This guest post was contributed by Kendall Manlove, a legal intern in our U.S. office. Kendall is a rising second year law student at Moritz College of Law at The Ohio State University and has previously worked with ALTSEAN-Burma. Opinions and analysis in this post are Kendall’s own. ERI has also posted our official statement on US investments in Burma.
In her long-anticipated Nobel Lecture last month, Daw Aung San Suu Kyi called for “cautious optimism” regarding Burma “not because [she did] not have faith in the future but because [she did] not want to encourage blind faith.” As someone who has been active in the Burma democracy movement, I can attest that the recent changes in the country have been staggering. Less than three years ago, the former military regime arbitrarily sentenced Suu Kyi to an additional 18 months of house arrest for letting a deranged American into her home after he swam onto her property. Today, she is a member of the Burmese Parliament.
Burma’s nascent political reforms have precipitated calls for the West to roll back economic sanctions. Recognizing that the rest of the world was about to take advantage of new investment opportunities, the Obama Administration announced on May 17 that it was relaxing economic restrictions on new investment in Burma. That day, Secretary of State Hillary Clinton said: “we say to American business: invest in Burma and do it responsibly.” Today, the Obama Administration announced what they actually meant by “responsible investment” when it released the rules these investors must follow in order to maintain their license to invest. While the rules cover a number of important issues, the U.S. missed an opportunity to develop a comprehensive framework that could have been used as leverage to push for continued reforms in Burma.
On the positive side, companies wishing to invest in Burma are not allowed to engage in transactions with the military or with military-owned businesses. Additionally, investors are required to report on their payments to the Burmese government as well their security arrangements and on measures taken to remedy the local impacts of any significant acquisitions of land in the country. These are steps in the right direction and should be required of all U.S. companies operating in countries like Burma, where the infrastructure is poor and the chance of graft is high.
However, the Obama Administration missed an opportunity to push for stronger corporate social responsibility requirements, particularly in the extractives sector. Tighter restrictions on doing business with the state-owned Myanma Oil and Gas Enterprise (MOGE), as called for by Daw Aung San Suu Kyi, would have ensured that the revenues from Burma’s vast oil and gas reserves would be put toward development and not into the hands of entrenched government officials and their cronies. Further, almost all investment in the extractives sector will take place in ethnic areas where the likelihood of human rights abuses, forced displacement and environmental degradation is extremely high. Companies will be able to designate any of the required disclosure information as a business secret and need only disclose such information to the U.S. Government and not to the public. Broader revenue transparency requirements would have lessened the burden on the U.S. government to monitor companies by allowing both communities in Burma and civil society groups inside and outside Burma to hold irresponsible investors accountable.
But the main reason these regulations disappoint is that they fail to recognize that Burma is still grappling with enormous problems. There are still 441 confirmed political prisoners in Burma and another 473 unaccounted for according to the latest figures from the Assistance Association for Political Prisoners (Burma). Fighting between the Burmese Army and the Kachin Independence Army in Northern Burma has actually increased since the 2010 elections, and renewed ethnic and religious tensions in Arakan State has created a rapidly worsening refugee crisis along Burma’s western border with Bangladesh. Last year, Transparency International named Burma the third most corrupt country in the world, while just this week, Freedom House named Burma, despite its recent improvements in civil liberties, as having some of the world’s harshest restrictions on the exercise of political rights. This was a rare opportunity for the U.S. to experiment with a more nuanced and versatile sanctions regime, one that placed the economic burden on the Burmese government and on large corporate investors and not on the people of Burma. Instead, the Obama Administration opted for only a few provisions that could have been part of something much more visionary and gave away too much up front.
Despite these criticisms, I still am optimistic for Burma’s future. But I have taken Daw Aung San Suu Kyi’s words to heart: I am tempering my optimism with a healthy dose of realism. The people of Burma have endured so much misery over the past few decades and still have tremendous challenges ahead. Our duty in civil society is to make sure that the U.S. and other actors that are reengaging with Burma after many years do not allow their rose-tinted glasses to become blindfolds to subsequent abuses.