Thank you for that kind introduction. To all of our local colleagues here, mingalaba.
I would like to thank the Union of Myanmar Federation of Chambers of Commerce and Industry and the United States Chamber of Commerce for hosting this symposium and for inviting me to participate. The very fact that this symposium is happening is something that we would not have envisioned even a year ago, so I am delighted to be able to participate.
So let me start with a story that has nothing to do with economics, nothing to do with business, but a lot to do with our values and our respect for this country. Yesterday I was at the National Museum, taking advantage of a day off to learn about this country’s history. While there I happened to witness the historic return of an important Bagan-era Buddha that was stolen many years ago. An earthquake in the 1930s broke the statue in two. The upper half traveled the world before finally ending up at Northern Illinois University where a professor there recognized it for what it was. The professor was also able to identify the lower half, which still resided in a temple niche in Bagan. She and other experts were dedicated to seeing the pieces reunited and returned to their rightful home. They toiled for years, but thanks to their dedication, this status has finally come home. When I asked the professor why she did it, she said simply, “Because it was the right thing to do.” This is exactly the type of people-to-people ties that we want to see between the people of our two countries.
Recently, the United States Government has worked very hard to build closer economic and commercial ties here as a means to support reform and the democratic transition, and I’m pleased that events such as this one demonstrate the progress we are making. When I look at the symposium delegation list, I see a wide range of American business interests represented—from the restaurant business to retail, finance and insurance, the information technology and extractive industries, and American Chamber representatives from Bangkok, Hong Kong, and Singapore. We are all here because we share a sense of the tremendous potential of your country; we all sense the opportunity to turn the corner in a lasting and responsible manner. And we applaud the pro-growth policies of engagement you have now embraced.
Simultaneously with rapid economic reforms, Burma has now commenced a program with the International Monetary Fund. Throughout 2013 the IMF, with U.S. support, will provide guidance and technical assistance to the government with a program that will increase the government’s capacity to steer economic reform and implement sound macroeconomic policy. In the short term, this will help the government in its goal of ensuring macroeconomic stability. In the longer term, with anticipated ongoing engagement with the international financial institutions, this will help the country lay the groundwork for achieving its key economic goals: sustainable and equitable growth, reintegration into the global economy, and reduction of poverty. Burma also recently reached agreement with several of its bilateral creditors through the Paris Club to cancel nearly six billion dollars in external debt and restore its debt sustainability. This support will provide space for the new, productive investments by the government and its bilateral partners. So we see that Burma has taken giant steps toward normalizing its financial relations with the international community. And while we realize that this road shall neither be short nor easy, what we are now witnessing is the government taking concrete steps to set the economy on the right course.
As we look to a more prosperous future together, I want to emphasize that the United States wants to establish broad and deep commercial and business ties with your country across the full range of sectors in the economy. But I also want to assure you that our efforts here are also part of a larger regional strategy to integrate this country with trade to China, India, and Southeast Asia.
I would like to address both of these points today. I’d like to focus initially on some of our recent history, including a discussion of the easing of U.S. sanctions, and then talk about our work on helping this country reintegrate fully into the regional and global trading systems.
As you know, President Obama’s administration has implemented an approach that eases many sanctions and provides incentives for further political and economic reform as the result of recent positive developments. We are encouraged that parliament has taken several steps towards reform, including passing new legislation to protect the freedom of assembly and the rights of workers to form labor unions. The government has also agreed to the U.S.-Myanmar Joint Plan on Countering Trafficking in Persons, and is taking steps to bring increased transparency to the national budget. Last November, the Parliament adopted a long-awaited Foreign Investment Law which has been acclaimed as a significant opening to encourage foreign investment in the future. And while it is an improvement over the previous 1988 law on foreign investment, there are still significant gaps remaining between local law and prevailing international practice regarding treatment of foreign investments.
President Obama’s trip here in November highlighted the continued progress this country is making on key reforms, including with regard to human rights. In recognition of this progress, we have responded with positives steps in many areas, including on the sanctions front, as we had promised to do. And that’s because during the past two years, the situation has changed dramatically. President Thein Sein and his government, Aung San Suu Kyi and other political and civil society leaders, and most importantly, the people of this country, have made substantial progress towards a more democratic government and a commitment to achieve national reconciliation. In the midst of these dramatic changes, President Obama and former Secretary of State Clinton announced last May that the United States would encourage American businesses to invest here responsibly and would take legal measures necessary to make this possible.
Following the May announcement, we engaged in dialogue with a wide variety of groups inside the country, including senior officials, opposition figures, and members of civil society. In the United States, we talked with corporate leaders, government, and NGOs. This led us to devise a measured approach to sanctions.
And so starting in July we eased our sanctions, but in a carefully calibrated manner. We remain vigilant about the corruption, lack of transparency, and the role of the military in this country’s economy. But our approach aims to support respect for human rights and democratic reform while aiding in the development of an economic and business environment that provides benefits to all the people of this country.
Now we are the first to recognize that we are going into uncharted territory and that we are learning as we go along. So we need your help. As we shift from the sanctions era to a more normalized trade relationship, I encourage American businesses to let the U. S. government know if companies are encountering particular impediments, sanctions-related or otherwise, to investing or doing business here so that we can work with you to devise appropriate solutions.
In this regard, for example, we heard from both companies and NGOs that specific sanctions on a number of banks were making it hard for them to get certain basic financial services such as checking accounts. As a result, just this past Friday we published an additional general license that allows individuals, companies, and financial institutions to conduct most transactions –including opening and maintaining accounts and conducting a range of other financial services – with four of this country’s major financial entities: Myanma Economic Bank, Myanma Investment and Commercial Bank, Asia Green Development Bank, and Ayeyarwady Bank.
For the government officials in the audience, I would also note that if you encounter any confusion about U.S. sanctions, please let us know. We would be happy to work with you to dispel any misperceptions.
For example, recently our embassy here made my staff aware that a particular Internet company had cut off services to customers in your country out of a misplaced concern about sanctions. My staff called the company’s lawyers, explained why there was no sanctions impediment, and the company restored its service.
Now let’s get back to values, which will explain why we’ve eased our sanctions in a way that’s different from anyone else. An integral part of U.S. corporate culture is that American businesses act as responsible partners in the countries where they invest. The U.S. government is dedicated to doing everything in its power to encourage and support this proud corporate social responsibility tradition. We want U.S. companies to invest here and to do so in a socially and environmentally responsible manner that can serve as a model for others and benefit all of the people in the community. As a result, we have paired our sanctions easing on new investment with reporting requirements for U.S. companies that encourages responsible investing, including with regard to promoting transparency and respect for human and labor rights, as well as supporting sound environmental practices, and land use. In addition, companies working with Mynama Oil and Gas Enterprise, or MOGE (pronounced M-O-G-E) must report their investment within 60 days. The purpose of the public reporting is to promote greater transparency and encourage civil society to partner with our companies for fostering sustainable development through responsible investment. It is also very encouraging to see that the government has decided to implement the Extractive Industries Transparency Initiative, which helps countries benefit in a transparent manner from the development of petroleum and mineral resources.
We are aware of the need for clearer guidance to companies on various aspects of this reporting requirement and have been working diligently with U.S. government experts on responses to comments from companies, civil society, and other stakeholders during the public review periods over the past few months. Our goal has been, and remains, to come up with a balanced reporting requirement that is not too onerous for companies, but that still provides useful parameters for responsible investing in this country. Companies present will be happy to hear that we are pushing back the deadline for submission of reports in recognition that it has taken the U.S. government longer than anticipated to respond to the public comments.
So to conclude on the issue of U.S. policy and sanctions, let me leave you with a few thoughts: Our policies reflect our values, how we expect our companies to act, and what our business community wants to do. It is a calibrated response to the actions of this government, and one that we hope will contribute to the development of this beautiful and historic nation. But as U.S. companies expand activities here, sanctions-related situations and other impediments to business will arise that we in Washington never dreamed of. I urge you to alert us as soon as you run into problems so that we can work together to find solutions. The dialogues we have maintained with government officials here, the private sector, civil society, and other stakeholders throughout the sanctions-easing process has been productive, and we hope to continue in this vein. Normalizing our trade and investment relationship in a responsible manner is something we aspire to in all of our sanctions programs. In this country, we continue to move in the right direction.
American involvement here has always been in the context of the larger Asia Pacific region. This country lies at a crucial crossroads between East Asia and South Asia, and provides enormous potential for its trading partners as it reintegrates fully into its historical role. We are working with regional partners to help in this process, because we believe that you and your neighbors can only benefit economically, socially, and politically from becoming closer trading partners. We are addressing this issue in a number of ways and I would like to take a moment to highlight a few of them.
The United States has successfully prioritized economic and commercial relations with ASEAN countries by launching just two months ago the Enhanced Economic Engagement, or E3, initiative. We have already begun working with ASEAN on several specific events this year to realize the goals of E3. For instance, plans are forming to organize a U.S.-ASEAN business summit in Brunei, the current ASEAN chair. This new framework will increase U.S. economic engagement with all ASEAN countries, and lay the groundwork for interested ASEAN countries to become members of the TPP.
The Trans Pacific Partnership trade agreement, or TPP, has received a lot of media attention and we have been inundated with inquiries about it in recent months. The Partnership is a key element of President Obama’s strategy of prioritizing U.S. economic engagement in the Asia Pacific region and will bring together some of the largest and fastest-growing economies (one third of global GDP) across the region into a single trading community.
We are also working closely with our Southeast Asian partners on infrastructure issues, which we view as a key component of regional integration. As all of you know, one of the core foundations of any economy is infrastructure, and during my time as Assistant Secretary, I have spent significant time working on this important issue. Former Secretary Clinton created the Lower Mekong Initiative in 2009 to address the issue of infrastructure development in Southeast Asia. The initiative seeks to foster cooperation and capacity building among Cambodia, Laos, Thailand, Vietnam, and as of this past summer, also this country.
Over the past four years, the Lower Mekong Initiative has implemented programs through a variety of interagency partners on both sides of the Pacific to meet some of the most pressing trans-boundary challenges in the region. This allows us to leverage U.S. expertise to promote infrastructure connectivity, and expand educational access to support development of sustainable infrastructure systems and technical capacity in the sub-region. We hope that it will increase investment opportunity in the region by providing avenues for public-private cooperation.
Just last month, the United States and Vietnam, in collaboration with the U.S. – ASEAN Business Council, co-hosted the first “Lower Mekong Initiative Infrastructure Best Practices Exchange” in Hanoi. The conference brought together senior government officials responsible for infrastructure development from member countries with experts from over 80 U.S. and local companies. Participants discussed best practices found in the Lower Mekong sub-region, the United States, and around the world, and the benefits these practices offer to partner countries. We look forward to further Best Practices Exchanges this coming fall and early next year.
The economic progress here opens up opportunities not just for increased economic linkages to neighbors in Southeast Asia, but for this country to position itself as the crossroads of East-West trade. You are quite literally the connective tissue between the dynamic and growing economies of Southeast and South Asia and are poised to be a primary beneficiary in regional economic integration.
As the countries of Southeast Asia develop, infrastructure projects will generate tens of billions of dollars in opportunities for companies looking to enter these markets. They will also provide the electricity, communications, and transportation infrastructure that is a prerequisite to development. I encourage those of you in the room in these industries to take advantage of the opportunities that Indo-Pacific infrastructure and connectivity will create.
Where Do We Go From Here: Responsible Investment and Corporate Social Responsibility
We have taken enormous strides forward in the past two years, easing sanctions in a calibrated manner and partnering with you to reintegrate this country fully into the regional and global trading systems. These rapid developments have resulted in an equally rapid increase in interest in your country by the private sector, as today’s symposium demonstrates. I firmly believe that foreign investment can support positive change for all your country’s people by spurring inclusive economic growth and sustainable development, and supporting respect for human rights, democratic governance, and environmental protection.
Foreign investment must play a key role in any broad-based economic development strategy for this country. The participation of U.S. companies will greatly benefit the people here through providing good jobs, raising living standards, demanding ethical sourcing, and encouraging the sustainable development of the country's plentiful natural resources.
We recognize that many of the companies represented here already have corporate social responsibility programs in place and bring a wealth of experience to this country. For example, KFC’s “Wall of Hope” has done much to fight hunger in Africa; and in 2011, Target became a member of the Sustainable Apparel Coalition. These are just a few examples from the audience here today.
In another example of partnership between a U.S. and a local company, Myan Shwe Pyi Tractors has partnered with Caterpillar to contribute to this country’s economic development by creating high-skilled jobs, improving capacity building, and supporting community development. For example, Caterpillar and Myan Shwe Pyi have donated their engineers’ time and company equipment to build schools and clinics and provide generators to the eye clinics supported by Helen Keller International, whose work helps restore sight to thousands of ordinary citizens here.
The State Department and our Embassy are here to assist you and partner with you to address these challenges and benefit from new opportunities here that are being generated through the ongoing political and economic reforms.
Governments, the private sector, and most importantly this country’s people will benefit from sound, sustainable economic development. In the complex and new environment here, it is critically important that we think beyond corporate bottom lines to consider how best to partner with all of you to ensure stability and prosperity in the years to come. U.S. investors offer great opportunities for mutual benefit, and I know the U.S. companies here will do their due diligence and invest responsibly for the prosperity of all.
As progress on political and economic reform continues, together with responsible investment and integration into the region, it is my sincere hope that this country will soon be restored to its traditional role at the crossroads between East and South Asia, and transformed into an engine of growth that honors its history, its culture, and its people.