Wednesday, July 11, 2012
The United States is poised to allow
U.S. companies to invest with Myanmar’s state oil and gas enterprise as
the Obama administration takes its biggest step yet to roll back
sanctions, marking a rare break from democracy leader Aung San Suu Kyi.
Suu Kyi, the Nobel Peace laureate who has long been the guiding force
on U.S. policies toward Myanmar, last month advised against investment
by foreign companies with the state Myanma Oil and Gas Enterprise, or
MOGE, because of concerns over its accountability and transparency.
Her comments reflected the growing disagreement between human rights
groups and business advocates over how the U.S. should proceed in easing
restrictions. While Suu Kyi has cautiously supported suspending
sanctions as a reward for Myanmar’s shift from five decades of
authoritarian rule, she and other democracy advocates are wary about
investment in MOGE, which had been an economic lifeline for the former
ruling junta. But doing business with MOGE is the only way to gain
access to Myanmar’s potentially lucrative energy resources and U.S.
companies fear they will lose out to foreign competitors if the
restrictions aren’t lifted.
Recognizing continuing concerns over corruption and rights abuses in
Myanmar, the administration is expected to require U.S. companies to
report on their investments in the country, which is also known as
Burma.
Secretary of State Hillary Rodham Clinton said in May that U.S.
companies would be allowed to invest in all sectors of Myanmar’s
economy, though not firms owned or operated by the military. She also
announced the suspension of a ban on the export of U.S. financial
services, seen as vital for starting to do business there.
The administration is expected to take the next step this week, when
it announces the issuance of a general license that finally opens the
door for American firms to operate in one of Asia’s last untapped
markets.
Clinton is currently traveling through Southeast Asia, a trip
centered on a meeting in Cambodia of the region’s foreign ministers but
also underscoring U.S. efforts to deepen trade and investment ties with a
region of rising prosperity and importance as an export market.
An announcement on easing sanctions would also coincide with the
arrival in Myanmar of Derek Mitchell, the first U.S. ambassador to the
country in 22 years, as Washington normalizes its diplomatic relations
with a former pariah state.
In a further sign of U.S. efforts to forge closer ties, Robert
Hormats, under secretary of state for economic growth, energy and the
environment, and Francisco Sanchez, under secretary of commerce for
international trade, will travel to Myanmar his weekend to promote
economic and business engagement.
Western governments are eager to reward reformist President Thein
Sein for reconciling with Suu Kyi, who has been elected to parliament
after spending 15 years under house arrest. The investment sanctions, in
place since 1997, have contributed to Myanmar missing out on the
region’s economic boom.
The U.S. Chamber of Commerce and some U.S. lawmakers have been
pressing the administration to expedite the general license, so American
companies can compete with those from Asia and Europe already free to
operate there.
A senior administration official said Monday that when Clinton is in
Siem Reap, Cambodia, accompanied by a U.S. business delegation, she will
be laying out plans of how the process of sanctions easing will
proceed. The official, who spoke on condition of anonymity to brief
reporters traveling with Clinton, said she will engage with U.S.
businesspeople ‘‘who are anxious and interested in the prospect of
participating in the economic opening.’’
Advocates argue that allowing investment would give a valuable boost
to Thein Sein in winning over military hardliners to his reform agenda.
U.S. companies also face more legal constraints on their foreign
operations than Asian and European firms and could have a positive
influence in opening up the nation’s crony economy.
But human rights groups and many Myanmar activists argue that the
administration is moving too fast to reward Myanmar and will lose
leverage in pressing for more reforms. The country is still plagued by
ethnic and communal violence. Despite the releases of hundreds of
political prisoners in the past year, hundreds more reportedly remain in
detention.
Aung Din, executive director of the U.S. Campaign for Burma, who
opposes allowing new U.S. investment and has been briefed by the
administration during its deliberations, said he expected it would allow
investment in all sectors, including with MOGE.
A likely caveat is that companies would be required to submit
official reports on their business dealings in Myanmar, particularly
those working with MOGE.
Lisa Misol, a senior researcher on business issues at the New
York-based group Human Rights Watch, said if the U.S. government allows
‘‘across-the-board investment’’ it could undercut reforms and
potentially fuel rights abuses and corruption.
‘‘Requiring disclosures by companies would be better than nothing,
but greater transparency isn’t enough and certainly doesn’t justify
opening the floodgates to business in a country with Burma’s track
record,’’ she said.
Source: AP
Source: AP
Posted in: companies,investment,markets,reports
