Conditions in Burma and U.S. Policy Toward Burma for the Period September 28, 2003 - March 27, 2004

Released by the Bureau of East Asian and Pacific Affairs
April 13, 2004 

Introduction and Summary

The overall situation in Burma has changed little over the past six months. The Burmese government released most persons arrested during the government’s May 2003 attack on Aung San Suu Kyi and her convoy. However, many pro-democracy supporters rounded up in the aftermath of the attack remain in detention; National League for Democracy (NLD) offices remain closed; senior opposition party leaders, including Aung San Suu Kyi and U Tin Oo, remain largely incommunicado under house arrest; and the government refuses to investigate the May attack. The Government of Burma (GOB) also has arrested more people for their peaceful political activities over the past six months, while over a thousand persons remain jailed for their political beliefs. The ruling State Peace and Development Council (SPDC) has focused efforts on promoting its own seven-step “road map” to a "genuine and disciplined democratic system." Although the SPDC unveiled the plan in August 2003 following the announcement of new U.S. sanctions, the junta has yet to set a timetable for the transition or give assurances that all political parties and ethnic groups will be included in a transparent and democratic process. In recent months, the SPDC and the Karen National Union (KNU) entered into serious cease-fire negotiations, which could bring an end to decades of conflict.

The U.S. consults with the European Union and others to maintain pressure on the Burmese junta to make progress toward a political transition. Following the events of May 30, the EU expanded the scope of its asset freeze and visa restrictions; Canada imposed visa restrictions; and Japan froze new development assistance to the junta. The UK has frozen over 3500 pounds of assets while other countries have blocked only minimal amounts; Japan is now providing assistance to some projects. No other country has adopted the economic sanctions imposed by the U.S.

The SPDC’s dismal economic policies have led to widespread poverty and the flight of most foreign investors. New U.S. economic sanctions have also had an impact on at least one sector of the economy; dozens of garment factories that had relied on exports to the United States have now closed. In addition, sanctions have caused the Burmese to rely more on euros than on dollars for trade. We have no statistics on the impact of sanctions on tourism. The Burmese government abruptly reversed its ten-month old rice liberalization policy in January 2004, banning all exports of rice and other staple commodities. The 31-country member Financial Action Task Force (FATF), recommended countermeasures on the GOB, since the GOB had not implemented money-laundering legislation. Most countries imposed additional reporting requirements, and the U.S. banned correspondent relations with Burmese financial institutions.

The SPDC continued to abuse severely the human rights of its citizens. Freedom of speech, press, religion, assembly, and association remain greatly restricted. Burmese citizens are not free to criticize their government. Egregious abuses of ethnic minority civilians by the Burmese military including rape, torture, execution and forced dislocation continue. Forced labor, trafficking in persons, and religious discrimination remain serious problems.

Immediate U.S. policy objectives in Burma are the release of Aung San Suu Kyi, other NLD officials, and all political prisoners, as well as the start of genuine dialogue on democracy and political reform, including the re-opening of NLD party headquarters and all NLD regional offices. Overall U.S. policy goals include establishment of constitutional democracy, respect for human rights, cooperation in fighting terrorism, regional stability, a full accounting of missing U.S. servicemen from World War II, combating HIV/AIDS, combating trafficking in persons and increased cooperation in eradicating the production and trafficking of illicit narcotics.

The U.S. will continue to urge other nations to use sanctions and diplomacy to press the junta to release Aung San Suu Kyi and all political prisoners and to allow all political parties to operate. The U.S. also encourages all countries with a major interest in Burma, particularly Burma’s immediate neighbors, ASEAN, and Japan, to use their influence to convince the government to undertake immediate steps on political reform and human rights. We will continue to urge the international community to support the UN Secretary General in his efforts to start genuine talks on a political transition in Burma.

I.  Measuring Progress Toward Democratization

Burma’s pro-democracy movement has not recovered from the May 2003 Government-sponsored attack on Aung San Suu Kyi and her supporters. NLD offices countrywide remain shuttered and Aung San Suu Kyi is under house arrest. Authorities moved her from prison to house arrest in September 2003 following an emergency medical procedure. In November 2003 authorities released five members of the nine-member NLD Central Executive Committee (CEC) from house arrest and in February 2004 transferred NLD Vice Chairman U Tin Oo from prison in Sagaing Division to house arrest in Rangoon. NLD Chairman U Aung Shwe and NLD Spokesman U Lwin also remain under house arrest.

Due to the efforts of UN Human Rights Special Rapporteur Paulo Sergio Pinheiro, and pressure from the United States and other members of the international community, the SPDC released from prison all other individuals arrested in direct connection with the government’s May 2003 attack on the NLD. Several NLD party members and supporters arrested in connection with the government’s May 2003 attack who were released from prison have been subsequently re-arrested. Many activists rounded up in the aftermath of the May 2003 attack languish in detention without trial, and over one thousand political prisoners remain in prison.

U.S. officials have persistently requested meetings with Aung San Suu Kyi and other detained NLD leaders, and the government has prohibited U.S. and other diplomats in Burma from visiting any of the detained democracy leaders. UN Special Envoy Razali Ismail, UN Human Rights Special Rapporteur Paulo Sergio Pinheiro, and representatives of the International Committee of the Red Cross (ICRC) have seen Aung San Suu Kyi on several occasions.

President Bush, in his announcement of new U.S. sanctions imposed after the May 2003 attack on the NLD, stated that these measures send “a clear signal to Burma’s ruling junta” that it must release Aung San Suu Kyi and all other political prisoners and “move down the path toward democracy.” Following the strengthening of U.S. sanctions and the increased international pressure arising from the outcry over the junta’s repression of the pro-democracy movement, the junta announced its seven-step “road map for democracy,” a plan that calls for reconvening a National Convention, drafting a new constitution, and holding elections. Prime Minister General Khin Nyunt unveiled the plan in August 2003, but the SPDC has yet to set a timetable for the transition. Authorities have offered vague guarantees that “all interested parties” will be allowed to participate. Of note, the SPDC convened a National Convention in 1993 under similar conditions, with Aung San Suu Kyi then also under house arrest, and that process collapsed in 1996 due to the military government’s failure to allow a transparent and democratic process.

During the past six months, the SPDC has sought support from countries in the region for its "road map" and has encouraged ethnic cease-fire groups to participate in a National Convention. In December 2003, the Thai government invited the Burmese Foreign Minister to “explain” the SPDC road map to officials from selected Asian and European countries. The United States was not invited to this meeting and did not attend.

UN Special Envoy for Burma Razali continued his efforts to encourage a political dialogue between the SPDC and the NLD. In early October 2003, he made his eleventh trip to the country since he became Special Envoy in 2000. Razali held meetings with SPDC authorities, including Prime Minister General Khin Nyunt and SPDC Chairman Senior General Than Shwe, and other GOB officials and non-governmental organizations. Razali also met briefly with Aung San Suu Kyi. Special Envoy Razali made his twelfth visit to Rangoon March 1-5, meeting with Aung San Suu Kyi, ethnic leaders and government officials. Razali indicated that he was encouraged by the interest of the Prime Minister in moving toward democracy. He emphasized that Aung San Suu Kyi should be released if there were to be any real progress.

UN Special Rapporteur Pinheiro last visited Burma in November 2003 to continue his efforts in support of greater government respect for human rights. He met with Aung San Suu Kyi, urged the government to release prisoners associated with the May 2003 attack on the NLD, and appealed for an independent investigation of that event. Pinheiro also continued to urge the government to allow an independent investigation of allegations of rape and other abuses by the Burmese military in ethnic regions. He will reportedly visit Burma again in April 2004.

The government continues to deny visas for certain foreign officials, including some Members of Congress and their staff, seeking to travel to Burma to engage in dialogue with the government and the political opposition.

In recent months, the SPDC and Burma’s largest remaining ethnic insurgent group, the Karen National Union (KNU), entered into serious cease-fire negotiations. KNU leader General Bo Mya visited Rangoon in January, and subsequent talks in February helped to secure progress toward a lasting cease-fire. If a final agreement between the SPDC and the KNU is reached, it could end over five decades of conflict, and could open up Karen and Mon States for badly needed international economic and humanitarian assistance and the eventual repatriation of thousands of refugees from Thailand and return home of thousands of internally displaced persons.

II. The Quality of Life in Burma

(Economy)
The import ban that took effect with the Burmese Freedom and Democracy Act (BFDA) and the simultaneously issued (in July 2003) Presidential Executive Order led to the closure of dozens of garment factories in the following months with an estimated loss of around 40,000 to 50,000 jobs. However, new orders from importers in EU member countries helped remaining factories continue production after November 2003.

The Executive Order also prohibits the provision of financial services to Burma and, beginning in July 2003, U.S. and other financial institutions immediately blocked U.S. dollar transactions, initially slowing Burma’s already sluggish formal foreign trade considerably. The Treasury Department reports that it has blocked $13.3 million worth of transactions. Of that amount, $1.7 million has been subsequently licensed by the U.S. By July 30, 2003, U.S. banks maintaining correspondent accounts with Burmese banks had blocked the balances in those accounts, an amount that exceeds $320,000.

The Burmese junta maintains tight control over all foreign currency transactions. U.S. sanctions were designed to deny the junta profits from foreign currency transactions used to fund their repressive methods of internal control. In response, the country’s banks have shifted from U.S. dollar to euro-denominated letters of credit and remittances and many traders have turned increasingly to informal trade, particularly along Burma’s borders with China and Thailand. The economy appears to have adjusted to the sanctions, and chronic economic mismanagement by the junta and a correspondingly poor business and investment climate are the primary reasons overall trade continues to shrink.

In January 2004, the GOB abruptly banned the export of rice and several other staples, reversing a ten-month old policy that had ended the government’s 40-year monopoly on rice exporting. The GOB defended its sudden move by claiming that over-exporting would lead to a rise in the price of staple food items. The policy reversal, which confused consumers and angered exporters, is yet another example of policy mismanagement by the SPDC.

In November 2003, the 31-member-country Financial Action Task Force (FATF), asked its member states to impose countermeasures on Burma for failure to implement adequately a 2002 money laundering law. In compliance with this request, the U.S. Treasury Department invoked the USA PATRIOT Act to bar U.S. banks from having correspondent relations with Burmese financial institutions. It also identified two private banks – Asia Wealth and Myanmar Mayflower – as banks of particular money laundering concern. After an initial rebuttal of the U.S. allegations, the Burmese government formed a committee to investigate the two banks.

In December 2003, the GOB issued long-awaited regulations to implement its 2002 Control of Money Laundering Law. In mid-February the GOB issued three new notifications, setting threshold limits and staffing a Financial Investigative Unit (FIU), which closed several loopholes of the money laundering law. FATF is reviewing these measures.

(Human rights/forced labor)
The SPDC severely abuses the human rights of its citizens. Freedom of speech, press, assembly, religion, and association remain restricted. Burmese citizens are not free to criticize their government. Security forces regularly monitor the movements and communications of residents, search homes without warrants, and relocate persons forcibly without just compensation or legal recourse. In 2003, the United States designated Burma a “Country of Particular Concern” for particularly severe violations of religious freedom, especially among Muslim and Christian populations. Also in 2003, the United States ranked Burma as a Tier 3 country for its unwillingness to make serious and sustained efforts to combat the trafficking of persons.

In a nationwide sweep following the May 2003 attack, authorities detained hundreds of pro-democracy opposition supporters, some of whom were tortured. Although authorities have released some of these detainees, the government continues to arrest persons for expressing dissent. In February 2004, a secret court sentenced six students to prison terms ranging from 7 to 17 years for handing out leaflets critical of the SPDC’s “road map.” Over one thousand political prisoners, including approximately 150 NLD party members whom authorities held in detention prior to the May 2003 attack, remain in prison. Numerous political prisoners who have completed their sentence time also remain incarcerated.

In October 2003, a videotape surfaced that contained footage of the May 2003 NLD convoy and events leading up to the violent attack on May 30. The videotape demonstrated the clear role of government-sponsored provocateurs who encouraged and participated in the harassment and intimidation of Aung San Suu Kyi and other NLD party members and their supporters. The videotape also provided substantial and compelling evidence that tens of thousands of courageous Burmese citizens were willing to risk bodily harm and severe political repercussions to exercise their right to peaceful assembly and association.

In November 2003, the government sentenced to death nine persons convicted in a secret trial for alleged treason. Among those sentenced to death was the editor of a sports magazine who had criticized the government for misuse of funds designated for soccer programs. We have reports that over eighty persons have been sentenced to death since the late 1970s, but have no reports of death sentences being carried out since 1982.

In December 2003, an Amnesty International (AI) team made its second visit to Burma (the first was in February 2003) and determined that the human rights situation had deteriorated significantly since the government’s violent May 2003 attack on the NLD. AI observed that the government's “assurances (to make changes) ring hollow in the face of continuing repression.”

Patterns of abuses are most egregious in ethnic minority areas. These abuses include censorship, persecution, torture, disappearances, extrajudicial executions, the curtailing of religious freedom and demolition of places of worship, forced relocations, rapes, and forced labor. The U.S. and the international community have reiterated the call for an independent investigation of the rapes of hundreds of mostly ethnic minority women by the Burmese military. The SPDC has not responded to UN Special Rapporteur Pinheiro's request to conduct an independent assessment into these abuses inside Burma nor has the government responded to his call for an independent investigation of the May 2003 attack on the NLD.

The junta has allowed the United Nations High Commissioner for Refugees to maintain a presence in northern Rakhine State, providing humanitarian support and protection services to more than 230,000 Rohingya Muslims who have returned from Bangladesh. Fewer than 20,000 Rohingya refugees remain in Bangladesh, although another estimated 200,000 Rohingya live illegally in southernmost Bangladesh.

Approximately 140,000 Burmese ethnic minority persons live in displaced persons camps along the border in Thailand. In February 2004, the UNHCR gained SPDC permission to begin work for the first time on the Burmese side of this border region and assess conditions for the eventual repatriation of refugees and return home of internally displaced persons.

Over one million Burmese, both ethnic minorities and ethnic Burmans, live illegally in Thailand; many of these are economic migrants, others are victims of conflict or abuse. Burmese living illegally in neighboring countries are willing to endure an often perilous existence, working in dangerous or exploitative jobs, because they believe it is even more dangerous and/or economically difficult to live under the military government in Burma. Some observers remain concerned that unemployed garment workers could be added to the already large number of trafficking victims from Burma, but reported numbers of former workers taking this path appears small and confirming the numbers involved is difficult. The government's economic mismanagement, political intransigence, and repression remain the primary causes of unemployment, illegal migration and trafficking.

There is abundant evidence that the practice of forced labor in Burma continues, an issue of serious concern to the U.S. and the international community. We are not aware that authorities have prosecuted any individual for use of forced labor. The Burmese Armed Forces make use of forced conscription for portering. We understand that it is Burmese policy to recruit soldiers at age 18 or above, with some exceptions for volunteers at an earlier age. Burma is a signatory to the Convention on the Rights of the Child which permits voluntary recruitment of those 15 and above. In the past, children have been caught in drives to meet recruiting quotas, but anecdotal evidence at least in Rangoon suggests this practice is now not as common. Ethnic minority cease-fire and insurgent groups conscript child soldiers, and we have seen numbers of child soldiers with these forces, particularly the Wa.

(Environment)
The Ministry of Forestry (MOF) is responsible for overseeing both protection of the environment and the SPDC's profitable logging operations. The MOF has instituted a program to increase the size of protected areas. However, the government has put few resources behind the policy, and illegal logging and illicit trade in wildlife products, much of it in border areas that are ruled with some autonomy by ethnic minority groups, overwhelm what minimal efforts are in place to protect natural resources. Conservationists are engaged in a losing battle to fight encroaching agriculture, logging, and poaching on "protected lands." Other environmental concerns in Burma include threats to reefs and fisheries and overall water resource management.

The government is focusing on the moneymaking possibilities of eco-tourism. Over the last few years, the government has opened up areas in Chin State, Sagaing Division, and Tanintharyi Division to specially arranged eco-tourism. There have been credible reports that in the promotion of these tourism activities the government has, without compensation, expropriated property of some civilians for facilities and forced others to provide services, including transportation of the tourists themselves and their baggage.

III. Development of a Multilateral Strategy

The immediate U.S. policy objectives in Burma remain securing the release of Aung San Suu Kyi and all other political prisoners and encouraging a genuine dialogue on democratic political reform, including the re-opening of all NLD offices. The United States continues its efforts to encourage all countries with a major interest in Burma, particularly Burma’s immediate neighbors and ASEAN, to use their influence to convince the generals to undertake these immediate steps. It is in the interest of Burma’s neighbors and other ASEAN countries, and in the interest of regional stability, for the SPDC to take a more constructive position on political dialogue, economic reform, and the institution of rule of law. Most countries in the region have expressed concern and agree that the SPDC must work with the democratic opposition in order to effect a smooth transition. Although some countries and the EU have sanctioned Burma over the years, still other countries believe sanctions are counterproductive and cause the population to suffer without influencing the junta in the right direction. No other country has joined the U.S. in adopting an investment ban, an import ban, or a financial services ban.

The ILO has long been concerned with the serious forced labor problem in Burma, which violates its obligations under the ILO's Forced Labour Convention. In November 2000, the ILO Governing Body concluded that the Government of Burma had not taken effective action to deal with the use of forced labor in the country and, for the first time in its history, called on all ILO members to review their policies to ensure that those policies did not support forced labor. The ILO still seeks to exert pressure on Burma to stop the use of forced labor.

Overall U.S. policy goals include establishment of constitutional democracy, respect for human rights cooperation in fighting terrorism, regional stability, a full accounting for missing U.S. servicemen from World War II, stemming the spread of HIV/AIDS, combating trafficking in persons, and increased cooperation in eradicating the production and trafficking of illicit narcotics. We will therefore continue to urge the international community to support the UN Secretary General in his efforts to start genuine talks on a political transition in Burma.

The United States co-sponsored the annual human rights resolution on Burma at the 2003 UN General Assembly, which was adopted by consensus. The United States will again seek to co-sponsor the annual Burma resolution at the 2004 UN Commission on Human Rights. The U.S. will support the ILO’s continuing close scrutiny of Burma, given the country’s failure to deal effectively with its pervasive forced labor problems.

The United States maintains extensive sanctions on Burma. These measures now include an arms embargo, bans on new investment and imports, an asset freeze, and a prohibition on the exportation of financial services to Burma or the provision of financial assistance to the GOB. The Department of State will maintain visa restrictions on SPDC members, senior military officers, and other senior officials of the junta; officials of the Union Solidarity and Development Association (USDA); and managers of state-owned enterprises, along with their family members.

These sanctions will be maintained until there is significant progress toward political transition and genuine respect for human rights or until a democratically elected government in Burma requests that they be lifted. It has been 16 years since the junta promised a “quick” transition to democracy.

We remain concerned that the junta’s neglect and economic mismanagement are leading to a humanitarian crisis in Burma. In 2004, we will continue a $1 million program to address the growing HIV/AIDS epidemic in Burma by funding only international non-governmental organizations to undertake prevention and care activities; no assistance is provided directly or indirectly to the government through this program. We also seek a greater commitment to more effective prevention, treatment, and care programs, including for pregnant mothers and high-risk groups.

The government has provided solid cooperation on counterterrorism issues, and the U.S. welcomes its growing cooperation with states of the region on narcotics issues. The U.S. appreciates the Government of Burma's continued bilateral cooperation in the full accounting of missing U.S. servicemen from World War II and the participation of U.S. officials in an annual joint opium yield survey.

In 2004, we are using funding appropriated by Congress to develop programs in support of democracy inside Burma, as well as democracy, social, educational, and governance-related programs outside Burma. None of these funds are disbursed to or through the Burmese Government.

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