Friday, December 02, 2011

Myanmar Leaders Meet with Hillary Clinton to Discuss Reform


On November 30th, Secretary of State Hillary Clinton arrived in Myanmar (also known as Burma) to discuss the country’s reform efforts and to assess whether these efforts warrant a change in U.S. policy toward the country. This visit marks the first time a U.S. Secretary of State has visited Myanmar since 1955, and potentially signals the first step toward improved relations between the countries.

In the 1980s and 1990s, relations between the countries soured due to the Myanmar military government’s numerous human rights violations against political dissidents and ethnic minorities. As a consequence, the U.S. and European countries imposed strict economic sanctions that prohibited new investment in Myanmar, blocked its exports to Western markets, and restricted financial transactions between the countries. Together, the military government’s economic mismanagement (it did not institute a capitalist economic system until the 1990s) and economic sanctions have resulted in Myanmar having the second-lowest gross domestic product (GDP) per capita in Asia.

In March, Than Shwe, the former President and top general, stepped down and Mr. Thein Sein (another former general, but a civilian as of April 2010) was elected President in Myanmar’s first election in over twenty years. The election was considered a sham in the U.S. and Europe, and although Myanmar is nominally a civilian government led by President Sein, it is still comprised primarily of military leaders. Since his election, President Sein’s government has released over 200 political prisoners, eased media censorship, and engaged in dialogue with Ms. Aung San Suu Kyi, the leader of Myanmar’s democracy movement who was under house arrest for most of the last twenty years before being released in November of 2010.

Although Clinton supports the reforms that President Barack Obama has called “flickers of progress,” she insists that Myanmar release the remaining 1,000 political prisoners, end ongoing violence between the Myanmar military and ethnic minorities, and cease illicit nuclear-missile-technology trade with North Korea before the U.S. will consider ending its economic sanctions on Myanmar. Clinton did, however, pledge to support International Monetary Fund (IMF) and World Bank efforts to determine whether Myanmar should receive international aid, and also suggested that the Obama administration would consider sending an ambassador to the country in the near future.

Economically, Myanmar suffers from an ineffective banking system, inadequate infrastructure, regular power outages, and extreme poverty. Despite these weaknesses, foreign investors are carefully watching Myanmar’s reform efforts because the country has vast amounts of oil, gas, timber, and gems, the availability of which would make it easy for foreign investors to earn a profit. Furthermore, wages are lower in Myanmar than its neighbors, many of its citizens speak English thanks to former British rule, and the legal system is derived from the British system, making it familiar to many potential Western investors. To attract more foreign investment, Myanmar needs to undergo more meaningful political reform to give companies the public support they believe is needed to set up business in the impoverished country. More foreign investment could promote strong economic growth and improved living conditions, much in the same way it has in other Asian countries.

Although President Sein has made progress, many analysts believe the country needs more economic results quickly. There is still a hard-line contingent in Myanmar’s military-dominated government and its patience with President Sein’s administration may run out if there are not concrete changes, such as the lifting of economic sanctions or improved economic activity. To produce these concrete changes, President Sein needs to convince the West that Myanmar has made meaningful political reform. The hard-line contingent, however, is reluctant to push political reform too quickly. Therefore, President Sein is in a difficult bind. If political reform moves too slowly, the West will not change its economic policies and there will be no concrete economic changes in Myanmar, but if political reform moves too quickly, President Sein will lose favor with the military leaders. Unless President Sein manages to find the appropriate balance, his tenure may be short and the hard-line government may return to power, potentially erasing what little progress has been made.

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