US Message to Burma: 'Engagement' Must Bring Results

US Message to Burma: 'Engagement' Must Bring Results
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By WAI MOE Tuesday, December 22, 2009

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The Burmese junta could face tougher US financial sanctions if Washington's new policy of direct engagement with the regime fails to produce results.

That's the message contained in recent remarks by legislators in Washington and US diplomats in Asia. It was also highlighted in a report by an Associated Press correspondent, who said: “The Obama administration has already a powerful economic weapon if talks with Myanmar [Burma] fail to achieve democratic reform: pressuring banks to avoid doing business [with the Burmese regime.]”

The agency report said the US Congress had already approved powers enabling the Administration to act against banks doing business with Burma.



The Administration's new policy on Burma links sanctions with direct engagement. The Burmese regime has, in effect, been served notice that sanctions will continue as long as no progress is scored in the contacts now taking place between US and junta officials.

This “carrot and stick” policy is the subject of wide discussion among US diplomats in Southeast Asia. Some senior US diplomats in the region told The Irrawaddy recently that if the junta generals believe engagement with Washington is giving them legitimacy they are totally wrong.

One diplomat said if the engagement policy produces no results within one year, further US actions are possible.

Some critics of the new policy point out that a similar approach followed by the US toward North Korea for more than 15 years had failed to prevent Pyongyang’s nuclear program.

The US diplomat said, however: “The Burma issue is quite different from North Korea. All in Washington know the US cannot engage with the junta without result.”

The US announced the conclusion of its Burma policy review on September 28. On the following day, Kurt Campbell, US assistant secretary of state for East Asian affairs, met with a Burmese delegation led by U Thaung, a former Burmese ambassador to Washington who is currently the minister of national planning.

In early November, Campbell paid a landmark visit to Burma, where he met Burmese Prime Minister Gen Thein Sein and pro-democracy leader Aung San Suu Kyi, as well as opposition and ethnic leaders.

While directly engaging with the junta, the US continues to monitor business contacts closely. On Dec. 16, the US Treasury Department announced it was fining the Swiss banking giant Credit Suisse AG US $536 million for working with countries on the US sanctions list, including Burma. The fine is the biggest in the history of the department’s office of foreign assets control.

“The great majority of the transactions involved Iran, although there were also transactions that appear to have violated US sanctions on Sudan, Libya, Burma, Cuba, and the former Liberian regime of Charles Taylor,” the US Treasury Department announced.

In September, the US-based watchdog Earthrights International accused two Singapore-based banks, the Overseas Chinese Banking Corporation (OCBC) and DBS Group (previously known as the Development Bank of Singapore) as “offshore repositories” for the Burmese junta’s revenues from the Yadana gas project. The junta has earned at least $5 billion so far from the project.

Burma observers suspect that the Burmese generals and their cronies have lodged many millions of dollars in financial institutions in Singapore, Shanghai, Hong Kong and Dubai.


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