Myanmar presidential economist ‘frustrated’ with Western sanctions

Author: | Published: 5 Apr 2012
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Myanmar’s presidential economists have branded the US government’s plans to instigate a targeted easing of sanctions as “frustrating” and called for more international assistance with regulatory reform.

The US today announced it was ready to ease some sanctions in the Southeast Asian country, such as a ban on US companies investing in or offering financial services to the country, in recognition of its burgeoning democratic transition.

But US Secretary of State Hillary Clinton stressed any relaxation of sanctions would begin cautiously, as Myanmar still had a long way to go to shake off years of military rule.

The announcement comes as the EU, Japan and Australia revealed similar plans to ease sanctions and restrictions on doing business in Myanmar following successful by-elections in the country last week. Opposition leader Aung San Suu Kyi’s National League for Democracy party won 40 of the 45 seats at stake.

Myanmar presidential economic adviser Set Aung told IFLR this morning that the sanctions currently in place had created a monopoly environment which succeeded only in benefiting the government cronies they were intended to hinder, and harming the ordinary business man in Myanmar.

“Western governments always talk about the good of the people, but they never do anything beneficial for the people,” he said. “They need to better understand that if this country’s democratic transition is going to work, it has to link to sustainable economic development which directly benefits the people.”

“Simply shifting the goal posts by relaxing periphery sanctions but holding on to those that really matter like trade restrictions will not help achieve that,” he said. “It is really frustrating and not helping the people.”

He added that the country was “desperate” for international assistance with its regulatory reform agenda.

“Most ministers are working in areas which they don’t know much about and are therefore desperate for international consultation,” he said.

“Our focus is on equitable, inclusive and sustainable development across the economic, social and environmental spectrum, but we can’t do everything; we are struggling with the reform process at the moment,” he said.

The Ministry of Finance and Ministry of National Planning and Economic Development were most in need of assistance, he said, given the number of reforms both departments had undertaken.

He added that some Asian consultancies were currently charging $1750 per day to assist with legislative reform but this was expensive and not enough alone.

“The people of Myanmar are complaining reforms are not happening fast enough, while international governments are saying we need to slow down,” he said.

“But if our transition to democracy is going to work we need to work quickly to narrow the gap between urban and rural development,” he said.

Earlier in the week, a Bank of America report warned of over-enthusiasm and great uncertainty in the opening up of Myanmar.

One British diplomat based in Myanmar said today he expected almost all European sanctions, excluding the arms embargo, to be lifted when the EU foreign ministers meet to discuss its policy on the country on April 23.

The British embassy was likely to begin encouraging socially responsible investment into the country around the same time, he said. It was also likely to begin to play a very close role in assisting Myanmar authorities with regulatory reform once sanctions were lifted, he said. The country’s outdated Companies Act was particularly in need of revision, he said.

“The President is keen to encourage British businesses to come in,” he said. “He thinks a lot can be learnt from western companies in terms of setting business standards, such as employee treatment, environmental awareness and so on.”

But he warned the arbitrary rule of law in operation in the country meant business activity in the region was still a risk.

Set Aung said Myanmar wanted sustainable not irresponsible or unethical investment. “Early birds are going to catch more worms,” he said.