Burma & Sanctions: an effective grip or a faux pas?
Name: David Kellerman Student nr: S2571765
Date: 14-10-2015 Type: Master thesis
List of contents
1. Introduction p.3
2. Historical Background p.6
2.1 Burmese Independence p.6
2.2 Burmese Socialism and Economic Mismanagement p.7
2.3 The Return of the Army p.8
2.4 Democratic Developments or False Hope? p.9
3. Literature Review p.12
3.1 Economic Sanctions defined p.12
3.2 Mainstream Theories on Success p.13
4. Research Design p.16
4.1 Foreign Policy Objectives p.17
4.2 Political & Economic Variables p.17
4.2.1 Political Variables p.17
4.2.2 Economic variables p.19
4.3 Limitations p.20
5 Economic Sanctions on Burma p.20
5.1 EU Sanctions p.21
5.2 US Sanctions p.25
5.3 ASEAN and Regional Actors p.29
6 Foreign Policy Objectives p.32
6.1.1 US Policy Objectives p.33
6.1.2 EU Policy Objectives p.34
6.1.3 ASEAN and Regional Actors’ Policy Objectives p.35
7 Variables and Outcomes p.37
7.1 Political Variables p.37
7.1.1 Companion Policies p.37
7.1.2 Duration of Sanctions p.39
7.1.3 International Cooperation with Senders & p.42 International Assistance to the Target
7.1.4 Target Country’s Political and Economic Health p.45 7.1.5 Prior Relations Between Target and Sender Countries p.51
7.2 Economic variables p.52
7.2.1 Cost imposed on the Target Country p.53
7.2.1.1 FDI into Burma p.55
7.2.1.2 Factors for Decreasing and Increasing Investments p.59
7.2.2 Trade Linkages p.61 7.2.2.1 Sanctions and the Garment Sector p.62
7.2.2.2 Sanctions and the Timber Ban p.64
7.2.3 Type of Sanctions Used p.68
7.2.4 Cost to the Sender Country p.69
7.2.5 Relative Economic Size of the Target and Senders p.73
7.2.6 Why Sanctions did not Succeed p.74
8 Conclusion p.76
List of Contents p.78
List of Tables p.83
List of Figures p.84
1. Introduction
Burma has been one of the most highly sanctioned countries in recent history. It has experienced a total of twenty-five years of comprehensive and smart devised
sanctions. After a successful by-election in 2012 in which the pro-democratic oriented party ‘NLD’ won by a landslide, sanction senders started to slowly lift sanctions. It remains unclear whether sanctions did or did not contribute to the current
democratization process in Burma. Therefore, this thesis researches what the effectiveness of sanctions has been in the Burmese transition towards democracy.
Burma has always been an independent country, up until the British and Japanese invaded it. After regaining power, a short period of democratic freedom emerged. In 1962, the army decided to stage a coup d’état, after which a short period of strict socialism followed. In this period, the Burmese Socialist Programme Party introduced economic measures that turned out to be economic mismanagements, which led to the 1988 uprising and eventually to the downfall of the socialist party.
The Tatmadaw regained direct control of the government and installed a military junta under the banner of the State Law and Order Restoration Council (SLORC), which was later converted into the State Peace and Development Council (SPDC). As a direct result of the violation of democratic and human rights by Burma, various sanctions were implemented. Since 2012, a genuine reform seems underway under the guidance of President Thein Sein who is said to allow ‘fair’ elections. This caused the sanction senders to slowly lift a major part of their sanctions (ICG, 2001, p.2-4)
The effectiveness of sanctions has been a widely contested issue. There is widespread disagreement concerning the shape, content and duration of economic sanctions in relation to its intended effect (Hufbauer, Schott and Elliot, 2012; Hart, 2014; Simon, 1996; Tsebelis, 1991). One of the factors that complicate a one-size fits all-approach is the fact that various nations and organization implement sanctions on countries with differing political-economic structures. This makes a homogeneous approach difficult. The main intent of a sanction is to achieve certain foreign policy objectives. One such objective is a change in government policy of the target country;
another is destabilizing the government. Sanctions have been historically applied in two ways: “comprehensive sanctions and smart sanctions (Hufbauer, Economic Sanctions Reconsidered, 2012, p.138). The former can be described as a “broad sanctions regime, which usually cover a wide range of actions” (e.g. full-out trade and investment bans, retraction of aid). Those sanctions have often been applied against
nations such as Cuba, Iran, South Africa and the latest being Russia; however, they are seen as unpopular measures, because the primary victim is often the population itself (Plumer, 2012, p.2,). Furthermore, a regime is sometimes able to shift resources and divert trade through which the elite and its regime in fact benefit from the
sanction. The second form of sanction is the smart devised sanction, which is more specific compared to comprehensive sanctions. The intent of these sanctions is comparable to comprehensive sanctions, in that it wants to achieve a foreign policy objective; however, the approach differs greatly. While, a comprehensive sanction is able to target a complete population, the aim of smart sanctions is to target the so- called “regime winning coalition” or more neutral: “specific officials, government functions and certain sectors” supportive to the sitting regime (Lektzian, 2007, p.852, Hufbauer, 2012, p.167-169). A smart sanction can consist of “the freezing of specific asset or assets used by the regime leadership; a ban on specific exports to the target state; the suspension of aid, or; banning travel for certain regime officials” (Hufbauer, 2012, p.141).
While, smart sanctions are often considered the golden bullet, they should not be seen as the only solution due to several reasons. For instance, the coordination and implementation of smart measures are time-consuming, providing the target country with the opportunity to counteract proposed sanctions. Counteraction entails that
“sanctions are sidestepped with black markets or diverted so that internal power rivals absorb the costs” (Plumer, 2012, p.3).
Furthermore, the effectiveness of sanctions depends on a multitude of factors, but research tends to focus on the correlation between effectiveness of sanctions and autocratic regimes. According Lektzian and Souva (2007), sanctions need to target the winning coalition of the regime. In a democracy, the median voter constitutes the regime winning coalition whereas in an autocratic regime, the elite and/or the army do. Furthermore, smart sanctions ought to target the regime winning coalition, as comprehensive sanctions leading to a deprivation of the ‘common’ people are often of little concern for the sitting regime (Cortright and Lopez, 2000, p.10). Consequences of (comprehensive) sanctions, such as job loss and economic deprivation, can lead to political disintegration and are often blamed on the senders, instead of on the regime.
Political disintegration is referring to a divide of the regime and the population. This disintegration can turn into political integration within a country and in fact prove
counterproductive to the effectiveness of sanctions, as the population ceases to oppose the regime.
This thesis aims to provide a clear and concise analysis of all variables that have influenced the sanctions outcome within Burma. An extensive review, based on the influence of political and economic variables on Burma after the majority of sanctions were lifted, does not yet exist. The majority of articles only review political or economic aspects on why Burma became democratized, but often fails to include the success or failure aspect of sanctions in their analysis. Others zoom in on specific sanctions and its impact on Burma, however the aim is too narrow to explain the wider impact of sanctions.
In order to evaluate the effect of sanctions, a theoretical model created by Hufbauer, Schott, and Elliot, will be used. The model, also called HSE model, analyses variables that provide insight on why sanctions either fail or succeed. These variables are divided into political and economic variables and are allocated a certain classification.
Sub-questions emerge from this model, such as, what was the political and economic state at times of the sanctions period? What were commercial relations between sanctions senders and the target country like? Was there cooperation or assistance from other actors to the sanction senders or, conversely, were they counteracted? How great was the cost imposed on the target country, but also on the sender itself? The answers of these sub-questions should eventually lead to a clarification of the main research question: to what extent did economic sanctions - implemented in 1988 and slowly lifted from 2012 onwards – contribute to the democratization and
liberalization in Burma?
In our model, a multitude of sanctions, such as diplomatic, financial and trade sanctions will be analysed. Furthermore, sanction senders most significant to the sanctions period will be analysed. These include the EU and the USA, and some regional actors, such as ASEAN, Thailand, and China. Burma is a special case, as it requires a deep analysis of internal factors, instead of a mere analysis of the sanctions from the sender perspective. Burma has been characterized by a stark regime for the past sixty years, which seems to prioritize internal political stability and unity over economic stability. The particular model is chosen due to its holistic view of internal and external factors in relation to why sanctions were or were not effective. Burma provides a perfect example for why sanctions are often not the ideal tool for pressuring autocratic regimes to comply with sender demands.
This thesis will be divided into 8 chapters and 35 sub-sections. The first chapter will discuss the Burmese political history and state development, which partly explains the reason why Burma is subject of sanctions, and why it has been irresponsive towards sanctions up until 2012. In the second chapter, a literature study in relation to the concept and effectiveness of sanctions will be conducted, providing an academic foundation for the remainder of the paper. In the third chapter, the research design will be described, including the model of Hufbauer, Schott, and Elliot that serves as the methodology for this thesis. Furthermore, the various economic and political variables will be discussed and the limitations thereof outlined. The fourth chapter provides an overview of sanctions implemented by the US, the EU, and policies by ASEAN and regional actors in relation to Burma. In the fifth chapter, an analysis will be conducted on the sanction’s policy objectives in relation to the sanction senders.
The effectiveness of sanctions is measured according to the HSE model in the fifth chapter, which is divided into one section discussing political variables and another discussing economic variables. The thesis concludes with a proposed answer to the research question.
2. Historical Background
To some Burma is an unknown country, however, to major global powers it is one of the most important geo-political countries, located in the heart of Asia, in between two world powers: India and China. Its size can be compared to France with 676,578 square kilometres inhabiting roughly 46 - 52 million people, making it the 40th largest country of the world. The exact amount is difficult to assess, because all parties, including the UN, the government of Burma and the EU differ about the exact number. Burma also borders two of the most touristic countries in South-East Asia:
Thailand and Laos. Before independence, Burma was subjected to British colonial rule, starting in 1885 until 1948.
2.1 Burmese Independence
An independence movement was formed as early as 1930, involving many leaders who have been in leading positions within the government of Burma or currently still are. The Japanese trained this independence movement during the Second World War II, which became known as the Tatmadaw (Pedersen, 2004, p.88). The Burmese
nationalist army before the end of the Second World War joined the side of the British to defeat the Japanese, after which the Burmese army turned against the British (Taylor, 2005, p.13-14). Part of the Tatmadaw was the father of the pro-democracy politician and activist Aung San Suu Kyi: Thaking Aung San, together with the former ‘socialist’ president of Burma deposed in 1988, Thakin Shu Maung or Ne Win (Taylor, 2005, p.13-14). Interesting enough is that Burma started out as a democracy, which was enabled primarily by the Tatmadaw. Furthermore, they acknowledged the rights of ethnic minorities, the largest being: the Karen, the Shan, Kayan, Karenni, Palaung, and Rohinga. These rights have been a topic of conflict for the past two decades (Seng, 2004, p.67). After the death of Aung San, combined with a few failures by the civilian government and pressure by insurgent groups, the Tatmadaw decided to stage a coup in 1962 to take full control of Burma (Pedersen, 2004, p.88).
This transition of power symbolizes the righteous attitude the military junta adapts to this day. At that stage, instead of labelling it a coup, they were said to protect the country from internal strife and collapse by restoring order amidst chaos. The army often referred to themselves as “creators and saviours of the country,” (Pedersen, 2004, p.88). For this reason, a potential return to democracy has been a difficult topic of debate. According to the army, democracy only served to increase internal
instability. They see themselves as the “army that won from the British” and as the entity that protected Burma against “self-serving politicians” (Pedersen, 2004. p.88).
Hence, the army has not taken a submissive stand, and has always regarded itself the legitimate leading party. Sanctions senders most likely underestimated this situation before the implementation of sanctions. The fact that the Tatmadaw established and protected Burma provides first motives for the government’s unresponsive attitude towards sanctions. They do not consider leadership as the end goal, but as a necessary mean to keep the country together. Hence, economic deprivation, caused by internal and external factors, is taken as a necessary cost to preserve this unity.
2.2. Burmese Socialism and Economic Mismanagement
When the junta was firmly in place in the middle of the sixties, General Ne Win, introduced the “Burmese way to socialism” (Hlaing, 2004, p.76). Burma experienced a relative short period of economic growth, during its democratic period, followed by a dramatic downfall, which ultimately led to a ‘development country-status’ in 1987 (Vuorijarvi, 2009, p.60). This period which lasted until 1988 was followed by an
ideology based on self-reliance in order to ensure national security; consequently alienating Burma from the international community (Pedersen, 2004, p.90). Japan, which has been a major (financial) support for Burma, slowly grew discontent with the political and institutional changes that Ne Win implemented. These changes inhibited the demonetization of small bank notes, deregulation of key agricultural crops, which led to sluggish growth. During the ’70 and ‘80’s, many Burmese workers should have retired; however, due to structural mismanagement by the Burmese government a whole generation was not able to. This drop in annual income did not only target the ordinary citizen, but also government employees, putting them below the poverty line. Consequently, a feeling of discontent among the Burmese people emerged. This discontent combined with the demonetization leading to the complete wipeout of the vast majority of citizen’s savings, and the price increase of food commodities (e.g. rice), led to the 1988 public uprisings and eventually to the demise of the socialist government led by Ne Win.
2.3 The Return of the Army
Ne Win was requested to resign from office and the military took formal control of the country. The military junta renamed itself the State Law and Order Restoration Council (SLORC) and was established to “eliminate all forms of internal dissent or rebellion” (UNCHR, 1998). During the social unrest, Aung Suu Kyi, daughter of war hero General Aung San, decided to leave the United Kingdom and erect the National League for Democracy (NLD). With no connection to the tainted past of Burma and her outspoken critical attitude towards the regime, she seemed to be the right person for the symbolization of pro-democracy sentiments. The SLORC elimination of all forms of internal dissent and rebellion was quickly realized. It saw Aung Suu Kyi as a threat and placed her under house arrest in 1989 on the charge of "endangering the state" (Guardian, 2008). Next to this, the SLORC declared martial law to counter pro- democracy protests and changed the name from Burma to Myanmar (Guardian, 2008). At this point, the international arena started to get involved in the internal matters of Burma. The US was one of the first countries to implement an armaments ban, which ought to prevent the regime of using armaments against its own people.
However, this might have proved futile, because it could have pushed Burma easily back into isolation or to ally with other actors, such as, China and Thailand.
Under growing international pressure the SLORC saw itself forced to organize national elections in 1990. This led to a landslide victory for the NLD in relation to the National Unity Party, which is the political arm of the army. The NLD won with 62% of the total votes casted, delivering roughly 80 percent of the seats. However, instead of a gradual shift of power, the junta found a loophole. The previous
constitution had been annulled when the junta staged its coup d’état in 1988. This left an opening for the junta to remain in power, due to the claim that to ensure a smooth transition, they should maintain all legislative, executive and judicial powers until a new constitution was drafted (Vuorijarvi, 2009, p.61). Consequently, the assembly was forbidden to intervene and the detainment of the two leaders of the NLD was continued. This clearly illustrated the belief of the army that they were acting as the
“protector and guarantor of the state” (Pedersen, 2004, p.88). Saw Maung, chairman of the SLORC underwrote this by stating: “we cannot transfer power as soon as the elections are held. The government would be formed according to a constitution. If the state power is hurriedly transferred, it would lead to a shaky and weak
government. … Stability can be achieved only by systematically forming a government based on a constitution” (Saw Maung, 1989). The efforts of the NLD have been based on a genuine belief of change for Burma. However, it provided a stark contrast with how the Tatmadaw envisioned a transition to a democratic Burma.
During those times, it was still unsure whether the Tatmadaw genuinely wanted to transfer power to democratic forces or whether they simply stayed in power to exert their own power and might. Nonetheless, the first five years of their leadership were the starting point of the two decades long conflict between the Tatmadaw and the western sanctions senders.
2.4 Democratic Developments or False Hope?
The outcome of the election, granting the NLD a decisive victory, ensured the political deadlock, which has stayed in place for over two decades. There were multiple attempts to resume a constitutional convention, in 1993 and 1995; however, at both occasion the NLD decided to not be part of the national convention, due to the undemocratic procedures and potential undemocratic outcome. Suu Kyi was
unexpected to be released in that same year, most likely to appease the international community. After the second time, the NLD started to approach governments and investors with the request to retreat from the Burmese economy and to impose
sanctions. This method was based on the South African disinvestment model.
However, it differed in three aspects: firstly, Burma was led by a dictatorial regime;
secondly, the low degree of trade linkages and thirdly, its ability to substitute trade partners made it stand out from South-Africa (Taylor, 2004, p.60).
In 1997, the SLORC changed its name to the State Peace and Development Council. This change merely constituted the switching of a few regional military commanders and cabinet ministers, not a different outlook on state affairs. In 2003, the Union Solidarity Development Association, a movement linked to the SPDC, attacked a protest held by the NLD, leading to numerous deaths. International outcry surrounding this event most likely led to the introduction of Seven Step Roadmap to Democracy in 2003 (Human Rights Watch, 2008). These steps included the
organization of a new National Convention, comparable to those suspended in ’93 and
‘96. A follow-up step was the drafting of a new constitution, which had to be adopted through a national referendum. Next was the organization of free and fair elections for legislative bodies governing each region or state, the so-called Pyithu Hluttaws. The Hllutaw were required to convene with attendance of their members. The final step was the formation of a democratic state that ought to be built by leaders, governments and central organs chosen by the Hluttaws (Burma today, 2004; Human Rights
Watch, 2008). This roadmap seemed to be a genuine move towards political transition; however, the junta never provided a time frame concerning the
implementation of the roadmap. The roadmap was viewed by some as a positive step;
an empty shell by others. The NLD was skeptical, but decided to join the talks.
However, it did not take long for the NLD to opt out together with other parties, because they saw the new constitution as an act of prolonging military rule with their consent. This was affirmed in a certain sense by re-reading the opening sentences of the draft constitution stating “one of the objectives forming the framework of the basic principles for the drafting of the Constitution of the State at the National Convention must be the participation of the Tatmadaw” (SLORC, 1990). Raising suspicion even further, there has been a great deal of commotion concerning the military clause 59(f), which states that "he himself, one of the parents, the spouse, one of the legitimate children or their spouses … owe allegiance to a foreign power, not be subject of a foreign power or citizen of a foreign country," nor shall they "be persons entitled to enjoy the rights and privileges of a subject of a foreign government or citizen of a foreign country” and cannot become president of Burma (Library of
Congress, 2014). Before putting Aung Suu Kyi into house arrest for the first time in 1989, she lived in the UK, was married to a British citizen, with whom she raised two children, both possessing a UK passport, which makes her ineligible for the role of presidency. These and other various points were a thorn in the eye for the
international community and pro-democracy groups, hoping for genuine democratic change. Nonetheless, the seven steps were pushed through and in 2008; the debated constitution was finalized and followed by elections in 2010. The elections were clearly manipulated as it gave the junta far more than the majority of the seats.
Therefore, new by-elections were held in 2012, leading the NLD to win 43 out of 44 seats, which was accepted by the military junta, international observers, and other parties (the Economist, 2014, p.3).
Since then, incremental reforms have been implemented. Burma is now slowly granting political freedom to its citizens, by abolishing censorship, allowing public gatherings and including former political opponents into the political process. With political freedom, economic change has come, leading to an influx of foreign money, which in turn caused Burma to relax its capital controls. However, all positive
developments aside, the majority of seats are still held by the military junta, namely 80% and changes are still not permanent (Economist, 2014).
This chapter has served to provide an insight into the antithesis between the NLD and the Tatmadaw in the past two decades. Both were aiming at a stable and united country; however, the means to reach that goal diverged extremely. The Tatmadaw envisioned a slow transition towards a more democratic society, only after stability was ensured; while, the NLD believed that stability could only be formed after
democracy was introduced. Valid arguments can be found for both the Tatmadaw and NLD. The NLD did not have any political administrative experience, which could have created a temporary power vacuum. Hence, ethnic minorities could have used this vacuum to secure their own autonomy. On the other hand, it was not clear, judging from the Tatmadaw’s (past) actions, that they were genuinely seeking for an opening up of the country. The crackdown on multiple protests, suppression of the NDL and the continuing house arrests of Aung San Suu Kyi, all indicated towards an extremely repressive dictatorial regime scared to lose control.
The next section will give an insight into the existing literature on sanctions, and in particular on its effectiveness, to provide a sound basis for our research. Certain definitions relevant to the remainder of the thesis will be discussed, showing that sanctions are still difficult to formulate as a concept.
3. Literature Review
In this section, an overview will be provided of the literature that is framed around the concept of sanctions. The primary focus of scholars is based on the effectiveness of sanctions, or rather their ineffectiveness. This section starts with a general explanation and definition of (economic) sanctions, followed by a discussion of the mainstream theories. Consequently, targeted and comprehensive sanctions will be discussed and concluded with an outline of the common perception of the effectiveness of sanctions.
3.1 Economic Sanctions Defined
The definition of the term sanction is not commonly agreed on within the academic society. Hufbauer, Schott, and Elliot, three academics whose theoretical model will be used in this paper, have defined sanctions from an economic perspective: “a
deliberate, government inspired withdrawal, or threat, of withdrawal, of customary trade or financial relations” Hufbauer, Schott, and Elliot, 1990, p.20). More broadly, Jean Combacau has defined the concept of sanctions as “measures taken by a state acting alone or jointly with others in reply to the behaviour of another state, which, it maintains, is contrary to the international law“(Combacau, 1992, p. 313). The
majority of academics define sanctions as a breach of an international norm requiring the altering of the policy or behaviour of the target state (Koutrakos, 2001; Brooks, 2010; Doxey 1980). Hence, a sanction is a measure in reaction to the breach of international law or norm. The reason why sanctions can lack in their effectiveness is because the acknowledgement of international law is not universal and leaders will often not respond to the ‘bullying’ of outside parties. The literature often regards sanctions as ineffective, because the altering of state policy or behaviour in the target is not met. However, the altering of policy or behaviour is often only the ‘formal’
objective, while, the real objective can have a domestic or purely symbolic dimension.
Domestically, there are interest groups that stand to benefit from the implemented sanctions. For example, a restriction on import of grain or oil from the target country, will definitely benefit grain farmers or oil producers in the sender country.
Symbolically, sanctions are a way of showing disapproval against actions of a target nation.
Brooks (2010) includes all these factors into her definition of sanctions, in which she defines sanctions as: “the imposition of punitive measures on a target state, measures which seek to limit the state’s aces to economic resources or cultural and social engagement, and limit movements of its nationals in order to elicit a change in the target’s policies consistent with the imposer(s) preferences” (Brooks, 2010, p.6).
The imposer preference can be read as any domestic constituent to be satisfied, any symbolic nature or real change of policy in the target state. Furthermore, she defines the content of ‘targeted’ and ‘comprehensive’ sanctions, whose definition will be discussed later on. On an institutional level, economic sanctions are defined in a European context as “restrictive measures” that are issued to achieve certain policy objectives that correspond with the principles of the Common Foreign and Security Policy (European Commission, 2014). The United Nations (UN) frames the concept of sanctions rather neutrally naming them “measures not involving force” that ought to restore international peace and security (Portela, 2014, p.3-8).
3.2 Mainstream Theories on Success
There are roughly three mainstream theories for the effectiveness of sanctions: those focussing on punishment, domestic constituents, and institutions. The general viewpoint throughout the academic and political community concerning the use of sanctions, was based on ‘inflicting pain’ on the target country in the form of costs or otherwise.
Firstly, the punishment-focused theory would cause disintegration of the target country’s population and ultimately lead to the demise of the ruling government.
Doxey (1980) is one of the authors within this mainstream field of thinking. However, she has been widely recognised for the moral and legal arguments supporting her claim that one should apply high pressure to a target country. Her claim is supported by the analysis of multiple cases in which she stipulates that, while sanctions or economic warfare will generate little result, the only way in realizing full effect is by yielding the highest pressure. Galtung (1967), a Norwegian socialist, has critically reviewed this argument by discussing the sanctions against Rhodesia, in which he labels the ‘punishment’ argument infamously the ‘naïve theory’. According to
Galtung, the so-called naïve theory is one in which “higher value deprivation leads to
more political disintegration” (Galtung, 1967, p.388). This theory reasons that any system can only withstand a certain amount of pressure and will ultimately lead to disintegration of the political system of the target state. However, according to Galtung, the process of adaption is disregarded within the naïve theory of sanctions,
“that what seems acceptable at the beginning, becomes acceptable as one gets used to life under hardship” (Galtung, 1967, p.388). Hence, with the implementation of sanctions, one ought to cause a political disintegration that should lead to a regime breakdown, but more than often the opposite is achieved. For example, the target government can blame the country’s suboptimal (economic) conditions onto the sender nation, causing the population to direct its anger towards the sender nation while uniting its people behind government leadership (Galtung, 1967, p. 388 – 400).
Secondly, the domestic oriented theory argues, that sanctions can be seen as successful, not only when foreign policy goals are met, but also when domestic interest groups are appeased. Another aspect of the domestic oriented theory and its explanation of its effectiveness is that the success of sanctions is highly dependent on the domestic support in the target country. Research has shown that sanctions will not have any long-lasting results if domestic support is absent (Dorussen and Mo, 2001).
Lektzian and Souva (2007), who are supporters of the third theory, the institutional theory of sanctions, see benefits in both previous theories. They argue that the size and effectiveness of sanctions depends on a state’s political institutions.
Hence, they claim that sanctions often fail to generate the desired effect on the target state, when it is led by a non-democratic regime. There are three reasons for this conditional relationship.
Firstly, sanctions that target import and export channels of a target state, aim to curtail the revenue stream towards the target regime. Without any official import channel, one would expect that difficulties arise with the import of certain
commodities. This mostly accounts for official channels, because smugglers are able to circumvent sanctions through unofficial trade channels. Through smuggling, autocratic regimes are better positioned to pursue rent-seeking activities, because they apply greater control over their economy. Another method of rent-seeking behaviour is when the non-democratic regime develops an alternative for the banned
commodity, which generates direct rent over these commodities. This happened in South Africa, which was facing armament sanctions; however, through the
development of a domestic arms industry, they were able to support their army and extract revenue from this newly developed industry nevertheless.
Secondly, in order for sanctions to carry out their full effect, they should be adapted to the type of government and to the source of the regime’s support. Lektzian and Souva discuss the concepts of both a ‘regime wining coalition’ and the targeted and comprehensive sanctions, which serves as an explanation to the previous
argument. A regime winning coalition constitutes a group of people and/or institutions that provides legitimacy to the regime domestically and sometimes internationally.
When the regime winning coalition is satisfied, the regime will be able to retain power, even under extreme pressure from sanctions. The regime winning coalition is differently constituted in autocratic and democratic states. Within a democracy, the people who are able to vote define the regime winning coalition. Within an autocratic government, there are often no fair and open elections. An autocratic regime derives its power from elitist groups within society and/or the army, and thus constitutes the regime winning coalition. Depending on the type of regime, a sender can then implement either a smart or a comprehensive sanction. Smart, also referred to as targeted sanctions, are sanctions, such as visa bans, freezing of personal assets and travel bans that aim to directly affect the sitting regime. Comprehensive sanctions are sanctions that potentially affect the general population through complete import and export bans, cutting of financial aid and the like (Brooks, 2010, p.19). The application of either targeted or comprehensive sanctions differs for democratic and autocratic regimes. A democratic state is more easily affected by comprehensive sanctions, which affects the general population, in this case, the regime winning coalition (Lektzian and Souva, 2006, p.8). On the contrary, in autocratic states, the elite and other groups often constitute the regime winning coalition, but certainly smaller in size than in a democratic state. Hence, when comprehensive sanctions are
implemented against an autocratic state, they will generate little effect, because the general population does not constitute the regime’s winning coalition. Smart sanctions are often a better choice, when one wants to target an autocratic regime. This does not automatically mean that targeted sanctions will work as effective within autocratic states, the way comprehensive sanctions work within democratic states (Cortright and Lopez, 2000, p.10)
In conclusion, Brook’s definition of sanctions will be used through the
remainder of this paper, as it expresses well the content and the aim of a sanction and
leaves room for interpretation. The effectiveness of sanctions and the related three most relevant theories have been discussed in this section, namely: punitive, domestic, or institutional theories. The institutional theory is best applicable as an explanation for sanctions against Burma, since Burma constitutes an autocratic regime. In the next section, the research design will be illustrated, which serves as an overview of how the research question will be answered.
4. Research Design
HSE’s model is derived from a comprehensive analysis of economic sanctions in relation to foreign policy purposes since the First World War. The model reviewed 116 sanction cases on a global level. In order to estimate the effect of economic sanctions, the authors have formulated a coherent set of criteria. They have drawn conclusion from this evidence, which is translated into policy advice. This advice should serve to inform governments, institutions, and academics about the best way to apply economic sanctions.
This chapter will discuss the HSE model and its tenets. This model is comprised of a set of policy objectives, which are often formulated when a sender implements sanctions. Based on these objectives, a sender could measure the effect of its implemented sanction. Furthermore, a host of political and economic variables that influence a sanctions period, will be discussed. In the last sub-section, the limitation of this study will be highlighted.
4.1 Foreign Policy Objectives
Policy objectives play a significant role in the outcome of a sanction. HSE have come up with five different policy objectives. Firstly, a modest change in policy, which are not trivial changes in any aspect, but are minor compared to the “grander scale of event” (Hufbauer, Schott, and Elliot, 1990, p.50). The release of political prisoners or assistance in combat of terrorism would be illustrative of modest changes. Secondly, major changes in policy, are defined as a complete reversion of a political system, e.g.
the ending of Apartheid. Hence, in contrast to modest changes, major changes in policy imply grave systematic changes, that sometimes involve the removal of the government. Thirdly, destabilizing a government often signals an attempt by the sender country to conduct a major change in policy. When these are not correlated, another reason for destabilization is the fact that the target government could have
adopted “a hostile attitude in its overall relation to the sender country” (Hufbauer, Schott and Elliot, 1990, p.51). Destabilizing a government is more an aim than an objective, in that the destabilization should lead to the government either majorly changing its policy tactics or removing itself from office entirely. Fourthly, disrupting military adventures are described by HSE as actions that disrupt small military ambitions, such as the attempt of preventing Italy to invade Libya. Lastly, impairing military potential of a country has the aim to diminish the military and industrial power of the target country, by blocking military exports to the target country.
4.2 Political & Economic Variables
Whether sanctions will have its intended effect is dependent on a host of variables.
HSE have divided these variables into political and economic variables. The political variables are comprised of the following six: companion policy measures, the extent of international cooperation with the sender, the presence of international assistance to the target, the duration of sanctions, the health and stability of the target country, and prior relations between sender and target. These will be shortly elaborated upon, in order to clarify its usage in the remainder of this paper.
4.2.1 Political Variables
HSE have distinguished three types of companion policies that can effect a sanctions period, positively or negatively: covert action, quasi-military action, and regular military action. Firstly, a covert operation in itself is an operation that should not disclose the initiator of the operation. Hence, secrecy is eminent when a sender uses covert action against a target. A clear example would be support for resistance groups within the target state or operations from Special Forces on the target’s soil. Secondly, quasi-military action is less secretive, but probably not as penetrative as either covert or regular military action; it is best described by the massing of troops of the sender country at the border of the target country. Lastly, a sender country can deploy regular military action, by sending troops to invade the target country (Hufbauer, Schott, and Elliot, 1990, p.43).
The duration of sanctions can have a decisive effect on the outcome of a sanctions period. 2.8 years is the amount that was necessary at minimum and 8.4 years at maximum (in the majority of cases) in which sanctions were successful in reaching their stated policy objectives. Hence, sanctions that last longer do not have to
be ineffective per se, but the success rate is higher when it surpasses the 2.8 years and when it stays under 8.4 years. The explanation is that a country can survive on
reserves during a sanction with a short duration, and impact will therefore be minimal.
On the other hand, in the long-term, the target country is able to supply itself through alternative trade routes and its population becomes adjusted to the shortcomings, as the support on a domestic or international level diminishes during a long-lasting sanction (Hufbauer, Schott and Elliot, 1990, p.43).
International cooperation can assist a sender country in their effort to coerce a change in behaviour of the target country. For example, in the case of the sanctions against Yugoslavia, sanction senders had conflicting interests, e.g. France had natural ties to the Croats, the British allied with the Serbs, and the Americans had connections to other parties (Hufbauer, Schott, and Elliot, 1990, p.44). On the other hand,
combined support of multiple senders of sanctions, could limit a potential trade diversion of the target country. International assistance to the target country is a relevant factor for the effectiveness of sanctions. When a target country can rely on befriended nations to compensate for the consequence that sanctions carry, the effect of sanctions can be significantly reduced (Hufbauer, Schott, and Elliot, 1990, p.45).
Furthermore, the economic wellbeing and political stability of the target country is essential to the outcome of a sanctions period. When sanctions are applied to a country that has a stable economic base, combined with a leadership that is firmly in power, sanctions can be imposed, but are unlikely to generate any significant effect.
Furthermore, within autocratic regimes, economic stability tends not to be imperative to provoke a response to the sanction by the regime. Often their people are already living on a subsistence level, and a further decrease of economic stability, does not have to spur a political disintegration per se. Hence, political stability is often more important than economic stability in determining the effectiveness of a sanction.
Sanctions are applied amongst nations that are both allies and foes of the sender country. Foes are less willing to succumb to economic pressure and are keener to raise countermeasures to sanctions. Befriended states have a higher chance of finding middle ground, after applying sanctions to one another, primarily because a friendly target will “often consider the importance of its overall relations with the sender country before fashioning a response to economic sanctions” (Hufbauer, Schott and Elliot, 1990, p.47).
4.2.2 Economic Variables
HSE have devised five economic variables that undermine the effectiveness of a sanctions period: the cost to the target country, trade linkages between sender and target, type of sanctions, and the cost of sanctions to the target and the relative size of the sender country in relation to the target.
Firstly, when the cost of non-compliance is higher than complying, a target country will quickly meet the demands of the sender. On the contrary, if the costs of compliance are higher than non-compliance, a target will likely remain unresponsive to the sender’s demands. Hence, inflicting the highest degree of punishment does not automatically entail that a target will comply. Secondly, the type of sanction is relevant, since a wrongly chosen sanction could affect all stakeholders (e.g. the people, pro-democracy interest groups), but the regime winning coalition. Hence, a divide needs to be made between smart and comprehensive sanctions. The sender therefore has the choice between financial, trade and diplomatic sanctions, which all have a different effect on the target.
Trade sanctions are measures that limit the export or importing capabilities of the target country. This means either banning import from the target by domestic companies and organizations, or limiting export to the target country. Financial sanctions are measures that entail to limit the financial capabilities of a target, by limiting lending capabilities, the withdrawal of certain forms of aid and freezing of foreign funds. Thirdly, trade linkages and interconnectedness are of high importance to the success of a sanctions period. A sender country can be significantly larger than the target country, but when there is no exchange of trade, a trade ban will not result in any significant effect. Therefore, it is important to get a clear view on the trade linkages between the sender and the target, in order to determine the effectiveness of a sanction. Fourthly, the size and sender of target countries matters, because sanctions implemented by smaller sender often carry no effect against bigger targets; vice versa, this will have a more significant effect. HSE researched that when the GDP-ratio was smaller than tenfold in relation to the target, sanctions did not meet its policy
objective in the majority of cases. Fifthly, the cost to the sender country is often forgotten. However, a control on export also inflicts costs on domestic businesses, besides the destruction of trade contacts in the target country when import controls are applied. Therefore, it is important to balance the costs the sender country has to bear, relative to the intended outcome of the sanction.
4.3 Limitations
Data published in autocratic regimes, such as Burma, can be statistically biased;
therefore, it is necessary to draw (economic) data from a range of sources (Baram, 2000, p.2). The sources used for this research, will be public statements made by officials on both the target and the sender sides, independent NGO’s and institutions, such as the IMF, World Bank and the UN. Other sources, such as peer-reviewed journals, articles generated by research institutions and economic data from primary and secondary sources will be used to compile a precise picture of the effectiveness of sanctions in Burma.
Some institutions, such as the WHO, tend to copy statements and economic data supplied by government officials; research conducted by independent institutions (e.g. International Crisis Group) will be given more validity. NGO’s within an
autocratic regime often do not receive permission to conduct the necessary research;
hence, certain conclusions might be biased and will be clearly underlined if so. While, US government reports and sources, can be an excellent source of material it has to be noted that these can be biased in order to rally supporters on their imposed sanctions.
Lastly, a range of books will be taken into account, while they may inhibit some out- dated material, they are able to provide a more holistic systemic view on the effect of sanctions, contain large data sets and background information on Burma. In general, it is clear that various sources can be biased in one form or the other. With this
knowledge in mind, and the realisation of its shortcomings, a combination of these sources should provide an objective view versus considering sources individually.
The methods of research will be primarily qualitative of nature and based on published literature. However, quantitative research will also be conducted with the use of graphs and statistics, which is comprised of import and export statistics, GNP and GDP growth or decay, and other economic indicators. The theoretical framework of HSE mentioned in chapter 3, will be carefully applied to Burma. In a clear division, Burma will be analysed according the political and economic variables in relation to the foreign policy objectives of the sender countries and institutions. The sanctions will be analysed in clear detail and its effects will be thoroughly discussed.
5. Economic Sanctions on Burma
This section will provide a detailed background on the sanctions that have been implemented against Burma starting in 1988 and roughly ending in 2011. Currently, the sanctions that are in place against Burma only reside in the area of armaments. As
discussed earlier, only the primary senders of sanctions will be discussed. The most significant senders are the USA and the EU, based on their scope and length of the implementation of sanctions. ASEAN will be discussed, primarily for its significant influence on the sanctions period. This section starts with a discussion on the sanctions implemented by the EU, followed by the US sanctions, and closed off by the actions of ASEAN towards Burma. At the end of every section, a table summary will be drafted to provide a coherent overview on the type of sanctions implemented.
5.1 EU Sanctions
The European Union refers to “restrictive measures”, which can be commonly called a sanction (EU, p.1, 2015). Only the weapons embargo is officially labelled a
sanction, not a restrictive measure, according to the EU (2013/184/CFSP).
Furthermore, sanctions as a concept is only officially used in combination with measures applied within the framework of the Common Foreign and Security Policy (CFSP) (Portela, 2014, p.4). In the remainder of this paper, all restrictive measures are referred to as sanctions. EU sanctions “aim to target those individuals or entities responsible for undesirable policies and actions” or in short, smart sanctions (EU 2014). These sanctions are mostly implemented in accordance with WTO agreements and UN treaty principles. The cooperation with the UN is sought to generate the greatest effect. Alternatively, the EU can implement autonomous sanctions; however typically, these are only implemented in order to combat terrorism or prevent
weapons from flowing into a certain country.
Historically, relations between Burma and Europe have never been consistent.
Primarily, because their past is affected by the colonization of the British, that ensured a relation characterized by mistrust and violence (Boisseau du Rocher, 2013, p.194).
Hence, the paranoia by which the Burmese junta is addressing western influence is in some respect legitimized. This creates “a perennial effect on the Burmese perception of the outside world and more precisely of Europe” (Boisseau du Rocher, 2013, p.194). Before 1988, the EU and Burma functioned on better terms; however, a stark diplomatic shift occurred shortly after the so-called ‘8-8-88’ revolts. A pro-democracy protest was held in the summer of ‘88, after a series of (economic) mismanaged events (e.g. demonetization of Burmese currency). This protest was forcefully obstructed by armed forces. After this event, Ne Win was asked to step down and an official military junta took office.
After 1988, the Burmese junta acted multiple times in contrast with European norms and values, best illustrated by not acknowledging the results of fair elections, and the violation of numerous human rights (Vuorijarvi, 2008, p.64). In response, the EU introduced its first sanctions, consisting of the suspension of financial aid and the implementation of an arms embargo (EU 2014). This weapon embargo prohibits the export of European arms and military equipment to Burma (CFSP, 2006, p. 116/79).
The withdrawal of financial aid did not include aid of a humanitarian or democratic nature. In 1996, due to a deteriorating human rights situation, the EU implemented smart sanctions: a visa ban and the suspension of high level visits (CFSP, 2006, p.116/79 - 80). This visa ban targeted the regime’s winning coalition, which consisted of key figures and their families within the military junta, military officers, and heads of corporate conglomerates (CFSP, 2006, p.116/81 – 84). In 2000, the visa ban and existing sanctions were expanded to a freezing of foreign funds of the same elite. A host of new measures was introduced after the military junta renewed the house arrest of Aung San Suu Kyi. The demand made by the EU was “to release her, stop
harassment of the NLD and allow for open debate at the National Convention on the drafting of a constitution” (Portela, 2014, p.10). The authorities did not respond to the EU demands, which led the European Union to expand its visa ban to lower ranked military officers, increase pressure on international institutions providing loans to Burma and making it illegal for EU companies to cooperate financially with Burmese companies (EU 2014). Financial cooperation, however, only applied to new
investment and cooperation cases, not for those already in operation. This was supplemented by removing insurance possibilities for companies active in or exporting to Burma (Portela, 2014, p.10). In 2006, a further extension of the
investment ban was concluded, with the inclusion of state-owned enterprises on the blacklist.
The Saffron revolution, which is widely considered a protest by Buddhist monks, was forcefully obstructed by the government, and has inspired a further expansion of the sanctions package. Next to this, measures were further tightened because of “lack of improvement in the human rights situation and the absence of substantive progress towards an inclusive democratization process” (2010/232/CFSP).
New sanctions, implemented in 2007, were meant to obstruct sectors exporting key Burmese commodities. The export of equipment and technology and the import of logs, timber, metal and stones were banned. The EU tried to further diminish
financial ties by blocking the creation of joint ventures with companies allied to the military junta. A logical result of these sanctions was a significant change in EU – Burmese relationships.
In their Common Position in 2006, the European Union has made clear that sanctions are to be suspended when “substantial improvement” occurs in the political situation within Burma (Common Position 2006/318/CFSP). Due to an improved political situation, the European Union decided to phase out sanctions in three steps. It led to an easing out in 2010 and 2011, suspension in 2012, and an incomplete
termination in 2013 (Portela, 2014, p.9). The only ‘sanctions’ that have remained in place are certain parts of the investment and visa ban.
Year Sanction Type Impact area Effectiveness
1990 Arms embargo Armaments
(smart)
Regime winning coalition
Zero, substitution by other actors
1991 Suspension of defence cooperation
Diplomatic (smart)
Regime winning coalition
Zero, substitution by other actors
Visa ban against top regime officials
Diplomatic (smart)
Regime winning coalition
Medium, Burma officials never attached meaning to travelling Expulsion of junta
military personal in MS
Diplomatic (smart)
Regime winning coalition
Medium, counterproductive, reinforced paranoia regime
High-level bilateral governments visits suspended
Diplomatic (smart)
Regime winning coalition
Zero, isolation served the purpose of the Tatmadaw
Suspension of all non- humanitarian bilateral
& multilateral aid
Financial
(comprehensive)
People Medium, but targeted the wrong group. Capital aid did also not flow to the people
1996 Established a common position on Burma 1997 Removal of Burma’s
listing on Generalized System of Preferences on industrial and agricultural products
Trade
(comprehensive)
People High, but targeted the wrong group. Low government interests in garment sector
1998 Visa ban extension Diplomatic Regime winning Zero, see previous comment
including SPDC senior officials
(smart) coalition
2000 Ban on technical equipment relating to suppression of the Burmese people
Trade (smart)
Regime winning coalition
Zero, substitution by other actors (e.g. China)
Freezing of foreign assets held by high and mid-level SPDC officials
Financial (smart)
Regime winning coalition
High, targeted the right group and limited their financial capabilities abroad.
2003 Tightening of visa ban and assets freeze
Diplomatic/Fina ncial (smart)
Regime winning coalition
See previous ‘visa-ban’
Tightening of arms embargo
Armaments (smart)
Regime winning coalition
See previous ‘arms-ban’
Withdrawal of EU military personnel from Burma
Diplomatic (smart)
Regime winning coalition
Zero, see ‘paranoia’ comment
2006 Ban on import of timber, logs, metal and gems
Trade
(comprehensive)
Regime winning coalition
Medium, circumvention of sanctions was possible through trade diversion
2007 Banning the creation of joint ventures with regime affiliated companies
Financial (smart)
Regime winning coalition
Medium, FDI substituted by other actors. FDI from sanctions senders was low anyway.
Table 1: Overview of EU Sanctions Against Burma - Impact Area and Effectiveness. Source: 2013/184/CFSP
5.2 US Sanctions
The United States is the country that has issued most sanctions in history, applied to at least 35 countries, among which important trade partners. After 1990, the number of sanctions issued increased steeply; between 1993 and 1996 alone, 61 laws and
executive actions have been created in order to legitimize sanctions (Treasury, 2015).
The implementation or lifting of sanctions within the US Congress is described as
‘tacit endorsement’, ‘explicit approval’ or ‘disapproval’. These sanctions can have a diplomatic, economic, or military nature. The US definition of sanctions is: “any measure or action of a diplomatic, economic, or military nature taken by a nation
(usually, the United States) or a group of nations to coerce Burma to comply with expected conduct or behaviour” (US Congress 2012).
The USA and Burma generally have been on good terms; however, relations quickly deteriorated after the 1988 coup d’état. In the transition from British and Japanese domination towards a democracy in between 1948 – 1962, the USA was a very supportive ally. This bond was primarily formed due to the safe haven Burma provided to American soldiers during the 2nd World War. Burmese and U.S. soldiers fought against the Japanese alongside Kachin guerillas. Until 1962, the US
government and private foundations dispatched missions to Burma to assist in a range of sectors. The USA developed into a major source of foreign aid and economic advice. Foreign direct investment and trade developed between the two countries. The increasing financial and diplomatic ties caused discontent amongst certain socialist politicians and General Ne Win. General Ne Win unfolded a socialist policy that same year, after its ‘coup’ in 1962, which further highlighted ideological differences
between Burma and the USA. Hereafter, the Burmese government subtly, but clearly distanced itself from the USA, by refusing economic aid in 1963 and refusing support to combat Chinese communist insurgents in the late 60’s. This subtle move-away to isolation was built on the principle of non-alignment and lasted until 1977, in which a fraction of young army officers pleaded for a move-away from isolation. The young army officer’s plea was heard and what followed was a decade of liberalization in economic and diplomatic ties between the USA and Burma (Badgley, 2004, p.14).
These increasing ties were reversed by the 1988 revolts. While this did not lead to a breakdown in relations with Burma; it led to a shift in focus towards the NLD. The shift of attention towards the NLD did influence the junta’s view on America and vice versa. In 1989, the USA started to ask for a return to democracy, reduction in opium cultivation and release of political prisoners. From that point on, relations started to deteriorate; however, the USA still provided assistance to Burma for its
counternarcotic policy. The production of opium had an impact on the USA, since Burma is the largest producer of heroin and the USA its largest consumer (Hadar, 1998, p.3).
Diplomatic relations were further affected by the withdrawal of the American ambassador in 1990, and the blocking or opposition to Burmese membership into various international organizations. The Bush administration was given the possibility of implementing “economic sanctions as the President determined to be appropriate”
at the end of the 80’s; however, the option was not utilized (Martin, 2012, p.1). A few years after the first diplomatic measures, a weapon embargo and the imposition of limited financial sanctions followed. Other proposals were made, exemplified by the 1995 Free Burma Act, and initiated by members of Congress. They were both
stipulating for stringent economic and trade sanctions. An amendment of the Foreign Instance Act 1961, in 1994 and 1995, led to a “withholding of U.S. contributions to selected international organizations with programs in Burma” (Martin, 2012, p.4). The successful amendment to the Foreign Operations Appropriations act gave the
president full authority to implement sanctions, until he saw a credible improvement related to human rights and democracy.
US sanction policy seemed clear-cut and united; however, a stark political divide was present within political backrooms of the United States. The presidential administration tried to find middle ground, while congress attained a more assertive attitude. Clinton tried to respond to congressional pressure, by publicly announcing reviews of its Burmese foreign policy and sending officials to Burma. It was agreed that cooperation should be maintained to stimulate improvements of human rights and democratization and primarily to combat the narcotic industry. However, after
increasing pressure on the NLD, a renewal of Aung San Suu Kyi’s house arrest and an overall “constant and continuing pattern of severe repression” on democratic groups, the US president decided to execute a presidential order stipulating that all new investment was to be banned in Burma (Hadar, 1998, p.3). Although the investment ban was well intended, the Clinton administration was worried for the effects it would have on companies active in Burma at the time. These worries seemed rather
unjustified, as companies that invested prior to the investment ban, were in fact allowed to continue investing into the same projects they were involved in.
Furthermore, it was a given that US relations with their East-Asian partners did not stand to benefit by the imposition of sanctions. Their East-Asian counterparts adhered to a policy of constructive engagement, as they believed that dialogue would carry larger effect than the implementation of sanctions that would effectively lead to political and economic isolation (Jones, 2008, p.273).
On the contrary, Burma’s actions did not help to change the doubtful attitude the presidential administration adopted towards the effects of its implemented sanctions. After the attack on the NLD and its followers, the USA decided to
implement the Burmese Freedom and Democracy Act in 2003, which activated a ban
on imports from Burma, froze assets of certain Burmese officials, blocked U.S.
support for loans from international financial institutions (IFIs), and banned visas for certain Burmese officials” (Congress CRS, 2012, p.4). The Burmese response to the Saffron revolution, which enticed the EU to restrict sanctions, formed the basis of the presidential order in 2007. In 2008, the import of jade was added to list of products and materials that were restricted and another expansion of financial sanctions and visa bans.
In total, the USA issued six laws, five presidential orders and a few alterations to existing laws, to try to steer Burma into the direction of democracy. The USA considers sanctions a valid and effective instrument within their foreign policy measures. In between 2012 and 2015, after the fair by-elections in which the NLD won significantly, the United States slowly lifted sanctions, which only left in place the arms embargo and parts of the visa, trade and investment ban.
Yea r
Sanction Type Impact area Effectiveness
1988 Arms embargo Arms (smart) Regime winning coalition
Zero, substitution by other actors
Suspension of foreign assistance (ex. humanitarian aid)
Financial (comprehensive)
Regime winning coalition &
people
Medium, but targeted wrong group
1989 Withdrawal of GSP eligibility
Trade
(comprehensive)
People High, but targeted wrong group 1990 Diplomatic
representation reduced to Charge d’Affaires
Diplomatic (smart)
Regime winning coalition
Low, reinforced paranoia
US Customs and Trade act 1990 alteration
Trade
(comprehensive)
People High, but targeted wrong group
1991 Denied renewal of bilateral textile agreement
Trade People High, but targeted
wrong group
1993 Suspension of Arms Regime winning Zero, substitution by
munitions export licenses to Burma (Arms Export Control Act)
coalition other actors
1994 Burma listed on list of ‘outlaw’
states
Diplomatic Regime winning coalition
Zero, counterproductive because reinforced paranoia
1996 Visa ban for top- level officials
Diplomatic Regime winning coalition
Zero, officials low interest in foreign travel 1997 Executive order
13047 –
investment by US persons banned
Financial (smart) Regime winning coalition
Low, US FDI was little.
Only large in people operated sectors (e.g.
garment) 2003 Free Burma and
Democracy Act - Import ban - Assets
freeze of SPDC institutions and senior members of USDA - Oppose
multilateral loans to Burma - Expanded
visa ban - Ban on
remittances
Trade (compreh.) Financial (smart)
Financial (comprehensive) Diplomatic (smart) Financial (comprehensive)
People
Regime winning coalition
People & regime winning coalition Regime win. coal.
People & regime winning coalition
- High, wrong group Medium, decrease in funds, but capital was not the primary driver.
High, wrong group
- Low, little travel - High, limits payments in dollar, but limits private business growth
2007 Presidential executive order 13448
Financial Regime winning coalition
Medium, investment substituted by China and Thailand
2008 Presidential Financial Regime winning Medium, investment
executive order 13464
coalition substituted by China and Thailand
Tom Lantos Block Burmese Jade act
Trade
(comprehensive)
Regime winning coalition
High, income earner for regime.
Table 2: Overview of US Sanctions Against Burma – Impact Area and Effectiveness. Source: Office of Foreign Assets Control (OFAC) (2014) Burma Sanctions Program. 202/622-2490. pp. 1-6
5.3 ASEAN and Regional Actors
ASEAN is a supranational body comprising eight South-Asian countries, among which, Brunei, Cambodia, Singapore, Thailand, Vietnam, Lao, Indonesia, the Philippines, Malaysia and currently Burma. Burma applied for membership in 1996.
The application was preceded by preliminary visits by high-level officials in the mid
‘90s, followed by an observer status in the same year as application. Together with Lao, Burma gained access into ASEAN on the 23rd of July 1997 (ASEAN, 2015).
With a track record of limited internal democratic governance, the majority of South-East Asian countries adheres to a strict policy of non-interference, and respects the internal sovereignty principle of their peers; in essence also satisfying their own.
Before the accession of Burma, the stance of ASEAN in relation to the human right and political violations was based upon that same principle. After the accession of Burma, the principle of non-interference was changed to ‘constructive engagement’
(CE). It’s a principle that originally stems from Thailand’s foreign policy towards Burma, which in turn is based on the foreign policy of Carter and Reagan’s towards South Africa during the Apartheid regime (Jones, 2008, p.273). Constructive
engagement in the American context meant the pursuit of “US strategic and economic interest while encouraging moderate regime change that would preclude a
revolutionary outcome and exclude Soviet-Cuban influence from Southern Africa”
(Jones, 2008, p.274). It differed slightly with the ASEAN principle of constructive engagement, as members did not like to interfere in each other’s internal matters.
However, the financial dimension of US’s constructive engagement aligned with the financial motives of ASEAN members. ASEAN states already started to engage with Burma at the end of the ‘80s, while officially adhering to the principle of non-
interference; they’ve subtly tilted the scale in favor of the military junta (Jones, 2007, p.2). Under the principle of constructive engagement, not a great deal changed. While, ASEAN actively sought to influence the attitude among the Burmese elite through re- education, democratization wasn’t their main focus. Stability was important, but
