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: PRESIDENTIAL DETERMINATION, REPOR



FILE ID:97120402.EEA

DATE:12/04/97

TITLE:04-12-97  TEXT: PRESIDENTIAL DETERMINATION, REPORT ON U.S. BURMA POLICY


TEXT:

(SLORC made no progress toward Burma democracy, life)  (3940)


Washington -- President Clinton transmitted to Congress December 2 a

required report on conditions in Burma and U.S. policy toward Burma

for the period from March 28 - September 28, 1997.


A U.S. statute (Public Law 104-208) requires that such reports be

given to Congress every six months.


"The people of Burma," the report says, "continue to live under a

highly authoritarian military regime that is widely condemned for its

serious human rights abuses. The military regime in Burma, the State

Law and Order Restoration Council (SLORC), has made no progress in the

past six months in moving toward greater democratization, nor has it

made any progress toward fundamental improvement in the quality of

life of the people of Burma.


"Observers agree that the Burmese economy appears to be further

weakening and that the government has a serious shortage of foreign

exchange reserves with which to pay for imports. Money from the

trafficking of illicit narcotics likely accounts for a substantial net

inflow of what foreign exchange is coming in. The SLORC continues to

dominate the political, economic and social life of the country in the

same arbitrary, heavy-handed way that it has since seizing power in

September 1988 after harshly suppressing massive pro-democracy

demonstrations."


The report states that U.S. policy toward Burma seeks progress in

three key areas: democracy, human rights, and counternarcotics.


"We have taken strong measures to pressure the SLORC to end its

repression and move towards democratic government. Since 1989, the

United States has been unable to certify that Burma has cooperated in

efforts against narcotics. The United States has suspended economic

aid, withdrawn GSP and OPIC, implemented an arms embargo, blocked

assistance from international financial institutions, downgraded our

representation from Ambassador to Charge, and imposed visa

restrictions on senior leaders and their families."


In addition, the President signed Executive Order 13047 which imposes

a ban on new investment by U.S. persons in Burma effective May 21,

1997.


The United States, the report says, is engaged in vigorous

multilateral diplomacy to encourage ASEAN, Japan, the EU, and other

nations to take similar actions to encourage progress by the SLORC.

"The EU imposed visa restrictions similar to ours and, earlier this

year, withdrew GSP. Canada also withdrew GSP in August, imposed a

requirement that all Canadian exports be issued an export permit prior

to shipment to Burma, and issued a government statement discouraging

further investment in Burma by Canadian firms. Japan's suspension of

much of its bilateral aid program remains in force," the report says.


"The net effect of these U.S. and international measures has been a

further decline of investor confidence in Burma and deeper stagnation

of the Burmese economy," according to the report. "While Burma's

economic crisis is largely a result of the SLORC's own heavy-handed

mismanagement, the SLORC is unlikely to find a way out of the crisis

unless political developments permit an easing of international

pressure."


Following are the official texts of the determination and the report:


(begin text)


THE WHITE HOUSE


Office of the Press Secretary


December 2, 1997


Presidential Determination


No. 98-6


MEMORANDUM FOR THE SECRETARY OF STATE


SUBJECT: Report to Congress Regarding Conditions in Burma and U.S.

Policy Toward Burma


Pursuant to the requirements set forth under the heading "Policy

Toward Burma" in section 570(d) of the FY 1997 Foreign Operations

Appropriations Act, as contained in the Omnibus Consolidated

Appropriations Act (Public Law 104-208), a report is required every 6

months following enactment concerning:


1) progress toward democratization in Burma;


2) progress on improving the quality of life of the Burmese people,

including progress on market reforms, living standards, labor

standards, use of forced labor in the tourism industry, and

environmental quality; and


3) progress made in developing a comprehensive, multilateral strategy

to bring democracy to and improve human rights practices and the

quality of life in Burma, including the development of a dialogue

between the State Law and Order Restoration Council (SLORC) and

democratic opposition groups in Burma.


You are hereby authorized and directed to transmit the attached report

fulfilling this requirement to the appropriate committees of the

Congress and to arrange for publication of this memorandum in the

Federal Register.


WILLIAM J. CLINTON


(end text)


(begin report text)




REPORT ON CONDITIONS IN BURMA

AND U.S. POLICY TOWARD BURMA

FOR THE PERIOD MARCH 28, 1997-SEPTEMBER 28, 1997


In accordance with Section 570(d) of the FY97 Foreign Operations

Appropriations Act, as contained in the Omnibus Consolidated

Appropriations Act (Public Law 104-208)


The people of Burma continue to live under a highly authoritarian

military regime that is widely condemned for its serious human rights

abuses. The military regime in Burma, the State Law and Order

Restoration Council (SLORC), has made no progress in the past six

months in moving toward greater democratization, nor has it made any

progress toward fundamental improvement in the quality of life of the

people of Burma.


Observers agree that the Burmese economy appears to be further

weakening and that the government has a serious shortage of foreign

exchange reserves with which to pay for imports. Money from the

trafficking of illicit narcotics likely accounts for a substantial net

inflow of what foreign exchange is coming in. The SLORC continues to

dominate the political, economic and social life of the country in the

same arbitrary, heavy-handed way that it has since seizing power in

September 1988 after harshly suppressing massive pro-democracy

demonstrations.


U.S. policy toward Burma seeks progress in three key areas: democracy,

human rights, and counternarcotics. We have taken strong measures to

pressure the SLORC to end its repression and move towards democratic

government. Since 1989, the United States has been unable to certify

that Burma has cooperated in efforts against narcotics. The United

States has suspended economic aid, withdrawn GSP and OPIC, implemented

an arms embargo, blocked assistance from international financial

institutions, downgraded our representation from Ambassador to Charge,

and imposed visa restrictions on senior leaders and their families.


In addition, the President signed Executive Order 13047 invoking the

authority of section 570(d) of the Foreign Operations, Export

Financing, and Related Programs Appropriations Act, 1997 and of

section 203 of the International Emergency Economic Powers Act to

impose a ban on new investment by U.S. persons in Burma effective May

21, 1997. The order prohibits U.S. persons from engaging in any of the

following activities if they are undertaken pursuant to an agreement,

or pursuant to the exercise of rights under such an agreement, that is

entered into with the Government of Burma or a nongovernmental entity

in Burma on or after May 21, 1997:


-- entering a new contract that includes the economic development of

resources located in Burma;


-- entering a new contract providing for the general supervision and

guarantee of another person's performance of a contract that includes

the economic development of resources located in Burma;


-- the purchase of a share of ownership, including an equity interest,

in the economic development of resources located in Burma; or


-- entering into a contract providing for the participation in

royalties, earnings, or profits in the economic development of

resources located in Burma, without regard to the form of the

participation.


Additionally, the executive order prohibits:


-- persons from facilitating transactions of foreign persons that

would violate any of the foregoing prohibitions if engaged in by a

U.S. person; and


-- any transaction by a U.S. person or within the United States that

evades or avoids, or attempts to violate, any of the prohibitions in

the order.


We are engaged in vigorous multilateral diplomacy to encourage ASEAN,

Japan, the EU, and other nations to take similar steps and/or other

actions to encourage progress by the SLORC in these areas of key

concern. The EU imposed visa restrictions similar to ours and, earlier

this year, withdrew GSP. Canada also withdrew GSP in August, imposed a

requirement that all Canadian exports be issued an export permit prior

to shipment to Burma, and issued a government statement discouraging

further investment in Burma by Canadian firms. Japan's suspension of

much of its bilateral aid program remains in force.


The net effect of these U.S. and international measures has been a

further decline of investor confidence in Burma and deeper stagnation

of the Burmese economy. While Burma's economic crisis is largely a

result of the SLORC's own heavy-handed mismanagement, the SLORC is

unlikely to find a way out of the crisis unless political developments

permit an easing of international pressure.


Measuring Progress Toward Democratization


In the past six months the SLORC has shown no sign of willingness to

cede its hold on absolute power. Since refusing to recognize the

results of the free and fair 1990 elections in which the National

League for Democracy (NLD) won a vast majority of both the popular

vote and the parliamentary seats, the generals have continued to

reline to negotiate with pro-democracy forces and ethnic groups for a

genuine political settlement to allow a return to the rule of law and

respect for basic human rights. Although SLORC Secretary-1 Lt. General

Khin Nyunt did relent in response to prompting by ASEAN nations and

Japan and agreed to meet with NLD Chairman Aung Shwe in July, the lack

of substance of the meeting made clear that the SLORC remains

unprepared to meet with Aung San Suu Kyi or to discuss meaningful

steps toward resolving the political crisis in Burma with the NLD.

This was reinforced with the subsequent sentencing of four NLD

members, all close associates of Aung San Suu Kyi, to lengthy prison

terms after closed trials, and the continued attacks on Aung San Suu

Kyi in the government-controlled press.


The SLORC claims that the military-dominated National Convention is an

appropriate forum for dialogue with the NLD and parties representing

the country's ethnic minorities. But the National Convention, a body

ostensibly tasked since 1993 with drafting a new constitution, is not

a democratic forum as currently structured. The Convention is

overwhelmingly made up of delegates hand-picked by the SLORC, which

has carefully stage-managed the proceedings and ignored even limited

opposition views. The SLORC appears determined to draft a constitution

that would ensure a dominant role for the military forces in the

country's future political structure. The NLD withdrew from the

National Convention in November 1995 because of the undemocratic

nature of the institution and was formally ejected by the SLORC in

December of that year. However, the Convention has not met since

mid-1996, and the SLORC's current plans for the body are unclear.


The worsening narcotics situation in Burma reflects the SLORC's

disregard for the rule of law. Burma is the world's largest source of

illicit opium, and output increased by an estimated 9 percent in 1996

to 2,560 metric tons. Nevertheless, Burmese law enforcement actions

against producers and traffickers remain limited. Leading trafficker

Khun Sa, who "surrendered" to Burmese forces in early 1996, has never

been brought to justice. Even as heroin production remains high,

Burmese traffickers are also diversifying into methamphetamines, which

are posing severe problems for neighboring states. As well,

traffickers are increasingly investing in legitimate sectors of the

economy, and there is reason to believe that drug profits are being

laundered through the Burmese economy at substantial levels. The SLORC

has taken limited actions to counter this dangerous trend.


Measuring Progress on Improving the Quality of Life


In the past six months the quality of life of the Burmese has

worsened. The SLORC's severe violations of human rights have

continued. There continue to be credible reports, particularly from

ethnic minority-dominated areas along the Thai border, that soldiers

have committed serious human rights abuses, including rape, forced

porterage, and extrajudicial killing. Disappearances continue, and

members of the security forces beat and otherwise abuse detainees.

Arbitrary arrests and detentions continue for expression of dissenting

political views. Several hundred, if not more, political prisoners

remain in detention, including 29 Members of Parliament elected in

1990. Prison conditions remain deplorable and prisoners are subject to

a lack of food and adequate medical care. As an example, U Tin Shwe, a

former NLD Central Executive Committee member, died in Insein prison

in June after prison authorities refused to allow him to see medical

specialists to obtain treatment for his heart condition.


The SLORC reinforces its rule via a pervasive security apparatus led

by military intelligence and sharply restricts basic rights to free

speech, press, assembly and association. Political party activity

remains severely restricted. The activities of the NLD and Aung San

Sun Kyi are monitored and circumscribed by the regime. Since late last

year Aung San Suu Kyi has been prevented from addressing party

supporters in front of her house, as the SLORC puts up blockades to

prevent gatherings there.


In response to street protests by large groups of students in November

and December 1996, the SLORC closed the nation's schools and

universities. While the SLORC finally reopened primary schools in

August of this year, universities remain closed to prevent another

outbreak of student protest.


Prior to the onset of the rainy season in June, the Burmese Army

continued its assault begun in February on the forces of the Karen

National Union near the Thai border. Up to 20,000 Karen were forced to

flee into Thailand, the vast majority of them civilians, including

women, children and the elderly. Thousands of civilians were forcibly

conscripted to serve as porters for the Burma Army in its offensive.

The Democratic Kayin Buddhist Association (DKBA), with the support of

the Burmese army, attacked refugee camps in Thailand, burning shelters

and destroying the meager possessions of hundreds of refugees as well.


Thousands of other citizens of Burma remain in exile because of fear

of persecution and poor economic conditions. About 21,000 Rohingya

Muslims from Arakan state remain in camps in Bangladesh. A few

thousand students and dissidents remain in exile in Thailand.

Approximately 119,000 individuals now reside in ethnic minority camps

along the Thai-Burma border, among them thousands of new arrivals

driven out by army attacks in the areas controlled by the Karen and

Karenni ethnic minorities.


Burma is a poor country, with an average per capita GDP of perhaps

$200 to $300. Even after adjusting for the relative purchasing power

of the Burmese currency, per capita GDP is perhaps $600 to $900.

Progress on market reforms has been mixed and uneven. Beginning in

1988 the Government partly opened the economy to permit expansion of

the private sector and to attract foreign investment. Though modest

economic improvement ensued, since 1993 the pace of economic reform

has slowed and major obstacles to further reform persist. These

include disproportionately large military spending, extensive overt

and covert state involvement in economic activity, excessive state

monopolization of leading exports, a bloated bureaucracy prone to

arbitrary and opaque governance, and poor human and physical

infrastructure. In addition, the SLORC does not have access to

external credit from the IMF, World Bank, and Asian Development Bank.

Money laundering in Burma is a growing problem, and the laundering of

drug profits is thought by some analysts to have a widespread impact

on the Burmese economy.


Since June, the Kyat has depreciated in value on the open market quite

rapidly, briefly rising to a level of almost 300 Kyats to the dollar

before the government stepped in and briefly detained foreign exchange

dealers. Currently, legal foreign exchange dealers are allowed to sell

Kyats at a rate of roughly 200 Kyats to the dollar, though the

official rate remains six to the dollar. In an effort to stem the loss

of scarce foreign exchange reserves, the government imposed strict

import and remittance controls on the private sector in July, allowing

companies to remit only $50,000 in profits overseas and permitting

importers to bring in only $50,000 worth of goods per month. Foreign

investors still operating in Burma note that the situation regarding

remittance controls is untenable. Should such controls continue, the

climate for foreign investment in Burma will be even more seriously

damaged than it already has been by the U.S. ban on new investment and

by consumer-led boycotts in the West. In June, the government raised

gasoline prices for most consumers from 25 Kyat to 180 Kyats per

gallon, causing a concomitant rise in the price of transportation for

most Burmese and further fueling the serious rise in inflation in the

country, which was estimated to be over 40 percent during the month of

August.


Despite rampant inflation, the government has thus far been able to

maintain a stable and low price for rice. However, severe monsoon

flooding throughout much of Burma in July and August, concentrated

particularly in rice-growing regions of central Burma and in the

Irrawaddy delta region, could severely impact the country's main

monsoon rice crop and lead to a serious rise in the price of rice.


The Government restricts worker rights and uses forced labor on a

widespread basis. The use of porters by the army -- with attendant

mistreatment, illness, and even death for those compelled to serve --

remains a common practice. Although the use of forced labor on some

infrastructure development projects appeared to be lessening as 1997

progressed, the military authorities nonetheless continue to force

ordinary citizens (including women and children) to "contribute" their

labor, often under harsh working conditions, on construction projects

in some parts of the country. Some of these projects -- such as the

moat of the Mandalay fort -- were undertaken to promote tourism to the

country. In the past year, the military has begun using soldiers

instead of civilians at certain infrastructure projects, following the

issuance of directives in 1995 to end the practice of forced civilian

labor. Child labor continues to be a serious problem.


As a largely underdeveloped country, Burma, with a rapid population

growth rate, faces increasing pressure on environmental quality.

Although the government has taken some steps to stem widespread

clear-cutting, Burma's large tracts of remaining tropical forest

remain under intense commercial exploitation. Some NGOs have charged

that Burma's teak forests in the Thai-Burma border area are being

rapidly destroyed by clear-cutting and deforestation. Because of the

severe restrictions on Embassy travel to outlying parts of Burma, it

is difficult to document the overall extent of the problem.


The poor quality of life is also reflected in rising drug abuse.

Burmese estimates put the addict population at approximately 60,000,

but UNDCP and NGOs working in the health sector estimate the actual

number is at least five times that figure. Intravenous use of heroin

is contributing to the rapid spread of HIV/AIDS. Drug treatment

services are not reaching most drug users because of a lack of

facilities and a lack of properly trained personnel. Addiction and the

spread of HIV/AIDS have become cross-border problems in China as well,

particularly in Yunnan province, on Burma's northern border.


Development of a Multilateral Strategy


The goals of U.S. policy toward Burma are progress toward democracy,

improved human rights, and more effective counternarcotics efforts.

Failing national reconciliation, Burma will not be able to address

systematically the many severe problems it faces, including narcotics

trafficking and abuse, a low level of education, and poor economic

performance.


In recent months we have forged a vigorous multilateral strategy to

seek improvement in our key areas of concern. We continue to consult

about Burma regularly and at senior levels with leaders of ASEAN

nations, Japan, Korea, the European Union, Australia, Canada, and

other countries having major trading and investment interests in

Burma. These efforts have helped build and maintain strong

international pressure on the SLORC. While acknowledging that it was

their decision to make, we urged ASEAN to postpone offering membership

in that organization to Burma this summer in light of the SLORC's

abysmal record on human rights and counternarcotics. Despite our

arguments that Burma under its current leadership has far to go to

emulate the kinds of constructive policies that ASEAN itself has

pursued for the past three decades, ASEAN leaders decided to pursue

their stated policy of constructive engagement with Burma by bringing

it into the organization on July 23. At the subsequent

post-ministerial conference in Kuala Lumpur, Secretary Albright made

very clear to ASEAN leaders her expectation that ASEAN will now seek

results from that policy by persuading the SLORC to begin a meaningful

political dialogue with Aung San Suu Kyi and the NLD and to take

effective steps against drug production and export.


The key to progress toward democracy and human rights is, first and

foremost, a direct dialogue about the political future of the country

among the SLORC, the NLD, and the ethnic minorities. In all our public

and private messages to the SLORC, leaders of third countries, and

other interested parties, we stress the importance of beginning such a

dialogue as the key to achieving significant progress in Burma. At the

same time, we urge them to press Burma for progress in the

counternarcotics area. We work closely with our friends and allies in

Asia and Europe to press the SLORC to begin dialogue. In response,

leaders from ASEAN nations, Japan, Australia, Canada, and the European

Union have urged the regime, both publicly and privately, to move to

dialogue with the democratic opposition and to curb drug production

and trafficking.


In order to urge the SLORC to make progress in our areas of concern,

we have taken a number of steps: suspending economic aid, withdrawing

GSP and OPIC, implementing an arms embargo, blocking assistance from

international financial institutions, downgrading our representation

from Ambassador to Charge, imposing visa restrictions on senior regime

leaders and their families, and implementing a ban on new investment

by U.S. persons. We likewise have encouraged ASEAN, Japan, the EU, and

other nations to take similar steps and other actions to encourage

progress by the SLORC in these areas of key concern. Many nations join

us in our arms embargo, including European countries, Canada,

Australia, Japan and Korea. The EU and Japan limit their assistance to

Burma to humanitarian aid and, for Japan, debt relief. Our efforts in

the international financial institutions continue to be successful in

blocking loans to the SLORC, which is probably the single most

important sanction we have against the regime. Since 1988 we have

taken an active role in pressing for strong human rights resolutions

on Burma at the United Nations General Assembly and the U.N. Human

Rights Commission, as well as having worked vigorously in the ILO to

condemn the lack of freedom of association for workers and the use of

forced labor by the SLORC.


Late last year, at our urging, the EU and associated European states

joined us in imposing a ban on visas for high-level SLORC officials

and their families. In addition, the European Union and Canada

withdrew GSP trade benefits from Burma's agricultural and industrial

products in March and August respectively, bringing their trade

policies in line with the U.S. ban on GSP.


ASEAN shares many of our goals with regard to Burma, but we disagree

on the means to achieve those goals. ASEAN believes that "constructive

engagement" of the SLORC is the most effective way to promote positive

change in Burma. We will continue to raise our strong concerns about

the situation in Burma with ASEAN and urge continued steps to

encourage progress by the SLORC.


(end report text)