Philadelphia Inquirer 25may97

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The Philadelphia Inquirer
     
Sunday, May 25, 1997
     
                              Burma, not alone
        The U.S. has issued sanctions, but their impact is unclear.
     
``Who controls the past controls the future.'' 
George Orwell
     
                            By Sudarsan Raghavan
                            INQUIRER STAFF WRITER
     
It is not 1984, but in today's Burma, Big Brother is alive and well.
     
Wednesday, as President Clinton set in place an executive decree banning 
all new U.S. investment in the Southeast Asian nation, soldiers of the 
Orwellian-named State Law and Order Restoration Committee -- or SLORC, 
as the junta is called -- arrested scores of supporters of the National 
League for Democracy political party.
     
The party, led by Nobel Peace Prize winner Daw Aung San Suu Kyi, won a 
landslide victory in 1990 elections, but that did not stop SLORC from 
refusing to honor the results. Instead, the repression was stepped up.
     
``SLORC's generals see themselves as God's gift to Burma and [ believe ] 
that no one else has the cohesion, the intuition, to run the country,'' 
a
Rangoon-based diplomat recently said.
     
But last week's roundups were as much a sign of the junta's continuing 
disregard for human rights and democracy as they were of its desperate 
state and its need to show the world, particularly its Asian neighbors, 
that it was in control, analysts said.
     
As America and other Western nations slap sanctions on Burma, SLORC's 
generals are keen to join hands with such powerful Asian neighbors as 
Indonesia, Singapore and China -- nations that also have been criticized 
by the West for having poor human-rights records and a lack of 
democratic ideals.
     
And those relationships with rich or powerful neighbors raise the 
question of whether America's imposition of sanctions can have much of 
an impact on Burma. Many Asian nations already are investing heavily in 
the country.  Singapore and Thailand are the second- and third-largest 
investors, respectively, after France. And a key sign of acceptance and 
international legitimacy may be given in July when the Association of 
South East Asian Nations (ASEAN), a regional economic and political 
partnership, is expected to admit Burma -- which has been under military 
rule since 1962 -- as a full member. ``I don't think any of these 
actions will change things on the  ground,'' a U.S. official said, 
referring to the executive order, ``but we hope it will make some 
governments take some form of similar action. To the  extent we can do 
that, that's where we can make an impact.''
     
To see how much Burma's junta values its Asian neighbors, look no 
further than last week's expulsion of suspected heroin smuggler Li Yung 
Chung from Thailand to the United States.
     
He was indicted in absentia in New York in May 1996 for allegedly 
masterminding the biggest heroin shipment in U.S. history: 1,070 pounds 
-- with a street value of $122 million -- seized in Hayward, Calif., in 
1991.
     
In March, Chung jumped bail in Thailand and fled to Burma -- which U.S. 
drug officials estimate produces more than half the heroin that winds up 
on American streets.
     
Washington, over the years, has been unsuccessful in persuading SLORC to 
expel drug smugglers who Western diplomats say launder money by, among 
other means, paying a hefty 40 percent tax to the junta or plowing funds 
into Rangoon's five-star hotels.
     
But the fast-approaching July ASEAN meeting and a visit last weekend to 
Rangoon by Thai Prime Minister Chavalit Yongchaiyudh to discuss 
drug-fighting efforts, analysts said, persuaded SLORC to hand over Chung 
to Thai authorities.
     
``The Thai prime minister's visit solidifies relations with the 
regime,''
said Sarah Cook, a London-based Burma researcher for Human Rights 
Watch/Asia. ``The return of the smuggler, that came on the day Chavalit 
left.''
     
Last year, Burma, which calls itself Myanmar, was granted observer 
status by ASEAN, which is composed of Indonesia, Malaysia, Thailand, 
Singapore, the Philippines, Vietnam, and Brunei.
     
Virtually all of Burma's neighbors subscribe to the tenet of 
``constructive
engagement,'' which argues that a country's policies can best be 
influenced
through diplomatic and economic involvement, not through sanctions, 
which isolate.
     
They say the West, particularly the United States, meddles too much in 
the
affairs of Asian countries, and they argue that Western investment bans 
in
such nations as Vietnam and Cuba have had little effect while 
``engagement'' has worked in Eastern Europe.
     
But human-rights activists have questioned the impact of constructive 
engagement, a policy that has been in effect toward Burma for nine 
years.
     
``With an increase in migrant and refugee outflows, stepped-up arrests 
and continuing forced labor, ASEAN must either conclude that its policy 
of
constructive engagement is bankrupt or use its influence with Burma to 
halt the slide,'' said Sidney Jones, executive director of Human Rights 
Watch/Asia in a statement last year.
     
On the surface, Burma's economy appears to be paradise for Asia's 
capitalists. Shops are laden with Sony and Daewoo television sets, 
Toshiba
videocassette recorders, and other Asian consumer items. Yuppies in 
Japanese and South Korean cars cruise past newly built hotels.
     
SLORC's generals say they are following the Indonesian model, combining 
economic liberalization with a tight grip on politics, and are quick to 
point out that reforms installed in 1988 have led to an average annual 
growth of 6 percent. While independent researchers put it at a more 
modest 3 percent, some observers are still tempted to see Burma as a 
potential Asian tiger.
     
Underneath the skin, though, it is a different breed of animal. In such 
booming Asian nations as Indonesia and Singapore, there is political 
repression but there also are fewer state-owned institutions, a wider 
distribution of income, and massive levels of investment.
     
Burma's economy, on the other hand, is in shambles despite large 
investments by such U.S. oil firms as UNOCAL and by the likes of King of 
Prussia-based InterDigital Communications. InterDigital signed a $250 
million deal, to sell and manufacture wireless telephone systems, on May 
16, just days before Clinton signed his executive order.
     
Much of the foreign direct investment, Asian and Western, is in 
short-term deals and not long-term job-creating enterprises. The 1988 
reforms have, for the most part, run their course. The gap between poor 
and rich, rural and urban is widening. Inflation is as high as 40 
percent.
     
``Life has gotten better for some since 1988, but for most people, 
incomes
have remained the same, and prices are rising,'' said Aung Nyunt, a cook 
and former soldier who supports his family on $13 a month. ``We are 
suffering.''
     
That is precisely why some American executives who will be affected by 
Western bans on investment argue that sanctions will only further hurt 
Burma's impoverished masses -- but not its elite. They add that U.S. 
firms will lose any edge they have to Asian and other Western companies 
and that change in Burma can only be brought through interaction, not 
isolation.
     
Said an American businessman in Rangoon: ''If I were the U.S. 
government, I would have McDonald's on every corner in Rangoon. That's 
the way to bring democracy to Burma.''
     
But Suu Kyi believes that the economy is the Achilles' heel of the junta 
and
that sanctions, no matter how painful, will weaken the generals and 
their
cronies, who, she says, are the only ones profiting from existing 
foreign
investment in Burma.
     
The junta's Asian friends, she said in an interview earlier this year, 
can
never muster the billions needed to build up Burma's dilapidated 
infrastructure -- a must for future growth. What is needed is a World 
Bank loan, she said, but that is not likely to occur until SLORC 
improves its human-rights record.
     
This week, foreign ministers from ASEAN nations are to meet in Kuala 
Lumpur, Malaysia. Analysts say a decision to admit Burma could be 
reached as early as this meeting and announced in July, when ASEAN 
celebrates its 30th anniversary. But the members of ASEAN are facing 
pressure from various sides to delay admitting Burma.
     
``That's what we're hoping for,'' the U.S. government official said. 
``Now
is not the appropriate time.''
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                       Copyright Sunday, May 25, 1997