail at tomblass@tomblass.co.uk.

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