US set to renew, but tweak, sanctions against Myanmar

Washington, May 14

The US business lobby says it is high time to drop the remaining US sanctions on Myanmar, but human rights activists and US lawmakers say not so fast.

Former political prisoner Aung San Suu Kyi is now running the government after winning elections. Still, the military continues to wield considerable power.

That poses a dilemma for President Barack Obama, who wants to encourage investment but not lose leverage to encourage further reforms. So next week, Obama is expected to renew sanctions for another year. The administration could take some state-run companies off a US Treasury blacklist.

Secretary of State John Kerry will be travelling to Myanmar on May 22 to signal support for the civilian-led government that took power last month and for further democratic and economic reforms, the State Department said Friday.

The US waived its longstanding bans on investment and trade in 2012 after the country began shifting from a half-century of repressive military rule. The US still forbids business dealings with companies majority-owned by the military and dozens of companies and individuals designated by Treasury’s Office of Foreign Assets Control. The US also bans arms trading and imports of rubies and jade, one of Myanmar’s most lucrative industries.

The authority under which sanctions are imposed is the International Emergency Economic Powers Act, which empowers the president to regulate commerce with another country in response to “an unusual and extraordinary threat” to the United States. Some 20 countries are subject to such a declared emergency.

“Does an emergency still exist as it did five or 10 years ago?” asked John Goyer, senior director for Southeast Asia for the US Chamber of Commerce, which is pushing lifting of Myanmar-specific sanctions that it says create uncertainty for investors. He said that where necessary, the US could blacklist companies and individuals under different sanctions programs.

Although several major US firms like Coca-Cola, General Electric, Chevron and Caterpillar are now operating in Myanmar, US investment of $248 million represents less than 1 percent of total foreign investment there, a much lower proportion than in other Southeast Asian countries, Goyer said.

Human rights activists see matters through a different prism. They cite continuing repression of 140,000 stateless Rohingya Muslims confined to squalid internment camps, and abuses by Myanmar’s army in long-running hostilities against ethnic armies.

“The current sanctions regime creates incentives for human rights abusers to clean up their act,” said Matthew Smith, executive director of the group Fortify Rights.