Will Myanmar's Reforms Prompt Lifting of U.S. Sanctions?

February 14, 2012

The political reforms underway in Myanmar for nearly one year have prompted a review of U.S. policy toward the country and speculation that the United States might consider lifting some of its sanctions against the regime. In reality, the Obama administration has set several conditions that must be met before the sanctions will be eased, including the government’s ensuring that the upcoming April 1 parliamentary by-elections will be reasonably free and fair.

But U.S. officials and congressional aides observe that lifting the tangled “spaghetti bowl” of sanctions imposed against the country since 1988 will be phenomenally difficult and slow. In some cases, such as the recent easing of restrictions against international financial institutions operating in Myanmar, the president and/or the secretary of state can issue waivers. In other cases, lifting a particular sanction will involve consultations between the administration and Congress.

In the cases of sanctions imposed earlier against countries such as South Africa, Vietnam, Indonesia, and Iraq, easing economic restrictions took years, and in some cases, the United States is still working on easing restrictive measures even though its relations with these countries have improved dramatically.

Despite this, U.S. officials say that if they find specific measures they want to introduce to respond to steps taken by the Myanmar government—to organize parliamentary exchanges or provide capacity building for economic officials, for instance—they are confident that Congress will work with the administration to make this possible.

Q1: What are the sanctions imposed on Myanmar by the United States?

A1: The United States imposed a variety of sanctions on Myanmar in response to what Washington saw as serious human rights and civil liberties violations by the country’s former ruling military junta. Sanctions began in 1988 when Myanmar’s military regime violently cracked down on peaceful, popular protests now known as the 8888 uprising and seized power under the newly established State Law and Order Restoration Council (later renamed the State Peace and Development Council, or SPDC). Sanctions have continued in subsequent years in response to actions by the SPDC that were considered damaging enough to warrant tougher action. According to a February 7 Congressional Research Service report on U.S. sanctions, the result is a “web of overlapping sanctions subject to differing restrictions, waiver provisions, expiration conditions, and reporting requirements.’’

The United States has enacted sanctions specifically targeting Myanmar via five federal laws and four presidential executive orders issued between 1990 and 2008. U.S. sanctions generally fall under several broad categories, including visa bans, restrictions on financial services, bans on imported goods from Myanmar and on new investments in the country, and constraints on U.S. assistance to Myanmar. In addition, there are U.S. laws that impose sanctions on Myanmar for unacceptable behavior linked to functional issues, such as the use of child soldiers, drug trafficking, human trafficking, money laundering, failure to protect religious freedom, and violations of workers’ rights.

For detailed information on U.S. sanctions on Myanmar, see Michael F. Martin, U.S. Sanctions on Burma (Congressional Research Service, February 7, 2012), http://www.fas.org/sgp/crs/row/R41336.pdf.

Q2: Is the United States considering softening its stance on sanctions?

A2: Political developments in Myanmar over the past year have sparked a policy debate in the U.S. government over whether Washington should remove or phase out some or all of the sanctions on Myanmar. In November 2010, national elections were held in the country. While far from free or fair, they ushered in a new nominally civilian government led by President Thein Sein, a former general. Since then, the Thein Sein government has taken steps toward political reform including initiating cease-fire talks with ethnic rebels, releasing opposition leader Aung San Suu Kyi after seven years of house arrest, releasing jailed political prisoners, and changing laws allowing opposition parties to participate in parliamentary elections.

Administration officials and U.S. lawmakers, who have been instrumental in imposing myriad and overlapping sanctions on Myanmar since 1988, have said any decision on lifting sanctions will be contingent on the actions of the new government going forward, as well as the views of Suu Kyi.

While the U.S. Congress has chosen to retain existing sanctions for the time being, the Obama administration has made some significant gestures to encourage the continuation of reforms. These steps include sending Secretary of State Hillary Clinton to Myanmar to meet with Thein Sein in late November 2011—the first visit by a U.S. secretary of state in 56 years. In January, the United States announced that it was ready to exchange ambassadors with Myanmar and that it would restore full diplomatic relations with the country.

In early February, Secretary Clinton signed a partial waiver of restrictions imposed on Myanmar under the Trafficking Victims Protection Act. The waiver will allow assessment missions and limited technical assistance in Myanmar by international financial institutions such as the World Bank and the International Monetary Fund. The waiver, which runs through September 2012, is in fact very limited, as most of the tough U.S. economic, trade, and political restrictions remain in place.

Q3: How difficult will it be to lift sanctions?

A3: Secretary Clinton said during her recent visit to Myanmar that Washington is “testing this commitment’’ to make sure the initial steps taken by the Thein Sein government are “real and sustainable’’ before any further discussion on lifting sanctions can take place. She spelled out the additional steps the Myanmar government would have to take for bilateral ties to improve. They include releasing all political prisoners; halting hostilities in ethnic areas and seeking a true political settlement; broadening the space for political and civic activity; and fully implementing legislation protecting universal freedoms of assembly, speech, and association. In particular, U.S. government officials and prominent members of Congress have said they will watch closely whether Myanmar will ensure that its April 1 parliamentary by-elections—which Suu Kyi and her party, the National League for Democracy (NLD), will be allowed to contest—will be free and fair.

The U.S. Congress will also face a challenge removing sanctions because of the overlapping provisions of the laws and executive orders of the current sanctions regime. Congress could come under heavy pressure not to lift sanctions from human rights groups that argue that reforms in Myanmar have not gone far enough and could still be reversed.

Q4: How important are the views of Aung San Suu Kyi to the lifting of U.S. sanctions?

A4: Opposition leader Suu Kyi has long supported Western sanctions against the military junta that formerly ran Myanmar. Her position is that economic sanctions would isolate the regime financially and diplomatically and, hence, hasten the end of its rule. Since the nascent political reforms began, Suu Kyi has not reversed her stance. But she was reported saying on February 14 following talks with a German official in Yangon that she agrees “with those who think that the question of whether sanctions are lifted should be left until after the [April] by-elections.”

Suu Kyi’s views on sanctions have not gone unchallenged. Over the years, experts have questioned the effectiveness of the sanctions, arguing that they have failed to produce the hoped-for outcomes—regime change, political and human rights reform, and better lives for ordinary people in Myanmar. Suu Kyi’s party, the NLD, on the other hand, has blamed mismanagement and poor governance by the former military regime for Myanmar’s economic plight. Some analysts say Suu Kyi sees sanctions as leverage over her political opponents in Myanmar since Western governments take a lead from her stance.

As the icon of Myanmar’s pro-democracy movement, Suu Kyi plays a critical role in U.S. policy considerations toward Myanmar. Her views on the appropriateness of lifting sanctions carry much weight with the U.S. government. Underscoring her influence, prominent members of Congress (e.g., Senate Minority Leader Mitch McConnell and Senators Joseph Lieberman and John McCain) who visited Myanmar in recent months articulated that Washington would be looking to Suu Kyi for guidance regarding the timing for any easing of sanctions.

One consideration is that despite Suu Kyi’s moral authority and standing within Myanmar’s pro-democracy movement, disagreements between activists in favor of lifting sanctions and those who oppose the move could complicate and slow down the progress toward a final decision.

Murray Hiebert is a senior fellow and deputy director of the Southeast Asia Program at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Tracy Quek is a researcher with the CSIS Southeast Asia Program.

Critical Questions is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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