The EU's relations with Myanmar/Burma

Overview

Latest update: June 2003

Political Context

Burma/Myanmar, independent since 1948, has been ruled by military dictatorship since 1962. The current military regime, formerly known as SLORC (State Law and Order Restoration Council), seized power in a bloody coup in 1988. Under international pressure, general elections took place in 1990. The main opposition party, under the leadership of Nobel Peace Prize Laureate, Aung San Suu Kyi, the National League for Democracy (NLD), won 82% of the seats to the National Assembly. However, the results of the elections were never honoured by the military regime, which instead convened a "national convention" to draft a new constitution aimed at reserving for the military a permanent role in Burmese politics. The "national convention" has not met since 1996. The SLORC was dissolved in November 1997 and replaced by the State Peace and Development Council (SPDC), but the old leadership remained basically in place and the old repressive policies continued.

The population of Burma/Myanmar is made up of 60% Burmans and 40% from 130+ other ethnic groups and sub-groups. Of the main ethnic groups, 17 have signed somewhat shaky cease-fire agreements with the military regime, while two of them continue in armed insurgency. The ethnic groups are located in the border areas; (Burma/Myanmar is surrounded by Bangladesh, India, China, Laos and Thailand), surrounding the central Burman area like a great horseshoe. The people of Burma/Myanmar live under a highly repressive authoritarian military regime, which is widely condemned for its serious human rights abuses. Extra-judicial executions, massive forced relocations and civilian abuse, including compulsory civilian "porterage" for the army, are on the daily agenda. The economic situation continues to deteriorate, with GDP growth low and FDI close to collapse.

Thousands of Burmese citizens remain in exile in Bangladesh and Thailand, many of them new arrivals driven out by army attacks on ethnic minority areas. Rohingya refugees returning from Bangladesh are officially classified as "non-citizens" and subject to movement restrictions, which seriously hinders their reintegration.

The government restricts workers’ rights and uses forced labour on a widespread basis. Measures against Burma/Myanmar have been introduced under Article 33 of the ILO Constitution with effect from 30 November 2000 – the first time the Article has been applied to an ILO member. The high level ILO mission that visited Burma/Myanmar in September 2001 noted that very modest progress had been made. In March 2002, the Burmese Government and the ILO agreed on the appointment of an ILO liaison officer to help stop the use of forced labour and in May 2003 the government agreed to appoint a mediator for forced labour compensation.

The leader of the National League for Democracy Daw Aung San Suu Kyi was released from house arrest on May 6th 2002 after spending more than 18 months in detention. The move raised hopes that the ruling military junta, the State Peace and Development Council, was finally planning to embark on a process of political reform. Since then, however, leading SPDC officials have refused to engage in meaningful political dialogue with Aung San Suu Kyi and her party the National League for Democracy (NLD).

Since May 2002 the junta has permitted Aung San Suu Kyi to travel freely around the country and rebuild the NLD party network. She has been received by large crowds but also increasing harassment and intimidation. During her recent trips around the country, signs of a renewed campaign of intimidation and harassment of NLD supporters have been growing. At the end of May 2003 Aung San Suu Kyi was once again detained, following violent clashes during her trip to Kachin State in the north. Several NLD members have also been imprisoned and the government has ordered the closing of all NLD offices in the country. A nation-wide closure of universities has also been enforced.

The European Union has undertaken four official-level EU Troika Missions to Rangoon, the latest one from 8-10 September 2002, in order to explain the EU's position on Burma/Myanmar and to get first hand information on the political and human rights situation in the country. During the visit, the EU Troika encouraged a stepping up of the reconciliation process between the SPDC, Daw Aung San Suu Kyi and the ethnic minorities. The EU Troika also urged for the immediate release of all remaining political prisoners.

The EU’s interest in Burma/Myanmar is primarily informed by political and humanitarian concerns, as well as by concerns about the supply of illicit drugs. (Burma/Myanmar is, together with Afghanistan, one of the world’s largest supplier of illicit drugs).

Legal basis of EU relations

The EU Common Position on Burma/Myanmar was first adopted in October 1996. The Common Position, while confirming already existing sanctions - an arms embargo imposed in 1990, the suspension of defence co-operation since 1991 and the suspension of all bilateral aid other than strictly humanitarian aid - introduced a visa ban on the members of the military regime, the members of the government, senior military and security officers and members of their families, as well as the suspension of high-level governmental visits to Burma/Myanmar. Separately, GSP privileges were withdrawn from Burma/Myanmar because of forced labour. This also means that Burma/Myanmar is not eligible to benefit from the "Everything but Arms initiative" either. The Common position has been maintained since 1996 and was strengthened in October 1998, by widening the visa ban to include explicitly transit visas and to cover the tourism administration in Burma/Myanmar.

In April 2000, the Council decided on a further strengthening of the Common Position, by (a) adding a ban on the export from the EU of any equipment that might be used for internal repression or terrorism, (b) publishing the list of persons affected by the visa ban, and (c) imposing a freeze on the funds held abroad by the persons named in the list. At the same time, the Council reiterated its desire to establish a meaningful political dialogue with the SPDC and, in this context indicated that the ban on the issue of an EU entry visa for the Burmese Foreign Minister might be waived by agreement of the Member States where this would be in the interests of the EU. The Council also invited the Commission to examine the possibilities for increased humanitarian aid.

On 28 April 2003 a new Common Position was adopted. It is a consolidated version of the original 1996 Common Position, subsequent amendments and new measures decided on 28 April.

The EU could find no credible reasons for the Burmese government not to agree on a definite timetable for the return of democracy to the country and found that the positive steps taken so far were insufficient to address the economic, humanitarian and political problems in the country. Thus, existing EU sanctions was rolled over for another 12 months. The Common Position has also been strengthened through an extension of the scope of existing sanctions to target more persons linked to economic or political activities of the State Peace and Development Council for the visa ban and asset freeze, and through amending and strengthening the arms the embargo. However the EU decided to suspended the implementation of the new expanded sanctions until on or before 29 October 2003. If substantive progress has not been made on a number of "key issues" before that date (such as the start of a substantive dialogue with Aung San Suu Kyi and the NLD, the release of political prisoners reduction of violence and human rights violations - particularly in ethnic minority areas) the new sanctions were to be implemented.

However, after the events in the end of May and the detention of Aung San Suu Kyi, the EU decided on 16 June to impose the new expanded sanctions, decided on 28 April, without delay. The EU has also reiterated its call for the immediate release of Daw Aung San Suu Kyi

Trade/Economic Issues

Burma/Myanmar is a resource-rich, but poor country. State socialism and international isolation have led to economic stagnation, despite a short-lived effort at economic liberalisation in the late 1980s. Since the mid 1990s, merchandise exports have stagnated, while imports have continued to rise, resulting in a growing trade deficit and severe depletion of international reserves. The government has printed Kyat to buy dollars, implemented restrictive trade policies, borrowed foreign exchange on commercial terms from foreign investors, finally slowing down its external debt servicing to the point of default. The economic difficulties have been compounded by the effects of the Asian financial crisis. An estimated 67% of tax revenue, from a tax base of only 3.6% of GDP, is dedicated to military expenditure.

International isolation has removed Burma/Myanmar’s access to most foreign aid, including assistance from the International Financial Institutions. The US, Canada and the EU have removed GSP preferences on imports from Burma/Myanmar and provide no preferential financing for exports to or investment in the country. The US Government has prohibited new investment in the country by US firms and nationals. Total foreign debt was estimated by the EIU at the end of 2000 at US$ 6.2 billions (most recent figure). The Asian financial crisis triggered a dramatic reduction in foreign investment, (from US$ 2.8 billion in 1996/97 to US$ 29.5 million in 1998/99) and a reduction in export earnings. In 2002, EU exports to Burma/Myanmar totaled € 84 million, imports from Burma/Myanmar totaled € 438 million.

Community Aid

There is no bilateral co-operation programme with Burma/Myanmar. In accordance with the EU Common Position, Commission funding is currently limited to the repatriation and reintegration of Rohingya refugees from Bangladesh (through the UNHCR and ACF) and a number of small NGO projects working primarily in ethnic minority areas and focusing on water, sanitation, medical care, reproductive health and HIV/AIDS prevention and care. Substantial assistance is also provided for Burmese refugees in Thailand and Bangladesh. The Commission has recently taken the decision to contribute € 5 million to combat HIV/Aids in Burma/Myanmar. This assistance will be implemented by NGOs and International Organisations. Further humanitarian assistance could be foreseen, provided the appropriate conditions for implementation can be secured and that there will be no direct involvement of or transfer of funds to any SPDC or SPDC-related body.

Euro-Burma Office

Square Gutenberg 11/2

1000 Brussels

Belgium

tel: 32 2 280 0691/280 2452

fax: 32 2 280 0310

e-mail: burma@euro-burma.be