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	Conditions in Burma and U.S. Policy Toward Burma For the period March 28, 1999 - September 28, 1999
	Plan for Implementation of Section 570 of Public Law 104-208 (Omnibus Appropriations Act, Fiscal Year 1997) Submitted to the U.S. Congress, November 2, 1999 Released by the Bureau of East Asian and Pacific Affairs, November 3, 1999 U.S. Department of State (Link to all periods available.)

The people of Burma continue to live under a highly repressive, authoritarian military regime. The international community widely condemns that regime for its serious human rights abuses. The State Peace and Development Council (SPDC), Burma's ruling military junta since 1997, has made no significant changes in the governing policies of its predecessor, the State Law and Order Restoration Council (SLORC), which seized power in 1988.

The regime has made no progress in the past six months in moving toward greater democratization, nor has it made any progress toward fundamental improvement in the quality of life of the people of Burma. To the contrary, conditions have worsened with the regime stepping up repression of the National League for Democracy (NLD), Burma's largest opposition party, and attacking its leader Aung San Suu Kyi, in the state-controlled press.

SPDC economic mismanagement, combined with residual effects from the Asian financial crisis, has sent the Burmese economy into a downward spiral that the regime appears unable to halt. Economic fundamentals have become increasingly opaque as the government has ceased publishing data on the money supply and foreign exchange reserves. The Government of Burma reported to the International Monetary Fund (IMF) in June that it had $350 million in foreign exchange reserves as of April 1999. According to official figures, annual inflation was 49 percent in 1998/99, although the actual rate is likely higher. The Burmese kyat held steady due to administrative controls on currency markets. After authorities increased electric bills eight-fold for companies and individual consumers in March and April, power outages decreased, although power supplies remain unreliable. Gasoline and diesel fuel are rationed to three gallons per vehicle per day. Onerous trade controls have made it difficult for international business to turn a profit. The military junta continues to dominate the political, economic and social life of the country in the same oppressive, heavy-handed way that it has since seizing power in September 1988 after harshly suppressing massive pro-democracy demonstrations.

U.S. policy towards Burma seeks progress in three key areas: democracy, human rights, and counternarcotics. We have taken strong measures to pressure the SPDC to end its repression and move towards democratic government. The United States has suspended economic aid, withdrawn Burma from the general system of preferences (GSP) and Overseas Private Investment Corporation (OPIC) programs, implemented an arms embargo, blocked assistance from international financial institutions, downgraded our representation from Ambassador to Charge d'affaires, imposed visa restrictions on senior officials and their families, and instituted a ban on new investment by U.S. persons. Since 1989, the United States has been unable to certify that Burma has cooperated in efforts against narcotics. We remain engaged in multilateral diplomacy to encourage the Association of Southeast Asian Nations (ASEAN), Japan, Korea, China, the European Union (EU), and other nations to take similar steps and/or other actions to encourage progress by the SPDC in these areas of key concern. The EU has renewed the range of sanctions it implemented against Burma, including visa restrictions similar to ours and the withdrawal of generalized system of preferences (GSP) benefits. We have also continued to urge the Government of Japan to maintain the suspension of much of its bilateral aid program, including large-scale development assistance.

As a result of economic mismanagement by the regime, financial crisis in much of Southeast Asia, and economic sanctions, approvals of new foreign direct investment in Burma fell by 96 percent in 1998, and are unlikely to pick up in the near term. Many foreign investors have withdrawn from Burma due to the unfavorable political situation. The government has demonstrated little will to rein in inflation-causing deficit spending or to implement market-oriented reforms. In the past year the focus of economic policy has been to support self-reliance and development of agriculture. The SPDC is unlikely to develop the economy unless political developments in Burma permit an easing of restrictions on lending by international financial institutions.

Measuring Progress Toward Democratization:

During the current review period (March-September 1999), the ruling junta showed no sign of willingness to cede its hold on absolute power. The regime refuses to recognize the results of the free and fair 1990 elections, in which the National League for Democracy (NLD) won a vast majority of both the popular vote and the parliamentary seats. The generals further refuse to negotiate with pro-democracy forces and ethnic groups for a genuine political settlement to allow a return to the rule of law and respect for basic human rights.

The government claims that the military-dominated National Convention is an appropriate forum for dialogue with the NLD and parties representing the country's ethnic minorities. But the National Convention, a body ostensibly tasked since 1993 with drafting a new constitution, is not a democratic forum as currently structured. Although the NLD initially participated, the Convention was overwhelmingly made up of delegates hand-picked by the junta, which carefully stage-managed the proceedings and ignored even limited opposition views. The regime appeared determined to draft a constitution that would ensure a dominant role for the military forces in the country's future political structure. The NLD withdrew from the National Convention in November 1995 because of the undemocratic nature of the institution and was formally ejected by the SLORC in December of that year. The Convention has not met since mid-1996, and the SPDC's current plans for the body remain unclear.

In September 1998 the SPDC rounded up almost 1,000 opposition party members, including 200 members-elect of Parliament, and detained them without filing charges in so-called police "guesthouses." These detentions came in response to the NLD's announcement that it would seek to convene the Parliament, elected in 1990, but never allowed to convene. After keeping the NLD members and parliamentarians in arbitrary detention for more than six months, the SPDC began releasing them. A core group of about two dozen members of Parliament, including Speaker-designate Dr. Saw Mra Aung, remain in detention. The regime allows families to visit members of this group once a fortnight.

In September 1998 the NLD formed the "Committee Representing the People's Parliament" (CRPP) to fulfill the role of the Parliament elected in 1990, but never recognized by the regime. The CRPP began to approve and reject laws passed by the military government. The SPDC viewed the CRPP as an attempt to create a parallel government and launched a concerted effort to dismantle the NLD. As of September 1999, the SPDC had announced the closure of over 50 NLD party offices and the resignation of over 34,000 NLD members and orchestrated recall drives against 45 Members of Parliament-elect. These actions, combined with the detentions described above, have crippled the NLD's nationwide organizational capacity. Throughout late 1998 and early 1999, the SPDC organized mass rallies denouncing Aung San Suu Kyi and the NLD in each State and Division. The state-controlled media accompanied these rallies with virulent personal attacks on Aung San Suu Kyi. In the past six months, the public rallies have ceased. However, the personal attacks on Aung San Suu Kyi have continued, as have the recall drives against parliamentarians who refuse to resign.

In January 1999, reportedly more than 200 Rangoon University students were each sentenced to 14 years in prison for staging nonviolent demonstrations against the regime the previous year. Numerous NLD leaders were also convicted and sentenced to long prison terms. On the positive side, in January and in February the government released two political prisoners before the end of their scheduled terms of incarceration. The releases came shortly after visiting U.S. Congressman Tony Hall raised these cases with senior Burmese government officials.

Burma is the world's leading producer of illicit opium, accounting for about 90 percent of Southeast Asian production and about half of the world's supply. Methamphetamine production and distribution from Burma is also becoming an increasing problem. The Burmese government has expanded its counternarcotics efforts over the past few years. Methamphetamine seizures tripled from 1997 to 1998 and continue to increase in 1999. During the first quarter of this year, methamphetamine seizures totaled 1.8 million tablets. Significant declines in both poppy cultivation and opium production have been recorded for the second straight year. Through a combination of drought and eradication efforts, poppy cultivation estimates for 1999 show a 31 percent decline over 1998. Reduced cultivation will result in a 38 percent decline in opium production. Analysts fear that cultivation may return to past levels or increase when the drought ends. Given the size of the narcotics problem in Burma, much more needs to be done. Part of the problem is that the Burmese government does not control many of the ethnic groups that traffic in drugs. Nevertheless, the government also needs to make a greater effort at interdiction. While there is no evidence that the government is involved on an institutional level in the drug trade, there are reports that corrupt army personnel in outlying areas may be aiding the traffickers. The government implicitly tolerates continued involvement in drug trafficking by ethnic insurgents who have signed cease-fire agreements. These cease-fires have the practical effect of condoning money laundering as the government also encourages former drug traffickers to invest their ill-gotten gains in the legitimate economy.

The United States recognizes that serious political and human rights concerns preclude our working directly with the regime in Burma. The United States also remains concerned about the potential damage that opium cultivation in Burma can inflict on the United States and the rest of the world. Against this backdrop, we have supported a small non-governmental program in Burma, the Old Soldiers Project of 101 Veterans, Inc., to replace opium poppy cultivation with substitute, economically-viable alternative crops. Despite impressive strides in a short period of time, the Burmese government suspended the Old Soldiers project in September 1998. After the regime suspended the program, the United States worked with the UN Drug Control Program (UNDCP) to keep the project operating under UNDCP auspices, but the government rejected the proposal. We continue to work with UNDCP and through other channels to try to convince the Burmese government to reverse its decision.

In further support of our counternarcotics efforts, we have encouraged the (United Nations) UN to develop programs to assist the Wa and Kachin ethnic minority areas as well as joint programs with Thailand and China. The bulk of the UN effort has focused on developing a program in a key opium cultivating area in the Wa region. This $15 million program, managed by the UNDCP, builds on a small pilot program that resulted in the elimination of opium cultivation in the project area. The program specifically provides development and demand reduction assistance directly to the inhabitants of three townships in the Wa region, without going through the government. On the development side, UNDCP is providing support to the farming community and extensive infrastructure and extension services support. Provisions for developing hospitals and clinics are also included, as are demand reduction programs. UNDCP has begun developing two pilot programs, one in the Wa region and one in the Kokang area, targeting poppy cultivation.

The United States and other donors worked with UNDCP over a long period to develop a program with reasonable benchmarks and effective oversight. We have also insisted that the UN continuously apprise the National League for Democracy and Aung San Suu Kyi of its program. She has not objected to the program, but wants to be sure that the regime derives no moral or material support from it. Since 1994, the United States Government has earmarked $6.05 million of our contribution to UNDCP for the Wa project. The funding goes to UNDCP and the project in the affected area, not to the Burmese government.

Measuring Progress on Improving the Quality of Life:

During the review period, the quality of life of the average Burmese citizen continued to worsen. The SPDC's severe violations of human rights continued. There continue to be credible reports, particularly from ethnic minority insurgent-dominated areas along the Thai border, that soldiers have committed serious human rights abuses, including rape, forced porterage, and extrajudicial killing. Disappearances continue, and members of the security forces beat and otherwise abuse detainees. Most adherents of all religions duly registered with the authorities generally enjoyed freedom to worship as they choose; however, the government imposed some restrictions on certain religious minorities. Arbitrary arrests and detentions of those who express dissenting political views continue. As of September 1999, hundreds, if not more, of political prisoners remained in detention, including more than two dozen members of Parliament elected in 1990. Prison conditions remained deplorable, and prisoners were subjected to a lack of food and adequate medical care. The International Committee of the Red Cross (ICRC) began making prison visits in May 1999. As of September, the ICRC reported it had seen over 18,000 prisoners, including 800 political detainees. ICRC officials reported they were allowed to interview prisoners privately and to conduct complete inspections of the facilities they visited.

The SPDC reinforces its rule via a pervasive security apparatus controlled by military intelligence which sharply restricts basic, internationally-recognized human rights to free speech, press, assembly, and association. Political party activity remains severely restricted. The activities of the NLD and Aung San Suu Kyi are monitored and circumscribed by the regime. Since late 1996, the SPDC has put up blockades in front of Aung San Suu Kyi's house to block gatherings in the street and prevent her from addressing party supporters. The regime has allowed the NLD to hold several gatherings inside Aung San Suu Kyi's compound, usually on national holidays, but often restricts the participation of observers and journalists. The regime allowed the NLD to hold party congresses within the compound in May and September 1997. Since September 1998, the NLD has ceased holding large gatherings at the compound, since many key NLD members remain in detention. The SPDC has allowed the NLD to hold events at party headquarters, but the regime continues to resort to tactics designed to intimidate those attending the events as they did, for example, on July 17 when they harassed or blocked party members from attending an event commemorating Martyrs Day.

In response to street protests by large groups of students in November and December 1996, the SLORC closed the nation's schools and universities. The SPDC finally reopened primary and secondary schools in August 1997 and some lower technical institutes in March 1998. Some universities were briefly reopened in July 1998 to allow previously enrolled students to take final exams and graduate. Medical schools were reopened in 1998 and remain open as of March 1999. Over the past eleven years of SLORC/SPDC rule, universities have been open for undergraduate students for a total period of two-and-a-half years. More than 300,000 students are waiting for the universities to reopen in order to continue their studies.

Thousands of citizens of Burma remain in exile because of fear of persecution and poor economic conditions, placing a major burden upon neighboring countries. About 21,000 Rohingya Muslims from Arakan State remain in camps in Bangladesh. A few thousand students and dissidents remain in exile in Thailand. Approximately 119,000 individuals now reside in ethnic minority camps along the Thai-Burma border, among them thousands of new arrivals driven out by army attacks in the areas controlled by the Karen and Karenni ethnic minorities. According to reliable reports, there may be more than one million Burmese internally displaced by such army attacks.

Burma is a poor country, with an average per capita GDP of approximately USD $406 at a trade-weighted exchange rate, perhaps double that in terms of purchasing power parity. Progress on market reforms has been mixed and uneven. Beginning in 1988 the government partly opened the economy to permit expansion of the private sector and to attract foreign investment. Though modest economic improvement ensued, rampant inflation has eroded real economic gains for the vast majority of the population. There is reason to believe that money laundering is a significant factor in the overall economy given the fact that the government encourages former traffickers to invest their funds in Burma. The pace of economic reform has slowed since 1993, and major obstacles to further reform persist. These include disproportionately large military spending, extensive overt and covert state involvement in economic activity, excessive state monopolization of leading exports, a bloated bureaucracy prone to arbitrary and opaque governance, and poor education and physical infrastructure. In addition, due to international opposition and to the SPDC's unwillingness to cooperate fully with the international financial institutions, access to external credit from the IMF, World Bank, and Asian Development Bank continues to be blocked. In September 1998 the World Bank announced that Burma had defaulted on its loan repayments.

After rapid market depreciation in 1997 of the Burmese kyat, from ks. 150/dollar to ks. 370/dollar, the local currency has stabilized at around ks. 350/dollar. Rather than reflecting an actual strengthening of the currency, local analysts believe the steady position of the kyat rate is due to narrow usage of foreign exchange and administrative controls imposed on the foreign currency markets. The official exchange rate of ks. 6/dollar is still used by the state sector to its advantage. In an effort to shore up scarce foreign exchange reserves, the government imposed strict import and remittance controls on the private sector in 1997 permitting companies to remit only $50,000 in profits. In 1998, the government further increased restrictions by limiting foreign exchange transactions to two state banks and by requiring that the content of imported goods be 80 percent "essential" items. Imports of most consumer foodstuffs were banned. These restrictions remain in place. Many foreign traders and investors still operating in Burma note that the sum total of these controls is untenable and business will decline inevitably as a result.

The government restricts worker rights and uses forced labor on a widespread basis. The use of porters by the army, with attendant mistreatment, illness, and even death for those compelled to serve, remains a common practice. The use of forced labor on some infrastructure development projects appeared to be lessening following the issuance of directives in 1995 to end the practice of forced civilian labor. The military authorities nonetheless continue to force ordinary citizens (including women and children) to "contribute" their labor, often under harsh working conditions, on construction projects in many parts of the country. Some of these projects, such as the moat of the Mandalay palace, were undertaken to promote tourism to the country. In the past few years, the military has begun using soldiers instead of civilians on certain infrastructure projects. Child labor continues to be a serious problem.

As a largely underdeveloped country, Burma, with a rapid population growth rate, faces increasing pressure on environmental quality. Although the government has taken some steps to stem widespread clear-cutting, Burma's large tracts of remaining tropical forest remain under intense commercial exploitation. Some non-governmental organizations (NGOs) have charged that Burma's teak forests in the Thai-Burma border area are being rapidly destroyed by clear-cutting and deforestation, including by ethnic insurgent groups in league with foreigners. Because of the severe restrictions on Embassy travel to outlying parts of Burma, it is difficult to document the overall extent of the problem.

The poor quality of life is also reflected in rising drug abuse. Burmese estimates put the addict population at approximately 60,000, but UNDCP and NGOs working in the health sector estimate the actual number is at least five times that figure. Intravenous use of heroin is contributing to the rapid spread of HIV/AIDS. While official statistics released in 1997 show over 10,000 HIV-infected people, and about 2,000 AIDS patients, international organizations estimate that at least one million Burmese may be HIV-infected. Drug treatment services are not reaching most drug users because of a lack of facilities and a lack of properly trained personnel. Addiction and the spread of HIV/AIDS have become cross-border problems of concern to China as well, particularly in Yunnan province, on Burma's northern border.

Development of a Multilateral Strategy:

The goals of U.S. policy toward Burma are progress toward democracy, improved human rights, and more effective counternarcotics efforts. Absent national reconciliation, Burma will not be able to adequately address the many severe problems it faces, including narcotics trafficking and abuse, low levels of education and poor economic performance.

The United States actively works to promote international pressure on the SPDC for a meaningful dialogue on a democratic transition and an improved human rights climate. We are pursuing a multilateral strategy to seek improvement in our key areas of concern. We continue to consult about Burma regularly and at senior levels with leaders of the ASEAN nations, Japan, Korea, the European Union, Australia, New Zealand, Canada, and other countries having major trading and investment interests in Burma. At the same time, we urge them to press Burma for progress in the counternarcotics area, in particular to curb drug production and trafficking. These efforts have helped build and maintain strong international pressure on the military regime.

We support the UN's "good offices" approach to encouraging dialogue between the regime and the democratic opposition as a means of achieving a peaceful transition to civilian rule. We welcome the continued engagement of the UN Secretary General and his senior representatives in this effort. UN Special Envoy for Burma Alvaro de Soto can play a valuable role by encouraging the SPDC to initiate a genuine dialogue with the democratic opposition, including Aung San Suu Kyi and the NLD.

The key to progress toward democracy and human rights is, first and foremost, direct negotiations about the political future of the country among the SPDC, the NLD, and the ethnic minorities. In all our public and private messages to the SPDC, leaders of third countries, and other interested parties, we stress the importance of beginning such talks as the key to achieving significant progress in Burma. At the same time, we urge them to press Burma for progress in the counternarcotics area. We work closely with countries in Asia and Europe to press the SPDC to begin talks. In response, leaders from the ASEAN nations, Japan, Australia, Canada, and the European Union have urged the regime, both publicly and privately, to move to dialogue with the democratic opposition and to curb drug production and trafficking.

In order to urge the SPDC to make progress in our areas of concern, we have taken a number of steps: suspending economic aid, withdrawing GSP and OPIC, implementing an arms embargo, blocking assistance from international financial institutions, downgrading our representation from Ambassador to Charge d'affaires, imposing visa restrictions on senior regime leaders and their families, and implementing a ban on new investment by U.S. persons. We likewise have encouraged ASEAN, Japan, the EU, and other nations to take similar steps and other actions to encourage progress by the SPDC in these areas of key concern. Many nations join us in our arms embargo, including European countries, Canada, Australia, Japan and Korea. The EU limits its assistance to Burma to humanitarian aid. Our efforts in the international financial institutions continue to be successful in blocking loans to the regime, which is probably the single most effective sanction against the regime. Since 1988 we have taken an active role in pressing for strong human rights resolutions on Burma at the United Nations General Assembly and the UN Human Rights Commission, as well as having worked vigorously in the International Labor Organization (ILO) to condemn the lack of freedom of association for workers and the use of forced labor by the SPDC. In June, with our support, the ILO took the unprecedented step of banning Burma from attending ILO meetings and receiving technical assistance due to its forced labor practices.

In 1996, at our urging, the EU and associated European states joined us in imposing a ban on visas for high-level SPDC and military officials and their families. In addition, the European Union and Canada withdrew GSP trade benefits from Burma's agricultural and industrial products in March and August 1997, respectively, bringing their trade policies more in line with the U.S. withholding of GSP. In October 1998, the EU broadened its visa ban to include high-level tourism officials and urged EU citizens to defer vacation travel to Burma.

ASEAN shares many of our goals with regard to Burma, but we disagree on the means to achieve those goals. Many members of ASEAN believe that "constructive engagement" of the SPDC is the most effective way to promote positive change in Burma. We will continue to raise our strong concerns about the situation in Burma with ASEAN and urge continued steps by ASEAN leaders to encourage progress by the SPDC. Secretary Albright has used and will continue to use multilateral meetings, including the ASEAN Regional Forum and Post-Ministerial Conference, to directly press the Burmese for positive change in the presence of fellow ASEAN members.

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