The current situation in Burma:

The human rights situation has deteriorated significantly in recent years. Following
the suppression of the September 2007 democracy uprising, the regime has stepped up
arrests and harassment of democracy activists, and increased its control over media
and monitoring of communications. The number of political prisoners has risen by
over 700 to more than 1,800. Leaders of the democracy movement are either in jail or
in hiding. Aung San Suu Kyi remains isolated and under house arrest.

In Eastern Burma, out of sight of the media, attacks on ethnic people continue, forcing
thousands of people from their homes. Villages are burned, villagers shot on sight,
and thousands of people used as forced labour by the military. Rape is used as a
weapon of war, even against girls as young as five.

The regime has rebuffed UN efforts to persuade them to enter into tri-partite dialogue,
and instead will hold a rigged referendum in May that will approve a constitution that
enshrines military rule. Burma’s 400,000 monks, plus members of other religious
orders, are banned from voting. Under the new constitution the military will have 25
percent of seats in Parliament, veto power over government decisions, and the head of
state must have served in the military, thereby excluding Aung San Suu Kyi.

Overview of the EU’s approach to Burma:

EU members are committed to a common foreign policy on Burma. In theory, this
could be highly effective, with all 27 EU members working together to help bring
democratic reform in Burma. In fact, we are left with the lowest common
denominator, and a weak and ineffective response that has had no impact on the
regime. As all 27 EU members have to agree on sanctions or any issue, it only takes
one country to say no, and then nothing happens.

The EU has been divided on how to deal with Burma. A handful of countries, UK,
Czech Republic, Netherlands, Ireland and Denmark, have consistently favoured
increasing pressure to various degrees. In recent years a handful of countries have
opposed increasing pressure, and some even favour reducing existing measures taken
by the EU. These were; France, Germany, Austria, Italy, Spain and Poland. France’s
opposition was attributed to the fact that Total Oil, France’s largest company, is a big
investor in Burma. France has, however, supported stronger action on Burma in the
past year, and supported proposals for a non-punitive resolution on Burma at the
United Nations Security Council.

The division within the EU has meant that it is left without an effective strategy for
dealing with the situation in Burma. A previous policy of gradually increasing
pressure on the regime if there was no change, and relaxing pressure if there was
positive change, is no longer being applied. The democracy uprising and subsequent
crackdown in Burma in August/September 2007, highlighted the EU’s lack of
strategy.

Following the September 2007 crackdown the regime correctly calculated that there
would be a condemnation by the international community, but very little action. The
EU has consistently imposed sanctions that avoid the main revenue streams of the
regime, and have implemented the sanctions they do have in a manner that has
reduced their effectiveness. There has been a series of small one-off sanctions
introduced over almost 20 years, thus giving the regime the time and opportunity to
adapt and find coping mechanisms. Following the crackdown in 2007, the EU
introduced the first targeted sanctions that will actually have an impact on the regime
and its cronies, although these took almost six months to be implemented. Further EU
sanctions that were proposed, such as an investment ban and financial and banking
sanctions never materialised, despite the regime continuing to arrest democracy
activists, defying the United Nations, and snubbing and insulting the UN envoy.

Current EU measures against Burma include:

An arms embargo
This is of course welcome, but there is no worldwide arms embargo and the regime
buys most of its arms from China and Russia. The EU has not taken any steps to work
for a global arms embargo.

A ban on non-humanitarian aid
Again welcome, but not a measure that has a serious impact on the regime.

An end to GSP trade privileges
Again, no significant economic impact on the regime.

A visa ban for senior regime officials and their families
Otherwise known as the shopping ban, as exemptions in the visa ban allow regime
officials to attend many international meetings in Europe. As the British foreign office
has admitted, regime officials rarely came to Europe anyway.

A freeze of assets held in Europe by people on the visa ban list
Less than €70,000 has been frozen in all 27 EU member states, again hardly a
measure to bring the regime to its knees.

A limited investment ban
This measure was introduced in 2004. The point of an investment ban is to stop
revenue going to the regime, much of which will be spent on the military. The
sensible options available were a ban on all new investment – as the USA has done –
or to target investment in key sectors of the economy that earn the regime money,
such as oil, gas, gems, timber and mining. The EU did neither. European companies
are banned from investing in a small number of named state-owned enterprises. The
state-owned companies named are largely insignificant. Most of the companies listed
are in no way involved in the economic areas that earn the regime most of its export
revenue. The timber, mining, oil and gas sectors were not included. However,
European companies were banned from investing in a pineapple juice factory and a
tailor shop. In addition, it is already illegal to invest in state-owned enterprises under
Burmese law, so the EU banned something that couldn’t happen anyway.

A ban on imports of, and investment in timber, gems and metals
_ Agreed in October 2007, and introduced in March 2008, these are the first sanctions
that the EU has introduced that will have a significant impact on the regime and the
business cronies supporting the regime. Gems and timber are significant revenue
earners for the regime, and the regime gives concessions in these industries as
rewards to the business cronies who support them. However, there does not appear to
be any enforcement mechanism whereby importers have to provide proof of origin
certificates.

The need for a political strategy

The European Union has repeatedly failed to understand the true nature of the regime
ruling Burma. Polite political engagement of the kind that UN envoys have engaged
in since 1990 have not produced a single democratic political reform. The regime is
not interested in the wellbeing of the people of Burma, and has no interest in
democratisation. The generals are not politicians or diplomats. As soldiers they
respect strength, but their experience of the international community is one of
weakness, that words are not followed by action.

The regime will have to be forced to the negotiating table through a combination of
political and economic pressure. Weak and badly targeted sanctions have meant that
to date they have not seen their interests threatened enough to persuade them that they
need to change. Only when the regime and business cronies start to feel real economic
pain and strong political pressure will they enter into genuine talks. The EU must,
therefore, implement the strongest possible targeted economic sanctions.

These sanctions must be accompanied by a positive alternative such as the economic
development package proposed by the British government, that would be
implemented only in the event of genuine reform. Sanctions targeting the business
cronies supporting the regime will be highly effective at undermining the narrow
support base of the regime. However, the sanctions must be accompanied by a
positive alternative, or the business elite will have nowhere else to go but the regime.

Sanctions, political pressure and humanitarian assistance must be integrated in a
common strategy. New targeted EU sanctions, on banking, finance, key imports,
insurance, and investment should be introduced on a rolling basis – not occasional
one-offs over several years - so that the regime and its business cronies get the
message unless they enter into genuine tri-partite dialogue, the economic pressure will
systematically increase. This should be coordinated with other countries that are
prepared to apply economic pressure, such as the USA, Canada, and Australia. The
EU should use this economic pressure as leverage to ensure that the regime finally
engages with the UN in entering into genuine talks.

The European Union, one of the most powerful political and economic blocs in the
world, has so far failed to use its influence in an effective and productive way to help
promote democracy and human rights in Burma. The following are practical steps the
EU could take to change this.

1) The EU should introduce financial and banking sanctions against Burma,
targeting the regime and its business cronies.

2) The EU should take the lead in diplomatic efforts to secure a global arms
embargo against Burma.

3) Appointing an EU envoy to discuss the situation in Burma is a positive step.
However, the EU should step up high level Foreign Minister and head of state
level engagement with Asian governments, including China, India, Thailand
and other ASEAN members, to persuade them to increase pressure on Burma
to reform.

4) The EU, having accepted that banning investment is an effective tool to
pressure the regime, should make its ban effective by banning all new
investment in Burma.

5) The EU should reverse the decline in support for projects promoting human
rights and democracy in Burma, and instead significantly increase such
financial support.

6) The EU should immediately implement its ban on imports of metals, timber
and gems. The ban must apply to imports via third countries if it is to be
effective.

7) The EU should provide cross-border aid to Internally Displaced People who
cannot be reached by aid from inside the country.

8) Freeze the assets of the regime in Europe – at the moment the asset freeze only
applies to individuals on the visa ban list.

9) Bring the EU into line with general assembly resolutions by including support
for tri-partite dialogue in the common position.

10) The EU should also be more pro-active in supporting measures within the ILO
to refer Burma to the ICJ.

11) The EU should endorse efforts to persuade United Nations Security Council
members to pass a binding resolution on Burma, and the Commission and EU
members should actively lobby for such a resolution.

12) The EU should support efforts by the British government to secure an
economic development package that would be implemented once there is
genuine reform in Burma.

Burma Campaign UK – March 2008

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