Over a lunch of rice and fish at the white, lake-side Rangoon villa where she spent six years under house arrest, Nobel peace prize winner Aung San Suu Kyi revealed in an extremely rare interview that Burma's economy is under severe strain. Yet the 52-year-old Suu Kyi insists that the U.S. maintain economic sanctions. Only international pressure, she says, can force the current military regime to cede power to her National League for Democracy (NLD), which swept Burma's only legitimate elections in 1990 but was denied office. Foreign investment, she says, strengthens the junta and undermines the cause of democracy, without benefitting the people or the overall economy. Companies such as Levi-Strauss, Pepsi-Cola, and Motorola have heeded this plea and pulled out of Burma. But others such as Unocal Corp., whose stake in a $1.2 billion gas project was grandfathered in under the U.S. sanctions, remain.
Although technically no longer detained, Suu Kyi remains under heavy government surveillance, and journalists are forbidden to meet her. On Mar. 6, Business Week's Asia Editor Sheri Prasso was able to circumvent Burma's internal security and see her at her home.
Q: A high-level U.S. delegation visited here in February and recommended some eventual softening of U.S. sanctions. What is your reaction?
A: I don't understand why they want to soften the sanctions, on what grounds. There are those who claim the people of Burma are suffering as a consequence of sanctions, and that is not true at all. First of all, the U.S. did not have many investments here to begin with. As it is, Burma seems incapable of holding onto its investments. There are many companies pulling out because conditions are not right in Burma for successful investment. If old companies are pulling out, why would new companies wish to come in?
Q: Have there been any tangible results from the sanctions?
A: We very much appreciate the U.S. sanctions because they have been a tremendous psychological boost for the democracy movement and also they have made businesses think carefully about what is really going on in Burma. I think it has made people study the situation in Burma more carefully. As a result of their investigations, they have decided they really don't want to invest here. When they looked into the situation, they found that really conditions were not favorable towards successful investment, because the economic policies of the government are not such to promote development in the long run. It was just a short-term boom that occurred here in the early 1990s.
Q: What message do you have for investors who want to come to Burma?
A: My message is very simple. We are not against investment, but we want investment to be at the right time, when the benefits will go to the people of Burma, not just to a small, select elite connected to the government. We do not think investing in Burma at this time really helps the people of Burma. It provides the military regime with a psychological boost. If companies from Western democracies are prepared to invest under these circumstances, then it gives the military regime reason to think that, after all, they can continue with violating human rights because even Western business companies don't mind. It sends all sorts of wrong signals to the present government. We think there is great potential in Burma for economic development, but at the right time and under the right circumstances. I do not think investing now is going to be profitable either to investors or to the people of Burma.
I would like to make it clear that the people of Burma are not suffering as a result of sanctions. The real profits do not go to the people of Burma. It's all concentrated in the hands of investors who are not Burmese, or priveleged people.
Q: You met recently with Unocal Corp. President John F. Imle Jr. Did he try to convince you to change your position?
A: I never discuss my meetings with anyone...[but] we believe in talking to people, even those with whom we disagree. Actually it's more important to talk with people with whom we disagree, because it's precisely [with them that] we need to try to come to an understanding.
Q: To what extent is the regional currency crisis having an effect here? Are investors from Thailand, Malaysia, and elsewhere pulling out?
A: Burma was doing badly anyway, even before the crisis in ASEAN. I have been told that a lot of companies are closing down. Every day we hear this department store closed down, this company decided to withdraw.
Q: How is that affecting the population?
A: Not very much. Of course employees of those companies are affected, but the numbers are very small. The public in general is not affected. The only people suffering are those profiting [previously], a very priveleged group of people. These companies are leaving because they do not like the economic climate in this country.
Q: What is the economic climate here?
A: The economic situation is very bad. Prices are rising, a lot of businesses are pulling out. There isn't much investment coming in, if at all. The big hotels, I think they built too many to begin with, they don't have many clients and are unable to cope. Every time you go to buy something you have to ask for the price because it changes from day to day, it's going up all the time. The official estimate of inflation is about 19%, but they always tend to underestimate the inflation rate.
The rice harvest is very poor this year. Some parts of Burma suffered from floods after the last monsoons, whereas in other parts they didn't get rain at the right time. Farmers tell me it's one of the worst harvests they've ever known, one said in something like 60-plus years.
Q: What is the potential for civil unrest?
A: It's difficult to tell what triggers people's discontent to the point where they decide they won't take it anymore. I know there has been a lot of speculation as to whether the situation is bad enough for a general uprising. The NLD [National League for Democracy] is not trying to create an uprising.
Q: There is some confusion over what to call this country. Do you have a preference?
A: Yes, Burma--because Myanmar is a name that this military regime chose when it took over. We don't think that any government, especially one that is not elected by the people, has the right to change they name of the country just because they fancy it.
Q: Under what conditions can you see a resolution to the current political impasse, such as a power-sharing agreement?
A: Everything has to start with dialogue. If anyone is interested in power-sharing, it can put it forward in the process of dialogue. We have said that with regard to dialogue, we are prepared to discuss anything. It has to be a substantive political dialogue on the basis of equality.
Q: The main universities here have been shut by the government for over a year. What effect is this having?
A: It's having a disastrous effect on young people and the future of this country. The standard of education is going down. We are not realy training our young people at all. [High school] graduates have no greater ambition than to become waiters at a hotel because they can earn more money than by entering the civil service. The values of our young people are being affected adversely, together with the education. The quicker we get democracy, the easier it will be to repair the damage that has been done.