As Myanmar takes steps toward democracy, the US is hoping that a broader section of the population will feel the fruits of reform, including potential foreign investment.
In the back of policymakers’ minds is the lesson from China. Some experts believe Myanmar launched reforms out of concern of being too dependent on China — and worry that the US could similarly fall out of favor.
The US has been at the forefront of a three-year diplomatic drive to bring Myanmar out of its isolation. However, unlike the EU, Japan and Canada, the US has retained most sanctions on the nation formerly known as Burma.
In a scene previously unthinkable, opposition icon Aung San Suu Kyi has entered the Burmese parliament. In spite of this, human rights groups say that decades-long ethnic wars have festered in border areas, with troops carrying out abuses and at times defying ceasefires supported by reformist Burmese President Thein Sein.
“We are hearing from our friends in border areas that perhaps the reforms are a bit uneven and not reaching all parts of the country,” US deputy policy coordinator on Myanmar W. Patrick Murphy said.
“It’s important that distribution be even — and not only in the reforms, but in the foreign assistance and commercial activity if and when that renews,” he said at the Carnegie Endowment for International Peace, a think tank.
Murphy said that international humanitarian workers’ access to remote, violence-torn regions has improved but added: “We would like to see this regularized and become the norm, not the exception.”
Hoping to provide incentives to Myanmar, the US said last month that it would restore full diplomatic relations. Murphy said he expected an announcement from a US ambassador “in the coming weeks.”
The US Treasury Department has already ended a ban on financial transactions by US non-governmental organizations in Myanmar. However, US policymakers are taking time to fine tune the most far-reaching of the steps announced last month — the easing of US restrictions on investment into Myanmar.
US business interests, including the US Chamber of Commerce, have pressed for a full lifting of investment sanctions, saying that US companies would lose out to European and Asian competitors already allowed to enter Myanmar.
However, human rights groups have called on US President Barack Obama’s administration to hold off on any sweeping end to investment restrictions without obtaining verifiable progress in areas such as ending ethnic violence.
The director of Human Rights Watch in Washington, Tom Malinowski, said that the US needed to ensure that its companies adhered to high standards. Many in Myanmar believe that Chinese investors damaged the environment through dams and other projects and blithely ignored the locals’ concerns
“We have a chance here to do it differently,” Malinowski said.
“But the danger is that there will be this gold rush into Myanmar before we have the kind of institutional reform [needed] and the resentment we saw generated by Chinese investment is going to be felt about all foreign investment,” he added.
US officials and lawmakers have been adamant about maintaining sanctions on key exports from Myanmar, such as gems and timber, which are seen as cash cows for the Burmese military.
Georgetown University professor David Steinberg, a Myanmar expert, said that a further risk was that investment would benefit a middle class that is largely Chinese.
Myanmar was the scene of ethnic riots in the 20th century against its Chinese and Indian communities. The Burmese-dominated military seized control of Asia’s rice bowl in 1962 in part to nationalize industries perceived as foreign-run.
“If the economy is once again seen to be in Chinese hands, there could be ethnic riots ... and a return of some sort of state capitalism that will try and get the economy back under Burmese control,” Steinberg said.