EU governments are to suspend most sanctions against Myanmar next week, EU diplomats said yesterday, in recognition of rapid political and economic reforms after decades of military dictatorship.
Envoys of EU governments reached a preliminary deal on the issue late on Wednesday and foreign ministers of EU states are expected to approve the move formally at a meeting in Luxembourg on Monday, after which it can take effect, diplomats said.
The suspension of EU sanctions, which include a ban on investment and trade related to timber and mining, is likely to open doors to a flood of investment in the country that neighbors the world’s two biggest markets, China and India.
“There is now agreement in principle [on] ... a suspension of all sanctions, except for the arms embargo,” one EU diplomat said, speaking on condition of anonymity.
EU diplomats say sanctions are being suspended — not lifted altogether — to maintain pressure on Myanmar’s quasi-civilian government to keep up democratic transition.
Opposition leader Aung San Suu Kyi, long an advocate of sanctions imposed for human rights abuses by Myanmar’s military rules, has spoken in support of such an approach.
British Prime Minister David Cameron also urged caution, when addressing parliament on Wednesday about Myanmar:
“While it is clear that the ... regime is making some steps towards greater freedom and democracy, we should be extremely cautious and extremely careful,” he said.
“We want to see the further release of political prisoners, we want to see the resolution of ethnic conflicts, we want the democratisation process to continue,” he said.
EU governments are keen to ease access to Myanmar for their businesses, hoping to capitalize on the country’s rich natural resources, proximity to large markets and vast tourism potential. European firms fear Asian rivals are securing a foothold and already boosting their presence.
The US Treasury on Tuesday relaxed sanctions on Myanmar to permit financial transactions to support certain humanitarian and development projects
Meanwhile, Japan is to waive Myanmar’s ￥300 billion (US$3.7 billion) debt and plans to resume suspended assistance to the country, the evening edition of the Asahi Shimbun reported yesterday.
Japanese Prime Minister Yoshihiko Noda is expected to announce the debt waiver during a meeting with Burmese President Thein Sein tomorrow in Tokyo, the paper said.
“Following the debt waiver, [Japan] plans to resume full-fledged yen loans to the country for the first time in 25 years,” the daily said.
Thein Sein will visit Japan from today through Tuesday, becoming the first Myanmar head of state in 28 years to make the trip.
A foreign ministry official declined to confirm the report, but said: “It is true that the two countries are working on the debt issue as well as plans to pave the way for resuming Japan’s Official Development Assistance for Myanmar.”
Additional reporting by AFP