Conditions In Burma And U.S. Policy (r)

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Conditions in Burma and U.S. Policy Toward Burma
For the period September 29, 1997 - March 28, 1998 
 
 
 Plan for Implementation of Section 570 of Public Law 104-208
(Omnibus Appropriations Act, Fiscal Year 1997)
Submitted to the U.S. Congress, June 24, 1998
Released by the Bureau of East Asian and Pacific Affairs, June 24, 1998
U.S. Department of State 
 

 

The people of Burma continue to live under a highly authoritarian military
regime that is widely condemned for its serious human rights abuses. Despite
a reorganization and renaming of Burma's ruling military junta in November
1997 through which the former State Law and Order Restoration Council
(SLORC) became the State Peace and Development Council (SPDC), the regime
has made no progress in the past six months in moving toward greater
democratization, nor has it made any progress toward fundamental improvement
in the quality of life of the people of Burma. 

The Burmese economic situation is grim and appears to be worsening. The
government is reportedly virtually bankrupt with regard to foreign exchange
reserves, holding less than the amount required to cover one month's import
purchasing. In March, the regime cut to three the number of banks in the
entire country allowed to process transactions involving foreign exchange,
all central government-affiliated. The military junta continues to dominate
the political, economic and social life of the country in the same
oppressive, heavy-handed way that it has since seizing power in September
1988 after harshly suppressing massive pro-democracy demonstrations. 

U.S. policy toward Burma seeks progress in three key areas: democracy, human
rights, and counternarcotics. We have taken strong measures to pressure the
SPDC/SLORC to end its repression and move towards democratic government.
Since 1989, the United States has been unable to certify that Burma has
cooperated in efforts against narcotics. The U.S. has suspended economic
aid, withdrawn Burma from the General System of Preferences (GSP) and
Overseas Private Investment Corporation (OPIC) programs, implemented an arms
embargo, blocked assistance from international financial institutions,
downgraded our representation from Ambassador to Charge d'Affaires, imposed
visa restrictions on senior officials and their families, and instituted a
ban on new investment by U.S. persons. 

We remain engaged in multilateral diplomacy to encourage ASEAN, Japan,
China, the EU, and other nations to take similar steps and/or other actions
to encourage progress by the SPDC in these areas of key concern. The EU
renewed the range of sanctions it had in place against Burma in October
1997, including visa restrictions similar to ours and the withdrawal of
certain trade preferences. The EU reviews its policy with regard to Burma
every six months and EU political directors agreed in March to recommend the
extension of these sanctions for another six months, a recommendation
accepted by EU Foreign Ministers in April. 

We have also continued to urge the Government of Japan to maintain the
suspension of much of its bilateral aid program, including large-scale
development assistance. While Japan has largely continued to withhold such
assistance, it did announce in early March its intent to provide assistance
in the form of a loan to Burma for renovations at Rangoon International
Airport to alleviate safety concerns of the Government of Japan. 

As a result of sanctions and the ongoing financial crisis in much of the
rest of Southeast Asia, new investment in Burma has come to a halt,
contributing to the financial mire in which the SPDC finds itself. While
Burma's economic crisis is also a result of the government's own
mismanagement, the SPDC is unlikely to find a way out of the crisis unless
political developments in Burma permit an easing of international pressure
and resumption of assistance from international financial institutions. 

Measuring Progress Toward Democratization 

During the review period, the ruling junta has shown no sign of willingness
to cede its hold on absolute power. Since refusing to recognize the results
of the free and fair 1990 elections in which the National League for
Democracy (NLD) won a vast majority of both the popular vote and the
parliamentary seats, the generals have continued to refuse to negotiate with
pro-democracy forces and ethnic groups for a genuine political settlement to
allow a return to the rule of law and respect for basic human rights.
Although Burma's Minister of Home Affairs did meet with five members of the
NLD's Central Executive Committee in mid-December, the meeting was largely a
lecture during which the NLD reports that its members were chastised for the
party's continued criticism of the ruling junta. 

Subsequently, UN Secretary General Annan's Special Envoy for Burma, Alvaro
DeSoto, met with senior Burmese Government officials in January at which
time DeSoto pressed the SPDC to take steps toward addressing the concerns of
the international community as contained in the series of United Nations
General Assembly resolutions on Burma, including movement toward political
dialogue with the democratic opposition. SPDC officials gave him no reason
to expect that such a dialogue will occur anytime soon. These meetings and
the continued refusal of the SPDC to meet with NLD party General Secretary
Aung San Suu Kyi suggest the junta remains unprepared to consider meaningful
steps toward resolving the political crisis in Burma with the NLD. 

The November reorganization of the regime, when SLORC became SPDC, appears
to have been an attempt by leading generals to address ASEAN and popular
concerns about rampant government corruption by dismissing 14 former
ministers and SLORC members and, in some cases, pursuing fraud cases against
them and their cronies in various ministries. At the same time, the top five
generals in the SPDC have further consolidated power and reemphasized the
primacy of the Burmese military by including all of the commanders of
Burma's regional military commands in the SPDC and giving them much
increased authority over all decisions related to government projects within
their command area. Whether the reorganization leads to a fundamental shift
in policy toward the democratic opposition remains to be seen, but there are
no encouraging signs at this time. 

The government claims that the military-dominated National Convention is an
appropriate forum for dialogue with the NLD and parties representing the
country's ethnic minorities. But the National Convention, a body ostensibly
tasked since 1993 with drafting a new constitution, is not a democratic
forum as currently structured. Although the NLD initially participated, the
Convention is overwhelmingly made up of delegates hand-picked by the junta,
which has carefully stage-managed the proceedings and ignored even limited
opposition views. The regime appears determined to draft a constitution that
would ensure a dominant role for the military forces in the country's future
political structure. The NLD withdrew from the National Convention in
November 1995 because of the undemocratic nature of the institution and was
formally ejected by the SLORC in December of that year. However, the
Convention has not met since mid-1996, and the SPDC's current plans for the
body remain unclear. 

During the 6-month review period, Burma took some positive steps in the
narcotics area, but overall efforts paled in comparison with the extent of
the problem. In December 1997, Burma Army troops began a campaign to
eradicate opium in northern Shan State. The extent of this eradication is
not yet clear, but it appears to be on a larger scale than were previous
efforts under the SLORC/SPDC. Counternarcotics law enforcement personnel
also stepped up interdiction efforts in 1997, seizing an estimated 1401
kilograms of processed heroin (compared to 493 kilograms in 1996), 7884
kilograms of raw opium (1300 kilograms in 1996), and 5.04 million
methamphetamine tablets (roughly equal to 1996) along with destroying 33
heroin refineries (vice 11 in 1996). Nonetheless, Burma remains the world's
largest source of illicit opium, with output estimated at 2,365 metric tons
in 1997 - enough to produce 197 metric tons of heroin. Leading trafficker
Khun Sa, who "surrendered" to Burmese forces in early 1996, has never been
brought to justice. He and other traffickers are investing in legitimate
sectors of the economy, and there is reason to believe that drug profits are
being laundered through the Burmese economy in substantial amounts, with
little effort taken to date by the government to counter this dangerous trend. 

Measuring Progress on Improving the Quality of Life 

During the review period, the quality of life of the average Burmese citizen
has continued to worsen. The SPDC's severe violations of human rights have
continued. There continue to be credible reports, particularly from ethnic
minority insurgent-dominated areas along the Thai border, that soldiers have
committed serious human rights abuses, including rape, forced porterage, and
extrajudicial killing. Disappearances continue, and members of the security
forces beat and otherwise abuse detainees. Arbitrary arrests and detentions
continue for expression of dissenting political views. As of March 1998,
several hundred, if not more, political prisoners remain in detention,
including 29 Members of Parliament elected in 1990. Prison conditions remain
deplorable and prisoners are subject to a lack of food and adequate medical
care. 

The SPDC reinforces its rule via a pervasive security apparatus controlled
by military intelligence which sharply restricts basic
internationally-recognized human rights to free speech, press, assembly, and
association. Political party activity remains severely restricted. The
activities of the NLD and Aung San Suu Kyi are monitored and circumscribed
by the regime. Since late 1996 Aung San Suu Kyi has been prevented from
addressing party supporters in front of her house, as the SPDC puts up
blockades to prevent gatherings there. The regime has allowed the NLD to
hold several gatherings inside Aung San Suu Kyi's compound, usually on
national holidays, and allowed the NLD to hold a party congress within Suu
Kyi's compound in late September 1997. However, subsequent attempts by the
NLD to hold party gatherings in October and November in various parts of
Rangoon were blocked by authorities, leading to several standoffs between
NLD supporters and riot police. A number of NLD supporters were arrested and
sentenced to lengthy prison terms for their involvement in the attempts to
hold these meetings. 

In response to street protests by large groups of students in November and
December 1996, the SLORC closed the nation's schools and universities. While
the SPDC finally reopened primary schools in August 1996 and some lower
technical institutes in March 1998, most universities remain closed to
prevent another outbreak of student protest. 

Thousands of citizens of Burma remain in exile because of fear of
persecution and poor economic conditions, placing a major burden upon
neighboring countries. About 21,000 Rohingya Muslims from Arakan state
remain in camps in Bangladesh. A few thousand students and dissidents remain
in exile in Thailand. Approximately 119,000 individuals now reside in ethnic
minority camps along the Thai-Burma border, among them thousands of new
arrivals driven out by army attacks in the areas controlled by the Karen and
Karenni ethnic minorities. 

Burma is a poor country, with an average per capita GDP of perhaps $200 to
$300. Even after adjusting for the relative purchasing power of the Burmese
currency, per capita GDP is perhaps $600 to $900. Progress on market reforms
has been mixed and uneven. Beginning in 1988 the Government partly opened
the economy to permit expansion of the private sector and to attract foreign
investment. Though modest economic improvement ensued, since 1993 the pace
of economic reform has slowed and major obstacles to further reform persist.
These include disproportionately large military spending, extensive overt
and covert state involvement in economic activity, excessive state
monopolization of leading exports, a bloated bureaucracy prone to arbitrary
and opaque governance, and poor education and physical infrastructure. In
addition, due to international opposition and to the SPDC's unwillingness to
cooperate fully with the IMF, SPDC access to external credit from the IMF,
World Bank, and Asian Development Bank continues to be blocked by sanction.
The laundering of drug profits in Burma's legitimate economy is thought by
some analysts to be extensive. 

Since last summer, the Kyat has depreciated in value on the open market
quite rapidly, briefly rising to a level of almost 350 Kyats to the dollar
before the government stepped in and temporarily detained foreign exchange
dealers. Currently, legal foreign exchange dealers are allowed to sell Kyats
at a rate of roughly 240 Kyats to the dollar in Rangoon, though the official
rate remains six to the dollar. In an effort to stem the loss of scarce
foreign exchange reserves, the government imposed strict import and
remittance controls on the private sector last July, allowing companies to
remit only $50,000 in profits overseas and permitting importers to bring in
only $50,000 worth of goods per month. These restrictions remain in place.
Many foreign traders and investors still operating in Burma note that the
situation regarding remittance controls is untenable. Should such controls
continue, the climate for foreign trade and investment in Burma will be even
more seriously damaged than it already has been by the U.S. ban on new
investment and by consumer-led boycotts in the West. 

The Government restricts worker rights and uses forced labor on a widespread
basis. The use of porters by the army -- with attendant mistreatment,
illness, and even death for those compelled to serve -- remains a common
practice. The use of forced labor on some infrastructure development
projects appeared to be lessening following the issuance of directives in
1995 to end the practice of forced civilian labor. The military authorities
nonetheless continue to force ordinary citizens (including women and
children) to "contribute" their labor, often under harsh working conditions,
on construction projects in many parts of the country. Some of these
projects -- such as the moat of the Mandalay Palace -- were undertaken to
promote tourism to the country. In the past few years, the military has
begun using soldiers instead of civilians at certain infrastructure
projects. Child labor continues to be a serious problem. 

As a largely underdeveloped country, Burma, with a rapid population growth
rate, faces increasing pressure on environmental quality. Although the
government has taken some steps to stem widespread clear-cutting, Burma's
large tracts of remaining tropical forest remain under intense commercial
exploitation. Some NGOs have charged that Burma's teak forests in the
Thai-Burma border area are being rapidly destroyed by clear-cutting and
deforestation, including by ethnic insurgent groups in league with
foreigners. Because of the severe restrictions on Embassy travel to outlying
parts of Burma, it is difficult to document the overall extent of the problem. 

The poor quality of life is also reflected in rising drug abuse. Burmese
estimates put the addict population at approximately 60,000, but UNDCP and
NGOs working in the health sector estimate the actual number is at least
five times that figure. Intravenous use of heroin is contributing to the
rapid spread of HIV/AIDS. Drug treatment services are not reaching most drug
users because of a lack of facilities and a lack of properly trained
personnel. Addiction and the spread of HIV/AIDS have become cross-border
problems of concern to China as well, particularly in Yunnan province, on
Burma's northern border. 

Development of a Multilateral Strategy 

The goals of U.S. policy toward Burma are progress toward democracy,
improved human rights, and more effective counter-narcotics efforts. Failing
national reconciliation, Burma will not be able to adequately address the
many severe problems it faces, including narcotics trafficking and abuse, a
low level of education, and poor economic performance. 

In recent months we have continued to pursue a multilateral strategy to seek
improvement in our key areas of concern. We continue to consult about Burma
regularly and at senior levels with leaders of ASEAN nations, Japan, Korea,
the European Union, Australia, Canada, and other countries having major
trading and investment interests in Burma. These efforts have helped build
and maintain strong international pressure on the military regime. 

The key to progress toward democracy and human rights is, first and
foremost, a direct dialogue about the political future of the country among
the SPDC, the NLD, and the ethnic minorities. In all our public and private
messages to the SPDC, leaders of third countries, and other interested
parties, we stress the importance of beginning such a dialogue as the key to
achieving significant progress in Burma. At the same time, we urge them to
press Burma for progress in the counternarcotics area. We work closely with
other countries in Asia and Europe to press the SPDC to begin dialogue. In
response, leaders from ASEAN nations, Japan, Australia, Canada, and the
European Union have urged the regime, both publicly and privately, to move
to dialogue with the democratic opposition and to curb drug production and
trafficking. 

In order to urge the SPDC to make progress in our areas of concern, we have
taken a number of steps: suspending economic aid, withdrawing GSP and OPIC,
implementing an arms embargo, blocking assistance from international
financial institutions, downgrading our representation from Ambassador to
Charge, imposing visa restrictions on senior regime leaders and their
families, and implementing a ban on new investment by U.S. persons. We
likewise have encouraged ASEAN, Japan, the EU, and other nations to take
similar steps and other actions to encourage progress by the SPDC/SLORC in
these areas of key concern. Many nations join us in our arms embargo,
including European countries, Canada, Australia, Japan and Korea. The EU
limits its assistance to Burma to humanitarian aid. Our efforts in the
international financial institutions continue to be successful in blocking
loans to the regime, which is probably the single most effective sanction we
have against the regime. Since 1988 we have taken an active role in pressing
for strong human rights resolutions on Burma at the United Nations General
Assembly and the UN Human Rights Commission, as well as having worked
vigorously in the ILO to condemn the lack of freedom of association for
workers and the use of forced labor by the SPDC. The U.S. Department of
Labor will be releasing a report on labor practices in Burma in the coming
months. This report will include evidence gathered by U.S. government
officials on the use of forced labor. 

In 1996, at our urging, the EU and associated European states joined us in
imposing a ban on visas for high-level SPDC officials and their families. In
addition, the European Union and Canada withdrew GSP trade benefits from
Burma's agricultural and industrial products in March and August 1997,
respectively, bringing their trade policies more in line with the U.S.
withholding of GSP. 

ASEAN shares many of our goals with regard to Burma, but we disagree on the
means to achieve those goals. ASEAN believes that "constructive engagement"
of the SPDC is the most effective way to promote positive change in Burma.
Notwithstanding our differences in approach, we were encouraged that the
Philippine Foreign Secretary and Malaysian Foreign Minister met separately
with Aung San Suu Kyi during the review period. We will continue to raise
our strong concerns about the situation in Burma with ASEAN and urge
continued steps by ASEAN leaders to encourage progress by the SPDC.
Secretary Albright has used and will continue to use multilateral meetings,
including the ASEAN Regional Forum and Post Ministerial Conference, to
directly press the Burmese for positive change in the presence of fellow
ASEAN members. 

[end of document]