The case for sanctions on Myanmar
By Sai Wansai
Lately, a few commentaries have been published on sanctions imposed on Myanmar by the United States and the European Union. Those against sanctions are convinced that they are punishing and hurting the population, rather than the ruling State Peace and Development Council (SPDC), also known as Myanmar's military junta. But one pro-sanctions commentary that was recently published argues that while those against sanctions have roundly rejected the use of sanctions as ineffective and inhumane, they have failed to come up with a genuine alternative.
In reality, the issue here mainly has to do with "moral posturing", and both opposing camps seem to have valid arguments to back up their position. Lets have a closer look through pragmatic and logical lens.
The general argument for those against sanctions is that trade sanctions hurt and impoverish average wage earners. The example put forward here is none other than the textile sector, which is one of Myanmar's top export earners.
The workforce employed in this sector is said to be 300,000 workers strong, according to the junta's sources. This number, however, is believed to be cooked up by Prime Minister Khin Nyunt, who created the Office of Strategic Studies, which is responsible for studying foreign policy and spinning information to boost the regime's image. According to a report from the Alternative ASEAN (Association of Southeast Asian Nations) Network on Burma, or ALTSEAN, titled "Ready, Aim, Sanction", veteran academic on Myanmar David Steinberg estimates that the figure is closer to 180,000. Neither figure takes into account that many people have lost their jobs due to the withdrawal of foreign direct investment, because of the poor investment climate the regime has created, or last year's banking crisis.
According to the same report, "In 2000, Cambodia exported 70% of its garment exports to the US, worth US$750 million. That year, Cambodian garment factories employed about 200,000 workers. A direct value-worker ratio would imply that 140,000 workers were employed to produce garments worth $750 million.
"Also in 2000, Burma [referred to as Myanmar since 1989] exported garments worth $400 million to the US. If a similar value-worker ratio was used, as in Cambodia, this would mean that about 75,000 workers were employed in Burma to produce garments exported to the US," the report says.
It seems the junta is inflating the figures in order to paint a very bleak picture of Myanmar's downtrodden textile workers and wage a propaganda war to win sympathy internationally by accusing the United States of using heavy-handedness on a poor, backward country such as Myanmar.
Even if the allegation holds some truth, the other side of the coin is that textile exports, which were valued at $324 million in 2002 and $251 million in the first eight month of 2003, are the top foreign-currency earner for the regime. There is no doubt that the junta would use this hard-earned currency to expand its military machinery, as was the case with its purchase of 10 MiG-29 Fulcrum fighters for $150 million after receiving Thailand's payment for Myanmar's gas export. The expansion of the junta's war machinery, which eats up nearly 50% of the country's yearly budget allotment, has more to do with the suppression of its 50 million people than defense of the country. Seen from this point of view, the rational of stopping the junta's cash flow clearly outweighs the joblessness of a few thousand people.
Another point to ponder is that there exist formal and informal economic sectors. While the formal one, which covers international trade, investment, production of raw materials, manufacturing, etc, is monopolized by the junta and its cronies; the informal sector, in which most citizens are involved, includes small unregistered enterprises, self-employed persons who work in their own or their family's businesses, and people who produce goods only for their own consumption.
Thus any blockade of the formal economy is bound to hurt the regime's war chest and consequently reduce its ability to suppress the people and expand its military machine. The effect on the informal economic sector meanwhile will be very minimal, as it has been during the last three decades of isolation under the rule of the Burma Socialist Program Party, which came to an end in 1988.
Those against sanctions have come up with a series of arguments, including that only constructive engagement would help change Myanmar's political landscape, leading to democratization, and not sanctions, which are counter productive and alienate the "moderates" within the junta. Such speculation, however, has proven false if the reactions of the SPDC during the past few years are of any indication.
Thailand, Singapore, Japan, Australia and Malaysia have, at one time or another, tried constructive engagement for economic reforms and, to a lesser degree, political reforms. But their generosity and support have been met with either outright rejection, indifference or broken promises.
In 1998, the World Bank teamed up with the United Nations secretary general and ambassadors from Japan, the United States, the United Kingdom, the Philippines and Australia and the Thai deputy foreign minister to coordinate a large (estimated at $1 billion) "carrot" in financial and technical aid from the World Bank but channeled through the UN. A billion dollars is an exorbitant amount of funding for Myanmar, whose gross domestic product for 2002 was only $6.7 billion. The conditions for the jumbo "carrot" were reportedly the release of all political prisoners and freedom of movement for Nobel Laureate Daw Aung San Suu Kyi and the activists of her National League for Democracy (NLD). After stalling for time for consultation with junta members, the SPDC rejected the offer.
Then in August 2002, when he led a large business delegation to Myanmar to further generous efforts at economic engagement, Malaysian prime minister Mahathir Mohamad appealed to SPDC chairman General Than Shwe to tackle corruption and nonsensical policies of the SPDC. Than Shwe ignored Mahathir's request.
That same year the Centers for Disease Control's (CDC) assistance offer to the SPDC Ministry of Health in creating an AIDS surveillance system was rejected. CDC standards required voluntary testing, confidential results and testing in conjunction with counseling and education.
In 2003, as Japan stepped up its aid to Myanmar (prior to the suspension following the Black Friday attack) and Thailand started an aggressive business diplomacy program with the junta, the SPDC became more resistant to dialogue and more oppressive in its actions.
Thai Prime Minister Thaksin Shinawatra's policy of "business diplomacy" with the SPDC to reduce the spill-over effects into Thailand of Myanmar's problems such as narcotics, refugees, disease and migrants was answered with a five-month border closure, the blacklisting of Thai journalists, public insults aimed at the Thai monarchy and people, and non-cooperation for Thailand's proposed ceasefire negotiations between the SPDC and several armed opposition groups.
The preferred scenario, for those against sanctions, would be somewhat like that of South Korea, where remarkable progress has made both on economic and democratic transformation. But the problem in Myanmar is altogether a different story. The military held a nationwide election in 1990, with the promise to install a multi-party democratic system, in which it lost miserably to the NLD, the Shan Nationalities League for Democracy (SNLD) and the United Nationalities Alliance (UNA). The combined vote received by the NLD and these ethnic-based political parties was 91%. (The military later annulled the election results.)
Against this backdrop, the junta has been committing gross human-rights abuses, population transfers and ethnic cleansing; it has used rape as a weapon of war, employed thousands of child soldiers and carried out extrajudicial killings, just to name a few activities.
The heart of the argument regarding sanctions, according to an opinion piece by David Baldwin titled "Sanctions have gotten a bum rap", is first that nothing works perfectly; second, there is nothing that will work alone; third, costs matter as much as benefits; and fourth, the rule of statecraft is that alternatives matter.
"A study by the Institute for International Economics of 116 cases found the success rate of sanctions to be about 33%. Some see this as evidence that such measures do not work and should be abandoned. Not necessarily. A baseball player who gets a hit only 33% of the time is a star, not a bum. It may well be that in statecraft as in baseball, .333 is a pretty good 'batting average'," Baldwin writes.
"One interesting thing about the question of whether economic sanctions work [it that it] almost never asked about military force, propaganda or diplomacy - the main alternatives to economic sanctions. Yet the answer is the same for each type of statecraft. Sometimes it works, and sometimes it doesn't," he argues.
In conclusion, Baldwin writes, "No matter how useful or useless sanctions eventually turn out to be in Myanmar, one thing is sure: putting economic pressure on governments we hope to influence or change will remain a potentially useful addition to the diplomatic tool kit. Presidents understand this even if pundits do not."
Given the conflict-ridden and oppressive political atmosphere, together with the sound arguments mentioned, we need to ask ourselves which option is still available for the international community to promote democratic change in Myanmar. If the international stakeholders are not prepared or are reluctant to take drastic measures more than just symbolic sanctions - of course, one must exclude the US sanctions, which are really biting - we might as well withdraw our commitment to the people of Myanmar and play along the "engagement at all cost" theme and even abandon our moral high-horse posturing.
Otherwise, it would do all of us well to ponder on implementing sanctions that really hurt or with teeth that bite, rather than dragging on or muddling through aimlessly. The US type of tough stand is what we need if we are to push for real change. Of course, this must be coupled with other diplomatic tools and pressures readily available. If frontline states such as the US and the EU are dedicated to pulling this through is anybody's guess.
Sai Wansai is the general secretary of the Shan Democratic Union.
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