Conditions in Burma and U.S. Policy

[thuwai@xxxxxxxxxxx]

Subject: Conditions in Burma and U.S. Policy Toward Burma ( March 28, 1999-Sept:28, 1999)

Dear Natters,
               This is kind of late but we can review something for new year 
2000. Burma is reaching to the new millenium without any prospect for the 
future. What kind of achievement that Burmese can get in the New 
milllennium?  U.S policy toward Burma is here below. Happy new millennium to 
all of you.

Regards,
Ko Zaw Win
New York


Conditions in Burma and U.S. Policy Toward Burma
For the period March 28, 1999 - September 28, 1999


Plan for Implementation of Section 570 of Public Law 104-208
(Omnibus Appropriations Act, Fiscal Year 1997)
Submitted to the U.S. Congress, November 2, 1999
Released by the Bureau of East Asian and Pacific Affairs, November 3, 1999
U.S. Department of State




The people of Burma continue to live under a highly repressive, 
authoritarian military regime. The international community widely condemns 
that regime for its serious human rights abuses. The State Peace and 
Development Council (SPDC), Burma's ruling military junta since 1997, has 
made no significant changes in the governing policies of its predecessor, 
the State Law and Order Restoration Council (SLORC), which seized power in 
1988.

The regime 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. To the contrary, 
conditions have worsened with the regime stepping up repression of the 
National League for Democracy (NLD), Burma's largest opposition party, and 
attacking its leader Aung San Suu Kyi, in the state-controlled press.

SPDC economic mismanagement, combined with residual effects from the Asian 
financial crisis, has sent the Burmese economy into a downward spiral that 
the regime appears unable to halt. Economic fundamentals have become 
increasingly opaque as the government has ceased publishing data on the 
money supply and foreign exchange reserves. The Government of Burma reported 
to the International Monetary Fund (IMF) in June that it had $350 million in 
foreign exchange reserves as of April 1999. According to official figures, 
annual inflation was 49 percent in 1998/99, although the actual rate is 
likely higher. The Burmese kyat held steady due to administrative controls 
on currency markets. After authorities increased electric bills eight-fold 
for companies and individual consumers in March and April, power outages 
decreased, although power supplies remain unreliable. Gasoline and diesel 
fuel are rationed to three gallons per vehicle per day. Onerous trade 
controls have made it difficult for international business to turn a profit. 
The military junta continues to dominate the political, economic and social 
life of the country in the same oppressive, heavy-handed way that it has 
since seizing power in September 1988 after harshly suppressing massive 
pro-democracy demonstrations.

U.S. policy towards Burma seeks progress in three key areas: democracy, 
human rights, and counternarcotics. We have taken strong measures to 
pressure the SPDC to end its repression and move towards democratic 
government. The United States has suspended economic aid, withdrawn Burma 
from the general system of preferences (GSP) and Overseas Private Investment 
Corporation (OPIC) programs, implemented an arms embargo, blocked assistance 
from international financial institutions, downgraded our representation 
from Ambassador to Charge d'affaires, imposed visa restrictions on senior 
officials and their families, and instituted a ban on new investment by U.S. 
persons. Since 1989, the United States has been unable to certify that Burma 
has cooperated in efforts against narcotics. We remain engaged in 
multilateral diplomacy to encourage the Association of Southeast Asian 
Nations (ASEAN), Japan, Korea, China, the European Union (EU), and other 
nations to take similar steps and/or other actions to encourage progress by 
the SPDC in these areas of key concern. The EU has renewed the range of 
sanctions it implemented against Burma, including visa restrictions similar 
to ours and the withdrawal of generalized system of preferences (GSP) 
benefits. We have also continued to urge the Government of Japan to maintain 
the suspension of much of its bilateral aid program, including large-scale 
development assistance.

As a result of economic mismanagement by the regime, financial crisis in 
much of Southeast Asia, and economic sanctions, approvals of new foreign 
direct investment in Burma fell by 96 percent in 1998, and are unlikely to 
pick up in the near term. Many foreign investors have withdrawn from Burma 
due to the unfavorable political situation. The government has demonstrated 
little will to rein in inflation-causing deficit spending or to implement 
market-oriented reforms. In the past year the focus of economic policy has 
been to support self-reliance and development of agriculture. The SPDC is 
unlikely to develop the economy unless political developments in Burma 
permit an easing of restrictions on lending by international financial 
institutions.

Measuring Progress Toward Democratization:

During the current review period (March-September 1999), the ruling junta 
showed no sign of willingness to cede its hold on absolute power. The regime 
refuses 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 further refuse 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.

The government 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. Although the NLD initially participated, the 
Convention was overwhelmingly made up of delegates hand-picked by the junta, 
which carefully stage-managed the proceedings and ignored even limited 
opposition views. The regime appeared 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. The Convention has 
not met since mid-1996, and the SPDC's current plans for the body remain 
unclear.

In September 1998 the SPDC rounded up almost 1,000 opposition party members, 
including 200 members-elect of Parliament, and detained them without filing 
charges in so-called police "guesthouses." These detentions came in response 
to the NLD's announcement that it would seek to convene the Parliament, 
elected in 1990, but never allowed to convene. After keeping the NLD members 
and parliamentarians in arbitrary detention for more than six months, the 
SPDC began releasing them. A core group of about two dozen members of 
Parliament, including Speaker-designate Dr. Saw Mra Aung, remain in 
detention. The regime allows families to visit members of this group once a 
fortnight.

In September 1998 the NLD formed the "Committee Representing the People's 
Parliament" (CRPP) to fulfill the role of the Parliament elected in 1990, 
but never recognized by the regime. The CRPP began to approve and reject 
laws passed by the military government. The SPDC viewed the CRPP as an 
attempt to create a parallel government and launched a concerted effort to 
dismantle the NLD. As of September 1999, the SPDC had announced the closure 
of over 50 NLD party offices and the resignation of over 34,000 NLD members 
and orchestrated recall drives against 45 Members of Parliament-elect. These 
actions, combined with the detentions described above, have crippled the 
NLD's nationwide organizational capacity. Throughout late 1998 and early 
1999, the SPDC organized mass rallies denouncing Aung San Suu Kyi and the 
NLD in each State and Division. The state-controlled media accompanied these 
rallies with virulent personal attacks on Aung San Suu Kyi. In the past six 
months, the public rallies have ceased. However, the personal attacks on 
Aung San Suu Kyi have continued, as have the recall drives against 
parliamentarians who refuse to resign.

In January 1999, reportedly more than 200 Rangoon University students were 
each sentenced to 14 years in prison for staging nonviolent demonstrations 
against the regime the previous year. Numerous NLD leaders were also 
convicted and sentenced to long prison terms. On the positive side, in 
January and in February the government released two political prisoners 
before the end of their scheduled terms of incarceration. The releases came 
shortly after visiting U.S. Congressman Tony Hall raised these cases with 
senior Burmese government officials.

Burma is the world's leading producer of illicit opium, accounting for about 
90 percent of Southeast Asian production and about half of the world's 
supply. Methamphetamine production and distribution from Burma is also 
becoming an increasing problem. The Burmese government has expanded its 
counternarcotics efforts over the past few years. Methamphetamine seizures 
tripled from 1997 to 1998 and continue to increase in 1999. During the first 
quarter of this year, methamphetamine seizures totaled 1.8 million tablets. 
Significant declines in both poppy cultivation and opium production have 
been recorded for the second straight year. Through a combination of drought 
and eradication efforts, poppy cultivation estimates for 1999 show a 31 
percent decline over 1998. Reduced cultivation will result in a 38 percent 
decline in opium production. Analysts fear that cultivation may return to 
past levels or increase when the drought ends. Given the size of the 
narcotics problem in Burma, much more needs to be done. Part of the problem 
is that the Burmese government does not control many of the ethnic groups 
that traffic in drugs. Nevertheless, the government also needs to make a 
greater effort at interdiction. While there is no evidence that the 
government is involved on an institutional level in the drug trade, there 
are reports that corrupt army personnel in outlying areas may be aiding the 
traffickers. The government implicitly tolerates continued involvement in 
drug trafficking by ethnic insurgents who have signed cease-fire agreements. 
These cease-fires have the practical effect of condoning money laundering as 
the government also encourages former drug traffickers to invest their 
ill-gotten gains in the legitimate economy.

The United States recognizes that serious political and human rights 
concerns preclude our working directly with the regime in Burma. The United 
States also remains concerned about the potential damage that opium 
cultivation in Burma can inflict on the United States and the rest of the 
world. Against this backdrop, we have supported a small non-governmental 
program in Burma, the Old Soldiers Project of 101 Veterans, Inc., to replace 
opium poppy cultivation with substitute, economically-viable alternative 
crops. Despite impressive strides in a short period of time, the Burmese 
government suspended the Old Soldiers project in September 1998. After the 
regime suspended the program, the United States worked with the UN Drug 
Control Program (UNDCP) to keep the project operating under UNDCP auspices, 
but the government rejected the proposal. We continue to work with UNDCP and 
through other channels to try to convince the Burmese government to reverse 
its decision.

In further support of our counternarcotics efforts, we have encouraged the 
(United Nations) UN to develop programs to assist the Wa and Kachin ethnic 
minority areas as well as joint programs with Thailand and China. The bulk 
of the UN effort has focused on developing a program in a key opium 
cultivating area in the Wa region. This $15 million program, managed by the 
UNDCP, builds on a small pilot program that resulted in the elimination of 
opium cultivation in the project area. The program specifically provides 
development and demand reduction assistance directly to the inhabitants of 
three townships in the Wa region, without going through the government. On 
the development side, UNDCP is providing support to the farming community 
and extensive infrastructure and extension services support. Provisions for 
developing hospitals and clinics are also included, as are demand reduction 
programs. UNDCP has begun developing two pilot programs, one in the Wa 
region and one in the Kokang area, targeting poppy cultivation.

The United States and other donors worked with UNDCP over a long period to 
develop a program with reasonable benchmarks and effective oversight. We 
have also insisted that the UN continuously apprise the National League for 
Democracy and Aung San Suu Kyi of its program. She has not objected to the 
program, but wants to be sure that the regime derives no moral or material 
support from it. Since 1994, the United States Government has earmarked 
$6.05 million of our contribution to UNDCP for the Wa project. The funding 
goes to UNDCP and the project in the affected area, not to the Burmese 
government.

Measuring Progress on Improving the Quality of Life:

During the review period, the quality of life of the average Burmese citizen 
continued to worsen. The SPDC's severe violations of human rights continued. 
There continue to be credible reports, particularly from ethnic minority 
insurgent-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. Most adherents of all religions 
duly registered with the authorities generally enjoyed freedom to worship as 
they choose; however, the government imposed some restrictions on certain 
religious minorities. Arbitrary arrests and detentions of those who express 
dissenting political views continue. As of September 1999, hundreds, if not 
more, of political prisoners remained in detention, including more than two 
dozen members of Parliament elected in 1990. Prison conditions remained 
deplorable, and prisoners were subjected to a lack of food and adequate 
medical care. The International Committee of the Red Cross (ICRC) began 
making prison visits in May 1999. As of September, the ICRC reported it had 
seen over 18,000 prisoners, including 800 political detainees. ICRC 
officials reported they were allowed to interview prisoners privately and to 
conduct complete inspections of the facilities they visited.

The SPDC reinforces its rule via a pervasive security apparatus controlled 
by military intelligence which sharply restricts basic, 
internationally-recognized human rights to free speech, press, assembly, and 
association. Political party activity remains severely restricted. The 
activities of the NLD and Aung San Suu Kyi are monitored and circumscribed 
by the regime. Since late 1996, the SPDC has put up blockades in front of 
Aung San Suu Kyi's house to block gatherings in the street and prevent her 
from addressing party supporters. The regime has allowed the NLD to hold 
several gatherings inside Aung San Suu Kyi's compound, usually on national 
holidays, but often restricts the participation of observers and 
journalists. The regime allowed the NLD to hold party congresses within the 
compound in May and September 1997. Since September 1998, the NLD has ceased 
holding large gatherings at the compound, since many key NLD members remain 
in detention. The SPDC has allowed the NLD to hold events at party 
headquarters, but the regime continues to resort to tactics designed to 
intimidate those attending the events as they did, for example, on July 17 
when they harassed or blocked party members from attending an event 
commemorating Martyrs Day.

In response to street protests by large groups of students in November and 
December 1996, the SLORC closed the nation's schools and universities. The 
SPDC finally reopened primary and secondary schools in August 1997 and some 
lower technical institutes in March 1998. Some universities were briefly 
reopened in July 1998 to allow previously enrolled students to take final 
exams and graduate. Medical schools were reopened in 1998 and remain open as 
of March 1999. Over the past eleven years of SLORC/SPDC rule, universities 
have been open for undergraduate students for a total period of 
two-and-a-half years. More than 300,000 students are waiting for the 
universities to reopen in order to continue their studies.

Thousands of citizens of Burma remain in exile because of fear of 
persecution and poor economic conditions, placing a major burden upon 
neighboring countries. 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. According to reliable reports, there may be more 
than one million Burmese internally displaced by such army attacks.

Burma is a poor country, with an average per capita GDP of approximately USD 
$406 at a trade-weighted exchange rate, perhaps double that in terms of 
purchasing power parity. 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, rampant inflation has eroded real 
economic gains for the vast majority of the population. There is reason to 
believe that money laundering is a significant factor in the overall economy 
given the fact that the government encourages former traffickers to invest 
their funds in Burma. The pace of economic reform has slowed since 1993, 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 
education and physical infrastructure. In addition, due to international 
opposition and to the SPDC's unwillingness to cooperate fully with the 
international financial institutions, access to external credit from the 
IMF, World Bank, and Asian Development Bank continues to be blocked. In 
September 1998 the World Bank announced that Burma had defaulted on its loan 
repayments.

After rapid market depreciation in 1997 of the Burmese kyat, from ks. 
150/dollar to ks. 370/dollar, the local currency has stabilized at around 
ks. 350/dollar. Rather than reflecting an actual strengthening of the 
currency, local analysts believe the steady position of the kyat rate is due 
to narrow usage of foreign exchange and administrative controls imposed on 
the foreign currency markets. The official exchange rate of ks. 6/dollar is 
still used by the state sector to its advantage. In an effort to shore up 
scarce foreign exchange reserves, the government imposed strict import and 
remittance controls on the private sector in 1997 permitting companies to 
remit only $50,000 in profits. In 1998, the government further increased 
restrictions by limiting foreign exchange transactions to two state banks 
and by requiring that the content of imported goods be 80 percent 
"essential" items. Imports of most consumer foodstuffs were banned. These 
restrictions remain in place. Many foreign traders and investors still 
operating in Burma note that the sum total of these controls is untenable 
and business will decline inevitably as a result.

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. The 
use of forced labor on some infrastructure development projects appeared to 
be lessening following the issuance of directives in 1995 to end the 
practice of forced civilian labor. 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 many parts of the country. Some of these projects, 
such as the moat of the Mandalay palace, were undertaken to promote tourism 
to the country. In the past few years, the military has begun using soldiers 
instead of civilians on certain infrastructure projects. 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 non-governmental organizations (NGOs) have charged that 
Burma's teak forests in the Thai-Burma border area are being rapidly 
destroyed by clear-cutting and deforestation, including by ethnic insurgent 
groups in league with foreigners. 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. While official statistics released in 1997 show 
over 10,000 HIV-infected people, and about 2,000 AIDS patients, 
international organizations estimate that at least one million Burmese may 
be HIV-infected. 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 of 
concern to 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. Absent 
national reconciliation, Burma will not be able to adequately address the 
many severe problems it faces, including narcotics trafficking and abuse, 
low levels of education and poor economic performance.

The United States actively works to promote international pressure on the 
SPDC for a meaningful dialogue on a democratic transition and an improved 
human rights climate. We are pursuing a 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 the ASEAN nations, Japan, 
Korea, the European Union, Australia, New Zealand, Canada, and other 
countries having major trading and investment interests in Burma. At the 
same time, we urge them to press Burma for progress in the counternarcotics 
area, in particular to curb drug production and trafficking. These efforts 
have helped build and maintain strong international pressure on the military 
regime.

We support the UN's "good offices" approach to encouraging dialogue between 
the regime and the democratic opposition as a means of achieving a peaceful 
transition to civilian rule. We welcome the continued engagement of the UN 
Secretary General and his senior representatives in this effort. UN Special 
Envoy for Burma Alvaro de Soto can play a valuable role by encouraging the 
SPDC to initiate a genuine dialogue with the democratic opposition, 
including Aung San Suu Kyi and the NLD.

The key to progress toward democracy and human rights is, first and 
foremost, direct negotiations about the political future of the country 
among the SPDC, the NLD, and the ethnic minorities. In all our public and 
private messages to the SPDC, leaders of third countries, and other 
interested parties, we stress the importance of beginning such talks 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 countries in Asia and Europe to press the SPDC to begin talks. 
In response, leaders from the 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 SPDC 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 d'affaires, 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 SPDC in these 
areas of key concern. Many nations join us in our arms embargo, including 
European countries, Canada, Australia, Japan and Korea. The EU limits its 
assistance to Burma to humanitarian aid. Our efforts in the international 
financial institutions continue to be successful in blocking loans to the 
regime, which is probably the single most effective sanction 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 
UN Human Rights Commission, as well as having worked vigorously in the 
International Labor Organization (ILO) to condemn the lack of freedom of 
association for workers and the use of forced labor by the SPDC. In June, 
with our support, the ILO took the unprecedented step of banning Burma from 
attending ILO meetings and receiving technical assistance due to its forced 
labor practices.

In 1996, at our urging, the EU and associated European states joined us in 
imposing a ban on visas for high-level SPDC and military 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 1997, respectively, bringing their trade policies more in line with 
the U.S. withholding of GSP. In October 1998, the EU broadened its visa ban 
to include high-level tourism officials and urged EU citizens to defer 
vacation travel to Burma.

ASEAN shares many of our goals with regard to Burma, but we disagree on the 
means to achieve those goals. Many members of ASEAN believe that 
"constructive engagement" of the SPDC 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 by ASEAN 
leaders to encourage progress by the SPDC. Secretary Albright has used and 
will continue to use multilateral meetings, including the ASEAN Regional 
Forum and Post-Ministerial Conference, to directly press the Burmese for 
positive change in the presence of fellow ASEAN members.

[end of document]








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