With military atrocities growing in Myanmar (Burma), the Biden administration’s hesitation to place sanctions on the junta’s largest source of foreign revenues has become the elephant in the room.
Myanmar’s military junta recently announced that it had executed four democracy activists months after convicting them in sham trials. The killings, which were the first death sentences carried out in Myanmar in decades, surprised even those hardened to the junta’s brutality and heightened fears that more of the 76 imprisoned activists sentenced to death would face the same fate. The military has encountered unprecedented levels of resistance since it began its coup in February of last year. It has been unable to contain the democracy movement, and the nationwide Spring Revolution has grown week by week. The military has responded with vicious human rights abuses, displacing over 700,000 people, killing thousands, and detaining almost 12,000 on spurious charges.
The junta first announced the planned executions in early June. Despite pleas from the international community and regional leaders, the junta carried out its threat. The executions were designed to send a message to the Myanmar people: The military has the power to kill Myanmar citizens with impunity, and the international community cannot stop it. Dozens of others have been sentenced to death. The executions might have partly been a tactic to strengthen the junta’s hand if it is forced to the negotiating table, much as a terrorist might begin killing hostages to gain leverage.
This is a military at war with its own people. While it has long sought to oppress ethnic revolutionary organizations in Myanmar’s hills and border areas, the military is now in conflict with the whole population, including the ethnically Burmese (Bamar)-majority heartlands.
The international community must respond
These latest developments have profound implications for how the international community should respond to the crisis. During the first year of the coup, many policymakers assumed that the military would quickly prevail and that the international community would face a brutal but entrenched military regime for the foreseeable future. They acted accordingly, treating the military with caution. Now, the international community is realizing that this is a conflict the junta cannot win. The military is unable to contain the democracy movement, is fighting rebellions on multiple fronts, has no control over significant parts of Myanmar, and is reportedly suffering from widespread discontentment and defections within its ranks. Delayed action by the international community at this stage only allows the junta to prolong a conflict that the UN predicts will push over 14 million people into a humanitarian crisis before the end of the year.
Biden must act boldly
The Biden administration, despite its rhetoric placing democracy and human rights at the center of its foreign policy, has struggled to support the people of Myanmar. When the coup began, the administration initially acted boldly, blocking the junta’s access to USD 1 billion in funds that the Central Bank of Myanmar held in the United States. Since then, it has taken incremental steps, sanctioning smaller revenue flows, working behind the scenes to encourage Southeast Asian governments to oppose the coup, and helping to bypass the junta’s efforts to block humanitarian assistance from reaching those in need.
However, even after acknowledging that the Myanmar military committed genocide against the Rohingya, the administration has failed to sanction the junta’s largest and most exposed source of income: the revenues that flow from offshore gas projects into the accounts of the Myanma Oil and Gas Enterprise (MOGE). MOGE, which was seized by the military early in the coup, receives payments in U.S. dollars, including an estimated USD 50 million each month from the Yadana Gas Project – in which U.S. company Chevron is now the largest investor. During the first year of the coup, the junta seized an estimated USD 1.5 billion in revenues from MOGE, revenue that could have been blocked had the U.S. government and other members of the international community enacted sanctions earlier.
Use sanctions to cut off the junta’s revenue sources
In February 2022, the EU took an important step forward when it placed sanctions on MOGE. These sanctions only apply to companies within EU jurisdiction, so their effectiveness is undermined by the lack of similar sanctions covering U.S. dollar transactions and U.S. companies. Combined, EU and U.S. sanctions would go a long way towards cutting off the junta’s access to revenues that it can use to pay for arms, jet fuel, soldiers, and patronage networks.
Instead of respecting calls from inside Myanmar and joining the EU’s efforts, however, the Biden administration has continued to defer to the Association of Southeast Asian Nations (ASEAN), the primary diplomatic forum for governments in Southeast Asia. Early in the coup, ASEAN and the Myanmar military reached a “Five Point Consensus” that the military subsequently ignored. In June, the current chair of ASEAN, Cambodian Prime Minister Hun Sen, urged the junta to reconsider the death sentences. After the executions took place, the ASEAN Special Envoy to Myanmar issued a statement calling the executions “highly reprehensible,” an almost unprecedented rebuke from the regional body. Beyond these words, however, ASEAN has not yet taken further action or recognized the failure of the Five Point Consensus to drive change.
It is a long path from strongly worded diplomatic statements to real action. ASEAN’s failure to curtail the junta highlights the need for the broader international community to act. Crimes against humanity and genocide are matters of global concern. The U.S. government has so far refused to take any action that could be interpreted as unilateral, a political calculation to protect its delicate relationships with allies in Southeast Asia – especially Thailand, which is a key anti-terrorism partner in the region and which it hopes will side with the United States in its rivalry with China.
To justify its inaction on MOGE, the U.S. government has pointed to fears of exacerbating the humanitarian crisis in Myanmar if the junta shuts off gas in retaliation for sanctions, and fears of upsetting the Thai government if the junta disrupts cross-border gas sales to Thailand. Both of these scenarios are based on the premise that the junta would take the drastic step of cutting off the gas in retaliation for sanctions, self-inflicting damage on its relationships with sympathetic regional governments. While the junta has not always acted rationally, there is no reason to expect that sanctions would lead to a cutoff of gas. It would certainly not be an automatic consequence of the sanctions and diversion of revenues.
Trust Myanmar’s local experts on what help is needed
Myanmar civil society organizations and elected lawmakers in Myanmar’s National Unity Government have repeatedly informed the international community that a return to long-term military rule would have a devastating humanitarian impact and that the potential benefit of MOGE sanctions is worth the risk of a hypothetical gas cutoff.
They know that military rule will not improve the economic or humanitarian situation. Gas revenues will stay in offshore accounts and be spent on Russian warplanes, corruption, and human rights atrocities rather than healthcare or the energy sector. While the U.S. government is understandably wary that the military will commit more atrocities and claim that its actions were “provoked” by the international community, it is past time that international policymakers trust local expertise.
If a gas cutoff were to occur, Thailand could replace it with liquefied natural gas (LNG) imports. Its contracts with MOGE even provide it with the grounds to seize MOGE revenues in Thai bank accounts to meet the costs of doing so. The U.S. government could also provide other means of support, such as helping Thailand to invest in renewables and reduce its costly reliance on fossil gas. For the United States, this is an opportunity to demonstrate its willingness to invest in its key allies in the region.
Economically, Thailand has more to lose from the ongoing coup in Myanmar than from MOGE sanctions, as the junta’s mismanagement, corruption, and atrocities place increasing stresses on neighboring economies. In reality, a major source of opposition to MOGE sanctions is the strong link between the Thai and Myanmar militaries and their mutual opposition to democracy movements.
Supporting a return to democracy in Myanmar is prudent foreign policy
The U.S. Government has a strong geopolitical interest in supporting Myanmar’s democracy movement. In the past six months, China has begun to express support for the military in its fight to seize control of the country, including through increased business dealings with the military since April, a visit in July by Chinese Foreign Minister Wang Yi, and supportive statements of the military after the executions took place. A return to military rule in Myanmar would drive the country to become more dependent on China for investment and political favor, closing an important entry point for U.S. influence in the region and placing economic and security stresses on Thailand.
Under military rule, Myanmar might also become a testing ground for Russian transnational repression, as the Russian government helps the junta control the local population. Indeed, in the past few months, Russia has accelerated deliveries of weapons to Myanmar. In early August, Russian Foreign Minister Sergei Lavrov recently visited Myanmar and met with the military coup leader Min Aung Hlaing. Without further action by the international community, Myanmar could become another Syria – where Russia intervenes to help a failing dictatorship survive.
A strong democracy movement in Myanmar, in contrast, would serve as a check against Chinese dominance and Russian interference in the region.
Much of the administration’s hesitation in Myanmar likely comes down to lack of a clear strategy from the top. The United States has many competing interests in Southeast Asia. Without a clear strategy for balancing these interests, it’s easy to see how bureaucratic inertia has consumed U.S. foreign policy in Myanmar, creating an environment where there are few benefits and many risks to taking bold action.
Sanctions on MOGE alone would not be a “silver bullet” that forces the military junta to stand down. But it would be a significant blow to the junta, as well as an important boost to the democracy movement. Coup leader Min Aung Hlaing is personally concerned about gas revenues. Furthermore, MOGE sanctions would force the junta to scramble to adapt to its new financial constraints. At a time when the junta is already facing internal stresses, such a shock might expose other weaknesses that the democracy movement and the international community could use.
US Congress Takes the Lead, But Action Remains Slow
The Biden administration’s current approach is to deflect questions about MOGE sanctions. For months, spokespeople have said that “all options are on the table,” but this appears to be more of a deflection tactic than anything else.
With the Biden administration’s inaction, members of the U.S. Congress have stepped forward. In July, the House of Representatives passed bipartisan legislation that would require the administration to place sanctions on MOGE. Following the junta’s executions of the four democracy leaders, Republican Senate Majority Leader Mitch McConnell called for U.S. sanctions on MOGE if Myanmar’s neighbors do not act. The Chair of the Senate Foreign Relations Committee, Senator Bob Menendez, also called for sanctions. Even if these measures pass Congress, however, they are a last resort – at the earliest, it will take Congress months to pass the legislation. The Biden administration should not wait for Congress to force its hand. It already has all of the tools it needs to implement MOGE sanctions now.
Every moment matters. The clock is ticking as the junta collects lucrative gas revenues each month, using these funds to escalate its crackdowns on the Myanmar people to new levels of brutality.