Sanctions Not to Blame for Poor Economy

Read full report here.

The National League for Democracy party released their official review of the
economic sanctions against Burma on Tuesday, February 8, 2011. Various parties have raised concerns that the sanctions are responsible for the economic hardship facing the people of Burma. The International Monetary Fund says ‘no’: “poor economic policies and performances, mismanagement and an unattractive investment climate [are] the main causes of the ills of the economy.”

The National League for Democracy believes that the sanctions were imposed in an effort to encourage democratic values and an improvement in human rights in Burma. These sanctions are the decision of the countries which impose them, and are not a result of the efforts of any political parties, organizations or individuals in Burma. There is no evidence of the sanctions having any “notable” effect on the economic conditions in Burma. Since the sanctions were implemented with the intent to improve the economic and human rights situation in Burma, the resolution of such issues will lead to an end to the sanctions, specifically the release of political prisoners. The National League for Democracy encourages Burma to move down the road towards democracy, economic prosperity, and the promotion of a civil society, and is willing to discuss the circumstances for modified sanctions with the countries imposing them, provided Burma makes steps for improve the quality of life within its borders.

Constraints on foreign trade have been cited as a source of the poor social conditions in Burma, but foreign trade has actually increased since the late 1990s. Natural gas is the country’s primary export, with profits increasing by 3x since 1998, however none of this money was distributed among the health and education sectors, and living standards remain low. Foreign investment has increased exponentially in the last few years, with more than 60% of the invested funds put towards oil and natural gas,  and the remainder split between hydroelectric power and mining. Human rights abuses are rampant in these sectors, while unstable exchange rates, corruption, and a lack of accountability are to blame for a lack of productive investments.

Garments, the third largest Burmese export industry, was hit hard by the implementation of sanctions in 2003, but the hit was borne by big businesses and the privileged classes and not the poorer factory workers. The industry has since recovered thanks to an explosion of demand from neighboring China.

In agriculture, which is the primary industry for 63% of the country’s population, the suffering is initiated by misguided government practices, such as lack of freedom in production and marketing and forced sales of land. The economic sanctions have little effect on the agricultural sector.

Sanctions are often blamed for the inability of Burma to develop a valid middle-class, but there is no market economy present to stimulate such development. By placing the blame squarely on sanctions, critics deliver “an absolution of governmental responsibility for ensuring that business contracts incorporate stipulations that protect the interests of the country and the people.”

Similarly, targeted financial sanctions have no effect on Burmese citizens because the average citizen does not have a bank account. The junta and their associates are the only ones with access to the financial system, and are therefore the only ones affected by these sorts of sanctions.

Read full report here.


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