Doing Business with Myanmar

The Daily Mirror on 29 August 2007 reports a high-level meeting at Ceylon Chamber of Commerce (CCC) between state and business leaders of Sri Lanka and a state delegation representing trade interests in Myanmar. The vice chairman of the CCC is reported to have addressed the visitors with the words, “This is an opportunity to extend our friendship for a fruitful partnership”. I wondered if those attending realized who they were befriending, and the possible consequences of this attempted friendship.

Myanmar is the new name for the country that has been better known as Burma. It is a country of about 47 million people who are predominantly Buddhist and, along with Sri Lanka, an important centre of Theravada Buddhism in the world.

Suppressed, brutalised, and plundered
But unlike Sri Lanka, Myanmar is also a country that is ruled by one of the longest running and most brutal military dictatorships in the world. In 1990, trying to head off local unrest, the Military agreed to hold elections. The Junta tried to rig the election process and whitewash themselves. To this end they fragmented the vote by creating hundreds of political parties. But Aung San Suu Kyi’s National League for Democracy (NLD) won a landslide victory, taking 82% of the seats. The people demanded overwhelmingly and desperately that the Junta should go home. Instead, the Military turned around and put the elected leader Suu Kyi under house arrest, and tightened their hold on power. Many of those who campaigned for her were put in prison, some have been tortured and others killed.

Aung San Suu Kyi

Seventeen years since elections, the elected leader, Aung San Suu Kyi, who has since been awarded the Nobel Peace Prize, is still under house arrest; millions of men, women and children are in forced labour; one and a half million people are internally displaced; over one thousand are held as political prisoners, many still being routinely tortured; the universities have been closed for most of the last decade to prevent protests; spending on health care is amongst the lowest in the world; 60% of the people are in poverty, even though the GDP per capita is about fifty percent greater than that of Sri Lanka; and the Junta along with their cronies has a stranglehold on wealth and power, feeding themselves through tourism, partnership with foreign businesses, and the sale of natural resources. It is to this ugly cabal of Junta and cronies that the Sri Lankan government and CCC are extending their “friendship and fruitful partnership”.

Consumers and human rights groups are watching
The Vice Chairman of the CCC who spoke those words, was until recently also the Managing Director and CEO of Ceylon Tobacco Company (CTC). He has good reason to know about the ugly reality of Myanmar. British American Tobacco (BAT), the parent company of CTC, was forced to pull out of Myanmar in 2003 after a sustained campaign by human rights groups and support for that campaign by the UK government.

“As in South Africa” writes Desmond Tutu, winner of the 1984 Nobel Peace Prize,

“the people and legitimate leaders of Burma have called for sanctions.”

“Suu Kyi and the people of Burma” he is quoted as saying,

“have not called for a military coalition to invade their country. They have simply asked for the maximum diplomatic and economic pressure against Burma’s brutal dictators.”

This call is being heard more and more all over the world. Dozens of companies have been pressured to pull out of Myanmar following consumer campaigns, including very large companies such as Pepsico, Heineken, Texaco, Triumph International and Premier Oil. All this means that in today’s heightened awareness of corporate social responsibility and consumer scrutiny, western industries find it increasingly embarrassing to have dealings with any entity that is doing business in Myanmar. The Sri Lankan business community would do well to take note.

Trading partners in the west are watching
The United States for all its ills and vices on the international stage has taken an admirable stand with regard to Myanmar. While the UK and EU have strong restrictions and discourage business with Myanmar, the US has gone further and placed formal economic sanctions on it. Understandably, the US Congress is somewhat peeved that other countries have not followed suite – such sanctions are a lot less effective when Myanmar can continue to buy and sell through third countries that trade with the US.

And indeed, Sri Lanka is one of those third countries. Last year, suddenly, Sri Lanka’s exports to Myanmar increased by 20 fold, though the total is still a pitiful US$ 2.3 million, and our imports from Myanmar doubled to US$ 5 million. Currently, more than 70% of Myanmar’s total export goes to the Asian region and round 90% of total imports is from this region. These statistics suggests that western governments led by the United States have mostly succeeded in isolating Myanmar from their markets but are being frustrated by opportunistic Asian countries that continue to coddle the Junta, and that Sri Lanka has been scurrying to join that opportunistic bandwagon.

Jeopardising the apparel sector in Sri Lanka
The apparel sector in Sri Lanka accounts for about 8% of GDP. The United States buys 45% of Sri Lanka’s apparel exports; that is about US$ 1,380 million worth of it. In June this year the apparel industry sent most of its big-hitters together with Professor G.L. Peiris, Minister of Export Development and International Trade, on a mission to the US. With the looming threat of Chinese competition, their goal was to explore avenues for preferential access to the US market. All this was reported in The Island and the Daily Mirror on 2 July 2007.

I’ve heard from American friends who attended the meetings in the United States that the Sri Lankans were truly impressive in their presentations before the American industry and government officials. Sri Lanka’s trademark concept was “Garments Without Guilt,” emphasising its commitment to “Social Responsibility” in the way that business was done. Indeed, it is on this platform that Sri Lanka will soon be asking the United States Congress to pass a bill approving preferential access.

Needless to say, this latest development — the CCC and the Sri Lankan government, led by the Prime-Minister, getting in to bed with Myanmar’s Junta — is unlikely to help Sri Lanka in the US Congress. Just one mention on the congressional floor of our “friendship and fruitful partnership” could well destroy the hard earned and much deserved chances of the Apparel sector. Even if we forget about ethics, we need to ask, are the tiny economic benefits of befriending a brutal military regime really worth all that?

We owe it to the people of Myanmar

But we must not forget about ethics.

As far back as 1999, Aung San Suu Kyi, the elected leader of Myanmar, smuggled out a video in which she spoke these words:

“Burma itself is like a huge prison with the military dictatorship holding the keys and locking us away from freedom. We would like to call on all of you to help us open the door of our prison … Economic sanctions are good and necessary for the fast democratisation of Burma. We would like the European Community, the United States and the rest of the world to be aware that sanctions do help the movement for democracy in Burma and …unilateral sanctions are better than no sanctions at all.”

The United States and European Union have proved her correct, while Asian Countries have mocked her by their actions.

It is not because our industries are likely to be quietly shunned by western companies and markets, not because we jeopardise the apparel sector’s opportunity for preferential access to the United States, but because of our shared cultural ties, because of our own sense of decency, and mostly because of our common humanity, that we must take the side of the suppressed and beleaguered people of Myanmar, and listen to their request.

The CCC and the Sri Lankan state should stand down from this Trojan horse of an “opportunity to extend our friendship for a fruitful partnership”.

Nishan de Mel
30 August 2007