Sanctions on Burma: Review by NLD

Tuesday, February 8, 2011

National  League  for  Democracy
97/B, West  Shwegondine Road,
Bahan Township , Rangoon

Sanctions on Burma
(A review by the National League for Democracy, 8 February 2011)

In recent months sanctions have repeatedly featured in discussions over the kind of policies that would best encourage positive change in Burma. Are current administrative policies and practices conducive to a healthy economy, with or without sanctions? Are allegations that sanctions have exacerbated the hardships of the people of Burma justified or are such accusations based on political motives? Are sanctions in their present form likely to achieve the desired objectives? Are there credible signs of progress in the democratization process? The issue of sanctions needs to be examined within the broad context of political desiderata and economic realities.
The extent to which sanctions bear responsibility for the economic hardships of the people of Burma is a subject that has raised much controversy. The International Monetary Fund has pinpointed poor economic policies and performances, mismanagement and an unattractive investment climate as the main causes of the ills of the economy. The Fund does not see sanctions as a significant factor in regard to the economic problems of the country. It might be well to consider here the allegation that development has been held back because of a sanctions related fall in development assistance. It should be noted that most Official Development Assistance to Burma was stopped only after 1988.  However, by December 1987 Burma had already fallen to the status of a Least Developed Country in spite of the 3,712 million US dollars that was received in aid between 1978-1988.
Have sanctions led to foreign trade constraints harmful to social conditions in Burma? The volume of Burmese foreign trade has actually increased rapidly since the late 1990s. Earnings from natural gas alone generated about 35% of total export earnings for the fiscal year 2008-09. Natural gas exports began in 1998 and brought in 1,070 million dollars in 2005-06 and 2,380 million dollars in 2008-09. It is estimated that gas exports could reach the 4,000 million dollar mark by 2010-11. Such sales of natural resources augmented income and strengthened financial resources. Foreign exchange reserves rose to 4,041.6 million dollars in 2008-09. Yet despite increasing financial strength, education and health care have been neglected and living standards have not risen. According to the 2010 Human Resources Development Report of the United Nations Development Programme, Burma has fallen behind Laos and Cambodia and now ranks lowest among the nations of South East Asia.
If we look at Foreign Direct Investment (FDI), foreign capital went mainly into the extraction of natural resources. Whereas FDI for 2008-09 totalled 925 million dollars, permitted foreign investment in 2009- 2010 increased to 15,839 million dollars, of which 62% was in the oil and natural gas sectors. The rest went to hydroelectric power generation and mining. Investments in other sectors were insignificant. Productive investments have been impeded by an unfavourable business environment comprising multiple exchange rates, lack of accountability and corruption. Even investments by some Asian countries unrelated to economic sanctions were withdrawn from Burma during the 1990’s.
               The Burmese garment industry was hardest hit by sanctions. 1998 to 2001 were the boom years for the garment industry because of high demand from American and European markets. Earnings from garment exports fell by 400 million dollars in 2003 as a result of US sanctions. Of that loss, only about 2.5% was related to labour wages. The main burden was borne by big businesses and by the privileged classes that were exploiting the country and the labour force. As garment factories could not export directly to the countries for which their goods were destined but had to reroute their goods through third countries, Burmese profits fell. However, by 2008-09, the garment industry had recovered due to the influx of new business from China. Currently, income from garment exports ranks third in the export earnings line-up.
               The rural population engaged in agriculture, which comprises 63% of the total population of the country, has not been affected by economic sanctions. Rather, peasants have suffered from lack of freedom in production and marketing, from forced sales of agriculture land and from policies and practices that have resulted in the gross suppression of the price of farming products. Thus the hardships of the vast majority of the people of Burma are not related to sanctions but to misguided government policies.
 It might be appropriate to mention here certain practices current in the forestry sector. Excellent laws and regulations, promulgated since colonial times, relating to the conservation of forests still remain valid. However these have been consistently ignored and for decades irresponsible logging has been rife throughout the forests of the country, particularly in areas contiguous to the national borders. Once pristine forests have been turned into bare tracts of land, the unhappy consequence of complicity between rapacious timber merchants from neighbouring countries and corrupt local authorities. From this example it can be seen that much of the present imbalance in the economic development of Burma is due to a lack of systematic management of domestic resources.  Sanctions cannot be blamed for the distressing state of Burma’s forests.
Criticism of sanctions, particularly economic sanctions, sometimes serve to divert attention from the main problems plaguing the country. Allegations that economic sanctions have prevented the emergence of a middle class overlook the glaring fact that there is no genuine market economy in Burma. Blatant cronyism is the trademark of the Burmese economy and constitutes the main obstacle to the emergence of small and medium enterprises. Similarly, allegations that it is sanctions that have distanced the ordinary people of Burma from concepts of good governance totally ignore the refusal of the military regime to accept suggestions of reforms that might in any way diminish their absolute grip on power in all spheres of the life of the nation. It has been claimed that sanctions have kept out high technology from the west while the only accessible technology, from countries that are not overly concerned with ethical considerations, is sub-standard. Such a claim is tantamount to an absolution of governmental responsibility for ensuring that business contracts incorporate stipulations that protect the interests of the country and the people.
It has been further alleged that financial sanctions are ineffective and poorly targeted. In actual fact only members of the military junta and their associates have been denied access to the United States’ financial system and since the average Burmese citizen does not have a bank account it can be asserted that these measures do not hurt the public at large. Financial sanctions have also prevented, albeit imperfectly, the laundering of black money and the siphoning off of revenues from the sale of gas and other natural resources.
 Targetted sanctions serve as a warning that acts contrary to basic norms of justice and human rights cannot be committed with impunity even by authoritarian governments.
Sanctions were imposed on Burma by the United States, member countries of the European Union, Canada, New Zealand and Australia with the following aims:
(a) To put an end to human rights violations;
 (b) To promote democratic values and practices;
               (c) To discourage the military government from oppressing the people.               
               The legislative assemblies that have emerged as a result of the 2010 elections are totally dominated, at all the national and regional levels, by the combined body of the Union Solidarity and Development Party, which was founded by the State Peace and Development Council (the erstwhile  State Law and Order Restoration Council) and the non-elected military representatives nominated by the commander-in-chief. Moves to designate these assemblies as the only permitted field for political play reduces democratization in Burma to a parody. The special appeal of the National League for Democracy (NLD) against its deregistration was dismissed with indecent haste and without acceptable legal justification by the Supreme Court. This too is an indication of intent to limit political activities in the country to a minimum.
               Now more than ever there is an urgent need to call for an all inclusive political process.  The participation of a broad spectrum of political forces is essential to the achievement of national reconciliation in Burma. Progress in the democratization process, firmly grounded in national reconciliation, and the release of political prisoners should be central to any consideration of changes in sanctions policies.

The views of the NLD with regard to sanctions may be summarized as follows:       
1.      The United States, member countries of the European Union, Canada, New Zealand and Australia imposed sanctions on Burma to effect improvements in the human rights situation and to promote democratic values.

2.       Sanctions are the result of decisions made by the countries concerned, not the outcome of demands by political parties, organizations or individuals in Burma.

3.      Recently there have been calls for the removal of sanctions by some political parties, organizations, individuals and nations. Most of these calls seem to have been motivated by political considerations. Available evidence indicates that economic conditions within the country have not been affected by sanctions to any notable degree. 

4.      As the major causes of sanctions are violations of human rights and lack of democratic practices, it is by dealing effectively with these issues that the removal of sanctions can best be effected. The release of all political prisoners is a critical requirement.

5.      We therefore urge the Government of Burma to take the necessary steps speedily and assiduously.

6.      The NLD considers that in the meantime the economic hardships of the people would be ameliorated if businesses that have already invested, or are thinking of investing, in Burma were to observe guidelines aimed at conserving the ecological environment, protecting the rights of workers and promoting civil society.

7.       The NLD calls for discussions with the United States, the European Union, Canada and Australia with a view to reaching agreement on when, how and under what circumstances sanctions might be modified in the interests of democracy, human rights and a healthy economic environment. A study and analysis by a team of widely-respected professionals on the effects of sanctions would be beneficial to such discussions.

8.      The international community has long expressed a wish to see Burma progress along the road to democracy and economic prosperity. Appropriate policies, wisely coordinated and consistently applied would constitute the best path to the achievement of this objective.


  1. Anonymous said... :

    Grandmother and Great Grandfathers of the NLD,

    In the statement, you said as follows:

    Recently there have been calls for the removal of sanctions by some political parties, organizations, individuals and nations. Most of these calls seem to have been motivated by political considerations.

    Actually your decision to continue to support economic sanctions targeted to the entire country/industry is obviously based on your political considerations not to lose your current role in Myanmar political landscape. Myanmar people will be the scapegoat of economic mismanagement of the junta and the sanctions you strongly support.

    No one can deny that the NLD's strategy to solely rely on international pressure and sanctions did not work in the past two decades. What is your strategy going forward? It is time to change yourself. Please change yourself first before trying to change Myanmar.

  1. Unknown said... :

    I want to be anomymous too, but call me PB Publico.
    The first Anunymous' comment is political too, for it is obvious he is bent on currying favour or doing spme business that is being affected by the sanctions: he has been directly afffected.
    To me every thing is political, but not necessarily siding with one party or another for personal gains. The objective must be genuiely oriented to public wellbeing for the long term.
    The Anonymous cannot guarantee that lifting the santions will be directly benificiaal to the general public, particularly the working class and the farmers. Can he? Do you know what the junta and its xcronies are doing to the poor farmers and the workers? Well, update yourself, if you don't know. If you know, you are not paying attention to the needs of the people.
    And on top of that the junta will not loosen its grip on the people, leave alone allow any degree of freedom or human rights abuses and war crimes.
    We want peace while the junta does not. It wants Burma on a perpetual state of war. They are very smart in that they know they cannot survive without their institutionalised idea of war in Burma.
    What do you say to that Mr Anonymous?
    And I say, caqrry on NLD. You are doing fine.

  1. ေမာင္သန္ ့။ said... :

    ပိတ္ဆို ့မွဳ ေၿပာၾကရင္ အေနာက္နိဳင္ငံ ပိတ္ဆို ့ေနတာ ဘဲ ေၿပာေနၾကတယ္။ root cause ကို ေၿပာတာ နည္းေနသလိုဘဲ။
    ေနာက္ပီး ေဒၚစု နဲ ့NLD ကို အပစ္ပံုခ် သလိုလိုမ်ိဳး ေယာင္၀ါး ၀ါဒၿဖန္ ့ ့ေနတာ ဘဲ အေတြ ့ မ်ားေနတယ္။
    တကယ္ေတာ့ ခု စာတန္း လို အခ်က္အလက္နဲ ့ တဖက္ က ၿပန္ေၿဖရွင္းတာမ်ိဳး ၿဖစ္သင့္တာေပါ့။
    လူ ့အခြင့္အေရးခ်ိဳးေဖာက္မွဳ ေတြ ခုရပ္လိုက္ပါ။
    ဥပေဒမဲ့ လယ္သိမ္းယာသိမ္း ၊ေပၚတာဆဲြ၊ခေလးစစ္သားေတြ ကိစၥ ရပ္လိုက္ပါ။ မရွိဘူး၊ရွိတယ္ ၿငင္းေနရတဲ့ နိဳင္ငံေရး အက်ဥ္းသားေတြ လႊတ္ေပးလိုက္ပါ။
    ဆက္ပိတ္ဆ့ို့မဲ့လူေတြေရာ၊ ေထာက္ခံသူေတြ ေရာကို ၿပတ္ၿပတ္သားသား ထ တိုက္ေပးပါမယ္။

  1. Cecilia Brighi said... :

    Very important statement! congratulations for the analysis and the conclusions. It should be presented officially to the Embassies and governments of those countries that have supported the sancitions, asking them to continue to use the intelligent targeted sanciton to press the Burmese junta to free all the political prisoners, open an inclusive time framed dialogue with ASSK, the demcoratic forces including the ethnic nationalities, and to stop all the human rights abuses all over the conutry.
    It is wrong to think that the sanctions have affected the Burmese people. they are directed only to the junta business and to its cronies.
    those who argue against sanctions should know that the workers of Burma have supported such decisions, that the junta has always used forced labour, slave working conditions to fill their pokets, that all the profits coming from international investments have never been spent for the benefit of the people of Burma.
    This is the problem, it would be misleading to hide the junta responsabilities. where is the national budget? why huge resources go to finance army and weapons and the construction of a new capital? etc....

  1. Unknown said... :

    To Anonymous!
    How about the cruel sanction by SPDC on its own people for more than two decades?And I know what kind of person you are and,you are exchanging with your precious life & junta's pice of shit!

  1. Anonymous said... :

    ေအာက္ပါအခ်က္ (၅) ခ်က္ကုိ NLDမွ လက္ရွိအစုိးရအား အဆုိျပဳ၍ ယုံၾကည္မႈစတင္ တည္ေဆာက္ႏုိင္မည္ဟု ေမွ်ာ္လင့္ပါသည္။
    ၁။ စီးပြားေရးပိတ္ဆုိမႈအားလုံးကုိ ရုပ္သိမ္းရန္ NLDမွ ႏုိင္ငံတကာသုိ႔ ေထာက္ခံတင္ျပရန္
    ၂။ NLD ကုိတရားဝင္ပါတီအျဖစ္ျပန္လည္အသိအမွတ္ျပဳရန္
    ၃။ ႏုိင္ငံေရးအက်ဥ္းသားအားလုံးလႊတ္ေပးရန္
    ၄။ တုိင္းရင္းသားလက္နက္ကုိင္အဖြဲ႕မ်ားအားလုံးႏွင့္ အပစ္အခက္ရပ္စဲ၍ ေဒသဖြံ႕ၿဖိဳးေရးကုိ လုပ္ေဆာင္သြားရန္
    ၅။ NLD၊ အျခားေသာႏုိင္ငံေရးပါတီမ်ား၊ တုိင္းရင္းသားအဖြဲ႕အစည္းမ်ား၊ လူမႈေရးအဖြဲ႕အစည္းမ်ား၊ ပညာရွင္္မ်ားႏွင့္ လူငယ္လူလတ္လူႀကီးမ်ားအားလုံး အာဏာပုိင္အဖြဲ႕အစည္းမ်ားႏွင့္ အျပဳသေဘာပူးေပါင္းေဆာင္ရြက္မႈမ်ားကုိ (ႏုိင္ငံႏွင့္ျပည္သူအတြက္ အက်ိဳးရွိမည့္ မည္သည္လုပ္ငန္းမဆုိ) တစ္ဆင့္ခ်င္း စတင္ျခင္းျဖင့္ အျပန္အလွန္ယုံၾကည္မႈကုိ အရွိန္ျမွင့္သြားရန္

  1. Anonymous said... :

    Your people are good story talker,problem are those Than Shwe group don't want to change,they want to control all and absolutely power.they don't want to change for civilian,they want to keep all in lower level,they know how to improve country and economy, but problem are they don't want to see all of civilian in good life, they want to see all in struggle for living, they only look for their family.How can NLD cooperate with then for change,there are no possibility, Yes agree to NLD for support sanction..

  1. Bamar said... :

    Mommy Suu;

    Since you are referring to international organization's reports on the impact of sanction on Burma, why do not you also compare the impact of other sanctions on Iran, Iraq, North-Korea, Libya, Cuba and Sudan? Have you ever seen the impact on any of those regimes? or the ordinary people in those countries better off for decades long sanctions?

    Instead of relying the assessment of NGOs who are foreigners and who are paid to write reports by staying and interviewing the lives of massage girls while sleeping with them at five stars hotels, driving pass the squatters/slums on air-con limos, judging the food at high-end restaurant, why do not you ask any ordinary slum dwelling worker(about 40 years old who grew up before 8888)whether life is better before 8888 or under General Tun Kyi's time before the sanction.

    Everybody know that the wealth of ruling generals and cronies grew unfettered by sanctions after its imposition.I believe that Mommy Sein (Gay Queen) who led gay-union in 8888 could do better than Mommy Suu in NLD and make all those old fags in NLD CEC to wear Hta Mein.
    NLD and all its leadership lose credibility and the endorsement of sanction is the letting-go-off last straw. History is judging them and my own feeling from personal worshiping of Amay Suu to turning against her prove it.

    Many millions of Burmese people who were not benefit from Democracy struggle by getting right to live in western countries such as U.S or Norway, would have the same point of view with me.

    Down with NLD and Mommy Suu!

  1. Anonymous said... :

    I am the one who wrote the first comment under Anonymous. Let me add a few comments to clarify my stance.

    I fully understand the mismanagement of the junta and the people's hardships under the oppressive regime.

    In my first message, I meant only the blanket sanctions targeting to the entire country and industry. I don't mean to say the sanctions targeted to the individuals of the junta and its cronies.

    I believe BLANKET sanctions hurt the general public and indirectly cause loss of opportunities to the country and the people to a great extent. On the other hand, these blanket sanctions had little impact on the junta mainly because they could do a lot businesses with Asian countries particularly in the sectors related to natural resources.

    So, I think the NLD is wrong to say that the sanctions (including blanket sanctions) had little impact on ordinary people. Moreover, the NLD should not accuse other political parties of being political in calling for lifting of sanctions. They may be doing for the benefits of people based on their own beliefs.

    My recommendation to the NLD is:
    - To help lift all blanket sanctions
    - To ask for reinforcing targeted sanctions
    - Not to rely too much on internation pressure
    - To devise a strategy which relies more on the forces/people inside the country
    - To make friends with China, India and ASEAN
    - To put little more focus on economic development of the country
    - Might not be relevant under this topic but please reform your party management. Please bring in more young people and also bring in people with different views.

  1. Thura said... :

    The NLD's statement said "Earnings from garment exports fell by 400 million dollars in 2003 as a result of US sanctions. Of that loss, only about 2.5% was related to labor wages." This 2.5% or $10MM can be translated into the annual income of 20,000 workers assuming $500 annual income per worker.

    The statement also said the garment industry recovered thanks to the demand from China. However, if there were no sanctions, demands from the West and China combined would have created tens or hundreds thousands of new jobs.

    In short, although the junta's mismanagement is the main cause of people's hardships, BLANKET sanctions also make people's lives harder. These blanket sanctions cause loss of opportunities in terms of new jobs, new business opportunities for small and medium enterprises, etc., which was not covered in the NLD's report.

    Moreover, these sanctions did not bring about any positive change in Myanmar's politics. The generals are richer than ever and their control over the country is stronger than ever. Any reason to keep these blanket sanctions?

    Let's make it very simple.
    - Lift controversial BLANKET sanctions
    - REINFORCE and EXPAND the sanctions targeted to the individuals

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