Obama Lifts Myanmar Sanctions as Suu Kyi Visits White House

Myanmar State Counselor Aung San Suu Kyi Meets President Obama At The White House

Aung San Suu Kyi meets Barack Obama in the White House on Sept. 14.

Photographer: Aude Guerrucci/Pool via Bloomberg
  • ‘It’s the right thing to do’ after changes, the president says
  • Myanmar is ‘ready to take off,’ de facto leader says

President Barack Obama said he would lift economic sanctions on Myanmar after meeting at the White House on Wednesday with the country’s de facto leader, Aung San Suu Kyi, a former political dissident whose government took power in March.

"The United States is now prepared to lift sanctions that we have imposed on Burma for quite some time. It’s the right thing to do," Obama said after the meeting, calling the country’s ongoing transition to democracy a "good news story."

U.S. companies have been watching closely for any sign they’ll get more access to the fast-growing Southeast Asian nation, known as Burma before its former military rulers changed the name to Myanmar in 1989. Business groups in the U.S. have complained that sanctions hinder them from competing with major rivals in an economy that the Asian Development Bank projects will expand 8.4 percent this year and 8.3 percent in 2017, making Myanmar Asia’s best performer.

"We are very interested in successful businesses" entering Burma, Suu Kyi said after the White House meeting. "We think our country is ready to take off."

She said that U.S. sanctions helped drive the country’s military junta to surrender power, but that the time had come to lift them.

Off-Limits Economy

By some estimates, as much as 70 percent of Myanmar’s economy is off-limits to American companies despite some easing of sanctions, according to Alexander Feldman, president and CEO of the U.S.-Asean Business Council in Washington.

"The president just removed the biggest challenge specific to American companies in Myanmar," he said, noting that U.S. businesses would now be able to "compete on a level playing field with competitors from Europe, Asia and elsewhere."

The U.S. first imposed economic sanctions on Myanmar in 1990 in an attempt to weaken the then-military regime and their associated business cronies. As the generals loosened their grip in recent years, the U.S. did likewise.

Most recently after Suu Kyi’s government took power in March, Obama’s administration allowed American businesses to have dealings with seven formerly blacklisted state-owned enterprises, use the country’s main port, and work with state-owned banks.

There was speculation that Suu Kyi might want some U.S. sanctions to remain in place until Myanmar’s military releases its remaining hold on the country’s government. Myanmar’s constitution still gives the military control over several key ministries and a quarter of parliament, and prohibits Suu Kyi from serving as president.

For an explainer on Myanmar’s transition to democracy, click here.

"The White House is likely prepared to make a strong statement by waiving most remaining U.S. sanctions with the exception of the arms embargo," said Herve Lemahieu, a research fellow specializing on Myanmar at the Lowy Institute for International Policy in Sydney. Suu Kyi will probably not go that far and instead signal that she would "tolerate further sanctions relief but make removing the last vestiges of the U.S. sanctions regime conditional," he said.

The U.S. still maintains a blacklist of people and companies, including two of the nation’s largest conglomerates, which invest in everything from mining to banking, but are controlled by the military. It also bans arms sales to Myanmar and the import of jade and gemstones from the country. U.S. entities investing more that $500,000 in Myanmar must file paperwork every year on issues from human rights to anti-corruption measures.

The U.S. should wait to lift sanctions until Suu Kyi’s National League for Democracy party has had time to carry out more government and institutional reforms, said Yan Myo Thein, a Yangon-based political analyst.

"Our political and economic institutions are not ready if the U.S totally lifts the sanctions," he said, noting the NLD still didn’t have a plan in place for legitimizing the country’s so-called cronies who benefited under military rule and still have a big influence on the economy.

Human Rights

Rights groups have also urged the U.S. to maintain the remaining sanctions, saying they are still needed to make sure more reforms are carried out and those in place become entrenched.

"President Obama should be laying out a series of human-rights benchmarks that will sustain momentum to eliminate unjust laws and ensure that the Burma Army fundamentally changes the way it operates, and only lift sanctions as those benchmarks are met," said Phil Robertson, deputy director of the Asia division at Human Rights Watch.

The U.S. is working to help Myanmar grow its economy through increased aid, promoting a healthy environment for trade and investment and taking steps to relax sanctions, Ben Rhodes, White House deputy national-security adviser, told reporters last week at a briefing in Laos.

"It’s something that we continue to look at, because the purpose of the sanctions regime was to support a democratic transition, and some of the sanctions even were tied to the treatment of Suu Kyi specifically," Rhodes said.

The issue of sanctions are a tricky one for Suu Kyi, whose party was elected in a landslide and is now going to be expected to deliver results, said Zeya Thu, a Yangon-based political analyst. Sanctions could hamper those efforts, he said.

"She is in a dilemma," he said. "Sanctions have a serious negative impact on the country no matter how targeted or smart they are. On the other hand, she might think of sanctions as a bargaining chip over powerful interests. She has to decide what will be her legacy."

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