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/* Written 15 Jan 6:00am 1997 by drunoo@xxxxxxxxxxxx(Dr U Ne Oo) in igc:reg.burma */
/* -------------" A Note on Non-violent Pressures (2/2) "-------------- */


The common response by majority of Burmese (probably 90%) about the
businesses operating in their country, which reflected in various published
letters over the years and also from current comments on the Internet, is
simple: "Kick all the businesses out of Burma." Despite these civil
protests by anti-SLORC groups, some international businesses have kept
their presence in Burma with the hope that they will be able to operate in
the future. Current obstacles for businesses in Burma are not only of
the protests by these activists. It also include the lack of legal and
financial infrastruture, an uncooperative SLORC and the totally
unpredictable political situation. Notably, in spite of these difficulties,
it is the oil companies that have consistently kept their presence in Burma
since the SLORC announced their economic "open-door" policy in 1989.

Major obstacles in economic liberalization
Regarding with the international business community's attempt to
economically open up Burma, it is clear that there has been very little
progress made over the years. The technical obstacles that were pointed out
in two articles in 1989 (Asiaweek's "Burmese Ways to Capitalism" and Far
Eastern Economic Review's "Open door, closed minds") are still in existence
in 1997 -- the evidence of SLORC do not have the capacity to understand the
problems. There was a sign of SLORC retreating from economic liberalization
in 1991 (See FEER's "A policy of pillage"). Then again in early 1994, a
renewed welcome to foreign businesses was made by SLORC.

In their battle to economically open up Burma, the international
businesses are facing not only with SLORC's lack of understanding about
economy and lack of infrastruture as their main problem; the obstacle also
include the "Burmese economic xenophobia." Of course, every country on the
earth, including the "Corporate America" and "Multicultural Australia",
have this kind of xenophobia in varying degree. But it need to be noted
that Burma as a country have uniquely isolated for more than 30 years from
international businesses. Adding to this fact is that the people who are
advocating a freemarket happen to be the same people who are responsible
for isolating Burma. It is quite likely that the Generals will keep their
conventional outlook (& prejudices) on the international businesses,
although they may wish to see the country developed. It should be stressed
that unless an economic system that is clear and transparent to the general
population being developed, there will always be the tendency to retreat
from economic liberalization in Burma. A change to democratic system of
government, with a plan to educate the Burmese population about how
international businesses operate, will certainly be needed for successful
economic liberalization. Reform on taxation and education about the foreign
ownership of businesses are essential in this context.

The SLORC's intention to attract businesses into Burma appears to be
changing eversince the opening. It is clear that SLORC's decision to open
the country for foreign-businesses in 1989 was driven by the pressure
to survive. In the later years, SLORC's motive for economic opening seems
to have changed into seeking contact with international community through
businesses and, ultimately, to derive its legitimacy from such contacts.

There is one known account of SLORC using its business contact for
political purpose: the case of the Miriam Marshall Associates. In 1994,
Ms M.M. Segal, the Chairperson of above company, gave a testimony before
the United States House Foreign Affairs Sub-committee on Asia and Pacific.
We will need to discourage such cases of SLORC using the businesspeople to
spread propaganda in order to gain the international acceptance.

The SLORC's changing interests in the ASEAN membership can also be
understood in this context. There has been no evidence that SLORC is
interested in ASEAN membership until early 1996. Only recently, the SLORC
appears to become quite interested to join ASEAN. This development is in
parallel with the growing condemnation of its illegitimate rule by the
international community and United Nations. Therefore, SLORC approached
ASEAN for its international acceptance and, hence, legitimacy.

When we normally talk about the trade sanctions and economic embargo, it
includes the restriction of intergovernmental grants and also of the
suspension of loans from international financial institutions. In this
context, the limited sanctions imposed on Burma have been quite strong
already. Currently, the revenue flow from businesses into SLORC's hand is
also quite small (We will certainly need to keep that way for a while.).
>From my personal view, we should rather counter the problem of the SLORC
trying to seek its legitimacy through business contacts.

To Counter the SLORC seeking legitimacy
One of the highlights of this year's developments, in my view, would be the
human rights report by the Special Rapporteur, Rajsoomer Lallah. The report
has clearly explained about the unconstitutional nature of SLORC's ruling,
especially after the period of May-1990 election.

SLORC has signed various contract agreements with foreign firms as if it
was a legitimate government after May-1990 election. The business community
should be informed about the status of their contracts and, also, should be
encouraged to seek approval of their contracts from the National League
for Democracy. We can start this campaign by the oil companies in the U.S.,
Japan, France and Thailand. Hopefully, other businesses will follow the
same path. This will marginalize SLORC from attempting to seek legitimacy
through international business community. (We would have been saving a lot
of energy for this work if the Third Committee of U.N. General Assembly is
a little more flexible about it in last November.)

Most of the contracts the SLORC claimed to have made so far seems to
be merely "on the paper agreements" and may not represent actual investment
flows. We would certainly need to inform the businesses not to invest with
large sum of money into Burma.

The Chance of Success for Sanction
There is important question of whether the sanctions will be able to topple
the military junta or, at least, to force the SLORC to enter dialogue. My
estimate is that the sanctions, although an important leverage on SLORC,
alone cannot force the SLORC to make political concessions. However, the
sanctions have certainly influenced the SLORC to behave better.

The pro-sanction strategy against the dictatorial governments, such as the
SLORC of Burma, are designed to have the three possible outcomes: (1) the
economic hardship may force the population to turn against the government;
(2) economic hardship within the armed forced may led to a coup and (3) the
government may be forced to negotiate because of the hardships of
population or its isolation.

The first option is clearly an inhuman and callous policy, which we must
avoid it as much as possible. There has been an unquestionably clear
disapproval of the rulings of current military junta by Burmese population.
It is therefore no need to create further tensions. The unwanted outcome of
such sanction strategy can be the complete social breakdown of the

The second option, a military coup in Burma, is also not a good policy
since it will help the continuation of military dominance in Burmese
politics. There are certain resentment by the Burma army rank-and-files
about current military leadership; and a coup may be underway if properly
orchestrated along with the sanctions. The unwanted outcome, however, is
the army itself become breaking-down and local warlords rise up (There
are some signs of this trend already emerging in Burma.).

The third option may be the most desirable among these possible outcomes.
It, however, is unlikely that the SLORC will negotiate with opposition
simply because of the suffering of economic hardships of the population;
the SLORC's insensitivity about the suffering of Burmese people is well
known. However there is some possibility that, if all the international
businesses withdraw from Burma, the SLORC will feel even more isolated and
may consider to negotiate with the opposition. Nevertheless, the trade
sanction alone is not a decisive leverage; it must apply in combination
with other forms of pressures.

One weak element, in my personal view, in some pro-sanction strategies in
general is that the implication of abandoning the oppressed population
whilst sanctions are being enforced. The pro-sanction strategy overlooked
the necessity to build an alternative body to replace the existing military
regime (Argument in this paragraph is somewhat unrelated to the trade and
economic sanctions, but more against the so-called "Total isolationist
approach".). In our example of Burma, the pro-sanction groups at some stage
had called upon governments to cut off all the diplomatic ties with Rangoon
military government and to withdraw all foreign contacts (Hence, a
total-isolation). Measures such as downgrading diplomatic representations
may be necessary in some circumstances. However, the foreign contacts are
always necessary -- either as human rights monitors or humanitarian workers
or even as journalists -- in order to ease government's oppressive measures
and to maintain international solidarity with the oppressed population.

Trade sanctions: Where it worked best
Although the trade sanction cannot decisively force SLORC to make political
concessions, it certainly influence the SLORC to behave better. During
the period of 1989-1992, the SLORC had conducted most vicious crackdown on
the opposition and offensive on the ethnic nationalities. It is believed
that the SLORC was anticipating the large financial support from oil
companies at that time. Most oil companies entered in 1989, however,
withdrew in 1991/92 because of disappointing results from their initial
explorations. The SLORC's hope for survival was dashed and, only then, it
began to sober down. The series of political concessions, release of
political prisoners et cetera et cetera, including ceasefires with the ethnic
nationalities, were followed by that period. (It should also be noted that
the serious condemnations made by the U.N. General Assembly (i.e. 1991
onwards) and international community are also the contributing factors in
this case of SLORC changing behaviour.)

With best regards, U Ne Oo.


1) "Burmese Ways to Capitalism", Asiaweek 17 February 1989.
2) "Open door, closed minds", Far Eastern Economic Review 14 December 1989.
3) "A policy of pillage", Far Eastern Economic Review 8 August 1991.
4) "Licensed to drill", Far Eastern Economic Review 8 August 1991.

/* Endreport */