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Being realistic about Myanmar
Publication Date : 24-04-2012
The role of sanctions in steering Myanmar towards reform has never been a straightforward matter. Trade and investment bans favoured by the United States and the European Union isolated its regime diplomatically, but it was the people who were starved of work and basic necessities. Asean nations were among those which provided relief and a credible pathway towards liberalisation by keeping economic links open, while persuading the generals to change their ways.
The US and EU may now offer more to nudge the civilian government towards offering more substantive political and social liberties. The EU is suspending sanctions while the US government has so far relaxed administrative restrictions only, as a repeal of economic sanctions will require congressional approval.
Is it prudent to press ahead with reward in the belief that there will be no backsliding? The answer has to be a qualified 'yes' in that President Thein Sein desires an accommodation with the US - from which good things will flow, in the government's thinking - more than merely attracting investments. Sanctions were never unconditional anyway. Western energy firms Total and Chevron sank billions into the oil and gas sector right through the so-called ban. As for investment, Myanmar cannot possibly absorb a sudden influx of capital until it has sorted out its legal system, investment laws and power generation for factory output. Diplomatic rehabilitation is for now the bigger prize to Naypyidaw, the reasoning being that the nation's resource wealth and tourism potential will see Western firms flocking in once Myanmar is reinstated as a nation in good standing.
Yet, caution sounded by exile groups and Yangon quarters should be heeded. They want more evidence that the President is firmly in control, and that divisions within the military would not result in a 're-assessment' of the agenda. It should be remembered that much the same people who ran Myanmar with an iron fist are now promoted as purveyors of hope. Japan was wise to require that 60 per cent of a 300 billion yen (US$3.70 billion) loan it has forgiven is subject to joint monitoring of the reforms. Likewise, the EU's relaxing of sanctions for one year first. One problem area is that the new Constitution giving the military veto power over proposed amendments is an effective check on full democratisation. Ms Aung San Suu Kyi and her party colleagues deferred taking the oath at Parliament's opening yesterday over disputed wording concerning the Constitution. It is a reminder to expect setbacks while hoping that good sense will eventually triumph.