Ditch sanctions for a ‘parallelist’ strategy

By DEREK TONKIN
In 2007 the UK House of Lords Economic Affairs Committee conducted a comprehensive review of the effectiveness of economic and financial sanctions in the resolution of conflicts in various parts of the world. They based their inquiry on long-standing criteria agreed in 1999 by all political parties which saw sanctions as a potentially useful diplomatic tool, provided they were properly targeted, commanded international support particularly from countries in the region, and had only minimal effect on the population.


On Burma, the Committee’s conclusions were that the results were discouraging and they recommended an urgent review of sanctions policy with a view to deciding whether it was worth continuing. The British Government declined, without giving any good reason.
This episode highlights a major difficulty with sanctions policies. There is often a sense of outrage at events to which governments feel a need to respond by taking action which, however ineffective it may eventually turn out to be in resolving situations, nonetheless meets the popular demand that “something must be done”.

The case of Burma is indeed a good example. After the suppression of the August 1988 general strike and uprising, most Western governments imposed an embargo on the supply of arms and military equipment and suspended bilateral development aid. By June 1989, Aung San Suu Kyi was reported as calling for trade and economic sanctions, but it was not until 1997 that the US and EU began to respond seriously. By 2010, the US has ratcheted up sanctions to the point of virtual economic warfare, though the EU has been more selective in its measures.

That Western sanctions have not had any significant effect, and indeed have very probably made matters worse, is not entirely due to Western incompetence. The military government in Burma has shown remarkable resilience in meeting the challenge of sanctions, and has been greatly helped by the fact that not a single Asian neighbour has followed the Western lead and has benefitted enormously from the bonanza of natural gas revenues from Burma, which will within three years increase substantially as gas and oil transit pipelines to China are completed and become operational.

Western sanctions, though, have also been peculiarly inept. Trade sanctions by the US mainly hit the labour intensive garment industry, which in Burma is of little interest to the regime as it is scarcely profitable. In the EU the incidence of forced labour was presented as a reason in 1997 to suspend the Generalised System of Privileges for Burma, even though the labour intensive industries of garments and seafood exported to the EU had no record of forced labour practices. More recently in 2008 investment and financial sanctions were directed at companies engaged in manufacturing or retailing products made in targeted sectors of the economy, like timber, metals and precious stones. Many of these ‘enterprises’ were no more than retail shops or small family businesses with no known affiliations to state, military or ‘crony’ interests.

The present situation is that the West is stuck with sanctions which everyone agrees are ineffective, but which are politically very difficult to remove. The assumption is that they must be having some effect and that they should stay until there is political reform in Burma. When the US embarked on their policy of engagement, the US Deputy Secretary Kurt Campbell made it clear to the Senate Foreign Relations Committee on 30 September 2009 that “lifting or easing sanctions at the outset of a dialogue without meaningful progress on our concerns would be a mistake. We will maintain our existing sanctions until we see concrete progress, and continue to work with the international community to ensure that those sanctions are effectively coordinated.”

This is the classic “conditionality” approach, which to the West sounds perfectly reasonable: sanctions can only be lifted in response to political progress in Burma – the traditional “carrot and stick” approach. Unfortunately, in a situation where sanctions applied are bearable and a regime is engaged in what they see as a vital political process – the Road Map to Democracy in which elections in 2010 are an integral part – conditionality is doomed from the start. The US administration however has particular difficulties because congressional opinion in both Houses is hostile to any supposed concessions, so in a very real sense Kurt Campbell has found his hands tied.

If conditionality is an unpromising policy for dealing with Burma, what alternatives are there? The first essential is to review existing sanctions and eliminate those which are targeted against the wrong people. The next step is to examine thoroughly what other sanctions might be applied. Can gas revenues, earned in Thailand and now banked in several countries with which Burma conducts trade like China, Russia, Singapore, Hong Kong and Dubai, be interdicted through political and regulatory measures, such as denying banks holding such accounts access to US financial facilities?

The answer is likely to be only with considerable bilateral damage to US and EU relations with the countries and national banks concerned. It would accordingly be quite counterproductive for the West to embark on any such action which, even if successful, would only be likely to result in an interruption of gas supplies to Thailand, over 20 percent of whose total energy and 30 percent of whose natural gas imports are now supplied from Burma. Thailand has enough problems of its own without having to face West-induced electricity blackouts and short-time at industrial plants in the Bangkok region.

Whatever new administration emerges in Burma after the elections, the West should aim to establish early contact and to see what prospects there are for engagement on matters of mutual interest and concern. There are areas in which cooperation should be possible, such as narcotics control, piracy off the coast of Malaysia and Indonesia, trafficking in women and children, control of HIV/AIDS, malaria and tuberculosis, and the re-engagement of international financial institutions. The very presence in the country of technical and development experts in various fields should help both to contain human rights abuses and to develop trust which is currently almost non-existent.

This in turn offers the opportunity for parallel initiatives: in discussing industrial promotion, or the introduction of trade unionism, for example, the West would inform Burma that in the context of helping to resolve urban unemployment, the ban on the export of garments to the US is being lifted, while in the context of the review of Generalised System of Preferences (GSP) in the EU, concessions previously enjoyed could be resumed on the same grounds. The negotiating skill needed is to present such moves not as concessions, but as mutual measures. The parallelism then emerges when the Burmese administration responds by showing how, for example in the labour field, new rules for trade unions are being elaborated and forced labour reduced. The US may then find that the assurances it is seeking on nuclear proliferation are more readily forthcoming; at present there is simply no incentive for the Burmese leadership to respond to US pressures in this field.

The temptation to identify linkage should be resisted. Any implied quid pro quo is better left unstated. In some cases, the conduct of parallel negotiations in different rooms or at different times could depend on the success of both sets of negotiations. Such “parallelism” is of the essence of diplomacy and is based on putting aside the cruder methods of carrots and sticks which so rarely work.  Changes result from the internal dynamic of contact and engagement in which trade, investment and tourism can also play an invaluable role.
The first steps are to find the political will and to accept the political risk of failure. Nothing ventured, though, nothing gained.

Derek Tonkin is a former British Ambassador to Thailand and currently Chairman of Network Myanmar