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U.S. Eases Economic Sanctions on Burma in Response to Reforms

By MacKenzie C. Babb | Staff Writer | 25 July 2012
Under Secretary Hormats (AP Images)

Hormats led the highest-level U.S. economic and commercial delegation to Burma in more than 25 years.

Washington — The United States is easing economic sanctions on Burma, encouraging American investment in the country as it continues to tackle tough political reforms, according to Under Secretary of State Robert Hormats.

Hormats, the under secretary for economic growth, energy and the environment, said Burmese officials have made “a remarkable number of very substantial reforms” during the past year and a half and that the United States is responding “action for action” by easing sanctions.

“The point we’re trying to make is you’re on the right track in our view, we’re going to take measures to demonstrate that we support the track you’re on, we would like you to continue the process of reform and we will respond constructively if you do,” he said July 24 at the Washington Foreign Press Center.

Hormats led a trade and economic delegation to capital city Nay Pyi Taw and business hub Rangoon July 14–15 — the highest-level U.S. trip of its kind to Burma in more than 25 years.

The country has taken steps to democratize under President Thein Sein, including the release of about 500 political prisoners. The new leaders also allowed by-elections, during which Nobel Peace Prize winner and opposition leader Aung San Suu Kyi’s political party achieved substantial victories and gained more than 40 seats in parliament.

Additionally, the country has undertaken an agenda of economic reforms that include the development of more than 100 labor unions, moves to provide for an independent central bank and writing new laws and regulations for foreign investment.

Hormats said the reforms “are producing opportunities for more and more people in the country.” The United States, he added, has responded by easing sanctions to allow U.S. exports of financial services and U.S. private investments in Burma.

He said new U.S. investments should provide support for the reform process, as American companies are sensitive to environmental issues, cultural minorities and workers’ rights. In fact, the United States has instituted new reporting requirements for those seeking a license to invest in Burma, he said.

“These companies, when they do make their investments, need to provide information to the U.S. government on who they are dealing with, on their labor practices [and] their environmental practices, how they’re dealing with issues of land acquisition, and how they address human rights considerations,” Hormats said.

The new measure requires this information to be posted online and accessible to citizens both in the United States and Burma. It is intended both to give the U.S. government information on how American companies are operating in the country and also to allow the Burmese people a chance to monitor U.S. investors, Hormats said. The undersecretary added that the measure will encourage responsible investing and greater transparency, and “is a very positive thing” for all parties.

He said the United States continues to encourage Burma’s leaders to pursue additional reforms, including greater transparency, the release of all political prisoners and increased investments in health care and education for more inclusive growth across the country.

In addition to President Thein Sein and pro-democracy leader Aung San Suu Kyi, Hormats and his delegation met while in Burma with civil society leaders as well as Speaker of the Lower House of Parliament Thura U Shwe Mann, Industry Minister Soe Thein, Central Bank Governor U Than Nyein and Deputy Commerce Minister Pwint Hsan.

Hormats was joined on the trip by recently arrived U.S. Ambassador to Burma Derek Mitchell, as well as Under Secretary of Commerce for International Trade Francisco Sánchez, Principal Deputy Assistant Secretary of State for East Asian and Pacific Affairs Joseph Yun, and Deputy Assistant Secretary of State for Democracy, Human Rights, and Labor Daniel Baer. Rounding out the delegation were senior business executives representing about 40 companies looking to establish economic ties in Burma.

The under secretary’s visit comes following Secretary of State Hillary Rodham Clinton’s historic visit to Burma in 2011, during which she praised political reforms and encouraged the country’s leaders to continue working toward democracy.