Should US sanctions on Myanmar be removed completely?

Myanmar's State Counselor Aung San Suu Kyi.Photo: Claude Truong-Ngoc/Wikimedia Commons

By Loke Hoe Yeong

Last week, the United States has announced that it would be lifting a number of Myanmar companies and banks from its sanctions list. However, it would keep the most of sanction measures, contrary to some expectations that it would lift them in light of the new government of Aung San Suu Kyi.

These came in the wake of US Secretary of State John Kerry’s visit to Myanmar on 22 May. He called on Aung San Suu Kyi in Naypyidaw, now his counterpart as foreign minister of Myanmar, besides being the country’s prime ministerial State Counsellor.

Kerry also met with the commander-in-chief of the armed forces, General Min Aung Hlaing, who continues to wield continue power over the country.

The Secretary of State had already visited Myanmar a number of times, but all before Ms Suu Kyi assumed her government positions, as a result of the landslide victory of her National League for Democracy (NLD) at the November 2015 polls. US President Barack Obama has already visited Myanmar twice.

In the lead-up to this visit, the US was in the awkward position of having to pressure the military generals – who continue to hold significant power in Myanmar – through continued sanctions, while helping Ms Suu Kyi consolidate power over the country.

Ms Suu Kyi faces the same awkwardness. She used to strongly advocate the use of sanctions on Myanmar as a way of pressuring the military junta towards democratisation. More recently, she has held the ambivalent position of neither supporting nor opposing maintaining the restrictions.

But in recent discreet communications with the US government officials, she indicated the country was “not yet ready” for removal of all curbs.

To Washington’s consternation, she also signaled publicly there would be no fast resolution of the plight of Myanmar’s 1 million or so Rohingyas, many of whom suffer persecution. In an ironic moment at a joint news conference after her May 22 talks with Kerry in Naypyitaw, she asked for “more space” to deal with the issue, urging “well wishers” — a clear reference to the U.S. — to cooperate.

What does the US want leverage on?

What is it that the US wants to continue holding leverage on over Myanmar?

“This work is incomplete, and the military’s role in politics continues to go beyond what would constitute a full transition to democracy,” Benjamin J. Rhodes, the deputy national security adviser, said in Washington last week,

The issue of the transfer of nuclear weapons technology has also come up now.

The US has longstanding concerns over Myanmar’s close relationship with North Korea, the pariah state which has been said to be developing nuclear capabilities.

In 2011, report by the US State Department said that Myanmar might be violating its commitments under the Nuclear Nonproliferation Treaty.

What sanctions remain?

US business groups had been pushing the US government to withdraw the sanctions on Myanmar. They have argued that companies from other countries are now free to do business in Myanmar, thus giving the US an unfair playing field in what has become the latest “frontier market” for investors around the world.

Ten state-owned businesses, including three banks and companies involved in the timber, pearl and precious stones industries, were removed from the Specially Designated Nationals list of enterprises that US companies cannot do business with.

Two other banks, of which the majority of shares are held by Myanmar’s military top brass, remain on the blacklist – but they have been the go ahead to do business with American companies

These effectively enabling American companies to make transactions legally with most of the entities on Myanmar’s business landscape. More than 100 entities remain on the blacklist.

However, restrictions on trade and investment activities with military-linked entities and individuals were here to stay. These sanctions undergird a ban on military sales and American imports of precious stones such as jade and rubies from Myanmar.

Kerry also met with the commander-in-chief of the armed forces, General Min Aung Hlaing, who continues to wield continue power over the country.

Leverage over Aung San Suu Kyi?

In a turn of events, it looks like the sanctions on Myanmar are increasingly being regarded as a leverage over the new government of Aung San Suu Kyi by the international human rights community, over a controversial issue.

Human rights groups want to draw attention to the human rights abuses of the Rohingya people, which the majority Buddhist-Burmese population of Myanmar refuse to acknowledge as an officially recognised ethnic group of the country.

Ms Suu Kyi has been facing international criticism for not taking a stronger stand against persecution of the Rohingyas. Her government clashed with the US recently this month, when it requested the US embassy in Myanmar not to use the term “Rohingya”.

In an apparent volte-face, a spokesman for Ms Suu Kyi said of the US ambassador’s remark that “it’s a slip of the tongue by the ambassador. It’s a democracy. He can say his opinion.”