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The removal of economic sanctions against a country is not merely a legal event, it is also an important strategic event, intended to facilitate policy and to ensure that the country that was sanctioned avoids doing the behavior in the past that led to sanctions. In this paper, the first in a series pending from the Economic Statecraft, Sanctions and Energy Markets program, former Treasury Department (OFAC) official Peter Kucik examines the case of Myanmar, its reintegration into the global economy and global financial sector, and lessons learned. The executive summary is below and the full document is available here as a PDF.
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Difficulties in Easing Sanctions on Myanmar [PDF]
by Peter Kucik
April 2016
The global sanctions regime against Myanmar is one of the few adopted that can be described as an unambiguous victory for the use of the tool and international efforts to press the country to undertake political reform. However, creating permanence for the gains reached through these efforts requires the same level of dedication, foresight, and seriousness in the removal of sanctions as the imposition of the regime in the first place.
Complicating this effort is the vast and intricate nature of the US regime on Myanmar. This situation is made exponentially worse by virtue of the US attempt to retain its sanctions infrastructure and maintain leverage to encourage further reform and prevent backsliding, while also encouraging Myanmar economic development and US-derived investment. While there is obvious tension in these goals, they are not necessarily irreconcilable.
Following the National League for Democracy (NLD) victory in the November 8, 2015, elections and the formation of the next government, there will be expectations both within Myanmar and internationally that the United States can and will work to prevent unintended consequences from the remaining sanctions and restrictions and follow through with its commitment to the now long-anticipated entry of additional US businesses into the Myanmar market. Without proper attention and care, the United States risks undercutting both policy imperatives and being left with diminished sanctions leverage and less market access for US investors and companies.
Although there are initiatives that could be undertaken by banks and other businesses to address certain obstacles, the impetus principally lies with the US government, as it has actively encouraged greater US participation in the Myanmar economy. If the United States really means to encourage and support the entry of US businesses into the Myanmar economy, it must do more to demonstrate that. Toward this end, I make the following recommendations:
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