Select Committee on Economic Affairs Second Report


49.  The sanctions currently applied against Burma by the EU are very different from those that were applied against Iraq. These sanctions are autonomous EU sanctions, applied outside the UN framework, and with little support in the East Asian region. The sanctions regime also involves the use of limited measures, in what is claimed to be a targeted manner, to achieve modest objectives. We have examined this case because it illustrates some of the problems connected with the use of autonomous targeted sanctions.

Sanctions on Burma: General as well as targeted

50.  A popular uprising forced the military to allow a democratic election in 1990 which was won by the National League for Democracy (NLD) with 82% of the vote, but the military have refused to relinquish power and the NLD leader Daw Aung San Suu Kyi has been under house arrest for ten years. The EU imposed sanctions on Burma by means of its Common Position in 1996 and it has renewed them every year since then.[25] The sanctions have been motivated by the regime's refusal to permit the elected government to take power and numerous violations of human rights. The EU sanctions include an arms embargo, a ban on exports of equipment for internal repression, a ban on certain services, freezing of funds and economic resources, restrictions on admission to the EU, a ban on financing of Burmese state-owned companies, suspension of selected aid and development programmes, suspension of high-level bilateral governmental visits, and a reduction of diplomatic relations.

51.  The UK Government strongly discourages trade, investment and tourism with Burma, and does not provide export credit guarantees to British exporters. While the UK measures are presented as being in support of the EU Common Position, in practice they go well beyond the letter of the Common Position and exceed the measures taken by many other EU countries, including France, Germany, Spain, Austria and Italy (p 172).

52.  The evidence suggests that UK sanctions on Burma should not be regarded as targeted sanctions, particularly since the policy of discouraging trade, investment and tourism hits the economy generally and consequently hurts the ordinary Burmese people.

An ineffective impasse

53.  The FCO states that the purpose of the sanctions is: "To put pressure on the regime to work towards democratic change and respect for human rights, through measures which are designed to target those obstructing reform and progress, but ensuring that the ordinary people of Burma suffer as little as possible."[26] The sanctions were intensified in 2004 in order to send "a clear signal to the regime that all EU partners share grave concerns about the situation in Burma and that the EU will continue to press strongly for progress towards national reconciliation and respect for human rights."[27] The EU Common Position states that the EU will consider suspending its sanctions and gradually resuming cooperation with Burma in the event of "a substantial improvement in the overall political situation" in Burma.[28]

54.  In his evidence, Dr Howells indicated that he thought that "our leverage over the regime is very limited", that "EU sanctions alone are unlikely to bring about change", that he was "yet to be convinced" that making Burma a "pariah state" would have any effect, that he felt "deeply uneasy" about the sanctions and that they are "not working very well" (Q 292). The sanctions on Burma send a signal of disapproval, and show that the UK and the EU are determined to apply pressure for change, but there has been no significant move towards greater democracy or increased respect for human rights. While the UK and the EU desire democratic change in Burma, they do not have any expectation that their current economic sanctions combined with those of other countries, most notably the US, will bring about that change. This contradicts the Government's principle that sanctions should "have clear objectives, including well-defined and realistic demands against which compliance can be judged, and a clear exit strategy".

55.  The FCO indicated that it favours UN sanctions on Burma "given that they are broader in scope and impact" (p 4). However, the FCO also suggested that, while it was pressing for them, "there is no prospect of UN sanctions in the near future" (p 4). In his evidence, Dr Howells elaborated that "there are some very powerful countries that do not wish to see sanctions intensified in any shape or form on Burma because they perceive that they need Burmese commodities and natural resources." (Q 292)

56.  The Government has not explained the point of arguing for measures which are very unlikely to be adopted and which command little support in the region. It would seem that the Government regards the current policy as the best available option, in the sense that it imposes a relatively low cost on the Burmese people and is better than any of the alternatives. Considering the evidence we have received, we are not persuaded on either count.

57.  The FCO argued that: "It is hard to measure any coercive effect these sanctions have on the Burmese regime, since any economic impact is far outweighed by the damage done by the [regime's] own economic mismanagement" (p 4). However, it seems reasonable to suppose that sanctions which hit the Burmese economy generally will inevitably hurt ordinary Burmese. We think that the Government should attempt to assess whether humanitarian assistance has helped to compensate for the humanitarian costs arising from the current sanctions against Burma.

58.  The tourism boycott has probably succeeded in discouraging some British tourists from visiting Burma. This represents a cost to the regime in terms of lost tax revenues, but there is also a cost to ordinary Burmese people, who would otherwise have benefited from greater tourism-related activities. The Government has not offered any criteria against which to assess its informal tourism boycott.

59.  Although Mr Kovanda told us that all current EU sanctions are targeted, he also noted that there are "restrictions on investment in certain state-owned companies and suspension of co-operation programmes" and that "Most of the sanctions" (and hence not all of them) are directed against members of the regime and their personal assets. He stated that he was not aware of costs to ordinary people "being a significant problem" (Q 268). However, this view does not seem to include an assessment of the opportunity costs of the whole package of measures against Burma. We received evidence from Mr Derek Tonkin, a former British diplomat, who drew attention to measures by the EC which prevent Burma from having duty-free access to EU markets, which it would otherwise have as a "Least Developed Country", and to the EU's opposition to the provision of IMF and Asian Development Bank facilities to Burma (pp 170-175). In our view, the impact of these measures would appear to be general rather than targeted, which suggests that some of the current EU sanctions should be regarded as general rather than targeted. Mr Tonkin also suggested that EU and UK policy has encouraged the US to persist with general sanctions, and it is these which are imposing the greatest humanitarian costs on ordinary Burmese people.

Debating the way forward

60.  Daw Aung San Suu Kyi and the NLD are in favour of the current sanctions. However, Mr Tonkin in his evidence argued that the NLD's support for economic sanctions is probably not representative of most ordinary Burmese and he proposed that the Government and the EU should give more weight to the views of those who are critical of sanctions on Burma (pp 170-175).[29] Mr Alex Singleton suggested that Burma might become less repressive, and gradual reform might occur, if there was a process of economic engagement that led to increased prosperity and the development of a middle class (Q 109). Mr Kovanda noted that current EU sanctions do not prevent engagement via programmes related to health, education and poverty alleviation, and the EU provides significant aid in these areas (Q 270).

61.  Although the FCO details relevant debates and statements on its website,[30] we are concerned that the Government and EU have not published any substantial analysis of the sanctions on Burma. We suggest that Government should undertake an urgent enquiry into sanctions policy on Burma, with a view to deciding whether it is worth continuing with it.

25   Council Common Position 2006/318/CFSP, 27 April 2006. Back

26   FCO Country Profile, Burma.  Back

27   FCO Country Profile, Burma. Back

28   Council Common Position 2006/318/CFSP, 27 April 2006, p. 2.  Back

29   See also Thant Myint-U, 'What to Do about Burma', London Review of Books, vol. 29, no. 3, 8 February 2007. Back

30   FCO Country Profile, Burma. Back

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