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The People's Call for Sanctions

"Until we have a system that guarantees rule of law and basic democratic institutions, no amount of aid or investment will benefit our people. Profits from business enterprises will merely go toward enriching a small, already privileged elite." Aung San Suu Kyi, Business Week, 1998

Who's call for sanctions?

The effectiveness of economic sanctions is a controversial issue but one that must be evaluated on a country by country basis. Many people supported the South-African anti-apartheid movement's call for sanctions against their own country because it came from majority of South-Africans. The international community on the whole came to understand that foreign investment was propping up the White South-African elite more than anyone else in the country.

The case for sanctions in Burma is similar to that of South Africa and Burma's democracy struggle has been called the South Africa of the 1990s by Bishop Desmond Tutu himself, who stated the following in 1993:

"Five years of constructive engagement have only given SLORC the confidence to maintain its repressive rule...International pressure can change the situation in Burma. Tough sanctions, not constructive engagement, finally brought the release of Nelson Mandela and the dawn of a new era in my country. This is the language that must be spoken with tyrants for sadly, it is the only language they understand."

Burma is in the unique situation of having a democratically elected body, the National League for Democracy (NLD), which won 82% of the vote in the 1990 elections, calling for an end to foreign investment and trade in their country. When they began to see that it was mostly the junta and its cronies who were benefitting from foreign business, Nobel laureate, Aung San Suu Kyi's NLD urged the international community to cut off their commercial ties to Burma.

Military Grip on the Economy  (Are investments helping the Burmese people?)

International investment may help open societies and bring democratic change in some countries. In Burma, however, foreign investment helps perpetuate the cruelty of a repressive unelected junta. While the majority of Burmese, who are small farmers living in rural areas receive no benefit from foreign enterprise, foreign exchange allows the military to maintain its rule by force of arms.

Full foreign ownership of companies operating in Burma is forbidden and almost all large investment in Burma is carried out through joint ventures with the military regime, notably the Union of Myanmar Economic Holdings (UMEH). The UMEH is owned in part (40%) by the Defense Ministry's Directorate of Procurement, whose main function is to import armaments. The other 60% of UMEH shares is reserved for active and retired military officers, army-owned business enterprises and friendship societies, including veteran groups.

Therefore, foreign investment not only props up Burma's dictatorship but it directly fuels the junta's weapons purchases, which amount to at least 40% of the country's estimated public sector spending. Moreover, the junta continues to expand its army of almost 500,000, the largest army in South-East Asia, despite the fact that Burma has no external enemies. At the same time, the regime still spends less than 2% on health care.

A Narco-Economy

As the world's top heroin producing country (competing with Afghanistan), it is estimated that over half of Burma's domestic economy is tied to the heroin trade as illicit drug profits are entrenched in the system. Local investment in hotels and real estate is linked to families of known drug lords, some of whom are under indictment by the United States, but are living freely and comfortably under Rangoon's protective wing. The State Peace and Development Council has in effect made it legal to launder drug money through various policies and there is a plethora of evidence that the military is protecting, encouraging and benefitting immensely from profits from the heroin trade.


Foreign Complicity in Junta's Abuses

There are many examples of foreign companies' complicity in Burma's military regime's human rights abuses. Currently, there is a lawsuit underway against American Oil company, Unocal, which is in a joint partnership with the French oil company, Total and the military's Myanmar Oil and Gas Enterprises (MOGE). Both companies haves been implicated in the human rights abuses carried out in the construction of the Yadana pipeline, Total was condemned for its involvement in the pipeline the French Parliament -- which visited the Thai Burma border and reported back confirming the allegations of complicity -- and in a report written by Info Birmanie called Total Denial.