Too early to lift sanctions on Myanmar, say some

They fear push for reforms may ease after US scraps trade curbs

Ms Suu Kyi with Mr Obama at the White House on Wednesday. Both leaders feel Myanmar is now in a position to open up to investors keen to take part in its economy, which is expected to grow 8.4 per cent this year.
Ms Suu Kyi with Mr Obama at the White House on Wednesday. Both leaders feel Myanmar is now in a position to open up to investors keen to take part in its economy, which is expected to grow 8.4 per cent this year.PHOTO: AGENCE FRANCE-PRESSE

United States President Barack Obama's decision to lift economic sanctions against Myanmar has been welcomed, but some living in one of South-east Asia's poorest nations are worried the move is premature and will ease pressure for reforms.

The decision, announced on Wednesday during Ms Aung San Suu Kyi's first visit to the White House as Myanmar's leader, comes as her new civilian government tries to engineer a democratic transition while sharing power with a military that has been guaranteed a quarter of all seats in Parliament.

An arms embargo and restrictions on US engagement with Myanmar's military will still hold.

Ms Suu Kyi, who previously supported sanctions against her country, said alongside Mr Obama: "We think the time has now come to remove all the sanctions that hurt us economically, because our country is in a position to open up to those who are interested in taking part in our economic enterprises."

Myanmar's economy is a bright spot in a region clouded by sputtering growth and political tensions. According to an Asian Development Bank report in March, its gross domestic product, which grew 7.2 per cent last year, is expected to chart the highest growth in Asia this year at 8.4 per cent and next year at 8.3 per cent.

Since Ms Suu Kyi's National League for Democracy swept the elections in November last year, the Nobel laureate has focused much of her administration's energy on peace talks to end the decades-long hostilities between the military and ethnic armed groups.

"Unity also needs prosperity," she said on Wednesday in Washington, where she also met Secretary of State John Kerry and some lawmakers. "People, when they have to fight over limited resources, forget that standing together is important."

Mr Obama said lifting sanctions was "the right thing to do" to "ensure that the people of Burma see rewards for a new way of doing business and a new government". Myanmar was previously known as Burma.

Ending sanctions would effectively take 38 individuals and 73 companies off the US blacklist. Many were seen as being closely tied to Myanmar's military, which controlled the country for some five decades before elections in 2010.

In a sign of how opinions are divided within Myanmar, a proposal by a Member of Parliament to lobby for the removal of US economic sanctions was defeated last month in the Lower House, with 219 votes against and 151 votes in favour.

"If sanctions are totally lifted, it will only benefit the cronies and businessmen close to the former government," political observer Yan Myo Thein told The Straits Times.

But businessmen and legal experts noted that the move was overdue, given that regulatory requirements imposed by these sanctions were creating bottlenecks in banking transactions.

Even though the European Union lifted its sanctions on Myanmar in 2013, the ubiquity of US dollar-denominated deals meant that US sanctions continued to affect the business environment. While Coca-Cola has re-entered Myanmar, many smaller US businesses remained daunted by sanctions.

"The country has already come a long way," said Mr Frankie Tan, the director of an infrastructure and utilities firm who has been based in Myanmar for 16 years. "We should lift sanctions and see if the whole country could move further by opening up."

In July, the government unveiled a 12-point economic policy that pledged, among other things, to cut red tape, support competition, create jobs and improve budget transparency. It was criticised for its brevity.

Naypyitaw has now drawn up a new investment law that Ms Suu Kyi expects to be adopted by Parliament "within the next few weeks".

A version of this article appeared in the print edition of The Straits Times on September 16, 2016, with the headline 'Too early to lift sanctions on Myanmar, say some'. Print Edition | Subscribe