US Sanctions on Burma Could Affect

[moe@xxxxxxxxxxxxx]

Subject: US Sanctions on Burma Could Affect Investors 

Thursday April 24 5:23 PM EDT 

US Sanctions on Burma Could Affect Investors

RANGOON, Burma (Reuter) - A U.S. diplomat warned Thursday that Washington's
decision to
impose sanctions on Burma could have implications for other foreign
investors but the Burmese
military said U.S. firms will suffer missed opportunities. 

Kent Wiedemann, U.S. charge d'Affaires to Burma, told Reuters in an
interview that while the initial
economic impact of the move might be small, shockwaves would go much further. 

"It's a powerful message to United States and other (foreign) companies that
this is not a good place
to do business if you do so in the United States," he said. 

Wiedemann added that consumers in the United States -- the world's biggest
economy -- had
already begun rejecting goods made in Burma because of concern over the
human rights record of
its military rulers, the State Law and Order Restoration Council (SLORC). 

"These are spontaneous, or popularity-driven, actions," he said. "It's a
reaction to the negative
impact of the human rights situation here." 

But Burma's ruling council said that U.S. companies would suffer missed
opportunities because of
Washington's decision to impose sanctions. 

A formal statement issued by the SLORC said Burma would not deviate from its
current policies as
a result of the U.S. decision. 

"We commonly feel sorry for the U.S. companies because they will not get a
second chance later to
invest in Myanmar (Burma) if opportunities are taken over by companies from
nations with
consistent foreign policies," an official said, reading from a prepared
statement. 

"More importantly, Myanmar has opened her doors to outside investment and
her abundant natural
resources will benefit all those who come to invest." 

The official reiterated remarks made earlier in the week by the SLORC's
Secretary One, Khin
Nyunt, that the sanctions decision had been introduced for domestic U.S.
political reasons. 

The United States is currently the fourth largest overseas investor in
Burma, with some $582.07
million committed toward 16 projects in the gas and oil sectors. 

Oil giant Unocal Corp. is the largest U.S. investor in Burma. Its chief
executive officer Roger Beach
told Reuters earlier this week the company was disappointed by the sanctions
but had no intention to
pull out of Burma. 

Several major U.S. cities and two states -- Massachusetts and Connecticut --
have approved
selective purchasing laws that prohibit their governments from buying goods
and services from
companies doing business in Burma. 

A U.S. ban on new investment in Burma was announced in Washington Tuesday,
but diplomats
accompanying a rare government-arranged trip to eastern Shan state at the
time of the
announcement said the impact would be small. 

A number of U.S. firms and other multinationals, including PepsiCo Inc., Liz
Claiborne, Heineken
NV and Carlsberg have pulled out because of rights concerns and pressure
from shareholders or
lobby groups. 

Despite that, bottles of Pepsi are still widely available on the streets of
Rangoon along with similar
profile Western brand-name products. 

"I wonder if that's really relevant," Wiedemann said. "What matters is
whether Burma will receive
large capital in aid or overseas investment." 

Most global aid agencies and Western nations stopped aid to Burma when the
current military
regime seized power in a bloody crackdown on the democracy movement in 1988. 

Wiedemann said Washington might be prepared to reverse its decision if
Rangoon takes steps to
improve human rights. 

He denied Burmese government allegations made earlier that the sanctions
were intended to derail
Burma's hopes of joining the Association of South East Asian Nations. 

"Clearly it will be awkward for us dealing with a body of nations which
includes a member with
which we have such sharp differences," he said. "Eventually Burma must be
part of ASEAN, but
whether it's this year is something ASEAN has to decide for itself." 

ASEAN comprises Brunei, Indonesia, Malaysia, the Philippines, Singapore,
Thailand and Vietnam.
It is expected to admit Burma along with Cambodia and Laos later this year. 

Singapore said Thursday constructive engagement, not sanctions, was the best
way to bring about
economic liberalisation in Burma. 

Malaysian Prime Minister Mahathir Mohamad said he disagreed with U.S.
economic sanctions on
Burma on grounds the measures would hurt the country's people and not its
government. 

Both the Thai and Malaysian prime ministers have said the U.S. sanctions
would not delay Burma's
ASEAN entry. aimed at encouraging the seven-member grouping to backpedal
from a policy of
engagement with Rangoon in order to isolate it.