The US, the new Myan­mar and the dragon loom­ing in the back­ground

The Myanmar Times - - Front Page - MONISH TOURANGBAM PAWAN AMIN news­room@mm­

MYAN­MAR’S demo­cratic tran­si­tion and the con­se­quent dy­nam­ics be­tween Nay Pyi Taw and Washington have com­manded strate­gic pri­or­ity for Amer­ica’s Asia pol­icy. China’s long years of in­flu­ence in Myan­mar and the lat­ter’s new over­tures to di­ver­sify its re­la­tion­ships lend geostrate­gic sig­nif­i­cance to USMyan­mar ties. As the Obama years come to a close, and the White House pre­pares for its new pres­i­dent, how the US-Myan­mar re­la­tion­ship pans out will be of in­ter­est to Amer­ica’s strate­gic com­peti­tors and part­ners alike.

On Septem­ber 14, dur­ing State Coun­sel­lor Daw Aung San Suu Kyi’s of­fi­cial visit to the US, Pres­i­dent Barack Obama re­turned Myan­mar to the sta­tus of a “least-de­vel­oped ben­e­fi­ciary de­vel­op­ing coun­try”. This al­lows the US to re­store trade ben­e­fits by re­in­stat­ing pref­er­en­tial treat­ment to Myan­mar un­der the Gen­er­al­ized Sys­tem of Pref­er­ences pro­gram. Call­ing Myan­mar’s tran­si­tion “re­mark­able”, Mr Obama scrapped those sanc­tions that could be lifted with­out con­gres­sional au­tho­ri­sa­tion in or­der to re­ward the South­east Asian na­tion for the progress made so far.

But not all sanc­tions could be re­moved im­me­di­ately with an ex­ec­u­tive or­der of the pres­i­dent. Un­der the Ge­orge W Bush ad­min­is­tra­tion, the US Congress passed the Burma Free­dom and Democ­racy Act to ban all im­ports from Myan­mar. In 2013, the Obama ad­min­is­tra­tion re­laxed some pro­vi­sions of the act, but con­tin­ued the ban on im­ports of pre­cious stones.

It was be­lieved that the trade in ru­bies and gems was run by cor­po­ra­tions con­trolled by the mil­i­tary and clan­des­tine busi­nesses, which in turn pro­moted cor­rup­tion and hu­man rights abuses. Ad­di­tion­ally, the Of­fice of For­eign As­set Control (OFAC) of the US Trea­sury De­part­ment main­tains a Spe­cially Des­ig­nated Na­tion­als (SDN) list, which pro­hibits Amer­i­can com­pa­nies from hav­ing busi­ness as­so­ci­a­tions with the en­ti­ties and in­di­vid­u­als men­tioned. The list in­cludes “in­di­vid­u­als and com­pa­nies owned or con­trolled by, or act­ing for or on be­half of, tar­geted coun­tries” as well as “ter­ror­ists and nar­cotics traf­fick­ers des­ig­nated un­der pro­grams that are not coun­try-spe­cific”.

In May this year, OFAC re­moved seven en­ter­prises and three sta­te­owned banks in Myan­mar from the sanc­tions list. OFAC also added a gen­eral li­cence al­low­ing US cit­i­zens to live and con­duct busi­ness in Myan­mar. At the same time, OFAC added six com­pa­nies to the SDN list which were owned by Steven Law and his com­pany Asia World, even though the com­pany claims to have sold its min­ing op­er­a­tions and that it no longer has any in­ter­est in the jade sec­tor. How­ever, Asia World is one of Myan­mar’s big­gest con­glom­er­ates and sim­i­lar sanc­tions on other busi­ness­peo­ple have made it dif­fi­cult for for­eign in­vestors to en­ter Myan­mar’s mar­ket by re­strict­ing op­tions for lo­cal part­ners in po­ten­tial joint ven­tures. This in­di­cates that de­spite its commitment to help Myan­mar progress eco­nom­i­cally and sus­tain its democ­racy, the US is still tread­ing cau­tiously as it goes about nor­mal­is­ing its re­la­tions with the coun­try.

Mr Obama faces do­mes­tic op­po­si­tion in the US Congress from those who think per­sist­ing con­cerns re­gard­ing mil­i­tary in­volve­ment in du­bi­ous busi­ness op­er­a­tions war­rant con­tin­ued sanc­tions. Daw Aung San Suu Kyi’s own pol­icy on hu­man rights vi­o­la­tions against the Ro­hingya has been a sub­ject of ex­ten­sive de­bate for some time.

While the Obama ad­min­is­tra­tion can take credit for de­frost­ing ties with Myan­mar’s mil­i­tary es­tab­lish­ment, it is be­lieved that the US Congress is in the driver’s seat in US-Myan­mar re­la­tions, es­pe­cially af­ter the Repub­li­can Party’s 2014 con­gres­sional elec­tion vic­to­ries. This has been high­lighted by the steep bud­getary cuts in mil­i­tary train­ing to Myan­mar and the re­port­ing re­quire­ments the Na­tional De­fense Au­tho­riza­tion Act im­poses on the De­part­ment of De­fense for all mil­i­tary train­ing or con­sul­ta­tion of­fered to the Tat­madaw. This could cre­ate more scope for China to in­crease its in­flu­ence in the coun­try through en­hanced mil­i­tary re­la­tions. China has over the years also in­jected it­self as a power bro­ker in Myan­mar by sup­port­ing strong mi­nor­ity rebel groups like the United Wa State Army, some­thing that a dis­tant power like the US can­not man­age.

China be­came an im­por­tant eco­nomic part­ner for Myan­mar dur­ing its pe­riod of in­ter­na­tional iso­la­tion un­der the mil­i­tary gov­ern­ment. With its re­cent demo­cratic tran­si­tion, it was be­lieved that in­creas­ing in­vest­ments from the West would help Myan­mar re­duce its eco­nomic de­pen­dence on China. So far, how­ever, in­vest­ments from the US and else­where in the West have been un­able to match those from China.

The Na­tional League for Democ­racy gov­ern­ment finds it­self forced to as­sure Beijing of the safety of its key in­vest­ment projects as Myan­mar strength­ens ties with the US. Key among these is the My­it­sone dam project, over which Beijing is in­creas­ingly ap­ply­ing pres­sure for a speedy res­o­lu­tion. How­ever, the NLD, which also re­cently con­vened the 21st-cen­tury Pan­g­long Peace Con­fer­ence to unite Myan­mar’s dif­fer­ent eth­nic groups, is sen­si­tive to the hos­til­i­ties which are likely to break out with the Kachin should the My­it­sone project go ahead as it is ex­pected to sub­merge sev­eral vil­lages in the project area.

Thus, na­tional se­cu­rity also be­comes a driv­ing force be­hind the need for Myan­mar to de­velop new part­ners as a way of en­sur­ing its eco­nomic growth. On that front, the US will have an im­por­tant role to play in mak­ing it vi­able for in­vestors to ven­ture into what has been called Asia’s last fron­tier econ­omy. To this end, the joint statement by Mr Obama and Daw Aung San Suu Kyi in­spires con­fi­dence by an­nounc­ing that the US-Myan­mar part­ner­ship will be an­chored on an­nual cross-sec­toral di­a­logue be­tween the US De­part­ment of State and Myan­mar’s Min­istry of For­eign Af­fairs.

How­ever, when asked when the sanc­tions will be lifted in en­tirety, the only time­frame of­fered by Mr Obama was “soon”. The ques­tion fac­ing Myan­mar’s econ­omy: Will that be soon enough? – Pol­icy Fo­rum

Monish Tourangbam is as­sis­tant pro­fes­sor at the De­part­ment of Geopol­i­tics and In­ter­na­tional Re­la­tions, Ma­ni­pal Uni­ver­sity (Kar­nataka). Pawan Amin is a re­search scholar in the Chi­nese Stud­ies Pro­gramme, Cen­tre for East Asian Stud­ies, School of In­ter­na­tional Stud­ies, JNU (New Delhi).

Photo: AFP

US Pres­i­dent Barack Obama (left) and then-op­po­si­tion leader Daw Aung San Suu Kyi hold a press con­fer­ence at her Yangon home on Novem­ber 14, 2014.

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