Obama Formally Eases Burma Sanctions

By Dan Robinson

President Barack Obama has ordered the easing of U.S. sanctions that have prevented American companies from doing business in Burma, to signal U.S. support for reform steps under way there. But , there are conditions, and Mr. Obama took another step aimed at individuals who are undermining the reform process.

In a written statement, Obama said U.S. companies will be permitted to operate “responsibly” in Burma, but will be prohibited from dealing with Burma’s military or entities owned by the Ministry of Defense.

The U.S. move was expected, as was a requirement in the executive order Obama signed to require that companies report on their activities in line with what are called “international corporate governance standards.”

The president signed another order expanding sanctions on senior officials and individuals “who undermine the reform process, engage in human rights abuses, contribute to ethnic conflict, or participate in military trade with North Korea.”

White House Press Secretary Jay Carney said the step is meant to send a clear message about the kind of behavior the United States expects as reform steps continue.

“The measures announced today are designed to recognize the progress that has been made on reform, but retain all the authorities to ensure that those individuals who continue, or companies that continue, to engage in corrupt or destabilizing behavior do not benefit,” said Carney.

Carney sidestepped a reporter’s question about whether the steps announced Wednesday will open the door for U.S. energy companies to do business with state-owned energy companies in Burma.

Aung San Suu Kyi, the 1991 Nobel Peace Prize laureate who is now a member of Burma’s parliament after spending years under house arrest, has expressed concerns about foreign investment with the Myanmar Oil and Gas Enterprise (MOGE).

Ernest Bower of the Center for Strategic and International Studies says U.S. sanctions on Burma imposed in the 1990s have deprived U.S. companies of investment opportunities.

Bower says U.S. companies will have to exercise caution in whom they choose to do business with. But overall, he says easing sanctions may enhance U.S. leverage to urge Burma’s government to speed up progress on reforms.

“We gain a lot by trying to provide some economic momentum to the reforms so they keep moving in this direction rather than think about sliding backwards and so American companies can engage and benefit from the new growth that may come in Myanmar and also share their values,” said Bower.

The breakthrough in relations with Burma began last year in response to reform moves by the government. It included a visit to Burma by Secretary of State Hillary Clinton and the appointment of an ambassador, Derek Mitchell, who took up his post this week.

Washington welcomed the return of Aung San Suu Kyi to the political scene, praised the release of political prisoners, and supported cease-fire talks between Burma’s government and armed ethnic groups.

But the U.S. has also moved cautiously. In May, President Obama extended the technical “national emergency” regarding Burma, citing concerns about ongoing conflict and serious human rights abuses in ethnic areas.

David Steinberg is Distinguished Professor of Asian Studies at Georgetown University’s School of Foreign Service. He says the question regarding sanctions is not so much one of increased leverage but how to implement reforms.

“The capacity to deal with all these issues including health, education, investment, foreign investment, all the kinds of industries that are necessary to make that country work, these things are very, very tough in a country that has lost its capacity to implement effectively,” said Steinberg.

President Obama on Wednesday called Burma’s political and economic reforms “unfinished,” but said “responsible investment will help facilitate broad-based economic development, and help bring Burma out of isolation and into the international community.”