The landscape surrounding sanctions against Burma is still heavily contested. ASEAN, the International Crisis Group and Chatham House have recently renewed calls for an end to sanctions against the country.

Their announcements follow comments from five newly elected ethnic groups claiming sanctions should be abandoned because of their impacts on regional development. In light of such changing opinions surrounding sanctions, it is time to reappraise the United States’ current sanctions policy, and particularly what the sanctions purport to do and what they have actually achieved.

First, Executive Order 12047 of 20 May 1997 prohibits new investments by US persons and companies in Burma. This exempts US UNOCAL’s substantial investment in natural gas ventures and the pipeline from Burma to Thailand, which provides $400-$647 million in annual income for the Burmese government. While a “sense of Congress” from 2008 tried to shame Chevron’s involvement, it had little effect with Chevron refusing to withdraw, correctly asserting that many competitors would gladly assume its place, and they would likely be less scrupulous. In addition to exempting the most significant investment in Burma, this Executive Order prevents smaller investments from the US which would work to integrate them into Burmese society, increasing their influence on political, economic and social issues.

The P.L. 108-61 Burmese Freedom and Democracy Act of 2003 bans the importation of certain Burmese products into the US and freezes funds or assets in the US associated with the Burmese government and individuals in senior positions. The Act also requires the US government to vote against the extension of financial assistance by international financial institutions to Burma, and authorises the President to deny visas to former and present leaders of the government or the Union Solidarity Development Association (USDA).

From the same year, Executive Order 13310 of 28 July 2003, blocks property and property interests of persons designated by the Treasury Department to hold senior leadership positions in the government or USDA, bans the export of financial services to Burma from the US, prevents any US person or company from approving, aiding or supporting foreign investment in Burma and prohibits US persons from purchasing shares in a third-country company if their profits are predominately from Burma.

These sanctions destabilised Burma’s international trade system, based on the US dollar, and decimated the garment sector, which employed a large number of unskilled women from rural areas. In turn, the ban on the importation of financial services denies the existence of public servants and members of the government working for political change. Instead of aiding the government in their goal of becoming a modern, developed nation, sanctions have left them to create their own version of elections and democracy.

The recent Wikileaks US Embassy Cables from Burma include correspondence by American diplomat Leslie Hayden. Hayden suggested that, “[w]hile our economic sanctions give us the moral high ground, they are largely ineffective… [i]f we really want to see progress, we need to show them what they will get in return. This means being willing to gradually remove sanctions”. Her debrief, dated 14 July 2008, suggested a possible deal, with the military allowing international election monitors in exchange for the US lifting specific sanctions. We are left to wonder what may have eventuated if her advice had been heeded.

Another suggestion from Hayden was to ease Burma’s categorisation as a “major illicit drug producing country” and a Tier 3 human trafficking country, acknowledging these as “areas where the regime has actually made some progress”. The US designation of Burma as a major drug producer and severe human trafficker subjects them to the Narcotics Control Trade Act and the Customs and Trade Act of 1990. These ban certain US foreign assistance and the importation of certain products.

Instead of recognising progress, the US has continued to impose new sanctions on Burma. Most recently, Executive Order 13448 of 19 October 2007, which granted the Treasury department the authority to determine individuals responsible for human rights violations and public corruption, or those providing material and financial backing to them or the government. Executive Order 13464 of April 2008 froze assets in the US and blacklisted Myanmar Pearl Enterprise, Myanmar Gem Enterprise and Myanmar Timber Enterprise.

Finally, the P.L. 110-286 Tom Lantos Burmese JADE Act of 2008 bans the import of jadeite and rubies mined in Burma, dictates the State Department to report on countries that sell arms and intelligence support to Burma and hold the leaders’ assets. This Act expressed a “sense of Congress” that investors in the Yadana natural gas project, primarily targeted at US firm Chevron, should “consider voluntary divestment over time” and publicly disclose their role and their financial support to the Burmese government.

These orders clarify the impotence of US sanctions.

Instead of continuing down this path, the US needs to build its influence and relationship with the Burmese government, through an engagement involving the gradual acknowledgment of progress with the removal of certain sanctions, allowing greater US investment and influence, leading to a sharing of knowledge and building of capacity and infrastructure.

It is this capacity building and infrastructure development that will most likely lead to the democracy that the US advocates for Burma.

Jacqueline Menager is a PhD candidate in the College of Asia and the Pacific, ANU.