October 22, 2017
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Home truths about those Sanctions

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Derek Tonkin of Network Myanmar Photo: intelligencesquared.com
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Former British Ambassador Derek Tonkin dispels ‘myth’ that sanctions have been effective.

In her article, ‘Advocacy groups urge EU to maintain sanctions’, Rosie Gogan-Keogh suggested that this activist cabal might be seeking a delay in lifting the remaining sanctions. I think rather that they are seeking the continuance of their suspension. The sanctions were indeed all temporarily lifted in April last year, apart from the arms embargo and the restoration of benefits under the Generalised System of Preferences (GSP), which is being handled separately.

The advocacy groups make the case that none of the EU's benchmarks for permanently lifting sanctions has yet been met and that it is important to maintain pressure. They base their case however on the latest mythology surrounding sanctions which is, as they say, that: “International pressure has clearly played a motivating role in the reforms currently taking place.” As a matter of ideology it is too much for some to accept that the former military regime might have been working to a plan all along.

Former French Foreign Minister Bernard Kouchner reflected the broad view of the international community when he told the Foreign Affairs Committee of the National Assembly on October 7, 2009, that a meeting the previous month of the UN Secretary-General's Group of Friends on Myanmar had concluded that: “Sanctions are useless and everyone recognizes that.”

At the same time, former US Assistant Secretary Kurt Campbell, who I see is now a consultant on a country which he has no hesitation these days in calling ‘Myanmar’, told the House of Representatives Committee of Foreign Relations at a hearing two weeks later that the most the US could hope to achieve through sanctions was to “pose some modest inconveniences”. In both cases Kouchner and Campbell were speaking about the effectiveness of sanctions against the military regime: useless, at the best only modestly inconvenient.

Aung San Suu Kyi, however, is on record in an interview with the New York Times on September 30, 2012, as saying that: “I always say that sanctions work … I always quote the International Monetary Fund by saying that for years IMF reports have consistently made the point that sanctions have affected the economy very little … I do not think sanctions hurt ordinary Burmese, as much as the IMF has gone into this and they have concluded that they did not hurt ordinary Burmese.”

I would make two points. The first is that I have found no such comment anywhere in reports issued by the IMF in recent years, or in those not generally released but shown in confidence to trusted contacts. Indeed, the IMF has, from my own analysis, acknowledged the impact of sanctions on ordinary Burmese.

“Tighter sanctions that have recently been announced [in the wake of the misnamed ‘Saffron Revolution’] … could have significant consequences on some sectors … In labour-intensive sectors such as tourism and textiles, a fall in demand could have adverse consequences on employment, even if the overall macroeconomic impact is small. Similarly, a fall in remittances from abroad could affect more people than the overall size of such flows.” (IMF Staff Report November 2, 2007)

The second point is that the massive inflow of revenue from the sales of gas and natural resources so cushioned the former military regime from financial pressures that they were able to build up Myanmar's foreign exchange reserves year by year, and this has been instrumental in Myanmar securing a resolution of their debt problems.

It is no coincidence that over the years the EU has steadfastly refused to release any assessment of the effectiveness of sanctions though repeatedly pressed to do so by parliamentarians in both London and Europe. Internal analyses have of course been made, but highlighting the extent to which sanctions were very clearly counterproductive to Western interests and to those of the Burmese people only ensured that for internal political reasons such assessments could not possibly be released, even in confidence to members of national parliaments or the European Parliament.

In any case, how exactly have sanctions ‘worked’, as not only Suu Kyi but certain schoolmasterly politicians and advocacy groups now argue without a shred of evidence?

The main sanctions, shamefully untargeted, were the denial of development aid, restrictions on humanitarian aid, and the discouragement of trade, investment and tourism, all of which were sanctions of a general nature affecting the economy as a whole. Incompetently targeted sanctions aimed at exports of natural resources like timber, precious metals and gemstones turned out to have exactly the opposite effect to what was intended as prices rose, profits to the military regime and cronies increased, and the West found itself paying higher prices for imports of these commodities through Asian intermediaries.

The military regime stood up to these sanctions throughout the first six phases of the ‘Seven Point Road Map to Democracy’ launched in September 2003. Whatever the West threw at them, the military regime was totally unmoved. It completed the sixth phase, the 2010 General Elections, to their complete satisfaction without yielding an inch.

Rather to the surprise of many, a reformist administration then emerged under President Thein Sein who has made it clear that sanctions should now be lifted if the West is seriously concerned to help the Burmese people and secure a better life for them. The new administration is now putting into effect the seventh and final phase of the Road Map, which is “to build a modern, developed and democratic nation” which cannot be done while sanctions hang like a millstone around the necks of the Burmese people.

Not only the President, but other leaders as well, notably Thura Shwe Mann, Leader of the Lower House, has highlighted the extent to which Myanmar has fallen behind its neighbours and how imperative it is that sanctions, which scarcely affected the military regime or its cronies, should finally be lifted so that the country should have a fair chance to prosper.

The issue which the EU has to face on April 22 is whether the serious problems which remain a matter of international concern, including the situation in Rakhine and Kachin states, and in recent days involving sectarian violence in Meiktila and elsewhere, merit a continued suspension of sanctions rather than their final lifting.

The civilian administration undoubtedly finds the suspension rather than the lifting of sanctions irritating, and the argument that the suspension provides symbolic, psychological and political pressure is superficially attractive. My own conclusion however is that it was always immoral to seek to capitalize on this pressure based on sanctions whose effect has been massively counterproductive while they were in force.

Myanmar is facing difficult problems, which the West will not help to resolve by the rigmarole of first reinstating and then suspending sanctions for another 12 months. I doubt in any case that Suu Kyi will favor another year's suspension. It is not in her political interests to irritate President Thein Sein's administration and the military unnecessarily, now that there is talk of amending the 2008 constitution. She has her own political agenda which may not be that of the Western world.

This situation has caused a dilemma in some Western countries. Quite recently the Senior Minister of State at the Foreign and Commonwealth Office, Baroness Warsi, spoke of “the intelligent use of sanctions which in the case of Burma have been attributed as one of the most effective levers in encouraging the regime to implement democratic change.” The Baroness does not say who might have so startlingly attributed the effect of sanctions against Myanmar in this way; indeed, all the evidence points in the opposite direction. But the British government has a political need on the home front to justify its actions and is unlikely to accept the final lifting of sanctions without making a fuss, against a background of parliamentary pressure from a militant lobby.

The reality though is that, if as I suspect there is no unanimous agreement either on reinstating and then suspending sanctions at the EU Foreign Affairs Council on April 22, or on lifting them either, then sanctions will simply lapse on April 30. So it might be politically attractive to the British government to be able to explain to the British Parliament that they had not supported the permanent lifting of sanctions, but the procedures of the Council had meant that sanctions had lapsed in the absence of agreement about what to do for the next 12 months.

This would then leave the United States rather out on a limb as the sole remaining Western country to maintain a sanctions regime, inimical as this would be to US commercial and financial interests. The complexity of the US sanctions regime, unfathomable to ordinary mortals, has puzzled even the US Ambassador in Myanmar, Derek Mitchell. However, the rest of the world has little choice but to let the US follow its own inclinations, as they have their own geo-strategic interests to pursue with which other Western countries may or may not agree, and over which in any case they have little influence.
– A former British Ambassador to Thailand, Vietnam and Laos, Derek Tonkin is an Adviser to Bagan Capital and a former member of the UK Joint Intelligence Committee.
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