Post-crackdown, some wonder: isolate or engage Burma?

HONG KONG Fri Oct 5, 2007 9:27am BST

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HONG KONG (Reuters) - Burma's use of force to quash peaceful protests and round up Buddhist monks has highlighted a perennial debate over how foreign governments and companies should approach a country that tramples human rights.

Is it best to try to isolate the regime, enforce economic sanctions and bar corporations from doing business there? Or should you encourage trade in the hope that it enriches the people while creating leverage, and leads to gradual change?

Aung San Suu Kyi, the Nobel Peace Prize winning lodestar of Burma's democracy movement, who is under house arrest in Yangon, has long called for a comprehensive international boycott, arguing that investment and tourist dollars help prop up the brutal military junta in charge.

Than Shwe, the junta's leading general, has reportedly said for the first time he would be willing to meet her on the precondition that she drop her support for sanctions.

Economic engagement may, indeed, prolong the junta's rule, but many still argue it is the best way to help the people of Myanmar and to create change.

"To my mind, the sanctions road has largely been exhausted," said Ian Holliday, a Myanmar specialist and dean of the faculty of social sciences at the University of Hong Kong.

"If you're looking for a long-run solution to the Burma problem, there has to be some corporate engagement. There are no successful stories in the world of sustained transition to democracy that have not had, also, underpinning that, a sustained capitalist class, business engagement and jobs for people."

LIMITED AND IMPERFECT

China, a major backer of the junta and a huge investor in the country, opposes economic pressure tactics and has been an obstacle in the U.N. Security Council to censure measures.

Burma's neighbours in the Association of Southeast Asian Nations (ASEAN), favour "constructive engagement".

"We know it has limitations. We know it's not perfect. It doesn't always deliver results," Dino Patti Djalal, Indonesia's presidential spokesman for foreign affairs, told CNN.

"But it's always a better option than the option of isolating Myanmar because once you isolate Myanmar (Burma) then you will undermine your ability to affect positively Myanmar's (Burma's) advance toward democracy."

The New York-based group Human Rights Watch on Monday adopted a cautious line, but stopped short of calling on companies in Myanmar (Burma) to withdraw. Businesses have a responsibility to put pressure on the junta but should consider leaving if human rights conditions do not improve, it said on Monday.

"The businesses that help finance the military shouldn't argue that the government's crackdown is not their problem," a statement quoted Arvind Ganesan, director of the Business and Human Rights programme at Human Rights Watch, as saying.

"Keeping quiet while monks and other peaceful protesters are murdered and jailed is not evidence of constructive engagement."

SANCTION REGIME

In the wake of the crackdown, the United States and European Union both reaffirmed their commitment to sanctions, while others argued that isolation would eventually pressure the totalitarian junta into relenting and allowing political and economic reforms -- even if it hurts the economy in the short term.

"To talk about the damage done by sanctions just misses the point. The big problem here is the state, rather than anything else ... What the economy needs is that regime to go," said Sean Turnell, an economist at Sydney's Macquarie University.

"I just see no evidence that the business activity that does take place in the country has any lessening effect in terms of the government in its reaction to things, its behaviour."

Pressure is building on the junta, with online campaigns, celebrity voices entering the mix, and activists planning a "Global Day of Action" on Saturday involving marches and rallies in 41 cities across Asia, Europe and North America.

But it's hard to prove if sanctions have accomplished anything in the case of Burma, or if business would make much difference, said one Hong Kong-based researcher of Burma who has lived there.

"So there's no point in spending time banging on those same drums," he said. "There are much more important things than need to be addressed now," he said, including getting the Red Cross access to detainees and beefing up the U.N. presence there.

In the short term at least, few businesses are likely to risk setting up new ventures in the impoverished Southeast Asian country.

"If I had money, I would not invest in Burma," said David Steinberg, Burma expert at Georgetown University. "There is no neutral, independent institution in the country to adjudicate business disputes. You have to be under the protection of someone in the military who could be out of power tomorrow."

(Additional reporting by Darren Schuettler in Bangkok)

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