The Irrawaddy News Magazine [Covering Burma and Southeast Asia]

The ‘Virtuous Circle’ of Carrot & Stick Sanctions
By WILLIAM BOOT / THE IRRAWADDY Tuesday, March 27, 2012

Have economic sanctions against Burma passed their sell-by date, or do they remain a key element in prodding the Burmese government down the road of reform?

Opinion is as divided among many leading Burma watchers as it is among the Western politicians who must ultimately decide on the fate of the sanctions, with some arguing for an immediate end and others believing the restrictions must remain in place until more positive and permanent reform happens.

A third line of opinion is that the sanctions could be gradually withdrawn bit by bit if reforms continue.

One of the most high-profile voices urging a rapid end to the sanctions, American economist and Nobel prize winner Joseph Stiglitz, has described them as an “impediment” to Burma’s emergence from decades of isolation.

Nobel laureate economist Joseph Stiglitz has described sanctions as an “impediment” to Burma’s emergence from decades of isolation.
Stiglitz praises what he sees as “unprecedented transparency” in recent financial decision making coupled with an easing of restrictions in key areas.

That’s not the view of more than 60 members of the British Parliament who, while praising the Thein Sein initiatives, argue that no reforms have yet been enshrined in law. They are seeking to commit the British government to block any attempt by the European Union to ease the sanctions after Burma’s April 1 elections.

A parliamentary motion to that end signed by British legislators from across the political spectrum “notes with concern that hundreds of political prisoners remain in Burma's jails, and that there has been an increase in human rights abuses in ethnic states.”

The 62 legislators who have so far signed the motion said: “International pressure has played an important role in encouraging reforms so far, and [we call] on the government to ensure that EU sanctions on Burma are not relaxed prematurely before substantially more political prisoners are released, conflict is ended and there is an inclusive dialogue process to secure further and irreversible reform.”

The editor of the Burma Economics Watch, Sean Turnell, is in favor of the carrot-and-stick approach— reducing sanctions gradually in return for more reform. The primary purpose of the sanctions imposed by the United States, the EU, Australia, New Zealand and Canada was to induce change, argues the economist from Australia’s Macquarie University.

“This I think they have done, primarily by creating incentives for all but the most rusted-on supporters and ideologues of the old military regime to embrace change,” Turnell told The Irrawaddy this week after a visit to Burma to assess the effect of the Thein Sein reforms.

“Consistent with such purposes then, sanctions easing in response to meaningful reforms in Burma have always been the promise. Such reforms are as yet partial, as I suspect then are the likely modifications to the various sanctions regimes. Of importance at the moment is the direction of change and its momentum, in terms of reforms and, as a consequence of these, changes to sanctions.”

The US special envoy to Burma, Derek Mitchell, appears to be in the same camp as Turnell, and it’s his views which are most likely to influence White House thinking and calls for US Congress action to roll back the most draconian of sanctions.

Mitchell said the Washington government is looking at which sanctions might be getting in the way of reform, but he has warned that there is no one change in Burma that will magically lead to the lifting of all sanctions.

“The conditions for sanctions and other restrictions are more than these [April] elections,” he said after his latest visit to Burma. “There are specific issues that have to do with the release of all political prisoners, have to do with ethnic minority issues and have to do with other issues. So, we are not looking for one particular event in order to say everything is normal, everything is right and is not reversible.”

Former British ambassador to Thailand and now chairman of the NGO Network Myanmar Derek Tonkin believes continued sanctions are “dumb”.

“Sanctions directed at the population at large have become a serious obstacle to the country's financial and economic reform programs, notably in rural development, poverty alleviation and social welfare,” he says on the Network Myanmar website this week.

“We should then have the honesty to recognize that it is the population at large which is being held to ransom by the Western pretense that their sanctions are ‘well-targeted’ when the overwhelming evidence is that almost all of them are not.”

In the same camp, Stiglitz argues: “It is clear that this moment in Myanmar’s history represents a real opportunity for permanent change. It is time for the world to move the agenda for Myanmar forward, not just by offering assistance but by removing the sanctions that have now become an impediment to the country’s transformation.”

Not so, says prominent Burmese exile Kyi May Kaung, a writer and analyst based in Washington.
“Countries that wish to see democracy and a free market in Burma should not lift sanctions too soon,” she wrote in an appeal for the Western world not to get carried away with what she says is the hype being generated by international media.

“Reporters love to preface their interviews by feeding the interviewee ‘Now that there is change in Burma’—in fact, there has been no meaningful structural or institutional reform. I and a few other voices are the only ones remaining skeptical, we think with reason, and our voices are all but drowned out by the sounds of the big media wheel.”

Opposition leader Aung San Suu Kyi has also urged caution, warning only days ago that media freedom in Burma was still being gagged by the authorities.

Turnell, who is in touch with a wide circle of opinion inside and outside Burma, thinks there is hope for what he terms a “virtuous circle of reform” in which sanctions can continue to play a part.

“One might also expect a narrowing and more specific targeting of measures, to ensure against unintended effects and to best encourage and hasten the reforms,” he told The Irrawaddy. “At the moment the ball is with Thein Sein. April 1 marks the next serve.”

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