17 Oct Crisis in Burma: Can the U.S. Bring About a Peaceful Resolution?

Taken from United States House of Representatives, October 17, 2007

Testimony of Bridget Welsh, Ph.D.

Assistant Professor

Southeast Asia Studies

Johns Hopkins University

The Paul H. Nitze School of Advanced International Studies

Before the

1. S.Subcommittee House Foreign Affairs Subcommittee onAsia, the Pacific and Global Environment

October 17, 2007

“Crisis in Burma: Can the U.S. Bring About a Peaceful Resolution?”

Mr. Chairman, Ranking Member Manzullo, and members of the subcommittee, thank you for inviting me here today to testify about how to bring about a peaceful resolution to the crisis in Burma (also known as Myanmar). I commend the actions of the committee in holding a hearing on this important question and drawing attention to the crisis of the estimated 54 million Burmese people who have been under military rule for the past 45 years. The compelling images of peaceful protest and the bravery of the protestors captured worldwide attention. It is critical to build on this momentum and translate it into substantive change. The developments since the crackdown last month have fostered greater unanimity in the international community for political reform and present the U.S. with an opportunity to explore new initiatives and to develop practical measures to improve the conditions of the Burmese people.

My remarks address the key question posed by this hearing – how can the U.S. help to facilitate a peaceful resolution.  I propose a number of concrete recommendations.  The recommendations are driven by the shared goal of achieving a better future for the Burmese people and point to a strategic, pragmatic and targeted consensus core set of initiatives that directly address the ongoing crisis in Burma. Lessons in our recent foreign policy in Iraq and Afghanistan clearly illustrate that bringing about political reform and sustaining democracy after a dictatorship require parallel and multiple approaches. Multiple approaches will increase U.S. leverage (which is now quite limited) in addressing the current crisis.

First, central to any peaceful resolution is the primacy of diplomacy. In this regard, I would like to commend the Bush administration for embracing the diplomatic effort under the auspices of the “good offices of the U.N. Secretary General” through the Secretary General’s Special Envoy Ambassador Ibrahim Gambari. There is no question that the U.N. will play a critical role in any peaceful resolution. The international community through the U.N. Security Council has also demonstrated that it is more united than ever before. Countries with direct leverage are now calling for dialogue and political reform. There is a genuine spirit of multilateralism and cooperation in place. For the first time in history, all the major global powers have adopted a united approach with respect to Burma. Unified international concern and the pivotal role played by China have brought the Burmese junta to the discussion table; it is essential that the junta remain to bring about a peaceful solution for the reason that they continue to hold the monopoly of means of coercion. Meaningful diplomatic dialogue is the primary means to bring about a peaceful resolution to the crisis. In this regard, I urge the Congress to support the U.N. dialogue process and recognize that this process will take time in order to be effective. For example, Members of Congress could help by urging senior members of the Bush administration (and perhaps the President himself) to actively engage in the dialogue process by calling on leaders in China and India to maintain international pressure for dialogue.

The Congress should also consider developing a new set of initiatives that complements the international dialogue effort. Led by members of this committee who have shown a strong commitment to justice and democracy in Burma, the U.S. has adopted a position of unilateral sanctions and consistent strong condemnation of the junta. I urge the committee to assess the effectiveness of these measures. Generally, the arguments against unilateral comprehensive sanctions in Burma have been threefold: a) They increase the burden on everyday people. b) They shrink the middle class and civil society which are essential for any reform process to expand and c) They are ineffective unilaterally since this form of sanctions lacks international cooperation. As U.S. business has left the country, the vacuum has been filled by other international companies from China, India, ASEAN countries, Russia and South Korea. There are also closer links between the junta and the Middle East and North Korea. None of these countries supports sanctions on trade and investment. Many companies from these countries adopt abhorrent business practices and create an environment that worsens human rights conditions on the ground. Arguably, having U.S. businesses in Burma provided an avenue for dialogue and greater transparency in business transactions. This is particularly important in the oil and gas sector, a large source of revenue that some have estimated could be as much as $2.6 billion. US companies also have sponsored needed socioeconomic projects that provide basic services to the people in the areas where they work.  Non-western companies have not duplicated such programs in areas where they have a presence.

There are four additional reasons the unilateral sanctions policy is limited in its effectiveness in Burma. a) Unilateral sanctions promote and reinforce isolationism. With a highly xenophobic regime and where years of self-imposed isolationism are part of the problem, sanctions feed into a climate of paranoia of the junta leadership, encouraging them to seek refuge with rogue regimes such as North Korea and promoting the regime to build up its nuclear capabilities. b) Equally important, the sanctions provide the regime with an excuse for the junta to deflect responsibility for the economic crisis for which they are indeed responsible. c) Moreover, the unilateral sanction policy has alienated countries within Asia that have leverage to promote dialogue with the regime, China, ASEAN and India. Maintaining the cooperation of these countries is essential for any process of dialogue to move forward. d) Finally, the conditions tied to the removal of sanctions limit the ability of the U.S. to be effective as an interlocutor in any dialogue process. It is important to note that over the last year, even before and since this crisis, leading human rights groups – Amnesty International, Human Rights Watch Asia, Free Burma Coalition – and international aid groups working in the country – World Vision, Refugees International and Catholic Relief Charities – are not calling for blanket sanctions in Burma, unilateral or otherwise.

As the Congress moves forward, working in tandem with the Executive Branch that is also committed to bringing about a peaceful resolution, more flexibility and targeting are needed in the application of sanctions. This will build on the growing multilateral effort and allow the US to lead more effectively to promote political reform. To date, sanctions have shown the strong commitment the U.S. has to the pro-democracy movement inside the country and shown support for the brave Burmese who have risked and continue to risk their lives. Modifying measures does not in any way take away from support and may in fact empower the reform process. Increasing U.S. leverage and creating conditions for flexibility reinforce the dialogue process.

In the spirit of promoting flexibility and increasing U.S. leverage, I suggest three important policy modifications. First, sanctions can be effective if they are targeted more specifically toward the leaders in the regime. U.S. policy has moved in this direction, with the Bush administration and some members of Congress calling for limits on financial/banking transactions and visa restrictions on leaders. My own view is that targeted sanctions need to concentrate on the individuals in the junta who are responsible for the killing and brutal repression. Targeted sanctions should not be applied in a blanket fashion to all leaders, but focused on key individuals who have engaged in human rights abuses and are thwarting the dialogue process. Targeting will foster conditions for dialogue and build support within parts of the State Peace and Development Council (SPDC) for the dialogue process. The Congress can assist this effort by asking the Secretary of the Treasury for a report on the known financial holdings of junta leaders and an assessment of the involvement of specific individuals in the ongoing crackdown. In order for these financial sanctions to be effective, there needs to be more cooperation between the Treasury and financial institutions in Singapore, Hong Kong/China, Taiwan, and Dubai, where it is believed that most of the financial assets of the leaders are held. Diplomatic efforts need to also limit the international travel of the junta leadership (and their families) that are thwarting reform.

Second, the U.S. Congress should support the measure that has widespread support among the human rights community – a multilateral arms embargo. This will require the Executive Branch to persuade the key arms suppliers, China, India, Russia and reportedly Serbia, to stop supplying the Burmese military with equipment. Cutting the supply of arms to the Burmese military focuses attention on the international condemnation of the state violence and the pressing need to reduce such violence.

Third, the Congress should consider measures to increase democratic assistance, particularly within the country. The reported $2.5 million 2007 earmark for the National Endowment for Democracy is down from a $4 million earmark two years ago. Voice of America and Radio Free Asia, who report on issues and are a critical part of the dialogue process, also have received severe cuts in funding. These funding cuts are not in line with current conditions.

Fourth, in assessing future measures, the Congress could consider building in more flexible measurements of progress in the dialogue process. This would not take away from the overall message of calling for democracy but would help to promote the very means for nurturing and facilitating democracy.

Part of the call for flexibility is an appreciation of inclusiveness and recognition that change will not happen immediately. It will be gradual, and likely involve the cooperation of some individuals from the military. Calling for a removal of the military from political power altogether goes against the history of the country. The Tatmadaw – the military – remains the most powerful institution in Burma, the only institution after Buddhism which has been severely damaged in this crisis.  Internationally, in Asia and within the National League for Democracy itself (which is partly comprised of ex-military people and led by a daughter of a general), there is a recognition that the military will be part of a future government that can maintain order and stability. Congress can craft any future measures in such a manner to allow for possible inclusiveness.

Another critical element of a new peaceful-oriented response to the crisis is fostering cooperation with Asian countries that have leverage over the regime. Due to the xenophobic nature of the junta, outside countries inherently have limited influence. The move of the capital to the remote center of Nay Pyi Daw has reinforced this isolationism. China has the most connections and business ties to the Burmese regime. Over the past five years these ties have increased especially in the oil and gas sector. The level of Chinese involvement is particularly intense in the border regions, where resource extraction in timber, gems, other minerals, fisheries, recently palm oil production, commodity trade and connection to dam and road construction is extensive. India’s financial links have also grown, signing an oil deal during the height of the crisis. This has been driven by India’s own resource needs and competition for regional power with China. China’s attention to Burma remains crucial and Congressional calls for engagement with China (which now appreciates that the Burmese regime is no longer stable) over Burma will strengthen the move toward political reform.

ASEAN’s links with the regime also remain strong. Singapore, Thailand and Malaysia, in this order, are the leading ASEAN investors in tourism and oil and gas, primarily. Singapore has a special personal relationship with the junta, providing medical treatment for the leadership, financial/banking transactions and remains (along with Dubai) the premier shopping destination for the junta and their families. Yet, over the past three years, ASEAN countries have become more frustrated with the junta, and the ASEAN statements led by Singapore during the crackdown this month show the group’s deep concern. For the first time, ASEAN has condemned the crackdown and is backing the dialogue process, albeit with varying levels of support and intensity among members. Congress can work with ASEAN to reinforce the dialogue process and urge participating countries to appoint a troika comprised of Singapore, Thailand and the Philippines or a regional forum to further the dialogue process. ASEAN is unlikely to impose sanctions and has none in place. Congress can urge greater cooperation with ASEAN in the areas of financial/banking transactions and travel. In this regard, it is important that the U.S. be active and the Bush administration send senior representatives to the ASEAN meeting to be held in November.

Widening the dialogue process internationally strengthens the dialogue process. Yet, change in Burma will only come from within. The spirit of inclusiveness in dialogue needs to extend within Burma itself. To date, the Congress has called on dialogue with the leader of the opposition, Aung San Suu Kyi. There is no question that she is the key person who needs to lead any dialogue effort from the opposition. Yet, the current crisis shows that the opposition is broader than the National League for Democracy (NLD). In fact, older leaders in the NLD did not fully support the peaceful protestors while younger members allied themselves with the Generation 88 movement, which led the first wave of protests against the regime after the massive 500 percent fuel price hike in August. Dialogue needs to include the younger generation – the future leaders of Burma. Congress can assist this effort by calling for the release of political prisoners from Generation 88, who along with the monks have faced the brunt of the brutal crackdown over the past few weeks. Dialogue must include representatives from the monastic order, who captured international attention with their spirit of self-sacrifice. Finally, the inclusiveness approach should include the ethnic minorities, who are deeply fragmented and have diverse perspectives. It is important to remember that these groups have used violence in the past, and the junta uses ethnic fragmentation as a means to justify its rule. A peaceful resolution to the crisis requires an inclusive spirit of all key groups of the opposition. It is only through bringing the newly formed opposition together – as the NLD did 20 years ago – in a form that reflects current leaders and actors that the opposition can have a stronger voice in the dialogue process, playing a more critical role in the political reform efforts. Dialogue cannot center on one person in the opposition to bring about peace.

Dialogue also needs to be supported by measures that address the causes of the crisis. Based on my own personal observations, the humanitarian crisis in Burma is horrendous. Two reports (The Gathering Storm and the UNDP “Household Survey”) are perhaps the most rigorous studies of actual conditions in the country. Poverty is massive. The UNDP Report in 2005 estimated that the number of people living in extreme poverty is “more than 30 percent” in the country as a whole, but much higher in Chin state (70 percent) and eastern Shan state (52 percent). It further indicated that, everything else equal, an increase of just 15–20 percent in food prices would push “well over 50 percent” of the total population below the poverty line, a prospect that with continuing high inflation could soon become reality. Over the last two years inflation has increased over 100 percent and with the 500 percent increase in fuel prices last month, Burma’s inflation continues to rise sharply. The country has been facing an ongoing humanitarian disaster for the past few years, with reports of HIV-AIDS, malaria and tuberculosis sky-rocketing and extreme poverty deepening. The crisis this August was as much an economic one as a political one. The monks are on the front line of poverty, and they consistently called for actions to improve basic needs. The calls by the monks perhaps more than any other show how dire economic conditions are, as the ranks of orphans (children sent away by parents who cannot afford to support them) have swelled and levels of donations from the public – who themselves are starving – have dropped. The time to support the Burmese people through humanitarian relief has come. This will create conditions to support the people and work to buttress dialogue. Since the crisis, parts of the junta have come to recognize how serious economic conditions are, and the use of incentives in the dialogue process can potentially be more effective than in the past.

Congress can strengthen the humanitarian effort by increasing funding for relief efforts. The Congress can provide funding to assess economic conditions. It can also amend legislation to allow international financial institutions to assess the situation inside the country by removing the restrictive clause on “technical assistance” and writing legislation that exempts humanitarian activities from restrictions on financial transactions. This can be tightly monitored by requiring the Treasury to review these activities. Congress can also direct the Treasury Department to issue multi-year Office of Foreign Assets (OFAC) licenses for humanitarian activities to qualifying humanitarian organizations. Currently licenses are granted for one- or two-year periods, and can take up to six months to acquire. This is time-consuming and limits the flexibility of humanitarian organizations and their ability to respond to rapidly changing economic conditions. Finally, Congress can support human capacity efforts by increasing the number of Fulbright-Hayes Grants from six. The adoption of these measures can be tied directly to progress in the dialogue process and release of political prisoners.

As one looks forward, the crisis presents an opportunity to rethink the U.S. approach to Burma. Steps have been taken by the Executive Branch to strengthen diplomacy, increase multilateral cooperation and introduce new multiple initiatives that can foster political reform. The window to act is now. Change will not happen overnight, and, as crises in Iraq and Afghanistan have shown us, there is no easy solution. There is no simple option for Burma. An approach that buttresses diplomacy, modifies sanctions for targeted effectiveness and greater international unanimity, promotes inclusiveness in dialogue internally and internationally, and addresses the severe humanitarian conditions can reinforce the call for a peaceful resolution. It will be slow going and will require patience. The Burmese people, who have been so brave and suffered so much, continue to inspire the call for pragmatic action to address urgent needs and lay the foundation for political reform.

Summary of Key Recommendations:

Supporting Diplomacy & Increasing U.S. Leverage

• Reinforce the U.N. dialogue process led by the Special Envoy
• Call on Executive Branch to continue to work closely with China/India/ASEAN on Burma
• Introduce/Reinforce targeted sanctions toward individuals in banking/travel
• Focus international attention on building support for a multilateral arms embargo
• Add flexibility in U.S. legislation with wording to acknowledge possible gains in the dialogue process, particularly with regard to banking/travel.
• Support Assessments by Treasury on the effectiveness of sanctions and possible targeted measures.
• Work with ASEAN/Asian countries to support visa and banking restrictions.

 Building Inclusiveness:

• Encourage dialogue beyond the NLD with the younger members of the opposition, “Generation 88”, monks and the ethnic minorities.
• Include the possibility of military participation in future political reform processes.
• Encourage Asian-led diplomatic efforts, particularly stronger roles by China, India and ASEAN.
• Increase democratic assistance to support more inclusive opposition voice.

Addressing the Humanitarian Crisis

• Increase funding for humanitarian assistance.
• Increase flexibility in legislation for humanitarian assistance by reworking language on the blanket prohibition of technical assistance by international financial institutions.
• Exempt certain humanitarian activities from restrictions on financial transactions carried out by U.S. financial institutions.
• Change Treasury OFAC licensing procedures for organizations engaged in humanitarian work.
• Increase funding for human-capacity building over the long-term, specifically toward Fulbrights-Hayes Grants.