The US plans to ease sanctions this week to allow its companies to invest in and provide financial services to Myanmar, but will require them to make detailed disclosures about their dealings, sources briefed on the matter said yesterday.
The unusual reporting requirement aims to promote greater transparency in the country — among the world’s most corrupt according to watchdog Transparency International — as it emerges from nearly half a century of authoritarian military rule.
The sources, who spoke on condition that they not be named, said the US Treasury Department was expected to issue two so-called general licenses, one giving general permission for investment in Myanmar and the other allowing financial services.
The moves would fulfill a May 17 announcement made by US Secretary of State Hillary Rodham Clinton to ease US sanctions on investment and financial services in recognition of Myanmar’s startling political reforms over the past 15 months.
While carving out exceptions to allow US companies to work in Myanmar the moves would leave the sanctions laws on the books, giving Washington leverage should Myanmar start to backslide on its reforms.
Clarification of the rules for investment could prompt a rush of US companies into the country.
Coca-Cola Co, for instance, said last month it wanted to work in Myanmar as soon as the government allowed it. It is one of just three countries in the world where the soft drinks giant does not operate. The other two are North Korea and Cuba.
Conglomerate General Electric Co has also expressed strong interest in the country, particularly in the healthcare and electricity sectors. In the face of street protests over power outages, Myanmar’s government promised in May it would buy two 25 megawatt gas turbines from the company.
Sanctions have also been suspended or lifted by other developed countries, including Canada, Australia, Japan and EU states.
Myanmar’s reformist, quasi-civilian government took office in March last year, ending five decades of military rule, and has started overhauling its economy, easing media censorship, legalizing trade unions and protests and freeing political prisoners.
The US has responded with diplomatic and economic gestures, sending Clinton to Myanmar last year as the first US secretary of state to visit in more than 50 years, as well as tentatively easing sanctions this year.
One source said the long delay between Clinton making her announcement and the Treasury issuing the licenses — which might have come as early as yesterday — was partly because of a debate among officials over how much disclosure to require.
The administration of US President Barack Obama hopes the reporting requirements will shed some light on Myanmar’s notoriously murky business practices and, over time, improve them.