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"Sanctioned, but not chastened" Eco (r)

Subject: "Sanctioned, but not chastened" Economist 4/26/97

"Sanctioned, but not chastened"
The Economist, 26 April 97, p34

It can hardly have come as a surprise. Long before President Clinton did so
on April 22nd, the generals who run Myanmar must have known that, sooner or
later, he was likely to make good on his threat to ban new American
investment from their country. Last September he signed legislation
requiring him to impose the ban if there was "large-scale repression", or
if Aung San Suu Kyi, Myanmar's opposition leader, was harmed or detained.
Since then, a car she was riding in has been attacked by thugs, and her
movements and visitors have been severely curtailed. Many members of her
party and other dissenters have been locked up. Meanwhile, heroin from
Myanmar has continued to find its way in large quantities to the United

So presumably the generals cared less about American investment than about
enforcing order at home and keeping the drug money coming. In announcing
the ban, Mr. Clinton's secretary of state, Madeleine Albright, described
the junta's policies - no doubt correctly - as "authoritarian" and
"ultimately doomed". But they also reflect a confidence that it can do
without America.

Conveniently for both the generals and the Americans, the ban is not likely
to affect existing investments. So, much the most important foreign
investment project in Myanmar - a gas pipeline costing $1.2 billion in
which an American company, Unocal, has a 28.3% share - is highly unlikely
to be scrapped. Unocal will not be able to commit itself to any further
investments. But both the company and the junta are confident that other
companies will be eager to take its place in exploiting Myanmar's
hydrocarbon riches.

Other American investors in Myanmar, including retailers, clothing
manufacturers and a giant soft-drinks firm, Pepsi, had already pulled out
under pressure from Americans urging consumer boycotts. Myanmar has also
incurred the loss of some tariff privileges from the European Union because
of its use of forced labour. All this is doubtless irksome. But it will not
be allowed to deflect the junta from its apparent determination to crush
all domestic opposition. And it will not have much impact unless Myanmar's
Asian neighbours turn against it.

They will not. China, which provides the army with some of its guns, will
remain a loyal friend. Japan and South Korea will, most probably, keep
their heads down. Above all, the members of the regional club, the
Association of South East Asian Nations (ASEAN), are unlikely to be
deterred from their policy of "constructive engagement". Already, if the
pipeline is discounted, their businesses are the biggest investors in
Myanmar. And their governments are still talking of admitting Myanmar as a
full member in July, when ASEAN celebrates its 30th anniversary. American
sanctions may actually harden the resolve of some ASEAN countries to admit
Myanmar. Malaysia, Indonesia and Vietnam resent and fear American interest
in their "internal affairs". They will not want the treatment of Myanmar to
set a precedent.