The Greatest Ethical Challenge Facing US - Myanmar Relations Today

By Pong Sawasdipakdi (Thailand) and Anne Gillman (USA) , Southeast Asia MA Candidates at Johns Hopkins University School of Advanced International Studies (SAIS) in Washington D.C.

MEMO FOR THE NATIONAL SECURITY COUNCIL U.S. INTERESTS IN THE SINO-BURMESE RELATIONSHIP

OBJECTIVE: Current Obama Administration policy is to support a unified, peaceful, prosperous, and democratic Burma that respects the human rights of its citizens. The U.S. aims to support a stable Sino-Burmese relationship aligned with U.S. interests. In pursuing this policy, the U.S. has interests in the Sino-Burmese relationship that derive from political, economic, and security concerns.

BACKGROUND: Over the majority of the past 25 years the U.S., many other Western countries, and Burma did not have formal relations. The international community was trying to isolate the repressive military junta ruling Burma. During this time, China, which shares a border with Northeast Burma, was a lifeline for the regime, providing political, military and economic support. Since the Thein Sein administration in Myanmar, the relationship has changed, with Myanmar exerting some push back on Chinese influence in the country, at the same time relations with the U.S. have improved.

POLITICAL

1. It is in the U.S. interest to support the Sino-Burmese relationship to communicate to China that U.S. involvement in Burma is not part of a containment strategy nor an attempt to drive a wedge in the bilateral China-Burma relationship.
   
2. After U.S. diplomats visited the Kachin State, China was wary of a potential U.S. intervention in the conflict. Partially to avoid U.S. involvement in its border, China has been the host of the recent ceasefire negotiations with the Kachin Independence Organization (KIO) and the Burmese Government. Border stability is in China’s interest, and China is fearful that a disintegration of the Kachin Independence Army (KIA) would present an opportunity for Kachin guerilla fighters to attack targets indiscriminately in the region, posing risks to Chinese investments such as the dual oil and gas pipeline. However, it is in the interest of the U.S. that the KIO and the Burmese Government peace talks lead to a permanent integration solution of the KIA and Burmese Army. Continued conflict with the ethnic minorities could present a barrier to the elections in 2015, and it is in the U.S. best interest that free and fair elections are held on time.
   
3. China recently appointed Wang Yingfan, a very senior diplomat and former Vice Minister of Foreign Affairs, the first special representative on Asian affairs. Wang Yingfan will primarily be focused on the Sino-Burmese relationship, and it is in the U.S. interest for Patrick Murphy, the U.S. Special Representative and Policy Coordinator for Burma, to establish a relationship and open communication channel with Wang Yingfan immediately.
   
4. As 2014 is the first year Myanmar is chair of ASEAN, the U.S. has an interest in increasing its influence relative to China in Myanmar so that China’s influence does not weigh unduly over Myanmar’s leadership of ASEAN.
   
5. China has started to build relationships with democratic oppositions in Myanmar. The U.S. currently has the strongest relationship with Aung San Suu Kyi and the National League for Democracy (NLD), and Thein Sein and the reform supporters in the Union Solidarity and Development Party (USDP). In light of the uncertain outcome of the elections of 2015 it is in the U.S. interest to also build relations with opposition parties in Myanmar as China is doing.
   
6. It is in the U.S. interest to promote a stable Sino-Burmese relationship so that the Chinese are close observers to the strategies and benefits of the transition. A successful and prosperous transition to democracy in Myanmar could be a good example for Chinese who may push for reform in the future to refer to.

ECONOMIC

1. China is the largest source of Burma’s FDI inflows, about a third of the total $42 billion the country received in 2012. The majority of the Chinese investment is in the hydro, oil and gas, and mining sectors. However, a significant amount has gone into infrastructure. Chinese companies view Burma’s need for infrastructure as a great opportunity. It is in the U.S. interest for China to invest in Burma’s infrastructure because infrastructure investments take a very long time to realize profits and will facilitate the entrance and ease of business for American companies in Burma.
   
2. The U.S. has an interest in responsible Sino economic involvement in Myanmar to prevent environmental and humanitarian disasters, and to protect the land for the benefit and enjoyment of generations to come.
   

SECURITY

1. China has provided a vast amount of military support to the Burmese military and ethnic minority militias in Burma. It is suspected that China conducts military intelligence gathering activities from Burma. It is in the U.S. interest to understand the extent of the Sino- Burmese military relationship. It is in the best interest of the U.S. that China does not fund the ethnic militias.

POLICY RECOMMENDATIONS

1. To gain a greater understanding of the Sino-Burmese military relationship the U.S. should propose a joint security exercise with U.S., Chinese, and Burmese partnership aimed at cutting down illegal drug activities in the Golden Triangle. Thailand has been frustrated by Burma’s inability to curb the flow of methamphetamines across the border, and China is not likely to welcome U.S. forces on its border, but a Sino-Burmese-American join effort may be possible on the Burma, Laos, Thai border.
   
2. Patrick Murphy should invite Wang Yingfan for an official visit to Washington D.C. to discuss which policies in Burma the U.S. and China can work together on in order to show China that the Burma – U.S. relationship is not part of a containment strategy, emphasizing, as Ambassador Derek Mitchell said, that “U.S. involvement in Burma is about Burma.”
   
3. USAID should design projects for public private partnerships involving American and Chinese companies in Myanmar. The partnerships will be mutually beneficial because the Chinese companies can bring the capital and state financing while American companies can bring the training and technological know how that Chinese and Burmese companies are hungry for.
   
4. To enable the U.S. to invest with confidence in Burma and partner with Chinese enterprises, the USG executive branch should ask the 113th Session of Congress to make it a priority to pass new legislation fully removing the old sanctions.
   
5. China desires to be seen as a responsible international power. The U.S. should publically commend China for taking a leadership role in the KIO/Burmese government peace process and encourage further facilitation of the peace process.
   
6. High-level U.S. Government representatives should plan to be present at as many of the 2014 ASEAN meetings in Burma as feasible in order to demonstrate commitment to the pivot and maintain an element of U.S. influence on Burma’s leadership of ASEAN.
   
7. U.S. diplomats fluent in Chinese and Burmese should be trained at FSI and posted in Yangon to strengthen and facilitate communication between the three nations.
   

2 

Memorandum for Secretary of State John Kerry concerning the 2015 Myanmar Elections Attitudes and Policy Regarding the Planned 2015 Elections in Myanmar

The first presidential election since the dramatic democratic and economic reforms in Myanmar will take place in 2015. The event is considered to be a signpost by the international community, including the US. An election considered legitimate will signal that the reforms will hold and most likely continue to be advanced in the future; an illegitimate election will be evidence of a backslide in the reforms and a shaky future for democracy in Myanmar.

The USG should use 3 very basic criteria to consider the elections legitimate: 1)No widespread complaints of voter obstruction or intimidation 2)Election results that have not been tampered with 3)The elections are held and constitutionally eligible elected parties are allowed to take office in a timely manner.i If the 3 criteria are met, the USG should make moves to permanently lift sanctions. The USG should communicate these expectations and the potential for lifting sanctions to the Myanmar leaders in private and not telling the government what to do, but offering to helping the government host legitimate elections.ii

The Burmese government is sensitive to being perceived as a puppet of any country. There is a strong sense of nationalism and pride shared among Burmese citizens, which the USG will want to avoid aggravating by appearing to interfere in internal affairs. For this reason, the USG should not threaten the Burmese government with what US policy would be if the elections are not deemed legitimate.

The USG should make 4 further recommendations to the Burmese government in private: 1)Appoint and allow access to local organizations to partner with international organizations for elections monitoring, 2)Encourage the Parliament to amend the 2008 Constitution to allow all Burmese citizens above a certain age be eligible to run for President and to remove the provision of 25% of Parliament seats for the military 3)Encourage the participation of Rohingya, other Muslim citizens, and ethnic minorities in the election. If verifiable efforts and relative successes are made to act on the recommendations, the USG should tell the government it will start the process of a preferential trade agreement with Myanmar.

A commission to review the constitution for possible changes was establish in late Mar. 2013, but it was proposed by the USDP, and needs to integrate NLD members.iii As the Constitution currently stands, Suu Kyi is not eligible to be President because her late husband and 2 sons are UK citizens. It is possible the Constitution could be amended to make it legal for her to be President, especially in light of the statement from the current President, Thein Sein, in support of her candidacy, and her recent attendance at the Armed Forces Day.iv However, passing a Constitutional amendment requires approval from 75% of Parliament, which is unlikely when 25% of the seats are held by current members of the military. The US could suggest that the government wait to see the outcome of the elections, and if less than 25% of the candidates elected to the Parliament are from the military, than the Committee would be obliged to present Parliament with a Constitutional Amendment.v

The USG will likely receive pressure from the business community and related lobbying organizations to employ a loose definition of what constitutes a legitimate election and find a way to work with whatever regime is in power in 2015. The US business community has already made substantial investments in Myanmar, including the announcement of the opening of the first American hotel in Yangon in 2014 by Hilton Hotels, and would like access to Myanmar’s market of almost 60 million people, geostrategic location between the world’s two most populous countries, and resources such as natural gas, labor, jade, and timber.vi

Members of Congress will likely pressure the USG to adopt a stricter view of what constitutes legitimate elections in Myanmar. Members representing Burmese hubs such as San Francisco, Fort Wayne, Indiana will be influenced by their Burmese American constituents who traditionally support Suu Kyi’s positions.vii They will be hesitant to permanently lift all sanctions, fearing that the USG will lose all leverage over the Burmese government.

Top Myanmar academics and diplomats will argue for continued engagement, regardless of the outcomes of the elections, because many do not view the sanctions as effective in influencing the military regime in the past. US Citizens who have had a chance to visit Myanmar and experience the poverty and severe underdevelopment of human capacity will likely encourage continued engagement in the hopes of bettering the lives of the majority of the country’s people who live in extreme poverty.

US Allies Japan and Thailand will argue for an approach of continued engagement because they are betting on an economic boom in Myanmar. Japan has recently invested a lot of foreign aid in the country in deals that American professors, such as Prof. Karl Jackson, have played a role in. Thailand, who recently encouraged the US military to invite the Burmese military to be observers at the Cobra Gold exercises will also support continued US engagement.viii Thailand will want to avoid any changes that could cause further unrest along the border or an influx of refugees. The number of flights from Thai border towns to Myanmar are increasing, and the border trade will soon be more closely monitored, providing a large tax collection opportunity.ix

The Chinese government, people, and businesses could verbally protest if they perceive the USG to be too involved in the elections process and influencing the results. The Chinese already suspects the increasing US interaction with Myanmar to be part of a containment strategy. The Chinese business community was slighted by the halt of the Myitsone Dam and is now facing increasing competition from international companies, and the nationalism of the Chinese people could be stoked if the US involvement in Myanmar is seen to be a catalyst for worsening Myanmar – Sino relations.

In the lead up to the election the most important thing the USG and Americans can do is communicate at every possible opportunity to the USDP, the Tatmadaw and ethnic minority militias, the business community, opposition political parties, and civil society groups that timely and legitimate elections in 2015 is in Myanmar’s best interest.

The US should continue, and expand, programs building the skills of journalists and support the 16 newly free and independent media outlets.x The media can further investigate the source of the violence in the country, and potentially expose the truth regarding the USDP involvement in framing it as stemming from religious conflict. It is possible that the recent conflicts in Bago Division are being framed by the government as stemming from conflict between Buddhists and Muslims as part of a strategy to cause political difficulties for Suu Kyi. If Suu Kyi stays quiet about the supposed religious conflict, the international community will criticize the Nobel Laureate for failing to stand up for human rights, but if she works to end the conflict and appears too supportive of the Muslim community (about 2% of the population), she could lose favor with the Buddhist majority of the country (about 85%) and lose many of the votes needed to be elected in 2015.xi Media can be watchdogs in the absence of rule of law or an electoral commission.

The American Center and USAID mission should continue educational programs about the different ways a legitimate election can be conducted so that the Burmese citizens are able to recognize and report inconsistencies leading up to the election. The American Center in Yangon can show and then discuss American movies that feature election stories during its weekly Tuesday free movie screening.

_______________________________________________________________________________________________________

i Forbes, Thea. “What is a ‘free and fair’ election?” Special Report. The Mizzima. October 15, 2012. Accessed April 1, 2013. http://www.mizzima.com/news/election-2010-/4451-what-is-a-free- and-fair-election.html
ii In-person conversation with former Burmese Foreign Service Officer. April 1, 2013.
iii Aye Aye Win. “Myanmar Parliament Agrees to Review Constitution.” The Associated Press. March 20, 2013. Accessed April 1, 2013. http://bigstory.ap.org/article/myanmar-parliament- agrees-review-constitution
iv Fuller, Thomas. “Myanmar Jarred by Peace Laureate at Military Parade.” The New York Times. March 27, 2013. Accessed April 1, 2013. http://www.nytimes.com/2013/03/28/world/asia/daw- aung-san-suu-kyi-appears-at-burmese-military-parade.html
v In-person conversation with former Burmese Foreign Service Officer. April 1, 2013.
vi “Hilton to open hotel in Myanmar.” The Bangkok Post. March 6, 2012. Accessed April 1, 2013. http://www.bangkokpost.com/breakingnews/339115/hilton-to-open-hotel-in-myanmar.
vii “Suu Kyi to visit largest Burmese community in US.” Mizzima News. August 28, 2012. Accessed April 1, 2013. http://www.mizzima.com/news/inside-burma/7860-suu-kyi-to-visit-largest- burmese-community-in-us.html
viii Ralph, Talia. “Cobra Gold: Myanmar gets invitation to US – Thailand military exercises.” The Global Post. October 19, 2012. Accessed April 1, 2013. http://www.globalpost.com/dispatch/news/regions/asia-pacific/myanmar/121019/myanmar- gets-invite-us-thailand-military-exercises
ix “Thai Airline to Launch Burma Flights from Mae Sot.” The Irrawaddy. April 1, 2013. Accessed April 1, 2013. http://www.irrawaddy.org/archives/31036
x Naw Say Phaw Waa. “Eight more publishers granted daily licenses.” The Myanmar Times. April 1, 2013. Accessed April 1, 2013. http://www.mmtimes.com/index.php/national-news/6201-eight- more-publishers-get-daily-newspaper-licences.html
xi Conversation with Burmese VOA journalist. March 30, 2013. 

Tipping the Balance on the Pivot

There is a noticeable wobble in the implementation of the Obama administration’s 2012 Asian pivot or rebalance policy.  While the countries of the Association of Southeast Asian Nations (ASEAN) have generally verbalized support for the new stance, there is one commonly cited concern: an over emphasis on the security aspects of the plan with only vague lip service paid to the economic portion. 

Although the U.S. government coffers have grave budget difficulties, the U.S. can still have a significant economic impact through the American private sector, and Myanmar, the ASEAN chair for 2014, is the prime arena to demonstrate commitment to a robust rebalance policy.  The time is right to emphasize investment in Myanmar because the country is the hot new market exciting investors, the Burmese government is encouraging increased American investment, and because the country is rebuilding from its very foundation, so smaller amounts of capital will make a relatively large impact.

It is no secret that Myanmar is rich in resources (i.e. teak, jade, natural gas), has a large workforce and market with a population of almost 60 million, and is in a geostrategic location between the world’s two largest markets – India and China.  However, as a result of U.S. sanctions against Myanmar, Americans have not been able to easily invest in the country until recently.  Since the reforms in Myanmar started in 2012, sanctions have been significantly rolled back, but still have not been permanently lifted.  Some inroads have been made: the USAID mission in Myanmar emphasizes public-private partnerships, exemplified by the recent CISCO investment, former Assistant Secretary of State Kurt Campbell’s newly established company has bid for construction of the new Yangon airport, and the U.S.-ASEAN Business Council has led multiple tours of the country for American business people – but it is still far from enough.

Given that a partial motivation for the pivot is to manage the perceived increase in China’s regional influence, those tasked with implementing the policy would do well to take a step back and look at the factor that has overwhelmingly enabled China’s growing presence – FDI. According to the Myanmar Directorate of Investment and Company Registration, 34.5% of FDI inflows in 2012 were from the Middle Kingdom, while only .6% was from the U.S.  During a conversation with an American entrepreneur in Yangon this past January, I learned that the only people he is doing business with are the Chinese in Myanmar – because they are the ones with capital.  An influx of American companies and capital can offer a desirable alternative for investors and government officials looking to implement public-private partnerships.          

           Secretary of State John Kerry needs to pressure Congress to permanently lift all sanctions against Myanmar.  Legislation for tax advantages for U.S. companies who invest at least $50 million in Myanmar should be proposed.  A preferential trade agreement with Myanmar can be negotiated, with the aim of eventually working towards their membership in the TPP.  Lastly, there needs to be greater communication between American diplomats and the expat business community in Myanmar.  Another American business person I met in Yangon confirmed that there is little consulting of the business community by foreign service officers.  The American Chamber of Commerce and the U.S.-ASEAN Business Council, can facilitate this discussion, but have yet to open an office in Myanmar. 

American companies will provide jobs and can influence the policy and institutions in Myanmar.  An example of how this will work is the Protec Helmet factory I visited in Hanoi, Vietnam in 2009, started by an American in 2002.  Through the influence gained by the factory’s business success and the large number of jobs, especially for the disabled, which it provided for the community, the founder was one of the forces inspiring the Vietnamese government’s policy change to require motorbicyclists to wear helmets. 

        The biggest concern of US companies looking to invest in Myanmar is the rule of law, and Americans are still cautious to take any actions that seem supportive of the Burmese military.  Irrational exuberance surrounding the emergence of this market also creates unrealistic expectations and could lead to a bubble of unaffordable wages and a spike in the cost of living for locals.  However, after spending 26 days in the country and interviewing more than a dozen American businesspeople, diplomats, and members of the Burmese business community, I am confident that the American private sector can navigate these risks and successfully invest.  We must not miss this opportunity to successfully penetrate the market early on, providing jobs, quality consumer goods, and make a difference in the poorest country in Southeast Asia.  Tasked with continued implementation of the policy, Sec. Kerry must facilitate and emphasize economic diplomacy in Myanmar to illustrate the tipping of the scales to even out the security and FDI portions of the pivot.