Conditions in Burma and U.S. Policy Toward Burma for the Period March 28, 2005 - September 27, 2005

Introduction and Summary

As a result of the Burmese military regime’s blatant disregard for human rights, its intolerance of dissent, and its ongoing efforts to perpetuate military rule, prospects for meaningful political change and reform continued to decline over the past six months. The Government of Burma (GOB, also referred to as the State Peace and Development Council - SPDC) kept senior democratic opposition leaders Aung San Suu Kyi and U Tin Oo under house arrest, and Hkun Htun Oo imprisoned, ensuring they had virtually no contact with the outside world. Although authorities released some political prisoners, arrests of pro-democracy supporters continued unabated. The National League for Democracy’s (NLD) party headquarters in Rangoon was still open, but all the party’s other offices remained closed. Authorities were quick to blame opposition and exile groups for three deadly bombs that exploded nearly simultaneously in Rangoon on May 7, and a device that was detonated in Mandalay on April 26, but no one has claimed responsibility for the attacks. On July 26, Burma relinquished its scheduled 2006-7 chairmanship of the Association of Southeast Asian Nations (ASEAN), asserting it needed to focus on national reconciliation. The GOB increased restrictions on NGOs and UN agency staff providing humanitarian assistance inside Burma. The Global Fund to Fight AIDS, Tuberculosis and Malaria announced in August that it was terminating its grant agreement with the United Nations Development Program to combat the three diseases in Burma.

The GOB continued to arrest people for taking part in peaceful political activities, and over a thousand persons remained jailed for their political beliefs. The National Convention to draft a constitution, in recess since March, is expected to reconvene later this year. The junta failed to set a timetable for taking subsequent steps on its "road map," including a national referendum on a new constitution and an oft-promised transition of power to an elected government.

The United States continued to consult with countries in the region, the European Union, and other interested parties to encourage them to maintain pressure on Burma to make progress toward a genuine political transition. During this reporting period, several non-EU member states signed onto the EU's common position on Burma, which includes a visa ban and a prohibition on extending credit to a list of state-run enterprises.

The government’s dismal economic policies have resulted in widespread poverty and the flight of most foreign investors. The latest U.S. economic sanctions, imposed in 2003 and renewed in 2004 and 2005, contributed to the closure of some garment factories in 2003 that had relied on exports to the United States. In addition, financial sanctions led the Burmese to rely increasingly on Euros, rather than on U.S. dollars, increasing the cost of foreign exchange transactions. The 33 members of the Financial Action Task Force (FATF) lifted countermeasures on the GOB in October 2004, although Burma remains on the FATF’s list of non-cooperative countries and territories.

The SPDC continued to abuse severely the human rights of its citizens. Freedom of speech, press, religion, assembly, and association remained greatly restricted. Egregious abuses of ethnic minority civilians by the Burmese military including rape, torture, execution, and forced relocation continued, though there are reports that abuses declined in areas controlled by some ceasefire groups. Forced labor, trafficking in persons, and religious discrimination remained serious problems. During the reporting period, the SPDC refused requests by UN Secretary General Kofi Annan's Special Envoy Razali Ismail and UN Commission on Human Rights Special Rapporteur Paulo Sergio Pinheiro to visit. In August, former Indonesian Foreign Minister Ali Alatas, now one of several UNSYG envoys for UN Reform, was permitted to visit, though his trip did not achieve any concrete results.

U.S. policy objectives in Burma remain unchanged: the immediate and unconditional release of Aung San Suu Kyi, U Tin Oo, Hkun Htun Oo and all political prisoners; the re-opening of all NLD party offices; and the start of a meaningful dialogue leading to genuine national reconciliation and the establishment of democracy. Overall U.S. policy goals include the establishment of constitutional democracy, respect for human rights and religious freedom, the repatriation of refugees with monitoring by UNHCR, the return home of internally displaced persons (IDPs), cooperation in fighting terrorism, regional stability, a full accounting of missing U.S. servicemen from World War II, combating HIV/AIDS, eliminating trafficking in persons, ending forced labor, and increased cooperation in eradicating the production and trafficking of illicit drugs.

The United States will continue to urge other nations to use sanctions and diplomacy to press the junta to release all political prisoners and to allow all political parties to operate freely. The United States also encourages all countries with a major interest in Burma, particularly Burma’s immediate neighbors China, India, and Thailand, as well as other ASEAN members and Japan, to use their influence with the government to urge it to take 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 meaningful talks on a political transition in Burma and to support UN efforts to improve the dismal human rights situation.

I. Measuring Progress Toward Democratization

Burma’s pro-democracy movement continued to face severe repression. The GOB constantly harassed and regularly arrested opposition party members, pro-democracy activists, dissidents, and their supporters. Aung San Suu Kyi, the Nobel Peace Prize Laureate General Secretary of the NLD, and U Tin Oo, the party’s Vice Chairman, remained under house arrest. All NLD offices, except the party’s Rangoon headquarters, remained closed. Hkun Htun Oo, the Chairman of the Shan Nationalities League for Democracy (SNLD) -- Burma’s most influential ethnic democracy party -- is being prosecuted on charges of conspiracy against the state. He and another eight Shan activists arrested with him in February potentially face the death penalty. In June, five political activists (including four NLD members) were sentenced to life in prison. In May, an NLD member died as a result of injuries sustained while in GOB custody. Though authorities released at least 323 political prisoners on July 6, they continued relentlessly to round up pro-democracy supporters. Most political prisoners released since November 2004 had already completed their sentences. Pinheiro and UNSYG Annan both welcomed the July 6 releases. Pinheiro said, "The release of all remaining political prisoners would also send an important signal to the people of [Burma] and the international community that the Government is committed to a process of reconciliation and to establishing an inclusive and participatory democracy in [Burma]." On July 6, Annan reiterated his call for the lifting of "remaining constraints on all political leaders and further called on the [Burmese] authorities to resume their political dialogue with all parties concerned."

GOB authorities continued to arrest and imprison NLD members and other democracy supporters for alleged political offenses. Over 1,000 long-term political prisoners remain in prison.

U.S. officials persistently requested meetings with Aung San Suu Kyi and U Tin Oo. The government prohibited U.S. and other diplomats in Burma from visiting either. No independent observer has been able to visit Aung San Suu Kyi since UN Secretary General Special Envoy Razali Ismail met with her in March 2004. Aung San Suu Kyi is now held with virtually no contact with the outside world.

Despite the government’s refusal to allow Razali and Pinheiro to visit Burma during the reporting period, Razali continued to encourage a political dialogue between the SPDC and the NLD. These efforts, however, consisted entirely of diplomatic discussions outside of Burma. The GOB has not permitted Razali or Pinheiro to visit since March 2004 and November 2003 respectively. Burma's Foreign Minister refused to meet Razali on the margins of the Post-Ministerial Conference in Vientiane, Laos in July 2005.

The junta's National Convention to complete the drafting of a new constitution -- the first step on its "road map to disciplined democracy" -- has been in recess since March 31. As it did in May 2004 (when the Convention originally reconvened after an eight-year hiatus), the SPDC handpicked pro-regime delegates to participate in the Convention, refused to include the NLD or pro-democracy ethnic groups, and prohibited free and open debate. UNSYG Annan issued a statement on April 8 urging "the [Burmese] authorities to use this occasion (the March 31 recess) to enhance interethnic harmony and political stability by engaging the representatives of all ethnic nationality groups and political leaders in a substantive political dialogue aimed at national reconciliation." In the same statement, he encouraged "the [Burmese] authorities to heed the friendly advice of its fellow Association of Southeast Asian Nations members to expedite its reform process."

Pinheiro noted in his report to the 61st session of the UN Commission on Human Rights that "The situation with regard to the exercise of those fundamental freedoms and rights in [Burma] has not substantially changed," and that "Restrictions which continue to hamper the enjoyment of such basic human rights and freedoms should be relaxed in order to create an enabling environment for the National Convention process." The report also states that "Only the full and unconditional release of all political prisoners will pave the way for national reconciliation and the rule of law." Pinheiro continued to urge the government to release political prisoners, allow all opposition parties to participate in the National Convention, investigate the May 2003 attack on Aung San Suu Kyi, and allow an independent investigation of allegations of rape and other abuses by the Burmese military in ethnic regions. The government has not responded to any of these requests.

On the occasion of Aung San Suu Kyi's 60th birthday (June 19), Secretary of State Condoleezza Rice wrote her a letter on June 18 which states in part: "The American people and I salute you on this special occasion, and reaffirm that the United States stands with you and all others in your struggle to free the Burmese people. We look forward to the day when you can celebrate your birthday in a democratic and free Burma where fundamental human rights are respected." On June 16, the Department of State issued a statement calling on "Burma's military rulers to release Aung San Suu Kyi, U Tin Oo, Hkun Htun Oo and all other political prisoners immediately and unconditionally, and to include Burma's democratic opposition and ethnic minorities in a meaningful dialogue that leads to genuine national reconciliation and the establishment of democracy." UNSYG Annan urged the GOB on June 16 "to release her and let her join her party and join the process on the national dialogue and national reconciliation."

Although the junta has not set a firm timetable for completing its "road map," it continued to seek support for the process from countries in the region. On July 26, Burma relinquished its scheduled chairmanship of ASEAN in 2006, citing a need to focus on the national reconciliation process. Some ASEAN governments had privately pressured Burma to give up the chairmanship for the good of the organization, a significant undertaking given ASEAN's reluctance to interfere in the internal affairs of its member states. Despite this success, ASEAN members have not publicly urged the GOB to address Burma's internal political situation. Foreign Minister Nyan Win attended the ASEAN Post-Ministerial Conference and ASEAN Regional Forum meetings in Laos in July, 2005. In neither forum was the GOB publicly criticized for its detention of Aung San Suu Kyi or its continuing abuses of human rights. The ARF Chairman’s Statement did express "concern at the pace of the democratization process" and called "for the lifting of restrictions and for effective dialogue with all parties concerned." Senior GOB ministers visited India, ASEAN capitals, and China during the last six months.

The SPDC and Burma’s largest remaining ethnic insurgent group, the Karen National Union (KNU), entered into a temporary cease-fire in early 2004 after KNU leader General Bo Mya visited Rangoon and held "productive" discussions. Talks have since been stalled, and the two sides have yet to formalize an end to over five decades of armed conflict. In the meantime, there have been reports of occasional, low-level skirmishes between the KNU and Burmese military.

On May 7, 2005, three large bombs simultaneously exploded in Rangoon at two crowded shopping areas frequented by foreigners and at an international trade center, killing at least 20 people and wounding several hundred. On April 26, an explosive device detonated at a busy market in Mandalay, killing at least three. Both events are a significant departure in terms of targeting and level of sophistication from other bombings that have occurred in recent years. The GOB blamed exile opposition groups and foreign governments for the incidents, as it has done in the past, but provided no convincing evidence to prove its allegations.

II. The Quality of Life in Burma

(Economy)

Former Prime Minister General Khin Nyunt’s October 2004 ouster caused significant short-term disruption to the economy. His now-dismantled MI apparatus played a key role in various sectors of the Burmese economy, particularly in the lucrative border trade and in commercial dealings with ethnic cease-fire groups. By the beginning of 2005, the situation began to return to normal with military, customs, immigration, and police units taking over MI’s former economic role. Much of this trade is flowing again; however, an air of uncertainty remains, and with it, a chilling effect on new business investment.

Despite continuing energy shortages, a lingering crisis in the private banking sector, the loss of its primary export market due to the 2003 U.S. ban on Burmese imports, and the expiration on January 1, 2005 of the WTO Multi-fiber Agreement, Burma’s private garment sector has managed to survive. New orders from importers in EU member states, Japan and Latin America enabled remaining factories to continue production and avoid new layoffs.

Chronic economic policy mismanagement and a resultant poor business and investment climate continued to be the primary reasons for Burma’s dismal economic performance. Despite GOB claims of 13.8 percent economic growth in FY 2004-05 (April-March), most foreign observers saw scant evidence of real economic expansion. Little new foreign investment entered the country during this period, though interest by Korean, Indian, and Chinese firms in the power and energy sectors increased, including in new offshore oil and gas exploration. China continued investing in infrastructure and commercial activities and remained a strong market for Burmese wood and wood products.

Burma remains on the Financial Action Task Force's (FATF) list of non-cooperative countries and territories in the fight against money laundering. The U.S. will continue to maintain Burma’s designation as a country of primary money laundering concern, as well as the Asia Wealth Bank and Myanmar Mayflower Bank designations as financial institutions of primary concern. In June 2005, Burma submitted an application to join the Asia-Pacific Group on Money Laundering, which is affiliated with the FATF. The APG deferred the issue of Burma's admission until its next plenary in January 2006.

Serious money laundering problems persist despite the closure of Asia Wealth and Myanmar Mayflower Banks on March 31, 2005. On August 5, 2005, GOB officials took over Myanmar Universal Bank (MUB) and arrested its Chairman and Executive Officer. The GOB did not publicly explain the motives for these closures, and there is no indication it used money laundering legislation to justify its action. There is strong evidence that the banks had connections to money laundering and narcotics trafficking. In light of the fact that Burma has done little to ensure that criminals do not control or have a significant investment in Burmese financial institutions, the Treasury Department has decided to maintain the application of Section 311 of the Patriot Act on both the Jurisdiction and the Asia Wealth and Myanmar Mayflower banks. These designations will remain until Burma fully addresses this issue and adequately implements legal reforms.

(Human Rights/Forced Labor)

The SPDC's severe abuses of human rights have been documented by NGOs, the UNCHR Special Rapporteur, and numerous other sources. Identified by Secretary of State Rice as one of the world’s "outposts of tyranny," Burma continued to restrict freedom of speech, press, assembly, religion, and association. Additional abuses in ethnic minority areas included persecution, torture, disappearances, extrajudicial executions, demolition of places of worship, forced relocation, rape, and forced labor. Burmese citizens were not free to criticize their government. Security forces regularly monitored the movements and communications of residents, searched homes without warrants, and relocated persons forcibly without just compensation or legal recourse. In 2004, the United States again designated Burma as a "Country of Particular Concern" for its severe violations of religious freedom, especially among Muslim and Christian populations, and in 2005 ranked Burma as a Tier 3 country for its unwillingness to make serious and sustained efforts to combat trafficking in persons.

Since March 2005, the GOB has released 324 of the country’s roughly 1,300 long-term political prisoners. The majority of these released detainees had already completed their original sentences. Among those released was Ko Ko Gyi, a key figure in the 1988 pro-democracy demonstrations. Despite these releases, arrests of pro-democracy supporters continued unabated.

The junta allowed UNHCR to maintain a presence in northern Rakhine State, where it provides humanitarian support and protection services to more than 230,000 Rohingya Muslims who have returned from Bangladesh. Approximately 20,000 Rohingya refugees remained in camps in Bangladesh, although another estimated 200,000 Rohingyas lived illegally in southernmost Bangladesh.

More than 146,000 Burmese refugees lived in camps along the border in Thailand. UNHCR has concluded that current conditions are still not adequately safe for the voluntary repatriation of thousands of refugees from Thailand and the return home of thousands of internally displaced persons. The UNHCR, however, was not permitted to continue monitoring the Burmese side of the border region to assess conditions for the voluntary return of refugees and internally displaced persons.

After an August 1-4 visit to Rangoon, World Food Program Director James Morris said that Burma’s "severe and wide-ranging hunger issues cannot be solved without fundamental changes that promote the socioeconomic well-being of the population, which is the preserve of the Government." He added, "The humanitarian issues are serious and getting worse. I made very clear that the primary responsibility for making things better rests squarely with the Government." At the same time, the GOB has increased travel and other restrictions on NGOs and UN agencies providing humanitarian assistance inside Burma.

The GOB’s economic mismanagement, political intransigence, and repression remained the primary causes of unemployment, illegal migration, and trafficking in persons. Over one million Burmese migrants continued to live in Thailand, though not all reside there legally. Burmese living illegally in neighboring countries were willing to endure an often perilous existence, working in dangerous or exploitative jobs, because they believed it was more dangerous and/or economically difficult to make a living in Burma.

There was abundant evidence that the practice of forced labor in Burma continued. The ILO remained ready to assist the government, but since March 2005, the GOB has increasingly hampered the ILO’s ability to carry out its mission, failing to cooperate with ILO efforts and stymieing ILO outreach. Recent GOB actions include: persecution of the complainant when an allegation of forced labor is determined to be unfounded, leading the ILO to stop submitting cases for investigation; a high-profile campaign of GOB-sponsored rallies vilifying the ILO, creating a hostile environment, and making it difficult for the ILO liaison officer to travel in country; and, finally, the cessation of cooperation and dialogue to support ILO efforts. On April 29, the GOB released the final detainee who had been imprisoned and sentenced to death in 2004 for communicating with the ILO.

The use of forced labor met the U.S. and UN definitions of trafficking in persons, and was a key factor in Burma’s Tier 3 designation in the Department’s 2005 TIP Report. In the past 18 months, the ILO liaison office accepted 102 cases of forced labor to investigate, and 59 cases were forwarded to the GOB. Responses from the government have been received on all submitted cases, and ten people were found guilty and sentenced. These early, positive results led to a slight decline in reported forced labor incidents, according to the ILO liaison office, but from March, the quality and rigor of investigations declined, and as of May, the ILO stopped referring cases to the GOB. The Burmese Government supported or tolerated the use of forced labor for infrastructure projects and the Burmese Armed Forces used forced conscription to enlist porters.

A February report by the UN Security Council noted the continued use of child soldiers in conflict areas both by the government and by some ethnic minority insurgent groups. The report singled out the Burmese Army, the Karen National Liberation Army, and the Karenni Army as the main recruiters. A July 26 resolution passed unanimously by the UN Security Council ordered UN country teams in affected areas to engage in immediate dialogue with offending parties to develop and implement action plans to end these violations. Some ethnic minority groups that have concluded cease-fire agreements with the government, particularly the United Wa State Army, also continued to conscript child soldiers.

(Environment)

The Ministry of Forestry (MOF) is responsible for overseeing the protection of the environment and the SPDC's profitable logging operations. Logging is a source of revenue for Burma’s army as well as the insurgent groups. The MOF instituted a program to increase the size of protected areas. However, the government committed few resources to support the policy and issued contradictory directives that the MOF increase foreign currency revenue from export of teak and other hardwoods. Consequently, unsustainable legal and illegal logging and illicit trade in wildlife products, much of it in border areas where ethnic minority groups have some autonomy, overwhelmed efforts to protect natural resources. Conservationists are engaged in a battle against encroaching agriculture, logging, and poaching on "protected lands."

The government focused on the commercial possibilities of eco-tourism. During the last several years, the government opened up areas in Chin State, Kachin State, Sagaing Division, and Tanintharyi Division to specially arranged eco-tourism. There were credible reports that in the promotion of some of these tourism activities the government expropriated civilian property and forced others to provide services, including transportation for tourists and their baggage.

III. Development of a Multilateral Strategy

On August 18, the Global Fund to Fight AIDS, Tuberculosis and Malaria terminated its grant agreement with the United Nations Development Program to combat the three diseases in Burma, citing the GOB's failure to facilitate access to project sites. Similarly, there are concerns regarding the emergence of other health threats, in particular, Avian Influenza (AI). Thus far, Burma has not reported any cases of AI, but it remains at risk due to its close proximity to affected countries. The junta's lack of cooperation with the international community set back efforts to fight infectious diseases and provide other humanitarian assistance, and is symbolic of its low regard for health and education issues.

Immediate U.S. policy objectives in Burma remained securing the release of Aung San Suu Kyi, U Tin Oo, Hkun Htun Oo, 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 continued its efforts to encourage all countries with a major interest in Burma, particularly Burma’s immediate neighbors China, India, and Thailand as well as other ASEAN members and Japan, to use their influence to convince Burma's leaders to take these steps, noting that future regional stability requires the SPDC to take more constructive positions on political dialogue, economic reform, and the institution of rule of law. Privately, most countries in the region continued to express similar concerns, and agreed the SPDC must work with the democratic opposition in order to effect a smooth political transition. ASEAN members have, however, not publicly called on the GOB to address Burma's internal political situation.

On June 24, 2005, the United States made reference to the deteriorating situation in Burma during UN Security Council consultations. The United Kingdom, Denmark, France, Greece and Romania supported this effort. In his statement, U.S. Ambassador Gerald Scott cited the continued detention of Aung San Suu Kyi and other political prisoners as evidence of the Burmese Government's intention to further entrench military rule and deny its people basic human rights. He also called on the international community to consider what steps can be taken to promote a transition to democracy.

On May 12, 2005, Bulgaria, Rumania, Croatia, Bosnia, Macedonia, Albania, Serbia, Montenegro, Norway, Iceland and Liechtenstein declared that they "share the objectives" of the European Union's Burma policy, and that they will ensure that their national policies conform to that of the EU.

The ILO has long been concerned with Burma’s serious forced labor problem and its violation of its obligations under the ILO's Forced Labour Convention. At the International Labor Conference in June, the ILO's Committee on the Application of Standards concluded that the forced labor situation had not changed and that the regime had shown no commitment to ending forced labor. The Committee called on ILO members to review their relations with Burma, including foreign direct investment and dealings with state-owned enterprises. Specific steps the committee called on Burma to take include: assure the ILO the GOB would not take action against individuals who file complaints of forced labor; resolve allegations of the Army's role in forced labor; commit to engage the ILO in substantive dialogue at the highest level; and facilitate freedom of movement of the ILO's liaison officer.

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. The United States co-sponsored the annual human rights resolution on Burma at the 2004 UN General Assembly and the annual Burma resolution at the 2005 UN Commission on Human Rights, both of which were adopted by consensus. The Secretary of State again designated Burma as a "Country of Particular Concern" in September 2004 for its particularly severe violations of religious freedom.

The United States maintained extensive sanctions on Burma. These measures include an arms embargo (already in place but also mandated by the 1998 International Religious Freedom Act), bans on new investment and imports, an asset freeze, and a prohibition on the export of financial services to Burma and the provision of financial assistance to the GOB. The Department of State maintained visa restrictions on SPDC members; government ministers and other senior Burmese Government officials; military officers above the rank of colonel; all officials of the Union Solidarity and Development Association (USDA); civil servants above the rank of Director General; and managers of state-owned enterprises. The visa restrictions covered the immediate family members for all the categories of individuals listed above. Sanctions under the Trafficking Victims Protection Act prohibit funding exchange visits to the United States by individuals affiliated with the Government, such as public school teachers. No other country joined the United States in adopting bans on investment and imports, or a prohibition on the export of financial services. In April, the EU renewed its sanctions, which include a ban on extending credit to a list of Burmese state-run enterprises and a more restrictive visa ban. The EU also called on its member states to vote against assistance to Burma by international financial institutions, though they were not required to do so.

U.S. sanctions will be maintained until there is significant progress toward a political transition and genuine respect for human rights or until a democratically elected government in Burma requests that they be lifted.

In 2004-2005, we provided $4 million to address the growing HIV/AIDS epidemic in Burma by funding international non-governmental organizations to undertake prevention and care activities; no assistance is provided to the government through this program. We also continue to promote more effective prevention, treatment, and care programs, including for pregnant mothers and high-risk groups.

The Burmese Government provided cooperation on counterterrorism issues, ratifying two additional UN conventions in 2004, and the United States noted the GOB’s growing cooperation with states of the region on narcotics issues and the reduction in poppy cultivation. Despite these efforts, Burma continued to fail demonstrably to provide adequate counternarcotics cooperation. During the reporting period, GOB cooperation with us on WWII remains recovery operations and an annual joint opium yield study decreased from previous years.