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AsiaWeek: Beyond Sanctions
Investors can help break Myanmar's political gridlock
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Something like the Sullivan Principles, a voluntary code of conduct for
foreign companies that helped eliminate apartheid in South Africa, could
be tried in Myanmar
James Finch, the author, is an American lawyer, a managing partner of
the Yangon office of Russin & Vecchi
PERHAPS THE ONLY SURPRISE in the U.S. imposition of economic sanctions
against Myanmar on April 22 was that the boom had not been lowered
months before. Key policymakers in the Clinton administration, including
Secretary of State Madeleine Albright, Ambassador to the U.N. Bill
Richardson and Secretary of Defense William S. Cohen, have long attached
considerable political and career importance on ending the suffering and
political stalemate in Myanmar.
What do the sanctions do and hope to achieve? They are contained in the
Cohen-Feinstein Amendment, a Senate bill signed into law by President
Clinton as part of the 1997 Appropriations Act. The Amendment makes the
sanctions conditional on a finding by the President that Aung San Suu
Kyi has been harmed or that large-scale repression or political violence
has been committed against the democratic opposition. These conditions
are so general as to have been triggered any day after the bill became
law.
The odd thing about the sanctions is that they don't apply to much. The
only prohibition is on new investment by Americans with the Myanmar
government or Burmese companies in "the economic development of
resources located in Myanmar." Excepted are contracts to purchase goods,
services or technology. The President's executive order muddies the
waters by attempting to broaden the sanctions. It recognizes the
exemptions but defines "resources" in a way which could be interpreted
to include them. The consequences of this sloppy drafting may have to be
resolved in the courts, as an executive order cannot exceed the reach of
a law on which it is based.
In any case, what the sanctions do not do seems more significant than
what they do. They do not, like some U.S. state and local ordinances
designed to punish Myanmar, make any attempt to prohibit the activities
of non-UU.S. state and local ordinances designed to punish Myanmar, make
any attempt to prohibit the activities of non-U.S. business interests.
When the legal smoke and dust settle from the executive order it will
likely be determined that U.S. companies can start or
What happens now? It is unlikely that the U.S. sanctions alone can break
the political stalemate. Though not prohibited, foreign business is
reluctant to invest, as it has been for some time. Of course, economic
limits on the development of a nation of any kind have the disadvantage
of being disproportionately severe on the lowest rungs of the economic
strata. While the high-minded arguments continue, the yearly per capita
income in Myanmar remains low, with all the attendant human suffering.
Can investors in Myanmar help break the political gridlock? Something
akin to the Sullivan Principles, used to eliminate apartheid in South
Africa, could be tried in Myanmar. The Sullivan Principles were a
voluntary code of conduct for foreign companies adopted by some doing
business in South Africa. These companies were monitored for compliance
by an independent consultant. The practice provided an alternative for
foreign companies to quitting the country. They were able to continue
operating, avoiding the disruption and job loss caused by closure. And
by complying with the principles they became part of the solution of the
larger problems of the country.
A program could be devised which would use economic growth to improve
Myanmar's human rights record. The first step is that both the National
League for Democracy, in the person of Aung San Suu Kyi, and the State
Law and Order Restoration Council would have to agree on voluntary
principles to which foreign companies would adhere. One benefit of thThe
first step is that both the National League for Democracy,
By 1990s standards, the Sullivan Principles are pretty tame stuff and
basically are contained in internal standards requiring many companies
to be "equal opportunity employers." The content of the principles for
Myanmar would be a matter for negotiation. Some key provisions:
A prohibition on forced or child labor and on any company which uses
such labor.
A prohibition on dealing with local partners or contractors suspected of
operating with laundered drug funds.
A ban against engaging in corrupt practices.
Hiring a balance of ethnic groups and not discriminating in hiring
policies against members of any political affiliation.
Using a portion of profits generated locally to support NGO projects
such as combating malnutrition or AIDS prevention.
Meeting the highest standard of environmental practices.
Compulsory periodic meetings with representatives of both political
camps to discuss progress on the principles and other matters.
The program should add to the stability of Myanmar. The country's
several ethnic groups are being held together by the iron hand of the
military. If this rule is lifted, with the gradual onset of democracy
there is real danger that the country will degenerate into ethnic
splintering and bloodletting. Foreign companies, creating jobs and
economic advancement, offer an attractive alternative to these
all-too-familiar ills.
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