Sep 19, 2012

Myanmar - Myanmar Leaders' U.S. Visit Could Bring Critical Changes

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The coming U.S. visits of Myanmar President Thein Sein and world-famous opposition leader Aung San Suu Kyi are emerging as a potential turning point for the future of the country's former military state's reform process—and a key point of discussion will be whether the U.S. will relax a long-standing ban on importing Myanmar-made products.

Ms. Suu Kyi, a Nobel Peace Prize winner, left Sunday for the U.S, where, among other things, she is set to receive a Congressional medal awarded for her pro-democracy advocacy in 2008. Mr. Thein Sein, whose schedule is subject to change, is expected to travel to the United Nations General Assembly meetings in New York later this month after first visiting China.

The arrival of two of the main players in Myanmar's gradual shift to democracy over the past 18 months represents an opportunity for the U.S. to encourage further reforms in the country. Among other things, officials from the White House and State Department are talking with Congress about how and when to eliminate the import ban on Myanmar products after the U.S. first began relaxing sanctions earlier this year.

Restrictions on U.S. companies investing in Myanmar have already eased, prompting moves by firms such as Visa Inc., V -0.16% MasterCard Inc. MA -0.11% and Coca-Cola Co. KO +0.70% to begin planning their entry into the country of 60 million people.

In return, diplomats and other observers say expectations of Myanmar's government are rising, as the country prepares a way to meet U.S. demands that it release more political prisoners. Myanmar is also working on a law clarifying the guidelines enabling foreign companies to begin investing in the country in earnest.

"I think the U.S. will want to make a show of supporting Myanmar's reforms, especially if it gets what it wants—some more prisoners released," said Sean Turnell, a Myanmar expert at Macquarie University in Sydney, Australia. Although the exact total is subject to debate, human rights groups say at least several hundred political prisoners remain behind bars after a series of prisoner releases over the past year.

In a speech to foreign investors in the Myanmar capital of Naypyitaw this week, U.S. Ambassador to Myanmar Derek Mitchell vowed that Washington's earlier moves to ease investment restrictions "will not be the end of the process of changing U.S. policy" towards Myanmar, though he didn't provide specifics on when more changes would come.

"We are very serious" about working with Myanmar to promote change, "even if fully extracting ourselves from the Byzantine array of restrictions imposed over the years may take some time," Mr. Mitchell said.

Lifting the import restrictions would potentially inject fresh life into large parts of the Myanmar economy, especially the country's textiles industry, which was once a major exporter to the West before trade sanctions were imposed in the '90s.

Relaxing the U.S. ban in Myanmar imports, though, is a potentially long process. Unlike the removal of earlier sanctions, which President Barack Obama achieved with executive decrees, completely lifting the import ban requires support from Congress—a difficult target to achieve while the U.S. is locked in an election cycle—although a waiver was written into the latest extension of the ban in August which could help speed up the process.

It might also require a clear signal from Ms. Suu Kyi that she approves of such moves. Her decision earlier this year to support the suspension of economic sanctions encouraged both the European Union and U.S. to begin relaxing investment curbs, and the E.U. now is preparing plans to grant Myanmar preferential trade status which will improve access for Myanmar exports.

It is unclear whether Ms. Suu Kyi and her National League for Democracy will endorse a rapid change. "I don't know what the lady's opinion is, but the NLD's stand is that we always think of the benefit of the people," said NLD spokesman Nyan Win. Earlier this year, Ms. Suu Kyi said Western firms should focus on investing in businesses that could create jobs for ordinary Myanmar people and warned against environmental exploitation.

Diplomats and people familiar with the situation say it is increasingly likely that the pro-democracy activist will meet with Mr. Obama at some point during her visit, but no such meeting has been scheduled with Mr. Thein Sein. The Myanmar president's advisers say he would like to meet with Mr. Obama, but that he is also looking forward to addressing other world leaders at the U.N.

"To have a chance to talk to the leaders of the whole world at a unique place is a golden opportunity for branding and marketing a nation," one presidential adviser, Ko Ko Hlaing, wrote by email.

Analysts do, however, think it is significant that Mr. Thein Sein is planning to visit China on Sept. 19 before heading to America on Sept. 25.

Mr. Turnell in Australia notes that in briefings to academics and other visiting experts, Myanmar officials have been trying to deflect suggestions that the country's rapid reforms were driven by fears of China's growing economic influence over the resource rich nation. The planned visit is also a reminder to the U.S. that it is not the only player in the region, and that Myanmar still has strong commercial and political ties to Beijing.

"Symbolically it is very interesting," said Mr. Turnell. "It's a real-politik moment."




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