Commentary: US sanctions on Myanmar will not reverse the coup
Sanctions have limited impact when Myanmar has support from some regional countries, key state-owned enterprises are left untouched and a looming cybersecurity law threatens to cut protesters from the outside world, says international security scholar Hannan Hussain.
COLLEGE PARK, Maryland: US President Joe Biden ordered a series of sanctions against Myanmar’s military leadership on Wednesday (Feb 10), including robust export controls, a freeze on cooperative US assets and a halt to billion-dollar government funds.
“I've approved a new executive order enabling us to immediately sanction the military leaders who directed the coup, their business interests as well as close family members,” announced Biden.
Though Myanmar’s military junta has withstood sanctions in the past, its current pursuit for regional legitimacy is dealt a challenge.
On the other hand, the sanctions do not target the most lucrative state-owned enterprises, and cannot address the threat of a looming cybersecurity law which can cut off Myanmar’s connection to the world, meaning their effects will be limited.
MYANMAR STILL HAS SUPPORT OF KEY REGIONAL POWERS
Japan, China and ASEAN are key players worth Washington’s engagement in shaping developments in Myanmar.
Tokyo is Washington’s leading ally in Asia, a major aid donor to Myanmar, with a history of sustaining communication lines with both its civil and military leaderships.
More than 400 Japanese firms have business interests in the country, with the number surging eightfold since 2011, according to the Japanese External Trade Organisation.
Tokyo has also escaped US pressure successfully in the past, deciding not to join international sanctions against Myanmar in previous years.
China is undoubtedly Myanmar’s biggest partner. Some of China’s most promising energy investments in Myanmar trace their origins to the military elite, and several decades of economic trade remain unchallenged by domestic upheaval.
ASEAN’s interests are held together by a similar thread. On the one hand, the bloc’s principle of noninterference permits the likes of Cambodia and Thailand to put their weight behind Myanmar’s military status-quo, without facing broad-based resistance within the alliance.
At the same time, the bloc’s commitment to “the rule of law” attaches an unspoken premium to the positions of Indonesia, Malaysia, Philippines, Singapore and Brunei. All five states have expressed concerns over the coup.
Yet ASEAN’s periodic activism has effected the biggest changes in Myanmar. Nowhere is this more evident than in 2006, when the United States and the European Union demanded Myanmar’s military regime to either move toward democracy or relinquish its rotating chairmanship of the bloc altogether.
ASEAN was quick to act on these demands. Its engagement of Myanmar was chief to its recent democratic transition.
But the bloc is likely to face its litmus test this March. US Secretary of State Antony Blinken is considering visiting the Asia Pacific next month to take stock of major regional developments, which could put pressure on regional countries to find a resolution to the situation in Myanmar.
Moreover, Blinken’s March timeline could also prove consistent with a subsequent round of anticipated US sanctions, which Treasury Secretary Janet Yellen announced the Biden administration is prepared to take, should there be “violence against peaceful protesters”.
TIGHTENING NOOSE WITH NEW CYBERSECURITY LAW
Even so, legions of Aung San Suu Kyi supporters managed to operate beyond government constraints, sustaining momentum across the country against the coup. All that could change with the passage of the military’s incoming cybersecurity law.
Authorities are considering punitive draft legislation that could extend sweeping powers over user data and social media access, enabling the military to order internet shutdowns and provide the government access to personal information for “security reasons”.
“Given the current complex political situation, a regime fast-tracking bill is in violation with the fundamentals of the Constitution and will not create any positive values for the society,” warned a collection of 120 technology companies in Myanmar.
Washington’s sanctions also falls flat when Biden’s executive order offers a free-speech warning against any “print, online, or broadcast media” crackdown, but is silent on the mechanics of implementation.
This is an important omission, because more protestors are now leveraging social media platforms, encrypted messengers, and multirange broadcast devices to sidestep government restrictions in Myanmar and sustain the flow of information.
With the new bill, the Hlaing leadership is on course to store away protestor data at undisclosed government locations for up to three years.
The military leadership has also proposed measures to compel telecom operators into handing over citizen information, on “sovereignty and territorial” grounds.
Taken together, Biden’s sanctions appear tall on military targets, but short on the junta’s push to shut off dissent and end international scrutiny on an illegal coup.
SANCTIONS DEIGN TO TARGET STATE-OWNED ENTERPRISES
Washington’s first-round of sanctions would ban Myanmar’s generals from accessing US$1 billion in US funds, freeze government assets and target three Myanmar companies dealing in precious gems funding the military directly.
But some of the military’s most successful investment enterprises remain insulated from the measures, allowing the generals to consolidate power at the cost of public suffering.
Myanmar Economic Holdings Limited and Myanmar Economic Corp in particular are sprawling military enterprises accounting for 134 jointly owned companies, with multibillion dollar operations in Myanmar’s strategic energy, infrastructure, mining, banking, tourism and agriculture sectors.
Uninitiated sanctions could signal increased risk tolerance for these military-controlled conglomerates.
Washington’s levers too may be limited, Myanmar’s citizens may have greater exposure to an estimated US$5.5 billion loss in foreign investment this year, if broader sanctions are enacted.
The economy has been left underdeveloped since the coup, where the country remains particularly dependent on oil, natural gas and agriculture.
Given that the military’s sprawling conglomerates are spared from sanctions, there is little chance that the regime would u-turn on the coup.
This should be a wake-up call for the US. The perceived wisdom at present is that sanctioning Myanmar’s leaders would weaken the military’s illegal hold on the country.
If that core assumption is to be taken at face value, the coup should have never succeeded in the first place.
Hannan Hussain is a foreign affairs commentator and recipient of the Fulbright Award at the University of Maryland.