[Senate Hearing 112-496]
[From the U.S. Government Printing Office]
S. Hrg. 112-496
U.S. POLICY ON BURMA
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HEARING
BEFORE THE
SUBCOMMITTEE ON EAST ASIAN
AND PACIFIC AFFAIRS
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
APRIL 26, 2012
__________
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COMMITTEE ON FOREIGN RELATIONS
JOHN F. KERRY, Massachusetts, Chairman
BARBARA BOXER, California RICHARD G. LUGAR, Indiana
ROBERT MENENDEZ, New Jersey BOB CORKER, Tennessee
BENJAMIN L. CARDIN, Maryland JAMES E. RISCH, Idaho
ROBERT P. CASEY, Jr., Pennsylvania MARCO RUBIO, Florida
JIM WEBB, Virginia JAMES M. INHOFE, Oklahoma
JEANNE SHAHEEN, New Hampshire JIM DeMINT, South Carolina
CHRISTOPHER A. COONS, Delaware JOHNNY ISAKSON, Georgia
RICHARD J. DURBIN, Illinois JOHN BARRASSO, Wyoming
TOM UDALL, New Mexico MIKE LEE, Utah
William C. Danvers, Staff Director
Kenneth A. Myers, Jr., Republican Staff Director
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SUBCOMMITTEE ON EAST ASIAN AND PACIFIC AFFAIRS
JIM WEBB, Virginia, Chairman
BARBARA BOXER, California JAMES M. INHOFE, Oklahoma
ROBERT P. CASEY, Jr., Pennsylvania JAMES E. RISCH, Idaho
JEANNE SHAHEEN, New Hampshire JOHN BARRASSO, Wyoming
CHRISTOPHER A. COONS, Delaware MARCO RUBIO, Florida
(ii)
C O N T E N T S
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Page
Biswal, Hon. Nisha, Assistant Administrator for Asia, U.S. Agency
for International Development, Washington, DC.................. 11
Prepared statement........................................... 12
Jackson, Karl, Ph.D., C.V. Starr Distinguished Professor of
Southeast Asia Studies School of Advanced International
Studies, Johns Hopkins University, Washington, DC.............. 35
Prepared statement........................................... 36
Manikas, Peter, senior associate and regional director for Asia
Programs, National Democratic Institute, Washington, DC........ 30
Prepared statement........................................... 31
Steinberg, David, Ph.D., distinguished professor, School of
Foreign Service, Georgetown University, Washington, DC......... 24
Prepared statement........................................... 25
Szubin, Adam J., Director, Office of Foreign Assets Control, U.S.
Department of the Treasury, Washington, DC..................... 15
Prepared statement........................................... 17
Webb, Hon. Jim, U.S. Senator from Virginia, opening statement.... 1
Yun, Joseph, Principal Deputy Assistant Secretary, Bureau of East
Asian and Pacific Affairs, U.S. Department of State,
Washington, DC................................................. 5
Prepared statement........................................... 7
Responses to questions submitted for the record by Senator
James M. Inhofe............................................ 43
Additional Material Submitted for the Record
U.S. Chamber of Commerce, the U.S.-ASEAN Business Council, and
the National Foreign Trade Council, prepared statement......... 42
(iii)
U.S. POLICY ON BURMA
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THURSDAY, APRIL 26, 2012
U.S. Senate,
Subcommittee on East Asian and Pacific Affairs,
Committee on Foreign Relations,
Washington, DC.
The subcommittee met, pursuant to notice, at 3:03 p.m., in
room SD-419, Dirksen Senate Office Building, Hon. James Webb
(chairman of the subcommittee) presiding.
Present: Senators Webb and Inhofe.
OPENING STATEMENT OF HON. JIM WEBB,
U.S. SENATOR FROM VIRGINIA
Senator Webb. The subcommittee will come to order. This
afternoon the East Asia and Pacific Affairs Subcommittee will
examine U.S. policy toward Burma, with particular reference to
the recent political reforms in that country, the impact of
U.S. policy, including sanctions, on Burma's political
transformation, and the prospect for further reforms.
I'd like to also point out at the opening of the hearing,
we've got a really, I think, fine list of witnesses today; two
different panels. I appreciate all of you coming. There is a
lot of business going on in the Senate right now as the Senate
prepares to wrap up tonight for this work period. Thursday is
always an interesting day in the United States Senate. A lot
can get done, but a lot happens. As they say, when the smell of
jet fumes fills the air people actually start talking to each
other.
But we have a series of votes that are scheduled to begin
as early as 3:25. It's my intention to stay here to try and
finish this hearing unless I'm called over to vote on the first
couple of votes. I appreciate everybody's time constraints
here.
Earlier this month, following a historic parliamentary by-
election, I visited Burma for the second time in the last 2\1/
2\ years. Prior to my visit in August 2009, Burma in many ways
appeared locked in its status quo of international isolation.
The promise of democratic reform had not been fulfilled.
Conflicts with ethnic minority groups threatened to fracture
the country. Aung San Suu Kyi remained under house arrest.
Externally, voices critical of the regime called for additional
sanctions and increased isolation of Burma by the United States
and the international community.
My 2009 visit, which was carefully planned for months in
advance, was the first to Burma by a member of Congress or a
national leader in more than 10 years. It reinforced
observations that I had made during my first visit to that
country in 2001 as a private citizen, namely that our
restricted diplomatic and commercial ties had also limited our
connections with the Burmese people and had prevented them from
seeing the benefits of a free society.
Both the country and its leadership were becoming more and
more remote, increasing the challenge that we all agreed was
our ultimate goal, which was to assist and encourage Burma's
reentry into the international community. In sum, our attempts
to isolate that country had limited our opportunities to push
for positive changes, which was the goal of the isolation in
the first place.
In September 2009, with my support, the administration
redirected U.S. policy to engage directly with the military
government, which began sending positive signals. Many within
our own government and elsewhere expressed deep skepticism
about this approach, but I believed that this redirection was
timely and appropriate. And although our engagement over the
past 2\1/2\ years has been an imperfect process, it has allowed
both governments to learn more about each other and to begin
the process of building trust in our bilateral relationships.
The transition from a military government to a more
representative political system officially began in November
2010 with the election of national and regional parliaments and
the transition to a civilian-led government. Most recently, the
April 1 parliamentary by-election filled seats vacated by
officials who became ministers in the new government.
During my 2009 visit I specifically observed to Burmese
Government officials that, at a time when Aung San Suu Kyi was
still under house arrest, in order for elections in Burma to be
perceived as credible she and her party should be offered the
opportunity to participate fully and openly in the process.
Aung San Suu Kyi's decision to participate in the by-election
and her open active campaign throughout the country was a
positive sign of political reconciliation taking place within
that country. Moreover, her party won 43 out of the 45 seats
contested in the by-election, making it the largest opposition
party in both chambers of the national parliament.
It is important to note that Aung San Suu Kyi, whose
struggles and sacrifices were at the very core of the reason
that sanctions originally took place, is now an elected
representative of the existing government and is directly
participating in shaping the future of the country.
Burma's movement toward democratic governance has been
propelled by two leaders, Aung San Suu Kyi and President Thein
Sein, who themselves could not be more different in their
background and their life experiences. The world knows about
the life and the struggles of Aung San Suu Kyi.
She was a member--is a member of one of Burma's great
families. Her father is widely viewed as the father of Burmese
independence. He was assassinated when she was 2 years old. She
studied overseas in Great Britain. She was denied the results
of an election that had proclaimed that she would be the
national leader. She spent years under house arrest. She won
the Nobel Prize for her struggles.
Thein Sein is less known and we know, quite frankly, less
about him. But we do know that he is from a village in a remote
part of that country which still does not have basic
infrastructure, such as paved roads and electricity; that he
chose a military career; that he was in charge of the relief
efforts after the tragic cyclone that killed tens of thousands
of people in that country; and that from all evidence this
experience as much as any other motivated him to try to seek
different ways in terms of the governmental process in the
country.
These two leaders set their differences aside for the good
of the country and joined together to try to move the country
toward its promised democracy. I respect both of them for their
courage and for their commitment to their country, and the
results of their effort are increasingly becoming clear. The
international community is once again engaging with the Burmese
Government and its citizens in a positive manner. Opposition
parties have been formed. Ethnic minority groups are
negotiating for peace and open media is being encouraged and
allowed. In 1 year more than 600 political prisoners have been
released. Aid groups are seeing a new willingness by the
government to tackle poverty and health crises in the country.
Burma will soon take up the chair of ASEAN, the Association for
Southeast Asian Nations, for the first time, representing a
vote of confidence by its fellow ASEAN members.
During my last visit earlier this month, I had the
opportunity to meet with representatives from different
business, political, and media groups. We had a good discussion
about their specific concerns. But unanimously they also said
that the situation is far different than it was a year ago and
that the ability to report and comment on political events
inside the country is vastly improved.
This is an incomplete process. More can be done on all
sides. We will continue to monitor it closely and press for
continued progress. But it's also important to consider these
changes in this country and in a global and regional context.
First, the events of the Arab Spring last year have taught us
that democratic movements often do not share the same path and
can occur within a windstorm of violence that is both dangerous
and uncertain. Burma's transition to this point is occurring
within a relatively stable environment.
Regionally, Burma's reforms, again at this point, place it
beyond many of its own neighbors. One of the comments that I
heard several times during my recent visit through Japan,
Thailand, and into Burma was that Burma, if it can sustain even
the changes that have been made over the last year, now places
about halfway up inside the ASEAN nations in terms of its
political process. They have been releasing political
prisoners. They have been opening up their media. They are
holding popular elections. There are concerns about policies in
other countries, most notably at this time Vietnam and China.
Despite the concerns that we have had and the continuing
negotiations we have had with those other countries, we have
full trade relations. We lifted our trade embargo against
Vietnam in 1994, 18 years ago. China is now our second-largest
trading partner, despite internal policies, and in fact we
lifted the trade embargo against China 41 years ago.
The State Department's human rights report estimates tens
of thousands of political prisoners are incarcerated in China
in prisons, administrative detention, or labor camps.
And, in telling contradiction to Aung San Suu Kyi's
situation, China's Nobel Peace Prize winner, Liu Xiaobo,
remains incarcerated for leading a pro-democracy manifesto that
calls for expanded liberties and the end to single party rule
in China. China is also undergoing a leadership transition this
year, but it will not be decided by a popular vote.
Burma has a long way to go, but its leaders should be
acknowledged for concrete efforts to take the country in a
different direction. The Government of Burma is attempting a
peaceful simultaneous transition in both the economic and
political spheres. This is rare, especially in this part of the
world.
Our opening to both China and Vietnam decades ago was
predicated on the idea that economic reform would ultimately
lead to political reform. In Burma, on the other hand, the
sustainability of political reforms will depend to a large
degree on economic progress in the country. In many ways,
economic progress in Burma is ultimately tied to the sanctions
that are in place. Most financial transactions, such as using a
credit card or getting a bank loan, are difficult or impossible
in Burma due to financial sanctions, and it's hard to conduct
business, let alone lay the foundations of a modern economy, on
a purely cash basis.
United States sanctions targeting Burma are specified in
five Federal laws, four Executive orders, and certain
Presidential determinations, which I will be asking our
witnesses to go through in some detail as they're very complex.
When I met with President Thein Sein's economic adviser,
Winston Set Aung, he commented to me that Burma is trying to go
overnight from a crawl to a run while its hands and feet are
tied. And his request was that at least at this point we could
untie their feet.
I hope today's hearing will give us a clearer understanding
of the range of sanctions that currently are in place, what the
obstacles are to removing them, and the administration's vision
for the path ahead.
Two weeks ago, Aung San Suu Kyi, speaking alongside British
Prime Minister David Cameron, announced her support for
suspending sanctions in response to democratic reforms in
Burma.
On Monday the European Union agreed to suspend for 1 year all
sanctions except for the arms embargo. Earlier this month, the
State Department announced that we would begin processing
easing the ban on the export of U.S. financial services and
investment. I understand the Department of Treasury took steps
last week to authorize nongovernmental organizations to conduct
certain activities.
We also should be mindful at this point that we as a
government should be identifying what measures can incentivize
further reforms and build the capacity for democratic
governance within Burma. This involves supporting the political
reconciliation process and negotiations for peace with Burma's
ethnic minority groups, as well as assisting the Burmese people
with political and economic reforms, including providing
training and assistance to all political parties and government
officials.
So at bottom we have reached a profound moment in the
history of our relations with this country, and when such
moments occur history teaches us that it's important to act in
a way that is clear and decisive. What those actions might be
is the subject of this hearing, and to discuss these and other
issues before the subcommittee, we have two distinguished
panels, as I mentioned earlier.
Our first panel, which is seated; I'd like to welcome
Principal Deputy Assistant Secretary Joseph Yun; Assistant
Administrator Nisha Biswal; and Office of Foreign Assets
Control Director Adam Szubin. And I will introduce the second
panel when this panel has completed its witness statements and
questions. So welcome.
Secretary Yun.
Let me ask, by the way, if you could summarize your remarks
in your opening statement, and your full testimony, all three
of you, will be entered in the record at the close of your oral
statements.
Secretary Yun.
STATEMENT OF JOSEPH YUN, PRINCIPAL DEPUTY ASSISTANT SECRETARY,
BUREAU OF EAST ASIAN AND PACIFIC AFFAIRS, U.S. DEPARTMENT OF
STATE, WASHINGTON, DC
Mr. Yun. Thank you very much, Mr. Chairman, and thank you
for inviting me here today to testify about United States
policy toward Burma and the remarkable developments that have
been unfolding in that country.
As you mentioned, Mr. Chairman, I will submit a written
testimony and I will keep my remarks very short.
Senator Webb. Your full testimony, as I said, will be
entered at the end of your oral statement.
Mr. Yun. Mr. Chairman, I do want to take this opportunity
to thank you especially for your leadership in respect to our
Asia policy efforts. From Burma to the Philippines to the South
China Sea to Japan, your leadership has enabled us to make
important progress over the past 3 years. Your insight into
Burma is particularly valuable. As you've mentioned, you've
made many visits, and I think you are the only U.S. official to
have met both Senior General Than Shwe and President Thein
Sein.
Let me say three things that remain constant in our Burma
policy. First is that it continues to be bipartisan.
Second, it does really reflect partnership between our
executive and legislative branches. And third, it is based on
close coordination with our friends and partners in Asia and
Europe.
During the past 9 months, the Burmese Government, working
collaboratively with many local stakeholders, has made
significant progress, as you mentioned. We assess this nascent
opening as real and significant, though we also believe it is
fragile and that we need to carefully calibrate our approach to
encourage continued progress.
The election this month of Nobel laureate and former
political prisoner, Aung San Suu Kyi, and 42 other National
League of Democracy members is the most recent dramatic example
of the political opening under way. In addition to
parliamentary by-elections, we're encouraged by other notable
political reforms in Burma, including the release of over 500
political prisoners in October 2011 and January 2012. The
government is also proceeding with important economic reforms,
including adjustment from a convoluted exchange rate regime,
easing some onerous import and export requirements, and
drafting new foreign investment regulations.
I'd like to go through a couple of steps that the United
States has done in response. Over the past year we have
responded to change in Burma with increased outreach and
concrete actions. During Secretary Clinton's historic visit to
Naypyitaw and Rangoon in May 2011, the first such visit in 56
years, she clearly articulated our commitment to partnering
with and supporting Burma on a path of reform and to a strategy
of matching action for action. To date, we have announced the
resumption of cooperation in counternarcotics and operations to
recover World War II remains of U.S. personnel. We have pledged
support for assessment missions by international financial
institutions and, following the release of over 250 political
prisoners in January, we announced our intention to exchange
ambassadors.
On April 4, to respond to Burma's by-election, Secretary
Clinton announced additional steps, which included our
intention to reestablish a USAID mission in Burma, lend United
States support for a normal UNDP country program, authorize
private United States entities to send funding to Burma for
nonprofit activities, facilitate travel to the United States
for select Burmese officials and parliamentarians, and begin a
process to ease the bans on exportation of United States
financial services and new private investment. We plan to
proceed carefully as we ease any sanctions, maintaining
targeted prohibitions on individuals and entities.
While we recognize the momentous release of political
prisoners, we continue to call for the immediate and
unconditional release of all prisoners of conscience and the
removal of conditions on those already released. We also urge
an immediate halt to hostilities in Burma's ethnic minority
areas, particularly in Kachin State, where fighting has
continued at varying levels of intensity since the cease-fire
lapsed in June 2011. We also remain troubled by Burma's
military trade with North Korea.
Therefore, I would like to emphasize that much work remains
to be done in Burma. Therefore, in conclusion, Mr. Chairman, as
we look forward there is a great store of good will within the
international community to reengage Burma. Though the
challenges that lie ahead are daunting, the efforts of the
resilient and diverse people of Burma are as inspiring as ever.
Let me say again how grateful we are to you and the members
of this committee, and we look forward to consulting closely
with you to support a brighter future for the people of Burma.
Thank you, Mr. Chairman. I am happy to answer any questions
you may have.
[The prepared statement of Mr. Yun follows:]
Prepared Statement of Deputy Assistant Secretary Joseph Y. Yun
introduction
Mr. Chairman, Senator Inhofe, and members of the subcommittee,
thank you very much for inviting me here today to testify about U.S.
policy toward Burma and the remarkable developments that have been
unfolding in the country. Many Members of this committee and in the
Congress have been key proponents of human rights and democracy in
Burma over the past two decades, and I am sure you all are following
events with as much hope and interest as we do at the State Department.
We have been the first to acknowledge that engagement with Burmese
authorities early in this administration was a profound disappointment.
We expected that it would be a long and slow process, but the lack of
progress from late 2009 to mid-2011 was nevertheless disheartening.
As some have said, ``That was then, this is now.'' Following the
formation of a new government in March 2011, positive changes have
emerged ranging from the release of political prisoners, to new
legislation expanding the rights of political and civic association,
and a nascent process toward cease-fires with several ethnic armed
groups. Secretary Clinton has become actively involved, including her
historic visit to Burma in December 2011, where she met senior Burmese
Government officials including President Thein Sein and opposition
democracy leader, Aung San Suu Kyi, who has been an inspiration to many
around the world, including the Secretary, for her steadfast efforts to
bring a more free and prosperous life to her people. She also met with
a variety of civil society and ethnic minority representatives.
Because of President Obama's and Secretary Clinton's far-sighted
leadership and the hard work of our first Special Representative and
Policy Coordinator for Burma, Ambassador Derek Mitchell, the Burmese
Government has engaged with the United States in candid and
constructive exchanges, leading toward concrete progress on our core
concerns over the past 9 months.
In both its words and actions, Burmese officials have demonstrated
increasing signs of interest in political, economic, and social
development, and national reconciliation. Although we assess this
nascent opening as real and significant, we also believe it is fragile
and reversible--as Secretary Clinton said on April 4, ``the future in
Burma is neither clear nor certain''--and therefore, we need to
carefully calibrate our approach to encourage continued progress.
Additionally, the impact of Burma's reform efforts has not extended far
beyond the capital and major cities. This is particularly true in
ethnic minority areas: Fighting continues in Kachin State, coupled with
reports of severe human rights violations. In Rakhine State systematic
discrimination and denial of human rights against ethnic Rohingya
remains deplorable. Overall, the legacy of five decades of military
rule--repressive laws, a pervasive security apparatus, a corrupt
judiciary, and media censorship--is still all too present.
The initial reforms are only the beginning of a sustained process
and commitment required to bring Burma back into the international
community and toward more representative and responsive democratic
governance.
political reforms
The election of Aung San Suu Kyi and 42 other NLD members is the
most recent and dramatic example of the political opening underway in
Burma, a culmination of several reforms that together constitute an
important step in the country's democratization and national
reconciliation process.
Overall, the NLD won 43 of the 44 seats it contested, losing 1 seat
to the Shan Nationalities Democratic Party. Though contesting in all 45
constituencies, the ruling Union Solidarity and Development Party won
only a single seat. Less than 7 percent of all seats in Burma's
bicameral legislature were at stake, but the participation and victory
of the NLD could give Aung San Suu Kyi a role and voice in government
for the first time in the country's history. The new Parliament
convened on Monday, April 23, but NLD members including Aung San Suu
Kyi have not yet taken their seats due to concerns about the
parliamentary oath. We hope the government and the NLD will work toward
a mutually satisfactory resolution of this issue soon to enable the NLD
to take their newly won seats and begin this new era in Burma's
politics.
In the runup to the by-elections, we consistently emphasized that
the results needed to be free and fair and reflect the will of the
Burmese people. We also underscored the importance of an inclusive and
open electoral process from the campaign phase to the announcement of
results. While not perfect, the by-elections were a significant step
forward in comparison to the 2010 elections, which we and others in the
international community strongly condemned as neither free nor fair. In
advance of the by-election, the Burmese Government's amendment of
certain election-related laws enabled the NLD, which authorities had
dissolved in 2010, to register and participate. The campaign process
was more inclusive than in the past with the NLD and 16 other parties
participating.
A few days before the April 1 vote, the government invited a number
of international representatives and foreign media from ASEAN, ASEAN
dialogue partners including the United States and the European Union,
and the United Nations to witness the polling. We asked representatives
from the National Democratic Institute and the International Republican
Institute to be present, and the Burmese Government invited several
U.S. journalists to cover the elections. Poll watchers had access to
polling stations to survey the voting and the vote count. While they
reported some irregularities, including questions with voter lists and
security of ballot boxes, overall, the election demonstrated a smooth
and peaceful voting process. In addition to the formal diplomatic
observation tour coordinated by the Burmese Government, authorities
also permitted U.S. Embassy officers and diplomatic colleagues to
informally watch voting activities on election day. The Government of
Burma did not, however, establish an adequate framework and allow
sufficient access for election monitoring or observation to be
conducted according to international standards.
Ahead of the vote, several problematic process issues arose. Before
the elections, the government cancelled polling in three constituencies
in Kachin State, citing security concerns. We also monitored closely
credible allegations of election-related irregularities. Aung San Suu
Kyi and the NLD raised concerns, publically and privately, about
inaccurate voter registration lists, reports of irregularities with
advance voting procedures, and local intimidation, including a violent
attack at a campaign event in the Naypyitaw district, in which an NLD
supporter was injured. We assess that these incidents, while troubling,
did not appear to reflect a government-directed effort to skew the
outcome of the elections. Although the by-elections marked an
improvement from the 2010 elections and a step forward in Burma's
reform process, we note that much work remains to be done as we look
forward toward the next general election in 2015.
In addition to the parliamentary by-elections, we are encouraged by
several other notable political reforms in Burma, including progress on
some of our longstanding human rights concerns. The Burmese Government
released over 500 political prisoners in October 2011 and January 2012
amnesties. These releases included the most prominent civic leaders and
pro-democracy and ethnic minority prisoners of conscience. Many of
these individuals had been imprisoned for over 20 years.
The Burmese Government has also made progress toward preliminary
cease-fire agreements with several ethnic armed groups including the
Chin National Front (January 2012), the New Mon State Party (February
2012), the United Wa State Army (September 2011), and the Shan State
Army-North (January 2012). For the first time in 63 years, the Burmese
Government and the Karen National Union (KNU) entered into a
preliminary cease-fire agreement in January 2012, and began followup
peace discussions the week of April 4 on a host of political issues at
the heart of Burma's longest running internal conflict. Earlier this
month, KNU representatives from Thailand traveled to Rangoon and
Naypyitaw for landmark meetings with President Thein Sein, Aung San Suu
Kyi, and several government ministers.
These efforts to halt the fighting are important initial steps, but
must be followed by genuine dialogue and negotiations to address the
longstanding political and economic grievances of ethnic minority
populations in Burma including issues of cultural autonomy, natural
resources, and power-sharing with the ethnic Burman-dominated central
government. Fighting continues in Burma's Kachin State despite periodic
cease-fire talks.
The Burmese Government has also pursued important legislative
initiatives in support of political reform. Parliament passed and
President Thein Sein has signed an International Labor Organization-
endorsed labor law allowing workers to form labor unions and protecting
freedom of association. The government has revised other legislation to
define, prohibit, and criminalize forced labor in Burma, and
authorities signed a memorandum of understanding with the International
Labor Organization in March to take proactive strides to eliminate all
forms of forced labor in Burma by 2015. In addition, Parliament passed
and President Thein Sein signed a new law in December 2011 to protect
the rights of citizens to peacefully assemble.
The Burmese Government has also taken a variety of measures to
relax media censorship. Today, Aung San Suu Kyi's image, her political
activities, and her meetings with world leaders are widely covered in
local and even in state media. While most news is still subject to
censorship, restrictions have been eased on television and the
Internet, including on exile news sites. The Burmese Government has
recently provided access for a range of foreign journalists for the
first time including from the Voice of America and Radio Free Asia. The
government has also started to host its first press conferences and
engage with civil society on the topic of press and media freedoms.
economic reforms
In addition to the notable political reforms I have highlighted,
the Burmese Government is proceeding with a strong program of economic
reforms. After decades of mismanagement, Burma has become the poorest
country in Southeast Asia with approximately one-third of its
population living in poverty. In January, for the first time, the
Burmese Government agreed that International Monetary Fund (IMF) staff
could publish a detailed summary of the conclusions of their 2011
Article IV consultation with the IMF. This year, the IMF consultation
addresses issues and challenges facing Burma as it transitions to a
more market-based economy, including needed reforms related to the
exchange rate regime, trade policy, monetary policy, and fiscal policy.
A summary was not only posted on the IMF Web site, but was also
published, in the Burmese language, in Burma's state-owned newspaper.
We have called on the Burmese authorities to release the full text of
the Article IV Staff Report, and we hope that they do so.
A primary distortion in Burma's economy has been the use of
multiple exchange rates. Burma's multiple exchange rate system is
highly inefficient, limits access to foreign goods to all except well
connected entities, and creates opportunities for corruption. On April
2, Burma's Central Bank aligned the official exchange rate close to the
prevailing parallel rate, an important first step reforming the
exchange rate regime. The Central Bank is now posting the official
daily rate on its Web site and allowing the exchange rate to move in
line with market forces. There will be teething problems as Burma's
financial sector adjusts to this important reform, but it is a
necessary first step for a broader agenda of economic reforms that we
hope will improve the responsiveness of the government to the needs of
the people.
In addition to exchange rate reform, the Burmese Government has
discussed the country's budget in Parliament for the first time.
Members of Parliament and the Government discussed budget allocations
and in March published an approved budget in a state-run newspaper.
Budget allocations for the military remain grossly disproportionate,
however, at 16.5 percent of the total budget. Allocations for health
and education were 3.25 percent and 6.26 percent of the total budget,
quite low by regional standards. At the same time, however, Burma
reduced the relative share of its military budget in its FY 2012
budget, and allocations for health and education quadrupled and doubled
respectively. Authorities have also eased some import and export
requirements and drafted a new Foreign Investment Bill.
As businesses consider investing in Burma, it will be critically
important to actively promote a strong corporate social responsibility
ethic through active engagement with our regional and like-minded
partners as well as with the Burmese Government and local communities.
We will also engage the Burmese Government to apply nondiscrimination
principles and to create a ``level playing field'' for foreign
investors. Moving forward, we believe that by addressing these
investment-related concerns, the private sector, including many U.S.
companies, will be able to play a positive role in contributing to
justice, development, and reform in Burma.
u.s. response
Over the past year, we have carefully responded to evidence of
change in Burma with increased outreach and concrete actions. As I
noted above, the President's decision to ask Secretary Clinton to visit
to Burma in late 2011 marked a turning point in our engagement policy,
sending a strong signal of support to reformers both inside and outside
of government, while never mincing words about our continuing concerns.
During her visit, Secretary Clinton clearly articulated our
commitment to partnering with and supporting Burma on the path of
reform and committed to a strategy of matching ``action-for-action.''
Since his appointment in August 2011 as the first U.S. Special
Representative and Policy Coordinator for Burma, Ambassador Derek
Mitchell has played a key role in driving this effort. He has traveled
to Burma, along with numerous other senior State Department officials,
nearly on a monthly basis, engaging officials in Naypyitaw and
consulting with key leaders of civil society, including Aung San Suu
Kyi, ethnic minority groups, and the pro-democracy opposition to
further catalyze concrete action on our core concerns.
The actions we have undertaken thus far have been measured and
meaningful. During Secretary Clinton's visit to Burma, we announced
that we would resume cooperation on counternarcotics and operations to
recover missing U.S. personnel from World War II, which the Burmese
Government suspended in 2004. We also pledged our support for
assessment missions and technical assistance by international financial
institutions and pursued a temporary waiver of trafficking in persons
sanctions to fulfill this commitment. Following the substantial release
of over 250 political prisoners in January, we responded with an
announcement regarding our intention to upgrade diplomatic ties to
exchange ambassadors.
More recently, we have announced additional U.S. actions. On April
4, Secretary Clinton announced five key steps that the United States
would take to respond to Burma's parliamentary by-elections and the
progress that they signified. We announced our intention to reestablish
a USAID mission at our Embassy in Rangoon, lend U.S. support for a
normal UNDP country program, authorize funds to be sent by private U.S.
entities to Burma for nonprofit activities, facilitate travel to the
United States for select Burmese officials and parliamentarians, and
begin a process to ease the bans on the exportation of U.S. financial
services and new investment. Since that announcement, the Treasury
Department has issued a general license authorizing certain financial
transactions in support of humanitarian, religious, and other not-for-
profit activities in Burma, including projects for government
accountability, conflict resolution, and civil society development.
In terms of easing the bans on the export of U.S. financial
services and new investment for commercial activities, we plan to
proceed in a careful manner. We will also work closely with the U.S.
Department of the Treasury to reexamine and refresh the Specially
Designated Nationals list.
We have taken important steps on the assistance front as well,
which my colleague from USAID, Assistant Administrator Nisha Biswal,
will address. I will say, however, that in the immediate term, the
State Department has announced new activities for microfinance and
health, particularly in ethnic minority areas, based on our
consultations with civil society in Burma. Special Representative
Mitchell launched an interagency scoping mission to Burma to assess
opportunities and obstacles to Burma's transition and to align U.S.
assistance efforts in a manner that promotes the overall reform
process, directly benefits the people of Burma, and alleviates poverty,
particularly in Burma's rural areas.
We continue to emphasize that much work remains to be done in Burma
and that easing sanctions will remain a step-by-step process. We have
pursued a carefully calibrated posture, retaining as much flexibility
as possible should reforms slow or reverse, while pressing the Burmese
Government for further progress in key areas.
We have serious and continuing concerns with respect to human
rights, democracy, and nonproliferation, and our policy continues to
blend both pressure and engagement to encourage progress in all areas.
While we recognized the momentous release of prisoners last January, we
continue to call for the immediate and unconditional release of all
political prisoners and the removal of conditions on those released.
The State Department's Bureau for Democracy, Human Rights, and Labor
estimates at least several hundred prisoners of conscience are still
behind bars. Through an upcoming human rights dialogue, we will engage
officials on developing a credible, transparent, and inclusive process
to identify remaining political prisoners of conscience, seek access to
prisons for international organizations, and press for the immediate
release of all political prisoners unconditionally. We have also
spotlighted our concerns regarding remaining political prisoners in
human rights resolutions at the U.N. General Assembly and the U.N.
Human Rights Council, which we have supported or cosponsored.
In every interaction with the Burmese Government, at every level,
we are also urging the immediate halt to hostilities in Burma's ethnic
minority areas, particularly in Kachin State, where fighting has
continued at varying levels of intensity since the cease-fire lapsed in
June 2011. We have consistently urged unfettered access for United
Nations and humanitarian agencies to Burma's conflict zones. This
access is crucial so that the international community can assess needs
and attempt to assist tens of thousands who have been displaced as a
result of the fighting. While the Burmese Government has recently
allowed limited access to U.N. agencies to deliver assistance to
certain areas of Kachin State, we are pressing for regular and
sustained access to all areas, including those controlled by the Kachin
Independence Army, to provide humanitarian aid to internally displaced
persons (IDPs). In March, the United States contributed $1.5 million in
assistance to the United Nations High Commissioner for Refugees (UNHCR)
to support IDPs in Kachin State.
We also remain concerned by serious human rights violations against
the ethnic minority Rohingya people who are denied citizenship and
human rights, such as freedom of movement and freedom to marry, among
other rights all people should be able to exercise. We will urge the
Burmese Government, including through a human rights dialogue, to
pursue mechanisms for accountability for the human rights violations
that have occurred as a result of fighting and discrimination in ethnic
areas. We will also continue to spotlight continued abuses in Burma at
the United Nations and other multilateral and regional forums including
ASEAN.
While we are pleased that the NLD, Aung San Suu Kyi's pro-democracy
party, has been allowed to reregister and participate in the political
process, the degree to which reforms are genuine and irreversible will
be reflected in the amount of political space the opposition parties
will have and the amount of dissent the government will tolerate in the
coming weeks and months. We will continue to monitor the
democratization process carefully, including the issue concerning the
parliamentary oath, and urge the Burmese Government to take steps, in
terms of both policy and legislative reform, to promote greater civic
openness and support for a vibrant civil society and more free media.
Much more needs to be done on the legal and institutional front for
the government to definitively break with its legacy of the past.
Dozens of oppressive, arbitrary, and unfair laws used to convict
political prisoners remain on the books and new laws need to be
effectively implemented to make a true difference in the lives of the
people.
In addition to continuing human rights and democracy concerns, we
remain troubled by Burma's military trade with North Korea. This is a
top national security priority, and we will continue to press the
government on this issue. We are collaborating closely with the EU,
ASEAN, and other key regional partners including South Korea, Japan,
and Australia to stress to Burma the importance of full compliance with
U.N. Security Council Resolutions 1718 and 1874 and to underscore to
senior Burmese officials the seriousness of this matter and its
potential to impede progress in improving our bilateral ties.
We will also continue to urge the Burmese Government for greater
transparency on nonproliferation. We were encouraged by public
assurances from senior officials, such as Lower House Speaker of
Parliament, Thura Shwe Mann, in January 2012, that Burma has no
intention of pursuing a nuclear weapons program and is committed to
full compliance of all its international nonproliferation obligations.
We have encouraged the Government of Burma to signal its commitment
through concrete actions such as signing and ratifying the IAEA
Additional Protocol, updating its Small Quantities Protocol and
improving cooperation with the International Atomic Energy Agency.
conclusion
As we look forward, there is a great store of good will within the
international community to reengage Burma, rebuild its capacity, and
reconnect with the Burmese people, should the reform process continue.
Though the challenges that lie ahead are daunting, the efforts of the
resilient and diverse people of Burma are as inspiring as ever.
Let me finally take a moment to acknowledge the leadership of
Congress in promoting change in Burma. So many Members of Congress have
demonstrated consistent and personal commitment over many years to
democratic reform, human rights, and the welfare of the Burmese
people--and many of you have traveled to the region in recent months to
see for yourselves conditions on the ground and meet with the reformers
themselves. We are grateful for your efforts, and we look forward to
consulting closely with you as we continue to support a brighter future
for Burma.
Senator Webb. Thank you very much, Secretary Yun.
Administrator Biswal, welcome back to the subcommittee.
STATEMENT OF HON. NISHA BISWAL, ASSISTANT ADMINISTRATOR FOR
ASIA, U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT, WASHINGTON, DC
Ms. Biswal. Thank you, Mr. Chairman, and it is indeed a
pleasure to be back here to testify about the developments in
Burma, which are quite exciting.
Senator, you covered much in your statement of the trends
and developments that give us so much cause for optimism in
Burma, and I wanted to outline to you how USAID is preparing
the way forward. The U.S. assistance relationship with Burma
dates back to 1950 and we have had an aid mission in that
country previously, which was suspended in 1988. But our
assistance programs, particularly our humanitarian programs for
the people of Burma, have continued from years past. Currently
we have had a bilateral assistance program of approximately $38
million per year that has addressed the humanitarian
requirements both inside Burma and along the Thai-Burma border,
as well as support for democracy, human rights, and independent
media.
Recently, Secretary Clinton announced the opening of a
USAID mission after the successful April by-elections. We plan
to have a mission director in-country by the fall of this year
and a fully staffed mission in place by next summer. We think
that that ability to have people on the ground will
fundamentally transform our ability to engage in support of the
Burmese people. It will allow us to directly support Burmese
civil society, to support reconciliation efforts, as well as
continued assistance to vulnerable populations, particularly
ethnic minority populations. It will allow us to engage with
reform-minded institutions inside government and outside,
particularly in strengthening their understanding and capacity
to engage in democratic governance. It will allow us to engage
more efficiently with the donor community. And finally but most
importantly, it will allow for a greater degree of oversight as
we engage in this new and evolving environment.
Our challenges as we move forward are going to be to build
upon the resilience of the Burmese people and the capacity of
the Burmese people without overwhelming them with the influx of
assistance from all donors that is not well coordinated. So we
hope that as we take these steps in this sequential order, we
will be able to assist in an efficient and effective manner.
I'm mindful of the words of Aung San Suu Kyi when we discussed
our plans with her, that assistance should be building upon
resilience and avoiding dependency.
Mr. Chairman, we have worked very closely with this
committee and with all relevant committees in Congress on Burma
policy and pledge to continue to consult closely with you as we
move forward.
I'll stop there and engage any questions that you may have.
[The prepared statement of Ms. Biswal follows:]
Prepared Statement of Assistant Administrator Nisha Biswal
Chairman Webb, Ranking Member Inhofe, and distinguished members of
the committee, thank you for the opportunity to testify before the
committee today on the important issue of our policy toward Burma. As
my esteemed colleague, Principal Deputy Assistant Secretary Yun has
recounted the dramatic changes underway and covered the broader U.S.
policy towards Burma, I will limit myself to discussing the areas under
my jurisdiction: U.S. assistance programs and policies in Burma and
along the Thai-Burma border.
As Principal Deputy Assistant Secretary Yun noted, the significant
steps taken by the Government in Burma have been matched by actions
from the United States. On April 4, Secretary Clinton announced that
the United States Agency for International Development would
reestablish its mission in Burma. The Secretary's announcement
recognizes the significant opening to strengthen our ties with the
people of Burma and provide critical support in their efforts for
political and economic reform.
past u.s. assistance
The United States signed the first U.S.-Burma Economic Cooperation
Agreement in 1950, and thus has had a long history in that country.
Following the events in 1988, USAID halted all economic assistance to
Burma and USAID American staff and contractors were evacuated. Since
that time, USAID has not had a mission inside Burma. While we suspended
our mission in Burma, we did not stop supporting the Burmese people.
The United States has continued to provide humanitarian assistance to
Burmese refugees and migrants in Thailand for the last 20 years and has
also provided support for human rights, democracy, and independent
media through USAID and the State Department.
Beginning in 2003, USAID resumed limited, targeted health
programs--because infectious diseases prevalent in Burma had the
ability to spread and undermine U.S. disease prevention efforts here at
home and in other parts of the world. These programs, which were
implemented through nongovernmental organizations, were managed from
our regional mission in Bangkok, Thailand. Significantly, in response
to the devastation of Cyclone Nargis in May 2008, the USG provided more
than $83 million in humanitarian assistance through USAID and the
Department of Defense.
Since FY 2010, funding for the USAID program has been approximately
$38 million per year, providing humanitarian assistance for Burmese
living along the Thai-Burma border, in the Irrawaddy Delta and Central
Burma, and supporting human rights and independent media--all of which
has been channeled exclusively through U.S. and international
organizations and in strict adherence to legislative requirements.
burma today
On my recent visit to Burma, I was struck both by the resilience of
the Burmese people, and the extreme fragility of its institutions.
Decades of mismanagement and missed opportunities have taken their
toll. Burma is a country of rich natural resources, but it is not yet
able to meet its development needs due in part to weak infrastructure,
low service delivery capacity, and corrupt governance systems.
Burma today is ranked among the least developed countries in the
world and is one of the poorest in Asia. The United Nations Human
Development Index, which is a composite index reflecting health,
education, and income indicators, ranks the country at 149 out of 187
countries with comparable data. According to the World Health
Organization, approximately 35 percent of children suffer from
stunting.
Despite the fertile landscape, many parts of the country suffer
from high levels of food insecurity and according to the World Food
Programme, the national prevalence of acute malnutrition among children
under 5 is 9 percent. Dengue, measles, avian influenza, HIV/AIDS, and
tuberculosis (TB) all pose significant health threats in Burma, and it
is in this area of communicable diseases where strengthening health
infrastructure is most critical. Burma's rate of TB prevalence is three
times higher than the global average and according to Medecins Sans
Frontieres, 85,000 people in Burma are in need of lifesaving
antiretroviral treatment for HIV/AIDS.
Yet, the nascent changes underway have fostered a sense of hope
among amongst the people. During my visit I had the opportunity to meet
with ethnic and religious leaders, released political prisoners, and
Burmese civil society leaders. And while I agree with their assessment
that the reality on the ground for the average citizen, particularly in
the ethnic areas has not yet changed or improved as a result of the
reforms, I was also struck by the hope, optimism, and determination of
the individuals and organizations with whom I met, to engage the
government in support of reforms and reformers in order to realize a
better future for their country.
usaid mission
This is precisely the opportunity and challenge for the United
States, and for USAID. Secretary Clinton's announcement authorizing
USAID to reestablish its mission will enable USAID to have the staff
and capability to partner with and support the Burmese people in this
endeavor. By supporting reform efforts and strengthening nascent civil
society organizations, we will build on our existing commitment to
improve the welfare and well-being of the people in Burma.
Pursuant to the Secretary's announcement, USAID sent to this
committee Congressional Notification No. 38 informing of our intent to
reopen the USAID mission later this year. We expect to have a small
mission within the U.S. Embassy with 5 to 7 U.S. Direct Hire Foreign
Service officers and 8 to 10 locally hired Foreign Service National
staff. We anticipate that as program needs and resource implications
are still to be determined, the exact makeup and size of the mission
may shift. Mr. Chairman, our plan is to have a mission director in
place by the fall of this year and to have the mission fully staffed by
next summer. We are sending in a retired USAID Foreign Service officer
to serve as interim Mission Director.
Mr. Chairman, as CN No. 38 notes, the expected startup costs for
the USAID mission in this fiscal year 2012 are approximately $600,000.
The fiscal year 2013 budget request assumes an operating budget for
Burma of $1.7 million. While we are still developing our final mission
plan, and the overall operating budget may change, we plan to absorb
the operating costs of the Burma mission from within the amounts
requested in the President's budget request for USAID Operating
Expenses.
The establishment of this mission will enable USAID to engage more
with Burmese organizations and institutions to support political
reforms, foster ethnic reconciliation, and strengthen the capacity of
reform-minded individuals and institutions. It will enable greater
oversight of our programs and stronger coordination with other donors,
multilateral institutions and eventually the private sector.
assistance priorities
During my visit, I met with members of the Burmese Government,
civil society, including nongovernmental organizations and bi- and
multilateral donors to assess the political, economic, and social
changes occurring in Burma and the opportunities for our engagement. In
addition, USAID took part in an interagency scoping mission to identify
the impediments to change, and look at the ways in which the USG could
best engage as we observe signs of change in Burma in the future.
While we have not yet completed the programmatic assessments of
needs and priorities for U.S. assistance in Burma, I would like to
share with you our preliminary thoughts based on my visit and the
scoping mission. We have identified four broad priorities, including
the need to (1) support reforms by strengthening civil society, (2)
build the capacity for institutional processes for good governance (3)
support reconciliation, and (4) ensure close coordination with the
international donor community.
Furthermore, we see a need to continue humanitarian assistance to
the refugee and displaced populations along the Thai-Burma border and
to expand access and assistance to vulnerable populations in Kachin
State and other ethnic areas.
strengthening civil society
A broad and resilient civil society exists in Burma despite decades
of repression. Most local civil society organizations are welfare and
service-delivery focused, but there is a budding movement for advocacy
around particular issues, such as transparency of government budgeting
and decisionmaking, inclusive policy dialogue, and promotion of human
rights. The organizations are small and informal, with little
management or financial structure--and they need training, mentoring,
and strengthening of their technical capacity.
While the operating space for civil society at the national level
has improved to a degree, most organizations are grassroots and operate
in remote regions where change is harder to discern. Even at the
national level, licensing and registration requirements, associated
fees, and changing restrictions governing civil society, matched with
an inefficient bureaucracy and severely limited communications, have
made it difficult for most civil society groups to operate safely and
legally. Additionally, very few local organizations have the capacity
to partner directly with international donors. Yet a robust civil
society is crucial for reforms to penetrate and take root at all levels
of government and society. So USAID will prioritize engaging with and
strengthening local civil society organizations.
building the capacity of institutional processes for good governance
Mr. Chairman, a consistent message we heard from both the executive
and legislative government officials in Burma was their limited
technical capacity and knowledge of bureaucratic procedures. This lack
of technical capacity in government was also identified by civil
society and human rights groups as a major roadblock to reform. For
reforms to be truly irreversible, it will require transforming the
culture and capacity of a large and entrenched bureaucracy. Some
ministries are already aggressively tackling this challenge, while
others are not. We believe engaging with the government in priority
sectors such as health and agriculture, where there are reform-minded
leaders, combined with support for local and international
nongovernmental organizations (NGOs) is critical to addressing the
alarming health and nutritional indicators in the country. Other
priority areas of governance we hope to explore include parliamentary
strengthening, electoral systems strengthening and support for the rule
of law and an independent judiciary.
national reconciliation
Ongoing ethnic divisions and armed conflicts continue to be a
significant concern. While the government has been signing cease-fire
agreements with many armed ethnic groups, these agreements, absent a
more inclusive dialogue to address political grievances and development
needs, will not lead to long-lasting peace. USAID, along with other
donors, is exploring ways to support a reconciliation process. However,
there are complex dynamics underlying the conflicts in many ethnic
areas and the road to reconciliation will be long and arduous. In the
meantime, we are committed to maintain our support for the Burmese
populations, particularly the refugee and displaced communities on the
Thai-Burma border. Ambassador Mitchell has led efforts to press other
donors to maintain and expand their assistance to these populations as
well. USAID continues to monitor closely the humanitarian situation in
Burma, including access limitations and potential openings in Kachin
and other border areas.
donor coordination
Because of the many development challenges in Burma--supporting
reforms, engaging civil society, supporting good governance, and
fostering ethnic reconciliation--we recognize the benefits of working
in tandem with the other donors. The close relationships we have
established with teams working on Burma issues at both the Australian
Agency for International Development and the United Kingdom's
Department for International Development will allow us to better
coordinate our programs going forward. We are also looking at ways to
engage Japan, and other Asian donors such as Thailand and Indonesia, as
well as regional organizations such as the Association of South East
Asian Nations. We are keenly aware of the need to build sustainable aid
mechanisms and local capacity in a way that maximizes efficiency and
impact, while avoiding duplication and without overwhelming the
government and local organizations.
conclusion
Mr. Chairman, I believe this is a critical moment for laying the
groundwork to address development needs in Burma that have long been
unmet. The development trajectory in Burma will not be turned around
overnight. But our investment, at this time, can help forestall greater
human tragedies and will, in a sense, determine the steepness of the
road ahead.
We are looking forward to increasing our engagement with the
Burmese people. As these reforms gain momentum we look forward to the
elections in 2015, which will be the true test of a transition to
democracy. And we are mindful of the advice provided by Daw Aung San
Suu Kyi when Ambassador Mitchell and I discussed plans for a USAID
mission to ensure that our assistance builds upon the resiliency of the
Burmese people.
USAID's core mission is to promote peace and stability by fostering
economic growth, protecting human health, providing emergency
humanitarian assistance, and enhancing democracy in developing
countries. We undertake these efforts to improve the lives of millions
of people worldwide because we believe it represents American values
and advances our national interests. We are committed to supporting a
peaceful transition in Burma that is consistent with our mission and in
the mutual interest of the American people and the people of Burma.
I appreciate the vital role the Congress has played on Burma. USAID
has consulted closely with this committee and other congressional
stakeholders and will continue to do so to ensure that our programs
reflect congressional intent.
I appreciate the opportunity to share with you our proposed points
of engagement to address the challenges ahead in Burma. I am eager to
hear your advice and counsel and welcome your questions.
Senator Webb. Thank you very much.
Before I introduce Director Szubin, I neglected to point
out at the opening that we do have a written statement from the
U.S. Chamber of Commerce. They have asked that it be considered
a part of the record and it will be put into the committee
record after the testimony of panel number two.
Director Szubin, welcome.
STATEMENT OF ADAM J. SZUBIN, DIRECTOR, OFFICE OF FOREIGN ASSETS
CONTROL, U.S. DEPARTMENT OF THE TREASURY, WASHINGTON, DC
Mr. Szubin. Thank you very much, Mr. Chairman. Chairman
Webb, Ranking Member Inhofe, thank you very much for the
opportunity to appear today to discuss current U.S. sanctions
against Burma and how we are responding to the very positive
developments that you outlined and that others have already
discussed.
Sanctions are an instrument of U.S. foreign policy and need
to match and reflect developments of that policy as it evolves.
We have all witnessed over the past 8 months the dramatic and
rapid developments that you outlined, including the election of
Aung San Suu Kyi and her party to the Parliament, along with
the release of hundreds of political prisoners and other
important reforms.
We must recognize the important role that our broad as well
as targeted array of sanctions have played in these
developments, along with sanctions imposed by our partners in
the European Union and elsewhere. We intend to continue some of
the targeted aspects of those sanctions against those who
oppose reform. At the same time, we must also adapt our
framework in response to the progress we have seen on the
ground.
We intend to proceed cautiously. The United States still
has concerns in Burma, including the remaining political
prisoners, ongoing conflict in ethnic minority areas, and
serious human rights abuses, as well as Burma's troubling
military ties to North Korea.
What Secretary Clinton announced on April 4 was the
beginning of a targeted process to ease certain sanctions in a
manner that will contribute to our overarching principled
engagement policy. We understand the importance of retaining
flexibility to tighten or ease our sanctions as warranted by
developments on the ground.
Our sanctions have played a central role in United States
policy on Burma over the past 20 years. In the wake of the
Burmese regime's 2007 crackdown on Buddhist monks and others,
the administration and Congress intensified our sanctions,
expanding the scope of our authorities and increasing our
efforts to identify and track the assets of bad actors.
President Bush issued two new Executive orders and worked with
Congress to enact the JADE Act of 2008. Throughout 2007-2008,
the Treasury Department targeted bad actors in Burma
aggressively, designating over 60 entities and a dozen
individuals. Treasury targeted wealthy cronies of the Burmese
regime along with their companies and commercial holdings,
highlighting their ties to illicit activities, including drug
trafficking and arms dealing.
U.S. economic sanctions have made it more difficult and
more costly for the Burmese regime and its financial supporters
to profit from their oppressive policies. These sanctions have
weighed heavily on decisionmakers and on their inner circle,
and we have heard them complain privately and publicly,
repeatedly and bitterly, about the impact that these sanctions
have had in restraining them. And we believe that has all been
to the good.
At the same time that we concentrated our sanctions on the
military government and its cronies, we worked diligently to
minimize the adverse impact of sanctions on the Burmese people
in every way possible. Our sanctions have not restricted travel
or the exchange of information to or from Burma. We have
broadly licensed personal remittances to Burma. In May 2008, in
response to Cyclone Nargis, OFAC swiftly issued a new general
license to facilitate the flow of aid to the Burmese people,
authorizing financial transactions in support of not-for-
profit, humanitarian or religious activities.
In addition, OFAC regularly issues specific licenses
authorizing financial transactions in support of a broad range
of not-for-profit activities in Burma, including conservation,
higher education, civil society development, and certain
noncommercial development projects.
In recognition of the historic reform efforts under way,
Secretary Clinton outlined on April 4 several key steps that
the administration would be taking. In particular, Secretary
Clinton announced that we would enable a broader range of not-
for-profit activities, and begin a targeted easing of the bans
on the export of financial services and new investment.
At the same time, Secretary Clinton underlined that
sanctions and certain prohibitions would stay in place against
those individuals and institutions that thwart efforts at
reform. We are working already to implement those commitments.
On April 17, OFAC issued a general license authorizing
financial transactions in support of a broader range of not-
for-profit activities in Burma, and we are now preparing to
take additional steps with regard to new investment and
financial services. But, as Secretary Clinton announced, these
measures will not constitute a wholesale lifting of sanctions.
We will retain targeted measures against cronies of the former
regime and their corporate holdings, and our sanctions
framework retains its flexibility. If developments in Burma
reverse course, we do have the authority to reverse these
loosening measures.
In summary, the Department of Treasury will continue to use
a balanced regime of relaxing and retaining sanctions as
appropriate to promote U.S. foreign policy goals toward a more
free, more prosperous, and more democratic Burma. As the
Burmese people determine their way forward and embrace the
opportunity for democratic representation, we stand ready to
work with our colleagues across the administration to assist
them.
Thank you very much.
[The prepared statement of Mr. Szubin follows:]
Prepared Statement of Director Adam J. Szubin
introduction
Chairman Webb, Ranking Member Inhofe, and distinguished members of
the committee, thank you for the opportunity to appear before you today
to discuss current U.S. sanctions against Burma and how we are
responding to the positive developments in that country. I am pleased
to be here with Deputy Assistant Secretary Joseph Yun and Assistant
Administrator Nisha Biswal.
response to recent developments
Sanctions are an instrument of U.S. foreign policy and need to
match and reflect developments in that policy. We have all witnessed
over the past 8 months dramatic and rapid developments in Burma,
including election of Aung San Suu Kyi and her party to the Parliament,
the release of hundreds of political prisoners, and other important
political reforms. We must recognize the important role that our broad-
based array of sanctions have played, but we also must adapt our
framework in response to the progress we see on the ground. We intend
to proceed cautiously; the United States still has concerns in Burma,
including the remaining political prisoners, ongoing conflict in ethnic
minority areas and serious human rights abuses, as well as Burma's
troubling military ties to North Korea. What Secretary Clinton
announced on April 4 was the beginning of a targeted process to ease
certain sanctions in a manner that will contribute to our overarching
principled engagement policy. We understand the importance of retaining
flexibility to tighten and ease our sanctions as warranted by
developments on the ground.
background: use of sanctions against burmese officials and junta
cronies
As one tool among many that the United States and the international
community have used to address concerns in Burma, our array of
sanctions have played a central role in our policy on Burma over the
past 20 years. In the wake of the Burmese regime's 2007 crackdown on
Buddhist monks, the administration and Congress intensified our
sanctions by expanding the scope of our authorities and increasing our
efforts to identify and track the assets of bad actors. President Bush
issued two new Executive orders and worked with Congress to enact the
Tom Lantos Block Burmese JADE (Junta's Anti-Democratic Efforts) Act of
2008. On September 27, 2007, the Department of the Treasury's Office of
Foreign Assets Control (``OFAC'') designated 14 senior officials of the
Burmese regime.
Throughout 2008 and into January 2009, the Treasury Department
continued to target bad actors in Burma aggressively, designating 56
entities and 12 individuals. Treasury targeted wealthy cronies of the
Burmese regime and their companies and commercial holdings,
highlighting their ties to illicit activities including drug
trafficking and arms dealing. Treasury sanctioned the holdings of
regime cronies: Win Aung, including his Dagon companies, and Steven Law
and Cecilia Ng, including their Asia World and Golden Aaron companies.
We also expanded sanctions against regime crony, Tay Za, to include his
Htoo Group and Air Bagan.
U.S. economic sanctions have made it more difficult and more costly
for the Burmese regime and its financial supporters to profit from
their repressive policies. Senior Burmese officials, such as the
Foreign Minister, have publicly complained about sanctions and called
for them to be lifted. And, in private conversations, influential
businessmen in Rangoon with connections to the regime have complained
about the detrimental effects sanctions have had on their business
operations and lives. Between July 1, 2007, and March 24, 2011, 355
transactions totaling approximately $11,100,000 involving Burmese
individuals or entities were reported to the Treasury Department as
blocked.
At the same time, we have worked diligently to minimize the adverse
impact of our sanctions on the Burmese people in every way possible.
Our sanctions do not restrict travel or the exchange of information, to
or from Burma. In May 2008, in response to Cyclone Nargis, OFAC swiftly
issued a new general license to facilitate the flow of aid to the
Burmese people by authorizing certain financial transactions in support
of not-for-profit humanitarian or religious activities in Burma. In
addition, OFAC regularly issues specific licenses authorizing financial
transactions
in support of a range of not-for-profit activities in Burma, including
conservation, higher education, civil society development, and certain
noncommercial development projects.
In recognition of both the historic reform efforts underway in
Burma, as well as the remaining concerns about those who oppose this
transformation, Secretary of State Clinton outlined on April 4 several
key steps the administration would take. In particular, Secretary
Clinton announced that we would enable a broader range of nonprofit
activities in Burma, and begin a targeted easing of the bans on the
exportation of financial services to Burma and new investment in Burma,
as part of our broader efforts to accelerate economic modernization and
political reform. At the same time, Secretary Clinton underlined that
sanctions and prohibitions would stay in place against those
individuals and institutions that thwart efforts at ongoing reform.
Treasury is working to implement these commitments, and on April 17
OFAC issued a general license authorizing financial transactions in
support of a broad range of not-for-profit activities in Burma. This
general license replaces the earlier license issued in response to
Cyclone Nargis authorizing financial transactions in support of not-
for-profit humanitarian and religious activities. It expands that
authorization to allow funds to be sent to Burma in support of not-for-
profit activities such as conservation, education, democracy-building
and good governance, and certain noncommercial development projects.
We are now preparing to take additional steps with regard to new
investment and financial services. But, as Secretary Clinton announced,
these measures will not constitute a wholesale lifting of sanctions. We
will retain sanctions targeting, among others, parastatals, cronies of
the former regime and their corporate holdings. And our sanctions
framework is fluid and flexible--if developments in Burma reverse
course, we can revoke licenses and reverse other measures.
In our use of sanctions to pressure the Burmese Government to
change, the United States has not acted alone. Sanctions have maximum
effect when they are part of a coordinated multilateral effort.
Although we have not had the benefit of a U.N. Security Council
Resolution, the United States has worked with friends and allies around
the world, including the European Union, Canada, and Australia, to
coordinate sanctions actions against the former regime in Burma. In
recent days, our friends and allies have lifted and suspended their
respective sanctions regime on Burma; the United States, like our
friends and allies, agree that steps need to be taken to recognize the
changes that have occurred in Burma and encourage further progress.
However, we intend to pursue a careful and calibrated approach and will
continue close and strong coordination with our partners to ensure
continued progress on our remaining concerns.
conclusion
The Department of the Treasury will continue to use a balanced
regime of relaxing and continuing sanctions where appropriate to
incentivize the Burmese Government down the road of political reform
and toward a more free and prosperous Burma. As the Burmese people
determine their way forward and embrace the opportunity for democratic
representation, Treasury stands ready to work with our colleagues
across the administration to assist them.
Senator Webb. Thank you. Thank all of you.
A vote has been called. Senator Inhofe would like to ask a
question. I'm going to go ahead and yield to him. I'm going to
stay here through the vote.
Senator Inhofe. Yes. Mr. Szubin--first of all, I'm sorry I
wasn't here on time. We're having a lot of conflicts today.
On the sanctions you're describing there, it's my
understanding--has the EU lifted sanctions?
Mr. Szubin. Yes, they have suspended sanctions in greater
measure----
Senator Inhofe. The EU has suspended all of them?
Mr. Szubin. With the exception of an arms export ban.
Senator Inhofe. OK. And we are now talking about lifting
some sanctions.
Mr. Szubin. That's right.
Senator Inhofe. But we don't know what ones. You're not
here today to talk about what is going to be the recommendation
of the State Department in terms of what sanctions should be
lifted?
Mr. Szubin. That's right. We are currently discussing those
steps within the administration very actively, with an aim
toward charting and continuing the course that Principal Deputy
Assistant Secretary Yun----
Senator Inhofe. I've heard some authentic rumors, I don't
think so--but some pretty good reports that they feel that we
may be lifting sanctions, but not sanctions on oil and gas. Mr.
Szubin, is that wrong or can you tell me where on your priority
lift of lifting sanctions oil and gas would be placed?
Mr. Szubin. At this point I can't comment on specific
sectors as to whether sanctions will be eased or not. What I
can point back to, Mr. Senator, is the principles that animate
these discussions within the administration.
Senator Inhofe. OK, that's fine. But let's stop and realize
and think about this. Sanctions are there to punish. They're
there because you've been a bad boy and we're going to have
sanctions on you, right?
Mr. Szubin. They're there to influence behavior.
Senator Inhofe. Yes, I understand. Now, if you were to come
up and decide you were going to lift sanctions and not lift oil
and gas, and yet the EU and other countries have lifted it, it
doesn't punish them at all because they will merely do it, but
do it with other countries than the United States. Isn't that
correct?
Mr. Szubin. That's an argument that's made against
sanctions at any time when they're not global. I would note
that the sanctions against Burma that have been retained have
never been global. The U.N. Security Council has not authorized
sanctions.
Senator Inhofe. OK, I'm not communicating. Someone's going
to be punished by--assume that you were lifting all sanctions
except oil and gas. Make that assumption. If that happens,
they're not punished, we are.
Isn't that correct? They're going to go ahead and do their
exploring, do their drilling, and reap all the profits. It will
just be with someone other than the United States.
Mr. Szubin. As I said, Senator, at the time of the Burmese
crackdown I heard those same arguments being made, that the
Chinese were exploring Burmese oil and gas sectors and we were
the ones who were punishing ourselves. Obviously, there's an
aspect to that with sanctions. We are restricting the
opportunities for U.S. businesses any time we impose sanctions.
At the same time, there are other principles that we're
vindicating in imposing those sanctions, and we believe, given
the unique skills and talents and resources that U.S.
businesses bring to bear, there is a real impact when we say to
a country: You will not have the benefit of U.S. firms
participating.
Senator Inhofe. That's true in a lot of businesses. It
isn't true in drilling because all countries do this. This is
something that we're not going to do any differently than any
of the other countries who previously had sanctions on them or
didn't have them at all. I just can't see the logic in saying
we're going to leave sanctions on oil and gas, when they're
going to continue to develop their oil and gas, but with
somebody else.
Now, it may not be true in some other businesses and
industry where we have a unique ability to do something other
countries can't do. It's not true in oil and gas.
Mr. Szubin. Please don't take me to be saying that that is
indeed the direction.
Senator Inhofe. Well, if it comes I just want to make sure
we've got it on the record that it's another thing that we
shouldn't be doing. That's all.
Mr. Szubin. Thank you.
Senator Webb. Thank you, Senator Inhofe.
I am probably going to miss this vote unless I am needed on
the floor. I want to keep this hearing going. I'm never going
to be Cal Ripken anyway in terms of consecutive votes, so I
guess if I'm going to miss one this is a good reason to be
missing it.
Let me first of all start by saying, Director Szubin, I'm
not here to debate whether or not sanctions are a good idea. We
have a lot of different opinions about that, and I think that
anyone who's going to have that debate should be able to
honestly discuss the changes in policy in China and Vietnam. I
actually was one who opposed the idea of lifting the trade
embargo against Vietnam, until the Japanese lifted their trade
embargo in 1993, and then I supported it. And, quite frankly, I
saw a lot of very positive benefits in doing that.
But that's not really the purpose of the hearing. I held a
whole separate hearing at one point on sort of the situational
ethics of American foreign policy, where do we find consistent
standards when we start applying these sorts of policies.
What I'm really interested in today, particularly from the
three of you, which is why I asked that we have the three of
you in a panel, is to give us some context here in two areas.
First, I would be interested in knowing a comparison of the EU
sanctions that were just lifted and what it took there compared
to what it takes here, but what the areas are. I assume it's
all of their trade areas. I understand this is a suspension,
but what is the difference in their sanctions versus ours?
The second question that I would have--and I think the
three of you are uniquely qualified to answer it--is what
exactly are the processes that we would go through, assuming
that we were to lift a number of these sanctions? How many of
them are capable of being lifted through the executive process
and which ones specifically require further legislation?
Secretary Yun, if you could begin and open us on that. But all
three of you; I'm very interested in seeing if we can't sort
this out on the record.
Mr. Yun. Thank you very much, Mr. Chairman. I do want to
emphasize one thing, which is as we continue to deliberate and
form how we should stand vis-a-vis the changes that are going
on there, we will consult broadly, and we have consulted with
you and we will continue to consult with you.
As Director Szubin mentioned, really we have decided to
ease sanctions. We have not come to conclusions on the steps we
need to take.
Senator Webb. I understand that. But my question is, If
this process were to move forward, which portion of it is
doable through decisions by the executive branch and which
elements would require further legislation? We have a very
complex series of policies with respect to this country that I
don't think we've had with very many others. So that's really
what I would like to hear about. I understand the
administration's present policy.
Mr. Yun. May I turn to Director Szubin, who is the real
expert on these things.
Mr. Szubin. Sure. And yes, Mr. Chairman, it is a complex
area of sanctions, with overlapping statutes, as you mentioned,
as well as Executive orders. And it does take even an expert--
and I wouldn't classify myself as an expert, but it does give
one pause in assessing the full framework.
That said, it is as a general matter true that the main
categories of sanctions that have been imposed, whether by
statute or by Executive order, can be lifted by the executive
branch should--either via licenses or via Presidential
rescission of Executive orders or issuance of waivers,
typically on a national security of the United States waiver
threshold.
That's true with respect to the investment ban, which would
require a Presidential waiver, but can proceed upon a
Presidential waiver. That's true with respect to the import
bans that were first issued in the Burmese Freedom and
Democracy Act and then expanded in the JADE Act, with a waiver
that has been delegated to the Secretary of State. That is true
with respect to designated entities, senior Burmese officials,
their cronies and the companies and parastatals that they
control that have been subjected to both congressional and
executive sanctions.
There is already a waiver process in place that allows for
those companies to be effectively delisted or for licenses to
be issued to deal with those companies and those individuals
upon a determination by the Treasury Department.
Finally, in terms of exports of financial services to
Burma, there is no legislative restriction at all. That's
purely governed by the Executive orders that the President has
put in place pursuant to IEEPA.
Senator Webb. Just to be clear in our understanding, that
conceivably could be done and still separate out the bad actors
that you were discussing in your testimony?
Mr. Szubin. Yes. And I believe Secretary Clinton even
alluded to this in her April 4 statement, that we have
designated, which is just term of art for developing an
evidentiary record and putting someone's name on the sanctions
blacklist, we have designated a number of former leaders from
the military regime as well as their cronies, individuals like
Steven Law, Tay Za, who have become very rich, often on the
backs of the Burmese people, and typically engaging in some
grey or illicit activities.
Senator Webb. Right. So they could be separated out if an
Executive decision were made on these other areas you're
talking about.
Mr. Szubin. That is correct, sir.
Senator Webb. Secretary Yun, what's the position of the
administration on the actions that the EU just took?
Mr. Yun. We have consulted closely with the U.N. We
understand that they have moved to suspend the sanctions, all
but the arms trade. Clearly, they are their own boss, but we
have been consulting closely. We believe, given the
developments that have gone on, the political openings,
economic openings, those were the paramount concern of the EU.
They made a number of visits. So I think it's fair to say they
had their reasons, as we do ours.
Senator Webb. So there's no--I'm not trying to put words in
your mouth, but there's no particular resistance or criticism
from the administration for the action that was just taken?
Mr. Yun. No; we have not criticized, nor have we made any
comments on them, yes, sir.
Senator Webb. Administrator Biswal, one of the comments
that I heard from President Thein Sein when I met with him was
an eagerness to learn more about democratic systems. My
impression was this is not the situation you would have in many
of these other historic evolutions, where you have the desire
of the people on top simply to perpetuate a system of the past,
although there are concerns in that area clearly from people
who have had reservations about the changes that have been
made.
But the question really is, Are we exploring ways to teach
or assist in the understanding of democratic processes across
the board, even with the ruling party?
Ms. Biswal. Thank you, Senator Webb. I had the opportunity
to travel to Burma just a few weeks ago and to meet with people
in all levels of government, in the executive branch as well as
in the Parliament. And I also came away with not only the
desire, but also the awareness of the lack of capacity to enact
the type of reforms that they are seeking to enact.
So we are exploring a number of different possibilities.
One is as we look toward the 2015 elections it's clear that we
are going to need to work with the government and Parliament.
The international community writ large will need to work with
institutions inside government and outside government to build
knowledge, understanding, and capacity of democratic practices.
We are looking at programs, including strengthening the
Parliament. In our meetings with Thuya Shwe Mann, the Speaker
of the Lower House, as well as with the Speaker of the Upper
House, there was a great desire to build the capacity of
Parliament to act as an effective check on the Executive.
In many of the ministries where we met, there was a desire
to build their technical capacity as well as their management
systems and capacity. Then in civil society as well, we see a
desire to create more formal management structures and
capacity. It's a very resilient civil society, but still a very
informal one out of necessity. So we're exploring all of those
opportunities.
I think that the needs are vast and the challenge for us is
how to prioritize and sequence our engagement for maximum
impact.
Senator Webb. Thank you very much. I couldn't agree with
you more. I think that we are pretty good at working with
opposition groups, as well we should be, in many parts of the
world in order to help create a better understanding of
democratic systems. I think this is a fairly unusual situation
here, where we do at least at the moment have the opportunity
to work with the governing systems in this area as well. I
would hope you would continue to do that.
I'm going to have to end the panel at this point in the
interest of time. I appreciate all of your testimony and we
will leave the committee hearing record open until--I was going
to say close of business tomorrow. We may not be in session
tomorrow. But if not close of business tomorrow, then the end
of the close of business of the first day that we are back in
session.
Thank you all again for your testimony.
We'll now hear from the second panel. I'd like to welcome
three distinguished experts on Burma and on Southeast Asia: Mr.
David Steinberg is a specialist on Burma, the Korean Peninsula,
Southeast Asia, and U.S. policy in Asia. He's the distinguished
professor of Asian Studies at Georgetown University. He was
previously a representative of the Asia Foundation in Korea,
Hong Kong, Burma, and Washington, DC. As a member of the Senior
Foreign Service, he also served as Director for Technical
Assistance in Asia and the Middle East for USAID and Director
for Philippines, Thailand, and Burma Affairs.
Dr. Karl Jackson is the distinguished professor of
Southeast Asian Studies at the School for Advanced
International Studies at Johns Hopkins University. He's a
former professor of political science at the University of
California-Berkeley and adviser to the World Bank,
International Finance Corporation; additionally, served as
National Security Adviser to the Vice President, senior
director for Asia at the National Security Council during the
George H.W. Bush administration, was Deputy Assistant Secretary
of Defense for East Asia during the Reagan administration.
Mr. Peter Manikas is a senior associate and regional
director for Asia Programs at the National Democratic
Institute. Previously he served as the Institute's chief of
party in Bangladesh, Cambodia, Indonesia, and Malawi. He has
been involved in NDI's democratic development work in more than
30 countries since 1988. Earlier this month he participated in
observing Burma's parliamentary
by-elections as one of two nongovernmental U.S. observers. Mr.
Manikas is a lawyer and member of the Illinois bar.
Gentlemen, welcome. Thank you for coming to testify today.
Mr. Steinberg, let's begin with you. Thank you very much for
being here.
STATEMENT OF DAVID STEINBERG, PH.D., DISTINGUISHED PROFESSOR,
SCHOOL OF FOREIGN SERVICE, GEORGETOWN UNIVERSITY, WASHINGTON,
DC
Mr. Steinberg. Thank you very much, sir. I'm honored to be
here. I'd like to second Secretary Yun's comments on your
leadership. This has been very important. I'll summarize my
report.
The reforms I believe are real. They are unlikely to be
rescinded in their entirety, but they are, however, fragile.
There's internal opposition both against them or against the
speed, and one of the problems is a lack of capacity, not to
articulate the reforms, but to implement them.
There are external problems as well. Potential changes, if
they don't occur in donor policies, will show that the reforms
have not produced the desired effect, and if donors attempt to
take credit for the reforms. That is very important. These are
Burmese reforms and they must be seen that way.
There is in Washington now an intensive campaign against
reducing sanctions based on the fact or the assessment that the
government is insincere and that we should await comprehensive
reforms in a variety of fields. I disagree with both of these
and will talk about that in my report.
Initiating change in Myanmar is difficult under this
administration because policy must be put into law and it must
be implemented without the taut military system, command
system, that existed previously. Minority issues are the most
important problem facing the country. It's been the most
important problem since independence. We are beginning to see
some positive effects in the Karen area, but much more needs to
be done, obviously.
I believe U.S. policy should concentrate on pluralism,
civil society, local legislatures, and the development of
nongovernmental resources inside the country. China is
exceedingly important in this relationship. The Chinese have a
comprehensive strategic cooperative relationship, partnership
with Burma, but the Chinese trust Myanmar less because of the
Myitsone Dam construction stoppage. China views the United
States policy as part of the containment of China, but there
are avenues of cooperation with China to avoid what China
really worries about, which is a bloody people's revolution
like 1988, which would destroy their position, or insurrections
on the Chinese frontier that would destroy their
infrastructure.
I have a set of recommendations that I will quickly read. I
hope that the United States can speed the confirmation of a
resident ambassador and nominate an appropriate and
knowledgeable person to take his place as the ambassadorial
coordinator.
I would like to see the official use of ``Myanmar'' as the
name of the state, and I think Aung San Suu Kyi will be
basically put in that position when she is in the legislature.
We should develop a timetable for the quid pro quo relief
from sanctions as reforms in Burma continue to be implemented,
while providing immediate changes in banking and certain labor-
intensive industry regulations.
We should begin dialogue with the Chinese on collaborative
efforts to provide economic assistance and to assist in
ameliorating minority problems along the Chinese periphery.
We should be supporting indigenous civil society
organizations and delegating to the U.S. Embassy in-country the
authority to use U.S. official assistance directly to state-
sponsored or supported institutions if and when local
conditions justify that action. It should be a local decision,
not a Washington decision.
We should encourage U.S. and ASEAN institutions to engage
in extensive capacity-building across a broad spectrum of
society needs, encourage the growth of autonomous,
intellectually respectable institutions of higher education and
learning, provide educational materials, encourage U.S. private
sector and nonprofit institutions to consider support to both
resident and nonresident teacher consultants to assist the
Burmese in this process, support the development of appropriate
concepts of law, legal institutions, and associations, and an
independent judiciary, as the Burmese Constitution stipulates,
but which is unlikely at the moment.
We should work with the Burmese Government on plans for the
reintroduction of nonlethal IMET training; and we should help
on the environmental issues.
I would like to say one thing on the sanctions issue, that
sanctions are a tactic and the tactic under the both Clinton
administration and the Bush administrations was regime change,
and that was not going to happen. Under the Obama
administration, sanctions have been an element in reform and I
believe that is an appropriate policy for sanctions if you're
going to have sanctions. But I would like to see a time limit
set on this.
Thank you, sir.
[The prepared statement of Mr. Steinberg follows:]
Prepared Statement of David I. Steinberg
I am honored to have been asked to testify before this subcommittee
on issues related to Burma/Myanmar. I will use the term Myanmar, rather
than Burma, in reference to events since 1989 when the country's
military rulers changed the name of the state. I do so without
political connotation, as virtually all states have used Myanmar except
the United States. I expect that will change in due course. It took
some two decades for the United States to call the capital of China
Beijing rather than Peking.
I would like to comment on the reforms and changes that have taken
place in Myanmar under the new administration that came into power in
March 2011. It is most appropriate near its first anniversary to assess
the prospects for progress in that country, and possible responses from
the international community, and more specifically from the United
States, and to consider the U.S. national interests in Myanmar.
Since the remarkably open and self-critical inaugural speech of
President Thein Sein on March 30, 2011, both foreign observers and
Burmese have been astonished by the breadth, scope, and speed of the
reforms articulated by the President. Although many foreigner observers
called the elections that brought him and his government to power a
``sham,'' which they were not, or ``deeply flawed,'' which indeed they
were by any objective international measure, so comprehensive have been
the positive changes both articulated and instituted that the world has
generally recognized that this is not simply a repeat of the
maladministration of the past half-century of direct and indirect
military rule. Rather, these changes are the most important chance
since 1962 for Burmese society to redeem its lost social and
developmental promise. The public recognition of the dire state of the
state was the first step toward comprehensive reforms that have been
needed since the military coup of that year.
Yet external critics of the military junta have engaged in an
obvious and intensive campaign in Washington from denigrating the
reforms to encouraging the slowing of the process of modification or
elimination of sanctions. They variously attributed the articulated,
planned reforms of President Thein Sein as an insincere, superficial,
and cynical attempt to placate foreigners to win approval for Myanmar
to chair the ASEAN summit in 2014, and to eliminate the rigorous
sanctions regimen imposed, most severely, by the United States.
Although the present government is an outgrowth of the military, which
had ruled the country since 1988, and although its abuses are well
documented, I believe this conclusion is both simplistic and wrong.
Some adherents of this persuasion have called for continuing the U.S.-
imposed and sequenced sanctions until a change in government occurs
and/or comprehensive reforms in all fields have been achieved.
There are two inaccuracies in this approach. First, serially
introduced sanctions (1988, 1997, 2003, 2008) are not an end: they are
simply a tactic to achieve the changes in policies or actions
objectionable to the United States. During the administrations of
Presidents Clinton and Bush, that goal was regime change--honoring the
results of the May 1990 elections that were swept by the opposition
National League for Democracy (NLD). The Department of State reports to
the Congress during that period repeatedly called for recognition of
the NLD's right to rule, even though the elections were for a new
constitutional convention, not a government. In effect, the U.S.
position to the junta was: get out of power and then we will talk to
you. This was, I submit, patently absurd. President Obama changed that
policy to call for reforms rather than regime change and this created a
new and positive dynamic to the bilateral relationship to which the
Burmese responded. That policy--pragmatic engagement--recognized the
internal U.S. political need to continue sanctions but to engage in
high-level dialogue. That policy has proven to be positive.
The second problem, that of awaiting comprehensive reforms in all
fields in which the United States has especial interests (including but
not limited to human rights, labor, religion, child soldiers,
trafficking, minority problems, censorship, rule of law, constitutional
changes, etc.), is that reform is a never-completed process, for as
progress is made in one or several fields, there is always more to be
done. The United States has significant experience in that arena. So
awaiting the resolution of all issues in all areas of concern is a
surrogate for continuing in perpetuity the sanctions in some form and
to some degree. Rather, the easing of some sanctions is more likely to
be a spur to progress, rather than an impediment to positive changes in
that society. In spite of NLD claims that broad sanctions have not hurt
the Burmese peoples, this is patently inaccurate. ``Targeted
sanctions'' are also likely to be ineffective in promoting change in
that society.
The scope of the planned and implemented changes in Myanmar is
remarkable, comprehensive, and encompasses major elements of that
society. A cease-fire with the Karen, the longest rebellion in the
modern world beginning in 1949, has been achieved. Political prisoners
have been released, and any remaining number (variously calculated and
in dispute) incarcerated is under review. By-elections have been held
on April 1, 2012, swept by the NLD, conclusively illustrating that they
were free and fair. Aung San Suu Kyi and her colleagues can take their
seats in Parliament. A liberalized labor law has been enacted.
Censorship has been vastly reduced. Currency reform has started and
other economic changes, including a new foreign investment law, are in
process. Construction on a major Chinese dam has been stopped because
of popular antipathy. The President is committed to better health and
education with increased budgets for those fields. He is concerned over
better minority relations--peace not simply cease-fires, which are but
the first steps in that process. Aung San Suu Kyi has publicly
indicated that she believes that President Thein Sein is sincere in his
desire for positive change.
Institutionalizing these planned changes, however, is more
difficult under the new governmental system than under the previous
junta. By ruling by decree under a military command system, the junta
could institute its will by fiat. Policy became fact--for better or
worse. Now, this new government must first articulate proposed
policies, then translate them into laws and pass them in the
government-controlled legislature but with significant debate, and
finally implement them without the same degree of authoritarian control
that previously existed. We have seen that in the Kachin State, for
example, centrally mandated cease-fire policies are not easily or
smoothly transformed into action: the center under the new government
will have more difficulty in controlling the periphery. However much
the new government is the product of the previous military regime,
differences between both are already apparent.
Is such broad progress irreversible? There are conflicting views.
It is highly unlikely that the changes could be comprehensively
rescinded without major popular unrest. But there are two aspects of
possible regression: internal issues and foreign responses. Internally,
there are obviously those within the old regime who still have
considerable power and who are against change or want change to proceed
slowly. Some in society will lose their privileged positions, access,
and economic opportunities, and will be concerned. If those close to
the previous military regime see the government's reform efforts
falter, or if reforms come too quickly to be ingested, or are badly
implemented, or indeed if they are not implemented at all, then
retrogression is possible. Internal momentum thus must be maintained at
a pace consistent with capacity if internal receptivity is to continue,
and the people must begin to feel that reforms are having a positive
impact, or have the potential to improve their lives.
External impacts on the reforms must be deftly undertaken. The
administration wants results from the reforms, ranging from practical
economic benefits in trade and investment that the relief from
sanctions would bring, to a more balanced foreign policy, increased
international political legitimacy, respectability for the military's
role in society, and indeed recognition of their patriotic concerns
over the well-being of the people. If the response from the outside
community is inadequate, and importantly the United States is the
central actor in this drama because of its power and past negative
role, then Burmese who have been against reforms could claim that these
changes were unsuccessful, and the old, authoritarian ways were better.
If, on the other hand, the United States or other foreigners were to
claim credit for the reforms and they were seen to be instituted under
foreign auspices and serve international--rather than Burmese--needs,
then a negative nationalistic reaction could set in.
To date, the U.S. response to the new government has been
appropriate and successful. The U.S. executive branch's measured
engagement and congressional sensitivities are understood at the
Burmese Cabinet level. They know that resolution of the sanctions
issues is both legally complex and politically charged, and is likely
to be a lengthy process. Progress has already been made, and the
Burmese recognize these changes. Although realizing that some forms of
sanctions are likely to continue for some time, key economic advisors
to the Burmese President have called for modification of the sanctions
that would have a positive impact on the Burmese antipoverty program.
They call for the removal from the sanctions of certain types of labor-
intensive industries, especially those employing women, that would
provide jobs, and the lifting of the prohibition of the use of U.S.
banking facilities, as this increases the problem of Burmese
competitiveness on the world's markets. Such changes would have both
positive social and economic effects.
United States public diplomacy toward Myanmar has been composed of
a single strand--human rights and democracy, when normally the United
States has multiple concerns in any country. That policy has been
influenced by Aung San Suu Kyi, or what the United States, or her
followers, believed to be her views. I have regarded reliance on any
single foreigner, no matter how illustrious or benign, in any country
as the primary influence on U.S. policy toward that country as
inherently unsound. Now, Aung San Suu Kyi is in government and a member
of the legal opposition. She will have the freedom to articulate her
views and they will be reported in the Burmese media. As she, and the
U.K. Prime Minister, have called for the suspension of sanctions
(``suspension'' is a political euphemism and more acceptable than
``removal,'' but their meaning in this context is the same because
sanctions could be reimposed at any time), there is a clear path to
move ahead on their gradual elimination in the interests of the Burmese
people.
If these changes are not superficial or insincere, as I have tried
to illustrate above, then will they bring democracy as understood in
the West and the United States? Certainly not in the near term. The
military have designed a system where their control will remain over
policies they regard as essential to the state and their interests.
They have explicitly done so in the 2008 constitution that includes 25
percent Active-Duty military in the legislatures at all levels, and in
various other provisions. Their interests include military autonomy
from civilian control, the unity of the state, and the importance of
their interpretation of national sovereignty. Even under a market-
oriented economy, which they espouse, and greatly enhanced foreign
investment, the military's economic interests are highly important and
influential though military-owned conglomerates that are not part of
the public sector. Even so, built into the military-mandated 2008
constitution are elements of pluralism that need fostering both from
internal and external sources. Even under such a system, there is ample
room for improvement in social and economic factors.
The most immediate problem facing the new administration is also
the oldest since Burmese independence in 1948, and has been the
essential issue facing the state since that time. That is, the balance
between the power and resources of the central government, dominated by
the ethnic Burman majority, and the diverse minority peoples who
comprise about one-third of the population but who occupy a far greater
proportion of the land base containing much of the natural resource
wealth of the state. Majority-minority relations have been the primary
problem of the country since 1948; no civilian or military government
has resolved them, with the military regimes exacerbating the issue.
Every major ethnic group has had a significant element of its
population in revolt at some time, and in spite of 17 official cease-
fires, peace where it exists is still fragile.
Some minorities half a century ago wanted independence, but now
will settle for some sort of federal structure, but federalism is
anathema to the military who have argued for 50 years that it is the
first step toward secession. The problem is exacerbated because all
neighboring states (except Laos), and the U.K. and the United States,
have supported rebellions or dissidents across borders that are
ethnically porous. The solution to minority issues is urgent, but the
credibility of all foreign powers in assisting resolution, given past
history, is questioned by the central government. Yet devolution of
more authority and revenues, and increased cultural respect of the
minorities and languages and cultures, beyond the appropriate rhetoric
of the constitution, is required if a long-term resolution is to be
found. It should also be remembered that the NLD is a Burman party, and
although it had called for a federal structure, it has only limited
influence in minority regions.
One major challenge to continuing reform is the lack of an adequate
capacity in almost any field. This is the result of isolation both
political and intellectual, and the effective collapse of standards in
an education system that was once the pride of the region. Capacity-
building is essential in any field, including the modern international
training of teachers both in country and abroad, especially in the
ASEAN region. As this process continues and as foreign public and
private assistance flows in, experience in other states has shown there
is likely to be intense competition for these capable individuals to
the detriment of coordinated foreign assistance.
This paucity of capacity is exacerbated by the weakness of
institutions aside from that of the military itself. This is both a
product of past military attempts to consolidate power by weakening
institutions and organizations not under their control, but it is also
an aspect of the personalization of power in Burmese society, where
loyalty has been to individuals and not to institutions. The building
of pluralistic institutions, public and private, is an important
element of change and growth.
Although U.S. policy has consistently focused on democracy
building, a preliminary stage toward that goal would be to concentrate
on the building such pluralism, and the movement from a unitary state
to a more complex system--one that is locally responsive to local
needs. The potential institutions for this change are built into the
new constitution: the state, regional, and minority legislatures at
local levels. Although they may not have been originally conceived a
serving this role, the potential is there. The strengthening of all
legislatures at central and local levels could be an important focus of
foreign assistance.
The regional impact of the Myanmar reforms is highly significant.
The European Union will likely drop its sanctions this month. ASEAN
certainly regards the changes as strengthening ASEAN as a whole.
Thailand has major plans to develop the Dawei (Tavoy) region as an
industrial hub, building industries that (as the former Thai Prime
Minister noted) could not be constructed in Thailand because of
environmental concerns. After China, Thailand is the second-largest
investor in Myanmar. Japan, after pressure from the United States to
withhold all but humanitarian aid, is prepared to provide major
assistance and to forgive Myanmar's massive debt to that country. It
has diverse historical and contemporary interests in Myanmar, not the
least of which is moderating Chinese penetration and influence. India
has important policy objectives, part of which, like Japan, relate to
moderating China's domineering role, but also importantly are focused
on India's own Northeast region which has been plagued by rebellions.
Delhi is working with Naypyitaw to develop a transit route (The Keledan
River Multi-Modal Transport Project) to the Northeast through Myanmar's
Rakhine and Chin states.
It is China, however, that is critical to Myanmar and important in
U.S. relations with that country.In May 2011, China and Myanmar signed
a ``comprehensive strategic cooperative partnership'' agreement.
Although China has signed such agreements with other states, this was
significantly the first time with Myanmar. Some erroneously thought
that Myanmar had become a client state of China. Yet several months
later President Thein Sein ordered stoppage on work on a major $3.6
billion Chinese dam on the Irrawaddy River in a culturally sensitive
area in the Kachin State, as he said he listened to popular opinion
against it.
Although China has erroneously viewed the changed Obama Myanmar
policy as part of a planned containment of Chinese interests in the
region, there are important potential avenues of cooperation between
the United States and China related to Myanmar. China fears two
potential dangers in that country: a people's uprising like that in
1988, or minority warfare near the Chinese frontier that could
jeopardize Chinese infrastructure projects in those regions.
China officially welcomes the U.S. improvement of relations with
Myanmar, as long as that influence does not threaten Chinese national
interests, which are important in Myanmar, which has been built into
major Chinese economic planning. China recognizes that the best
antidote to civil unrest in Myanmar is broad-based development that
only the West can help bring, so there are potential avenues for
cooperation there. The United States and China could also collaborate
on assisting the process of reconciliation with the minorities on the
border with China. Such cooperation would serve Chinese interests,
improve the lives of the minority peoples in those areas, and open
those areas to U.S. and international business as well. Although
suspicions abound in Myanmar on U.S.-China relations, this need not be
the case. The United States would have to recognize Chinese national
interests in its oil and gas pipelines and in environmentally and
socially sound hydroelectric projects, while China would have to
understand the U.S. concerns for a stable and prosperous Myanmar in
light of the U.S. alliance with Thailand and the burgeoning
relationship with India.
The United States needs to continue its engagement with Myanmar by
responding to positive plans there with supportive policies and actions
designed to improve the condition of the Burmese peoples, which is in
the national interests of the United States.
United States has a national interest in the development of a
stable, prosperous, cohesive yet pluralistic Myanmar with a responsible
and balanced foreign policy.
In summary, U.S. interests in Myanmar would be served by the
following actions:
Speeding the Senate confirmation of Derek Mitchell as
resident Ambassador in Myanmar. His work as ambassadorial
coordinator has been exemplary.
Nominating an appropriate, knowledgeable person to take his
place as the regional coordinator on Myanmar policy to
supplement the internal U.S. ambassadorial role.
Officially using Myanmar as the name of the state.
Developing a timetable for quid pro quo relief from
sanctions as reforms in Myanmar continue to be implemented
while providing immediate changes in banking and in certain
labor-intensive industry regulations.
Beginning dialogue with the Chinese on collaborative efforts
to provide economic assistance and to assist in ameliorating
minority problems along the Chinese periphery.
Supporting reputable indigenous civil society organizations
and delegating to the U.S. Embassy in country the authority to
use U.S. official assistance directly to state-sponsored or
supported institutions if and when local condition justify such
action.
Encouraging U.S. and ASEAN institutions to engage in
extensive capacity-building across a broad spectrum of
society's needs.
Encouraging the growth of autonomous, intellectually
respectable institutions of higher education and learning.
Provision of educational materials that would support both
internal capacity-building and higher education.
Encouraging the U.S. private, educational, and no-profit
institutions to consider support to both resident and
nonresident teachers/consultants to assist the Burmese in these
processes.
Supporting the development of appropriate concepts of law,
legal institutions and associations, and an independent
judiciary, as the Burmese Constitution stipulates.
Working with the Burmese Government on plans for the
reintroduction of a non-lethal IMET training.
Encouragement of the Burmese human rights commission
activities.
Advocacy on analysis and amelioration of environmental needs
related to Myanmar's natural resources and economic expansion.
This is a unique moment in U.S. Myanmar relations, and it should
not be ignored.
Senator Webb. Thank you very much.
Mr. Manikas, welcome.
STATEMENT OF PETER MANIKAS, SENIOR ASSOCIATE AND REGIONAL
DIRECTOR FOR ASIA PROGRAMS, NATIONAL DEMOCRATIC INSTITUTE,
WASHINGTON, DC
Mr. Manikas. Thank you very much, Mr. Chairman. It's a
pleasure to be here. I look forward to testifying on the recent
reform efforts in Burma. I have been involved in Burma for
quite some time, but it's been only recently since we've had
the opportunity to actually travel there. I've made two trips
since January, the latter one being around April 1 as part of a
two-member delegation to observe the by-elections.
During both of those trips, though, I found widespread
agreement among all the people that I talked to that the recent
changes are very significant and that they've led to a
significant opening of the political space. At the same time, I
think everybody's quite concerned about how far these reforms
are going to continue to go and how much more needs to be done
to help ensure that democratization continues.
As the nation heads toward elections in 2015, there is not,
for example, a level playing field. With 25 percent of the
seats in the legislature reserved for the military, opposition
parties face a very difficult challenge in garnering a
majority. Also, the constitution is unclear on the scope of the
civilian government's authority over the military, and the
military retains a veto power over constitutional amendments.
In addition, human rights abuses persist, particularly in
the border areas, and, while many political prisoners have been
conditionally released, others remain in custody.
Mr. Chairman, the recent by-elections provided the first
opportunity in more than two decades for the NLD to compete for
public office and, while there were several problems in the
elections, they marked an important step forward in the reform
process.
I was invited by the U.S. Government to view the by-
elections along with a colleague from the International
Republican Institute, but because of the limitations on our
ability to observe every aspect of the electoral process it was
not really an international election observer mission that met
international standards. However, we were able to see more than
we initially expected. Polling officials often invited us into
polling stations, despite the lack of legal authority to do so.
There are several election-related issues that I outlined
in my written testimony that should be examined, I think,
further. These include the lack of a legal authority for
nonpartisan election monitors and problems in advance voting.
While these issues and others are identified in my written
testimony, obviously they didn't affect the outcome of this
election, but their impact in 2015 may be magnified in a much
more hotly contested political environment.
In addition, there are several reform initiatives being
explored or pursued by reformers inside and outside of
government that the international community should support.
These include: One, efforts to secure a lasting peace in
the ethnic areas. Exploring how other countries in the region,
such as Indonesia, have dealt with decentralization in the
context of a substantial ethnic diversity might be very helpful
in that regard.
Two, reviewing the constitution, especially the imbalance
between civilian and military authority.
Three, promoting the rule of law by establishing an
independent judiciary.
Four, strengthening the legislative process, which can be
an important forum for debating and adopting further reforms.
And five, increasing the capacities of political parties
and civil society, which have to modernize and adjust to a more
competitive political environment.
Mr. Chairman, the challenge of the international community
is how to calibrate a response to the changes that are
occurring. That response needs to support the reforms that are
taking place and encourage further democratization, while also
recognizing that the transition process is a work in progress
and that reforms to date must be expanded and sustained.
NDI hopes that the international community will continue
its efforts to help reformers in pursuing their goals and
fulfilling the aspirations of the Burmese people.
Thank you very much.
[The prepared statement of Mr. Manikas follows:]
Prepared Statement of Peter M. Manikas
Mr. Chairman and members of the subcommittee, I appreciate the
opportunity to speak about recent events in Myanmar and the ongoing
efforts of the people of Burma to advance political and economic
change. The nation's new openings have led to opportunities for
organizations like NDI to travel within the country; and in January I
traveled to Yangon and Mandalay with a small NDI team to assess the
political environment. Earlier this month I participated as part of a
two-member U.S. delegation sent to view the April 1 by-elections.
recent developments
After decades of military rule and economic stagnation Myanmar is
beginning to institute political and economic reforms. In recent
months, the country has seen in rapid succession: cease-fire agreements
with most of the ethnic groups long at war with the central government;
the release of a large number of political prisoners; the easing of
restrictions on the media and civil society; amendments to the
electoral laws paving the way for the National League for Democracy
(NLD) to participate in the political process; and the holding of by-
elections in which the NLD won all but one of the constituencies it
contested. As a result of the by-elections a new generation of
reformers will soon be entering the nation's legislative chambers.\1\
The government also has announced an overhaul of its currency system
and recently instituted a managed floating exchange rate. In addition,
a new foreign investment law has been introduced in Parliament.
---------------------------------------------------------------------------
\1\ On April 23 the newly elected NLD members of Parliament
declined to take their seats because of the requirement that they take
an oath ``to safeguard the constitution.'' The oath appears as an
appendix to the nation's constitution and the dispute likely
foreshadows further contention regarding constitutional issues.
---------------------------------------------------------------------------
The reforms implemented and underway are impressive and should be
acknowledged and responded to by the international community. It is
equally important, however, to recognize that Burma is at the
beginning--not the end--of a reform process and the outcome is not
assured. The nation is still grappling with the challenge of
transitioning from military rule to a more open political and economic
system. The political situation is fragile and much more needs to be
done to help ensure that the democratization process continues.
As the nation heads toward national elections in 2015, there is
not, for example, a level playing field for the participants in the
nation's political process. Since, according to the 2008 constitution,
25 percent of the seats in the national and regional legislatures are
reserved for the military, political forces aligned with the military
need to secure only one-third of the contested seats to attain a
majority in each chamber. Opposition parties, on the other hand, would
need to win twice as many elective seats--two-thirds--in order to
garner a majority.\2\
---------------------------------------------------------------------------
\2\ For instance, there are 440 seats in the Pyithu Hluttaw, the
lower house of the national legislature. Of these, 110 are reserved for
the military. The remaining 330 seats are filled through election. For
allies of the military, a controlling majority would be obtained by
securing 111 elected seats giving them a total of 221 seats (110
reserved plus 111 elected seats). Opponents of the military would need
to win 221 of the 330 contested seats (or two-thirds of the contested
seats) in order to have a majority.
---------------------------------------------------------------------------
Once elected, the constitution is unclear on the scope of the
civilian government's authority over the military. Article 6(f), for
instance, states that the defense services are to participate in the
national political leadership of the state. Article 20(e) assigns the
military the primary responsibility for ``safeguarding the
nondisintegration of the Union, the nondisintegration of national
solidarity and perpetuation of sovereignty.''
In addition, while progress has been made in negotiating peace
agreements with the nation's ethnic groups, human rights abuses
persist, particularly in the border areas. For many who live in remote
rural areas, life has not changed. And, while many political prisoners
have been conditionally released, others remain in custody. Those that
have been released are unsure of their freedom to engage in the
political process. Political space has opened for democratic activists,
but enforcement of the rights of assembly and expression remains
uncertain.
The reform agenda established within government and in the
political opposition--requires international engagement and support to
help ensure that democratization proceeds.
the april 1 by-elections
The recent by-elections provided the first opportunity in more than
two decades for the NLD to compete for public office and the success of
the electoral process was an important step toward political
reconciliation. The government's invitation to the international
community to view the election, coming just a few days before the
elections were to be held, was a positive development, although it fell
short of international standards for election observing. The
Declaration of Principles for International Election Observation,
launched at the United Nations in 2005, for example, establishes
fundamental standards for observation missions, including observing the
preelection period and deploying a sufficient number for observers to
assess an election nationwide. There was no opportunity to observe the
campaign period, no legal authority to enter polling stations and no
opportunity to view the aggregation of results. At the same time, the
invitation for the international community to witness the process was a
significant step toward increasing the transparency of the elections
and opening Burma to the outside world.
Originally 48 seats were to be contested, but the elections in
three constituencies in Kachin state were postponed due to the
government's concerns about security. Thus, a total of 45 by-elections
were held. These consisted of 37 seats in the lower house (Pyithu
Hluttaw); six seats in the upper house (Amyotha Hluttaw); and two seats
in the regional Hluttaw. The NLD ultimately fielded 44 candidates and
43 of them were successful.
I was invited by the U.S. Government to view the by-elections,
along with a colleague from the International Republican Institute. We
constituted the U.S.-based delegation; however the U.S. Embassy as well
as other embassies in Yangon deployed their staffs throughout the
country as the elections approached. Because of the limitations on our
ability to observe every aspect of the electoral process, it is not
possible to evaluate the by-elections as a whole. However, we were able
to see more than we initially expected and polling officials often
invited us into polling stations despite the lack of specific legal
authority to do so.
Throughout the day we visited nine polling centers in Naypyitaw and
the surrounding area. The management of the polls was quite different
from center to center, but in general we saw no election-day
intimidation of voters or candidates and, despite some significant
shortcomings in administration, most of the polling centers seemed to
be staffed by well-intentioned officials. Polling agents from the NLD
and Union Solidarity Development Party (USDP) were present at every
station we visited. Either officials invited us into the station or we
had an unobstructed view through doorways and windows. At the closing
that we witnessed, the count was conducted in the view of the party
agents and was reasonably efficient. But still, a lack of transparency
was evident. For example, the final vote count that we witnessed did
not include an announcement of the results. We had to obtain that from
the NLD party agent. Nor were the results visibly posted on or near the
polling station. We saw no international or domestic observers in any
of the polling centers we visited.
In one polling center--the most rural center that we visited--
voters had been given a white slip of paper, provided by the USDP that
was designed to enable the prospective voter to find his name on the
registration list. This was a common practice in some townships and was
used by both parties to assist illiterate voters. At this station,
however, the slip of paper also contained an illustration of a voter
placing a check mark in the box for the USDP. The slip was given to the
officials when the voter went to the registration desk at the polling
station and the slip was retained by the election officials. Therefore,
the polling station now had a record of that particular voter being
linked to the USDP. In the other polling stations where a similar
practice occurred, the slip did not link the voter with a party and was
not retained by election officials. It is not hard to imagine how this
practice could be abused--for example by denying entry to someone who
did not have a USDP-provided slip. There were other peculiarities about
this polling station. We received the least cordial greeting there; in
fact, no one would speak to us. The center was surrounded by a gate and
at first we were denied entry, but the entrance later opened for us.
Since we could not enter the polling station at this location, we could
not talk to the polling agents. Indeed, we could not be sure that
agents were present. While this might be an isolated instance, it could
be the case that in the most remote rural areas similar practices are
followed, beyond the scrutiny of any observer.
We also saw another questionable practice in polling that took
place on the grounds of the Ace company. The election officials marked
the white slips with a green pen. The voter could later take the white
slip to a camp that was set up and receive a free meal. It is not clear
if this represents a civic-minded gesture to encourage people to vote
or was designed to influence the voter's choice.
There were several issues that should be examined going forward:
While political party agents could observe the polling,
nonpartisan election monitors did not have the legal authority
to enter the polling stations; domestic election monitors were
deployed on election day, conducted their activities and
reported their findings, but were constrained by their lack of
legal status as observers;
There seemed to have been no effort to ensure that those who
voted in advance of election day, as permitted by the election
law, did not vote twice--once in the days preceding the
election and again on election day. There was no inking used on
either day and we saw no evidence that voters were crossed off
the registration list when they voted early; the advance votes
were locked in a cabinet at a township office, guarded by
election officials and distributed to the proper polling
station on election day. The security of the ballots is highly
problematic, particularly because the number of advance votes
at some stations could affect the outcome of an election;
The ballots delivered to each station were exactly equal to
the number of registered voters. There was no room for error
(though the accuracy of the registration list is dubious);
There were no serial numbers on the ballots and no apparent
way of linking a ballot to a polling station; and
The lack of inking for the advance vote and on election day
poses a potential threat of fraudulent voting.
Obviously, these problems did not affect the outcome of the
elections. However, if they persist they could pose more substantial
issues in the 2015 electoral contests when much more is at stake and
tensions among the political rivals are heightened. The problems
identified are not difficult to remedy, but addressing them effectively
will require that the Union Election Commission be receptive to
reviewing its procedures and drawing on regional and global best
practices. The Commission is appointed by the government and its
independence is, therefore, suspect. Election reform will undoubtedly
be high on the list of priorities for the newly elected members of the
national legislature.
the way forward
While the April 1 by-elections and the reforms that preceded them
were significant and important steps, reformers inside and outside of
government will undoubtedly be debating an ambitious reform agenda,
which includes:
1. Addressing the Ethnic Conflicts. While cease-fire agreements are
in place with almost all of the ethnic groups, this 60-year-old problem
persists, threatening the stability of the country and jeopardizing
democratization efforts; cease-fire agreements will have to become
peace agreements and they will likely be ultimately debated in
Parliament.
2. Constitutional Development. Aung San Suu Kyi has identified the
need to address the constitutional imbalance between civil and military
authority, such as removing the reserved military seats from the
constitution, as a top priority. Some reformers in government have
acknowledged that addressing this and other constitutional concerns
will be needed to achieve national reconciliation. Reformers have
indicated an interest in Indonesia, which also reserved temporarily
military presence in the Parliament, as a model for constitutional
development in this area. Federalism and other means for decentralizing
power to help resolve ethnic conflicts will likely be discussed in the
context of constitutional change.
3. Electoral Reform. There is a growing recognition that steps must
be taken to remedy shortcomings in election administration, including
securing the independence of the Union Election Commission. This will
become increasingly important for enhancing public confidence in the
electoral process as the 2015 elections approach.
4. Establishing the Rule of Law. An independent judiciary is needed
to protect the rights of those participating in the political process
and ensure the equal application of the laws.
5. Strengthening the Legislative Process. Shwe Mann, the speaker of
the Lower House of Parliament, has indicated that he is receptive to
assistance in modernizing Parliament so that it can address more
effectively the problems of corruption and economic development.
Parliament will face new challenges as it adapts to a new multiparty
political environment where the rights of the opposition will have to
be recognized in the country's legislative chambers. The new
legislature also faces the challenge of addressing the balance of power
between Parliament, the Executive and the military.
6. Political Party Development. The nation's political parties are
seeking assistance in adjusting to the new political environment. The
victory of the NLD may well be a reflection of the overwhelming
popularity of Aung San Suu Kyi, rather than the party's institutional
strength. The USDP, too, must adjust and modernize to meet the demands
of a more competitive political system.
7. Civil Society Strengthening. There has been little experience in
Myanmar with an active civil society and civil society activists are
pressing for reforms so that they can operate within the framework of
the law. For example, many civil society groups are operating in the
absence of legal registration; they are also seeking assistance to
build their capacity to operate, particularly in the area of democratic
development, which in the past has not been recognized as a permissible
civil society activity.
8. Media Access. To establish a level playing field for all of the
participants in the political process, access to the media will be
essential. There was little coverage of the by-elections in the media
and no laws that require equal treatment of the candidates.
9. Human Rights Monitoring. Human rights violations continue
throughout the country, particularly in the ethnic areas. Monitoring
and reporting on the human rights situation can help focus attention
on, and raise public awareness of this issue.
10. Developing a Telecommunications Policy. Economic and political
development depends in part on the ability to connect citizens
throughout the country in a cellular network that is affordable and
reliable. Currently, no such network exists, though reformers in and
out of government have identified this as a pressing need. Such a
cellular network would be important for the rapid transfer of
information by election observers in the national elections of 2015.
Mr. Chairman, the challenge confronting the international community
is in how to calibrate a response to the changes that are occurring.
That response needs to support the reforms that are taking place and
encourage further democratization, while also recognizing that the
transition process is a work in progress and that the reforms to date
must be expanded and sustained.
NDI hopes that the international community will continue its
efforts to help reformers inside and outside of government in pursuing
their goals and fulfilling the aspirations of the Burmese people.
Senator Webb. Thank you, Mr. Manikas.
Just for your information, I think I'm now missing my
second vote. There may soon be a posse out to bring me over to
the Senate floor. But we'll continue as long as they allow me
to.
Dr. Jackson, welcome.
STATEMENT OF KARL JACKSON, PH.D., C.V. STARR DISTINGUISHED
PROFESSOR OF SOUTHEAST ASIA STUDIES, SCHOOL OF ADVANCED
INTERNATIONAL STUDIES, JOHNS HOPKINS UNIVERSITY, WASHINGTON, DC
Dr. Jackson. Thank you. Thank you very much for inviting me
to testify. It's a privilege to be back here in the Senate
testifying after all these years, and I too would like to
reiterate what Joe Yun said in praise of you for conducting
these hearings.
I have only really two major points. I've been back and
forth to Myanmar now nine times in the last 2\1/2\ years. There
is a uniformity of opinion within the country, regardless of
whether you're talking to released political prisoners, members
of the government, or people in the lobby of the hotel, there's
a unanimity of opinion that things have changed, there is no
going back, and that the military regime is over.
I believe that the time has come to change the way we
define our strategy for dealing with Myanmar. I think we need a
more active strategy for encouraging democracy and, rather than
a reactive strategy, in which we wait for them to make the
first move and then we respond, hopefully in kind. I think we
have to change our own role definition from that of teacher-
disciplinarian to that of a more open-handed partner in the
process--the process of trying to move this country, Myanmar,
toward democracy.
Now, my second point is whether the reforms survive depends
vitally on elite opinion inside Myanmar, more vitally on elite
opinion within Myanmar than on anything else. And the subelites
that I'm talking about are the military, the bureaucracy, the
business elite, and the civil society elite. We should deal
actively, actively, with all four of these in order to make
sure that all four of these subelites realize that the road to
reform is the road to benefit for them, for each of them, for
civil society, for the bureaucrats, for the business elite, and
for the military elites.
The whole question revolves around the politics of
democratic reform's survival. This is not an assured thing at
this point in time and our policy should be tailored to trying
to make sure that the process of democratization goes on.
I would just list four things. I think we should
incentivize each of these four subelites. We should obviously
continue to cultivate civil society, not just a single group
but across the board, with particular emphasis on activities
that lead different parts of Burmese or Myanmar society to deal
with one anther. In other words, we should encourage civil
society groups that involve more than a single ethnic group.
Second, we should lower the transaction costs for Myanmar
business persons by decreasing or dropping as many financial
sanctions as we possibly can. We should try to open up free
access to the American market, especially for myanmar's small
and medium enterprises. We should allow Americans to invest in
schools, hospitals, hotels, and SMEs, to generate employment
within Myanmar.
We should also supply technical assistance to reforming the
bureaucracy. This is a military, top-down model of bureaucracy
that frankly the people who operate it don't fully know how to
change. I would advocate greater emphasis on rule of law
programs, rather than the ``ruler's law'' programs that have
dominated Burma for the last 20 years.
Finally, in order to encourage elements within the military
to support the democratic reforms, I think we should open up
slots within the U.S. military education system for a limited
number of the Myanmar military. In other words, I think we
should take ``yes'' for an answer.
Thank you.
[The prepared statement of Dr. Jackson follows:]
Prepared Statement of Karl D. Jackson
Let me begin by stipulating my answers to several questions that
have preoccupied us all over the last several years. We have debated
whether any change could take place in Burma. Subsequently we debated
whether any real change had transpired. Now we are debating whether
enough change has taken place to satisfy us, on the assumption that we
will decide the future of Burma. What nine separate trips in a little
over 2 years have taught me are: (1) significant changes have already
taken place; (2) reforms are real, and although there are certain to be
setbacks, the reform trend seems likely to continue; and (3) absent
further changes the United States will be playing an increasingly
marginal role in a fast-paced drama in which almost all other nations
have dropped or suspended sanctions to take advantage of growing
opportunities.
u.s. national interests
The questions with which we should be concerned now are:
1. Why should the United States be interested in Myanmar? What
long-term U.S. national interests are involved in Myanmar?
2. What can the United States do now to encourage the emergence of
a new, more peaceful, friendly, and democratic Myanmar?
In real estate three things determine value: location, location,
and location. The same can be said of Myanmar. It is strategically
situated below China, between the emerging mega-nations of Asia--India
and China. Myanmar has become increasingly reliant on China for
weapons, official development assistance, and foreign direct
investment. If Myanmar were to become a full-fledged client state of
China, this would change the regional strategic balance. To avoid
overdependence on any one nation, Myanmar officials over the past year
have articulated a more omni-directional foreign policy that is equally
friendly toward ASEAN, China, India, Japan, and the United States.
Beneath the surface, even when the relationship with China seemed most
intimate, Burmese nationalism and antipathy toward the growing number
of Chinese nationals working inside Myanmar motivated the Myanmar elite
(including most especially the military elite) to look outward, first
to ASEAN and now to the entire outside world (including the United
States).
The United States could safely ignore more than 55 million people,
living in a resource rich country the size of Texas, located just above
the vital Strait of Malacca, as long as Myanmar was consumed by its own
internal conflicts and led by a military elite that largely ignored,
and was ignored by most of the outside world. As long as the outside
world remained more or less uniformly willing to ignore Myanmar, the
United States could afford to overlook Myanmar's strategic and economic
potential while concentrating almost exclusively on the odious
qualities of the Burmese Government. The world has changed. China has
risen. The United States has pivoted back to Southeast Asia. Myanmar is
now simply more accessible in political and economic terms than it has
been for the last 50 years. Will the United States take advantage of
the new opportunities or will it miss the boat?
developments in myanmar
Domestically driven political developments in Myanmar have created
the first real opportunity in 50 years for the outside world to play a
supporting role in Myanmar's development. A new constitution is in
place (guaranteeing the role of the military), but the first multiparty
Parliament since 1962 is passing laws and requiring the government to
take notice of its views regarding budgetary allocations. Most
political prisoners have been freed, press censorship has been
partially relaxed, the government is more responsive to public opinion,
and the by-election of April 2012 appears to have been free and fair.
Aung San Suu Kyi and President Thein Sein are cooperating with one
another, even while Aung San Suu Kyi is rebuilding her party, the
National League for Democracy, with an eye toward the election of 2015.
A process of democratization is well underway in Myanmar but is far
from complete. There is remarkable unanimity of opinion inside Myanmar
that the process is real and has gone so far that it would be difficult
to reverse.
After having been wracked by 40 insurgencies since the 1940s, the
Government of Myanmar has now managed to reach cease-fires with most,
but not all, of its armed internal competitors. Exports of natural gas
and gems have indicated to the government that it can survive the
sanctions regime, but contact with the burgeoning economies around
Myanmar have convinced a significant segment of the Myanmar elite to
join the race toward a more prosperous modernity. The military remains
by far the most powerful sub-elite in the society. The army is not
uniformly supportive of the reforms themselves, but as long as
President Thein Sean's policies restore Myanmar's respectability,
increase domestic prosperity and maintain internal stability, the
officer corps remains unlikely to oppose the President's policies
overtly as long as the emerging, semidemocratic system does not attempt
to take away the military's wealth and privileges.
The economy is expected to expand by more than 5 percent in 2012.
Economic reforms are at least as important as political ones. The dual
track exchange rate has been abolished and replaced with a managed
float on April 1, 2012. Privatization under the prior government
benefited individuals who were well connected, but under President
Thein Sein the ``cronies'' are less favored, and even the cronies are
adapting to the changed political situation. A new foreign investment
law was drafted in March 2012, allowing joint ventures as well as 100
percent foreign ownership, and granting protection against
nationalization. With 80 percent of the world's teak supply, 90 percent
of its rubies, and the 10th-largest natural gas reserves in the world,
the economy seems poised for sustained growth if it can gain full
access to trade. The negative impact of sanctions fell most heavily on
those producing items that could not be readily smuggled. For example,
textile production initially fell by 30 percent and resulted in
significant layoffs of textile workers.
Over the past year the price of hotel rooms in Yangon has increased
by 50 percent, and the hotels are filled with Chinese, European,
Japanese, and Korean tourists, businesspersons, aid officials, and
foundation representatives, all of whom sense that there will be
attractive opportunities in Myanmar in a matter of weeks or months
rather than years or decades. Only Americans are conspicuous by their
relative absence. If Myanmar can maintain its current economic growth
rate for several decades and create significant infrastructure
connecting itself by road, rail, and pipeline to China and to Thailand,
Myanmar will become a land bridge between India, China, and the rest of
peninsular Southeast Asia and increased its strategic importance even
before its GDP/capita catches up with its economic potential.
human resource limitations
Myanmar, like Indonesia under the early New Order and Vietnam after
the initiation of its reforms, seems to be ``getting the policies
right,'' and this should generate significant increases in wealth.
There are two very real limiting factors: lack of capacity in
government and the absence of a modern university system. Since 1962,
top down, military style government predominated. Almost all decisions
were pushed up to the very top because of pervasive fears that
initiative would result in dismissal. Rule by decree rather than laws
governed outcomes. The judiciary disintegrated and the law schools were
closed. As a very-well informed Myanmar interlocutor remarked,
``Judicial reform must start from scratch. The members of Parliament
cannot draft laws because there are very few trained lawyers to advise
them.'' A bevy of changes are needed to economic rules and regulations
but there is almost a complete lack of persons who know how to write
them. As one of the most important advisors to President Thein Sein
said to me, ``We know we need to change, but we do not know what we
need to change or how to change it.'' International expertise,
especially in the form of resident advisors, is desperately needed in
the short run to prevent the economic momentum from being lost.
University education (once the strongest in Southeast Asia) has
been decimated by five decades of military rule and starved of
resources during 60 years of civil strife. The antigovernment movement
was repeatedly led by university students and the military reciprocated
by closing the universities for long periods of time and dispersing
undergraduate students permanently from the main campuses. Rangoon
University, once the finest in Southeast Asia, now consists of a large,
decayed, empty campus. Weeds grow everywhere among the closed and
crumbling buildings and constitute a metaphor for the country's
intellectual capacity. Expenditures have been so low that books,
rudimentary equipment for laboratories, IT facilities, and
internationally trained faculty are simply absent. In the health
sector, the hospitals and medical schools are short of almost
everything from decent beds to sufficiently trained staff, from access
to the Internet to sustainable standards of excellence. Virtually no
ambulance services exist (even in Yangon) and there are very high death
rates from accidents because of the poverty of emergency room care and
procedures. Appropriately focused technical assistance could have very
substantial impact on the lives of ordinary people who are not to blame
for past bad government.
the future of myanmar
Transitional democracies have often failed in spite of the world's
best wishes. Good will is not a substitute for good policy, and tactics
are not a substitute for strategy. What we are witnessing in Myanmar is
an attempt at top-down transition to democracy. Because of our past
sanctions policies and our inability to unravel them rapidly, we are
probably going to be unable to play a leadership role in seizing the
best chance democracy has ever had in Burma. The administration cannot
move as fast as it would like because it feels that Congress wants to
go slowly, but going slowly may result in the missing the moment for
reform.
Everyone wants the reforms to succeed and for Myanmar to become a
fully democratic and prosperous nation in the shortest possible time
period. The problem is top-down transformations are prone to failure.
The task of evolving from rule by a narrow military elite to more open
forms of government is inherently difficult and requires exceptional
leadership throughout the society as well as favorable external
circumstances.
There are at least five factors that must be present for a
successful top-down transition to democracy.
1. A middle level of strength and confidence within the government.
Governments that are too strong, don't reform, and governments that are
too weak can't reform. Reforms can be strangled from within by those
who had most of the power and derived most of the benefits from the old
way of doing things. Successful reform requires that a growing
proportion of the old powerholders become sufficiently confident and
willing to share increasing portions of the wealth and privileges with
wider groups in return for the prospect of a more rapidly growing,
distinctly richer, more peaceful and more respected society. The
proportion of established and emerging elites who have confidence that
reforms can bring about a win-win situation must increase with time in
order to sustain the reform movement. In Myanmar, holding the U.S.
sanctions in place will make it more difficult to increase the
proportion of military officers actively supporting democratic reform.
Small things, such as allowing access by the Myanmar military to the
U.S. military education system, might increase support for democratic
reform.
2. An ability to deliver. Political evolution can fail because the
benefits of reform take too long to arrive. Failed policies can kill
political evolution whereas successes can supply the political space
allowing the reform process to continue to unfold gradually. Early
successes in economic and social policies create the political oxygen
for subsequent political evolution. Regimes that improve schools,
medical care, and economic livelihoods often buy time for the private
sector to deliver increases in overall general welfare (see Asia over
the last 40 years). Increased delivery of government services, in
combination with private sector job creation, can increase the
legitimacy of newly minted democratic institutions. Broad sanctions
against investment and constrained access to technical assistance from
international institutions (such as the World Bank and the
International Finance Corporation) will make it more difficult for
President Thein Sein (perhaps in collaboration with Aung San Suu Kyi)
to improve hospitals and schools and to increase employment among those
most hurt by the sanctions. Allowing targeted investment in schools,
hospitals, and employment-producing industries such as tourism and
small and medium enterprises would enhance the prospects for success
and improve the lives of people in the bottom half of the social
structure. Unless economic success arrives in time, the political
reformers may be chased from power.
3. Institution building. Political transitions can only succeed if,
at the elite level, there is a generalized acceptance of new and
permanent ``rules of the game.'' Successful transition from elitist to
more popular forms of government require acceptance of the norm that
power can be shared and that at some stage the ruling elite may be
peacefully replaced by a new government. For this to become possible,
those who are in power must become confident that if they lose direct
control of the government their lives and property will continue to be
safe. Confidence comes from the rules established to protect and
regulate rights. In Myanmar this will take time and will require the
establishment of a legal framework as well as the creation from scratch
of a judiciary that is willing to constrain any arbitrary exercise of
power. Encouraging the rule of law, through aid to judicial reform,
could play a vital role in establishing firm ``rules of the game'' for
elites and counterelites alike. Helping Myanmar to redevelop its law
schools and judicial system should be among the highest priorities of
the U.S. Government rather than being prohibited by sanctions against
bilateral assistance to the Government of Myanmar. Under just-issued
modifications by the U.S. Treasury this assistance may become possible
but only through nongovernmental organizations in a country where there
are, as yet, no private universities. A tsunami of foreign investment
in a country without an adequate legal framework will create a
widespread culture of corruption and/or enhance the importance of a
select number of crony capitalists who can provide political protection
for the foreign investor. It is much less costly for all concerned if
early foreign assistance can help Myanmar to get the regulations right
initially before large veto groups have become established within the
evolving political system.
4. A patient populace. Without a patient populace that is willing
to watch and wait for elites and counterelites to accumulate trust and
work out their differences, reform can be killed by excesses of popular
participation. Although virtually everyone favors the growth of civil
society, a political system can be torn apart if it is the wrong kind
of participation (see Weimar Germany). For instance, participation in
political parties that accept the rules of the game of political
competition has a positive impact on the political system. In contrast
political parties dedicated to the overthrow of the entire system
usually destroy the reform process.
Politics based exclusively on religious and ethnic identities tend
to divide rather than unite and the rise of identity based politics
tends to kill off reform. Continued progress toward settlement of the
ethnic conflicts that have bedeviled Burma since independence must be
given the highest priority. No peace; no rapid economic improvement. No
peace; no sustainable political reform.
At present in Myanmar reconciliation and realistic expectations
seem to be the dominant mood.
The just-released U.S. Treasury regulations should facilitate
increased assistance to civil society organizations in Myanmar but care
must be taken that the civil society organizations being funded support
the reform process. Those with political aspirations can either reform
the system or break the machine, and assistance to civil society should
be designed to promote civility across ethnic and religious divisions.
5. Favorable Circumstances. If the world economy were to drop into
depression and global trade and incomes collapse, this would obviously
imperil political evolution in Myanmar. If, on the other hand, reform
starts during a long positive global economic cycle, this helps the
process of peaceful reform. Global economic prosperity would benefit
reform in Myanmar by enabling elites and counter elites to share an
expanding economic pie.
a strategy
First, the current trajectory in Myanmar is positive and the United
States should ``take `yes' for an answer.''
Second, we should do everything possible to encourage reform in the
short run rather than taking a minimalist position. Targeted sanctions
relief could support reform without permanently relaxing the entire
sanction regime. Rather than waiting for conclusive proof that Myanmar
had become a democracy, the United States should selectively relieve
prohibitions against private investment to encourage the
democratization process by demonstrating the tangible benefits of
reform (such as increased employment opportunities). Likewise,
international institutions should be encouraged to assess Myanmar's
social and economic needs and provide technical assistance to Myanmar's
reformers in their attempt to create a more modern and open economy. In
addition, we should encourage reformist sentiments in the military
elite by offering limited access to the U.S. military education system.
Third, private and public support for judicial reform and the rule
of law should be given a very high priority. Getting the rule of law
established early is vital to the long-term legitimacy of the
democratic process. Leaving governance questions until ``later'' is a
false economy. Institution-building takes longer than anything else,
and in Myanmar the current reform moment has created an opportunity to
get things right at the outset on important topics such as
environmentally responsible investment codes and mechanisms for
controlling corruption.
Fourth, the U.S. universities should be encouraged to provide
technical assistance to Myanmar's universities to relieve human
resource shortages especially in economics, law, medicine, and
engineering. In addition, the United States should encourage its
friends and allies such as Australia, Japan, Korea, Singapore, and
others to fund scholarships for executive education and degree programs
to bring Myanmar back into global society after decades of isolation.
Fifth, above all do no harm. It has been estimated that there are
only a few hundred officials and an equally small number of persons in
civil society who are implementing the economic and political reforms.
When Myanmar becomes ``the darling of the donors'' aid agencies and
NGOs will pour into the country. To satisfy each of their
organizational needs the international NGOs will hire away the best and
the brightest, thereby damaging the capacity of Myanmar's Government
and civil society to continue to push the reform process forward. Aid
agencies and NGOs alike should be encouraged to cooperate in
establishing a coordinating mechanism to control the harmful effects of
``the aid rush.''
Senator Webb. Thank you very much, Dr. Jackson.
Again let me say that all of your full statements will be
entered into the record immediately following your oral
statements, and following that the written statement by the
U.S. Chamber of Commerce will be entered into the record.
Senator Webb. Let me just start off by saying there's just
an enormous amount of experience sitting at this table. All
three of you have my profound respect. I have appreciated being
able to listen to these condensed statements as well.
I would start off by saying I think that a number of people
here in the political process tend to, quite frankly, overreact
to the word ``sanctions'' in terms of lifting sanctions.
There's a difference between lifting sanctions and moving into
full relations or full economic relations even. I think you can
see that with the example of Vietnam, where it took until I
think 2007 until we had full economic relations with Vietnam
from 1993.
Dr. Jackson, I really take your point when you talk about
moving into an active national diplomatic policy toward this
country. It's a rare moment in history when we have this kind
of an opportunity. One of the most profound impressions I had
when I was visiting in 2009, when I was able to sit down with
General Than Shwe and his immediate group was actually how
remote they were. The country had grown more remote, part of it
because of the decisions of their own government, part of it
because of the way that the Western world, for lack of a better
term, had decided simply not to talk with the regime.
And to come out of that remoteness, when you get this
moment when there's an expression of clear intent, really does
require proactive policies, because in many cases they don't
know what the next step should be. I mentioned that in my
earlier statement, but that's one of the things I kept hearing,
is we want to learn.
So I would like to ask all three of you for your thoughts
on, first of all, whether you believe that's a legitimate
comment at this time or whether that represents just a piece of
the ruling government, and if so how do we do this? What should
we be doing to decrease the remoteness, to incentivize conduct?
Dr. Jackson, you mentioned with respect to the elites.
What should we be doing?
Start with Mr. Steinberg.
Mr. Steinberg. Senator, if I were to make a suggestion I
would think that we, the U.S. Government, the State Department,
should be sitting down with the Burmese and saying: You know
that sanctions are difficult to be lifted in their entirety.
They know that already. Cabinet officials have told Dr. Jackson
and myself that. So if you were to establish a timetable saying
if you do X we will do Y, and at a certain point if everything
works out we will have sanctions ended by a certain date, that
will alleviate the anxiety that they have, because in the past
they have taken some actions and they wanted a U.S. reaction
and we didn't react to the degree they wanted.
But if we could agree on that timetable, that would be a
step forward, I think, and it would be proactive.
Senator Webb. Mr. Manikas.
Mr. Manikas. NDI has never had a policy on sanctions
themselves, but I think that we certainly think that it's very
important to provide positive inducements to the reformers
inside the government. When I met with Suu Kyi in January, I
know that she communicated that message to me very clearly.
I think that there is going to have to be a variety of ways
in which we engage the government, and it could be on the
reform measures that I think almost all of us have identified.
There are obviously people in government that are quite
interested in pursuing reform and we should take advantage of
that. That's going to be a form of engagement, I think, that
will be very important going forward.
Finally, calibrating the international response to the
positive events that are occurring I think is a very
challenging task. But I think it's important to consult with a
broad range of actors within Burma, including the opposition,
in regard to how they feel, how far the international community
should go in responding. I think there's going to be continued
disagreement over the pace and extent of the international
response, but I think that's expected and it's just part of the
process that I think we're going to experience going forward.
Senator Webb. Dr. Jackson.
Dr. Jackson. I guess I beg to differ with my colleague
somewhat. I think we should be more open-handed. I think we
should move more quickly, not because I approve of the people
who have run that government for the last 40 years, but because
I want to see them ushered out the door more rapidly and the
way to do that is to allow the reforms to go forward and to
prevent internal struggle within the government against those
reforms.
We could be doing things at a practical level that would be
approved of by people like Daw Aung San Suu Kyi, that we are
not able to do or not able to do readily right now. Let me give
you an instance. It would be nice to be able to conduct
seminars, for instance, for the highest level people in the
government, regardless of whether they once wore a military
uniform, on the subject of how do you run a nonmilitary
bureaucracy, how do you create rule of law as opposed to rule
by fiat.
Well, you'd say to yourself, well, the Treasury
Department's not going to bother you about conducting those.
Well, unfortunately that's not entirely true, because of
the fact that some of those people might be on a list somewhere
and I can't get money from an American foundation to do it just
on the chance that one of those individuals with whom I might
be talking might be on a list somewhere.
These are practical obstacles that are preventing us from
moving and moving quickly. The next 2 years are what are
critical. Sure, we can eventually get all this stuff cleared
up, but the question is how long will the moment for reform
last.
Senator Webb. Thank you very much for that.
I'm going to have to close this hearing. Let me say that,
Dr. Jackson, I fully agree with what you just said. I think
that the two most important factors right now from my own
personal point of view would be to get as many people from the
international community to interact with the average citizen on
the street in a positive way so they can see with their own
eyes different ways of doing things; and the other is to get as
many people as we can from their governmental systems out, so
that they can see with their own eyes how the rest of the world
lives and that we can have the kind of conversations that
you're talking about. I will be doing whatever I can in the
coming months to try to assist that process.
Again, all three of you, I have a tremendous admiration and
respect for the years that you have put into this part of the
world and I appreciate you testifying today.
This hearing is over. Thank you.
[Whereupon, at 4:13 p.m., the hearing was adjourned.]
----------
Additional Material Submitted for the Record
Prepared Statement of the U.S. Chamber of Commerce, the U.S.-ASEAN
Business Council, and the National Foreign Trade Council
The U.S. Chamber of Commerce, the US-ASEAN Business Council, and
the National Foreign Trade Council are pleased to have the opportunity
to submit a statement for the record to the Senate Committee on Foreign
Relations, Subcommittee on East Asian and Pacific Affairs, on Burma.
Our three organizations represent millions of U.S. businesses
across every state and every sector. Our members range from small
businesses with a few employees to some of the world's largest
companies.
Our members have been watching developments in Burma with great
interest, and applauded the much-improved electoral process by which
Aung San Suu Kyi and the National League for Democracy won a resounding
victory in by-elections held on April 1, 2012. Badly needed political
and economic reforms in that country are moving forward, in many cases
at a pace faster than most observers had expected. For the first time
in many years, there is a genuine sense of hope for the future.
It is in U.S. interests that the process of reform and
liberalization continue. We commend the administration, in particular
Secretary Clinton and the State Department, for their increased level
of diplomatic engagement, and their continued efforts to support reform
in Burma.
This is a critical moment; the momentum is behind reform, but the
process is fraught, the challenges are formidable, and there is
ultimately no guarantee of success. Therefore, U.S. policy should be
geared toward supporting and strengthening the hands of the reformers.
Strategic engagement by the U.S Government, as well as by leaders from
the nonprofit and business sectors, is vital to solidifying and
broadening these reforms.
As the next steps in the process of encouraging Burma's engagement
with the global economy are laid out, the door should be opened to
further involvement of
the U.S. business community. U.S. companies bring in the capital,
technology, and respect for rule of law that will build a foundation
for sustained economic growth. Without this foundation, development and
improved standards of living for the people of Burma (or any other
country) is simply not possible.
Moreover, U.S. companies provide capacity-building, training, high
environmental standards, and projects that engage the communities in
which they operate to a substantially greater degree than most of our
competitors from other nations. For example, Burma's neighbors benefit
tremendously from U.S. corporate social responsibility projects in
areas ranging from maternal health to education, environmental
stewardship, IT training, agricultural productivity, and many others.
These are all areas where Burma badly needs support and assistance.
Laying out a plan that eases restrictions on private investment
across all sectors and includes the same rules for all businesses is
critical to the success of this effort. Permitting investment in some
sectors, while prohibiting it in others, will not prevent those sectors
from being developed in Burma; it will simply ensure that our
competitors fill the void, as they are already doing. As a result, the
jobs which could go to American workers will instead go to their
counterparts in Europe, Asia and elsewhere. U.S. companies are already
starting from a disadvantage, as numerous entities from other nations
have substantially stepped up their engagement in recent months.
Most urgently, the lifting of financial services facilitation and
transactions sanctions will be essential to the sustainable expansion
of the Burmese economy and the successful operation of any U.S.
business effort. Currently, U.S. companies are unable to conduct many
basic research efforts that would enable them to formulate plans
focused on engaging Burma because of the ban. Lifting the financial
services facilitation and transactions sanctions in conjunction with
easing the investment ban is an essential step in enabling any U.S.
business to work in Burma.
The Specially Designated Nationals (SDN) list provides a way to
ensure that business dealings do not enrich those parties responsible
for Burma's decades of suffering, and that those honest entrepreneurs
seeking a way to connect with the outside world are not kept in
isolation due to the actions of others. This list should be maintained,
regularly updated, and made more accessible and user-friendly.
It is incumbent upon the international community, and multilateral
institutions, to ensure the success of Burma's reform effort. The April
23 announcement by the EU of the suspension of its sanctions, and
similar moves by Australia, Japan, and others, now calls into question
the continued value of coercive measures. We all want to ensure that
the citizens of Burma have the chance to rebuild their country with a
fair and rules-based economic system that creates sustainable growth.
The U.S. administration and Congress need to lay out a plan that will
allow U.S. businesses across all sectors to begin the process of
reconnecting with Burma in a timely manner.
______
Responses of Principal Deputy Assistant Secretary of State Joseph Yun
to Questions Submitted by Senator James M. Inhofe
Secretary Clinton has established a new Bureau of Energy Resources.
In announcing the Bureau, the Secretary recognized the critical
importance that energy plays around the world. In describing the
Bureau's key missions, she said that it would seek to ``increase access
to energy in developing countries, expand good governance, and deepen
transparency.'' Secretary Clinton acknowledged that U.S. energy
companies are instruments in advancing transparency and safe and
sustainable operations.
Question. Assuming you agree with Secretary Clinton's assessment in
establishing the Bureau on Energy Resources, do you agree that U.S. oil
and gas companies would be instruments that could positively influence
transparency and other reform goals in Burma?
The Chinese, French, and other nations are looking to increase
investment in Burma's oil and gas sector right now.
Answer. In all of our actions with respect to Burma, from foreign
assistance to any potential new investment, the United States is
seeking to ensure that we advance our overarching goal of a more
democratic, prosperous, and freer future for the diverse peoples of
Burma. We believe that U.S. companies, including oil and gas companies,
can play a positive role in this effort by demonstrating high standards
of responsible business conduct and transparency, including respect for
human
rights. As Secretary Clinton announced on May 17, we are taking steps
to authorize new U.S. investment in Burma, as well as the export of
U.S. financial services to Burma, across all sectors. We believe these
steps will help bring the country into the global economy, spur broad-
based economic development, and support ongoing reform. We will proceed
in a careful manner that supports positive change in Burma and will
continue to consult closely with Congress as we move forward.
Question. If the U.S. Government does not allow U.S. oil and gas
companies to explore for and produce resources in Burma in the coming
months, will those resources go undeveloped or will companies from
other countries like China and France fill the void?
Answer. On May 17, Secretary Clinton announced that the U.S.
Government will take steps to authorize new U.S. investment in Burma,
as well as the export of U.S. financial services to Burma, across all
sectors, with the exception of arms.
Chinese, South Korean, Vietnamese, Thai, and Indian companies are
already active in Burma's oil and gas sector, as is Total, a French
company. Chevron, a U.S. company, retains a minority stake in one
project that predated the imposition of the sanctions on new
investment. According to press reports, Burma's 2011 bid round resulted
in awards of 10 new onshore blocks to companies from Russia, Oman,
India, Thailand, Indonesia, Malaysia, Switzerland, and China. Although
Burma has a difficult investment climate, we believe Burma's future bid
rounds are likely to generate significant international interest.
Question. Do you agree that if sanctions were eased to allow for
U.S. oil and gas companies to conduct business in Burma, the United
States could assert a positive influence there through close
monitoring, and in collaboration with the international community, help
ensure strict enforcement of the Specially Designated Nationals list?
Answer. As we take steps to ease our financial and investment
sanctions in Burma, we will continue to monitor the situation
carefully, work with our regional and like-minded partners, and
restrict transactions with individuals and entities on the U.S.
Treasury Department's Specially Designated Nationals list. We will work
in close collaboration with U.S. companies and U.S. and Burmese civil
society leaders to encourage responsible investment consistent with our
overall goals of supporting Burma's reform process. American companies
can play a positive role in Burma in contributing to broad-based and
sustainable economic development and in modeling high standards of
labor and human rights, environmental stewardship, and transparency.
Question. Do you agree that U.S. oil and gas companies are more
transparent, and generally operate in a more free market manner than
Chinese, Russian, or many other nationally owned oil companies?
Answer. Many U.S. companies in the extractives sector helped to
create, and are active participants in, international initiatives to
promote transparency and respect for human rights, including the
Extractive Industries Transparency Initiative and the Voluntary
Principles on Security and Human Rights. All U.S. companies, including
oil and gas companies, must abide by restrictions in the Foreign
Corrupt Practices Act and other U.S. laws that prohibit bribery and
other corrupt practices when operating overseas. Furthermore, section
1504 of the Dodd-Frank Wall Street Reform Act requires all companies
who file reports with the U.S. Securities and Exchange Commission to
disclose payments they make to foreign governments. These initiatives
and requirements--along with the voluntary responsible investment and
corporate governance activities undertaken by many U.S. companies--
encourage U.S. companies to maintain high standards of transparency and
accountability, particularly in difficult investment environments with
weak institutional governance and rule of law, as is the case in Burma.
Question. As potential instruments of U.S. foreign policy, is it
not in our Nation's interest to allow U.S. oil and gas companies to
conduct business in Burma and have an opportunity to engage with and
advance free market reforms there, and compete against Chinese and
Russian own petroleum companies which may not value or support free
market or transparency agendas?
Answer. We support a peaceful transition in Burma to a more
democratic, prosperous, and free market system that respects the rule
of law, the fundamental human rights of its diverse peoples, and all of
its international obligations. We believe U.S. companies can contribute
to advancing economic reform by promoting high standards of
accountability and transparent business practices, as well as improving
the lives of the Burmese people through their activities, and we
encourage them to do so. On May 17, we announced that we will take
steps to ease our bans on the export of financial services and new
investment in a manner that supports Burma's economic and political
reform process and contributes to a brighter future for its people.
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