Abstract
On August 28, the United States imposed crippling economic sanctions against Myanmar (Burma), a country whose human rights record makes Iraq under Saddam seem like a model welfare state. The move, intended to pressure the military junta to release pro-democracy leader Aung San Suu Kyi, will be a serious blow to hundreds of thousands of factory workers. Although they work in notorious sweatshops, their jobs offer them a better life than a frequent alternative–forced labor.
Many experts say that the sanctions are unlikely to trigger a regime change in Yangôn (Rangoon), Myanmar's capital, or usher in democracy. They are more likely to drive an estimated half million workers out of their jobs. Perhaps with a sense of what was in store, a spokesperson for the ruling State Peace and Development Council (SPDC), the fig leaf by which the military junta likes to be known, lost no time in deeming the sanctions “weapons of mass destruction.”
Myanmar watchers say the sanctions will have little effect on the junta, which has only an army of some 350,000 to look after, and forces much of the population to provide support services to that army by serving as recruits, porters, forced labor, or sex slaves. Reports from Myanmar tell of entire villages emptied, their populations forced at gunpoint to work as porters for the army; of schoolboys kidnapped from the streets to be child soldiers; and of young girls “gifted” to officers.
Given these circumstances, a job in a Myanmar sweatshop may actually insulate a worker from worse exploitation on the outside. It can also mean dealing not with soldiers, but with civilian managers who are usually several notches less brutal than the thugs in uniform.
The immediate impact of the sanctions will be felt in Myanmar's infamous garment and shoe factories, which churn out apparel and fashion accessories. Eighty percent of these goods, worth about $400 million, are exported to the United States. This industry, with appalling working conditions and an average wage of 15 cents a day, employs an estimated 400,000 people, mostly women. With U.S. sanctions putting an immediate ban on imports, more than 75 percent of an estimated 200 factories are expected to close.
Bad as they may be, the garment factories have given many Myan-marese women hope for a dignified existence. With the factories shut, many are being exposed again to the kind of lives from which they tried to escape.
Many people familiar with Myanmar have called for selective sanctions–banning the importation of goods or services produced by forced labor. Selective sanctions are more difficult to monitor and implement, but they do not punish an entire population for the government's wrongdoing. In the case of Myanmar, human rights groups say that the gold mines, timber industry, and gas pipeline projects all use forced labor. Because local contractors affiliated with the army provide the workers, foreign companies are able to deny complicity in their labor practices.
In the 1990s, U.S. energy giant Unocal was accused of using forced labor in its pipeline project in Myanmar. The company argued that the laborers employed on the pipeline were doing “compulsory state service” similar to convict labor permitted in the state of Florida. The case against Unocal was dropped because the prosecution could not prove that Unocal was directly involved in the practice.
Myanmar's low wages are just too tempting for many multinational corporations to ignore. Unocal, British American Tobacco (BAT), and Canadian company Ivanhoe Mines, to name a few, make huge profits using workers in Myanmar.
In almost all cases, the partner in Yangôn is either the Union of Myanmar Economic Holdings (UMEH) or the Myanmar Economic Corporation (MEC), both of which are directly controlled by the military junta. These two conglomerates have come to symbolize the army's stranglehold over business and industry.
According to its leaked 1995-1996 annual report (the company's reports are not made public), UMEH was formed in 1990 as “a special public company, with shareholders limited to the Directorate of Defense Procurement, Ministry of Defense, Defense Regimental Institutes, and other bodies of the Defense Services and War Veterans.” UMEH shares offices with the Directorate of Procurement of the Ministry of Defense. The report lists among UMEH's aims “to support military personnel and their families” and “to try to become the main logistics and support organization for the military by gradually establishing industries.” Some of the industries in which UMEH has partnered with transnational corporations are banking, tourism, import and export of foodstuffs, gem and jade mining, construction materials, leasing of fishing boats, real estate, and general retail.
The other company, MEC, is believed to be majority owned by the SPDC, the ruling council. Among its shareholders are regional army commanders–the long arm of the junta, whose job it is to keep various opposition groups in check in the provinces.
According to Philip S. Robertson, a representative of the Solidarity Center, a nongovernmental organization, the government “encourages” foreign companies to partner with UMEH or MEC, and both participate in joint ventures in garment factories, cigarettes, alcohol, electronics, and car and motorcycle assembly. By controlling these two companies as well as the enterprises that are operated directly by the Ministry of Industry, the military has extended its reach into virtually all aspects of the economy.
This stranglehold on the economy is intended to enable the junta to outflank any sort of pressure to share political power–and perhaps to hold on to economic power even if political power is someday wrested away by force.
Ironically, the Bush administration's sanctions don't apply to the multinational corporations that continue doing business with the junta and, in some cases, are expanding their operations. Ivanhoe, the mining company, has literally found a gold mine. Cheap, probably forced labor is said to have made its Myanmar gold ore extraction operations about 20 percent cheaper than anywhere else.
The Canadian Foreign Minister Bill Graham is quoted in the Toronto Globe and Mail as saying, “I'll ask them [Ivanhoe Mines] to use whatever leverage they have … to let the government know that Ms. Suu Kyi should be released.” Graham said Ivanhoe had a corporate responsibility to speak to authorities and press for the pro-democracy leader's release. Ivanhoe's founder, Robert Friedland, is said to be on good terms with a few of the generals. The company is reported to be opening a second mine in Moditaung, near Mandalay, Myanmar's second largest city.
Similarly, British American Tobacco's Myanmar operations are adding millions to its bottom line. Despite appeals by the Blair government to quit the country, company chairman Martin Broughton is reported to be increasing British American's investment there. A company spokesperson was quoted as saying, “What we've always said is that we're a business. We're not the government or an international statesman.”
Some firms, like the Dutch oil-drilling equipment supplier IHC Caland, say they are locked into contracts that run for the next five to 10 years. And, they say, they could lose their investment, or worse still, face international arbitration and damage claims by their Myanmar partners if they choose to leave the country.
If the multinationals cannot export to the United States, they will simply sell elsewhere, or import Myanmar-manufactured goods using third-party transfers. Goods produced in one country can be exported to an intermediary country in semifinished form, where they can be finished and tagged to the importer's specifications.
China, the junta's closest political ally, main weapons supplier, and a major trading partner, has completely ignored the continued detention of Suu Kyi. For Beijing it is business as usual.
U.S. sanctions against Burma are forcing garment factories to close.
Myanmar's head of state, Gen. Than Shwe, called China a “fraternal friend” after it agreed to a 2002 request for a $200 million loan package, plus new investments in junta-owned businesses. China also wrote off or rescheduled earlier debts. Nui Som, a Thailand-based Myanmar watcher, says, “China is to the Myanmar junta what Pakistan was to the Taliban before September 11–a benefactor. … Most of the heavy infrastructure projects are either Beijing built or funded.”
It is widely believed that China's “aid-and-trade” policy with Myanmar largely fills the void created by the state's diplomatic isolation from Western countries. Many observers feel that the latest round of U.S. sanctions will only increase Yangôn's dependence on Beijing. As a commentary in Irrawaddy magazine concluded on March 9, “It would not be too much of a contradiction to say that Myanmar is China's protégé in every sense of the term. Myanmar has consistently ignored world opinion to free pro-democracy leader Aung San Suu Kyi or to follow international guidelines on human rights–it would not have done so without the benevolent hand of some big world power behind it.”
Russia, too, is courting Myanmar, though purely for trade. Russia is believed to have sold MiG fighter jets to Yangôn and is supposedly helping the junta set up a 10-megawatt nuclear power reactor. The Russians consider Myanmar a promising prospect for future arms sales. The country's inventory of Chinese military hardware has its ancestry in Russian weapons systems, and Russia is pursuing an aggressive policy of direct sales to clients.
As long as China treats Myanmar as a kid brother worthy of protection and help, any sanctions against the brutal regime will have limited impact. A report in a pro-government newspaper, the Myanmar Times, spoke of the junta as “realigning” its “export and foreign currency management,” which basically means routing it through China to minimize the impact of sanctions.
The army is reported to pick young children up off the streets, force parents to surrender one child in each home for military service, and routinely visit schools to identify the “right” soldier material.
According to an investigation by Human Rights Watch, one-fifth of Myanmar's 350,000 soldiers are below the age of 16. That makes Myanmar the worst violator of international laws against using children in armed conflicts, Human Rights Watch contends. Many of the child soldiers now in the custody of rebel troops like the Karen National Liberation Army, which operates in the northeastern part of the country, have given graphic accounts of how they were snatched up by the army and trained as soldiers.
The Burmese government denies the charges, according to the February 10 Washington Post. “I am totally flabbergasted at the assertions in the Human Rights Watch report,” Col. Hla Min, deputy head of the Defense Ministry's international affairs department, told the Post. “Today, after 98 percent of all the insurgents have made peace with the government, there is not much need for recruitment as accused by certain quarters,” he added.
But the Post also quoted Naing Win, a 17-year-old soldier who said he was picked up at a train station near Mandalay when he was 15. Authorities found he had no identification card and gave him a choice: Join the army or go to prison. He was forced into a truck with 40 other people, 16 of whom were boys. They were taken to an army base, then to a holding camp for recruits. In the camp, if a boy refused to eat his food, was late, or missed a task, he could be beaten or killed. Naing Win deserted after witnessing his battalion commander and other soldiers rape and murder a young girl, a member of the Karen tribe, which opposes the junta.