Multinationals and human rights
WAITING FOR DEMOCRACY
Multinationals and human rights
The Burmese economy needs investment to modernise
The Burmese government has faced an international campaign by human rights groups to block foreign investment. The campaign, which is supported by opposition leader Aung San Suu Kyi, has had some noticeable successes, particularly with consumer products companies.
But major infrastructure projects have carried on, and the government argues that the boycott just hurts the Burmese people. Opponents of the government say that given the lack of democracy, and the use of forced labour, economic pressure is the best way to force the regime to change.
Consumer boycotts
The campaign had its first big success in 1996 when the Danish brewer Carlsberg withdrew its plans for a $30m bottling plant. US companies have been particularly sensitive to consumer pressure.
Pepsi was forced to withdraw in 1997 after a well co-ordinated consumer boycott organised in the US by church and student groups, which involved picketing the company's Taco Bell and Kentucky Fried Chicken restaurants. Other consumer brands which were also affected by the boycott, including Levi Strauss jeans, Liz Claibourne, Macy's, and Mobil Oil, have ceased production or sales.
Major Western investments
But other investors - mainly those in capital projects - have not been deterred. The largest foreign project is the $1.2bn development of a massive offshore gas field - a joint development of the French oil company Total and the US energy company Unocal. The Yadana field is located near the Andaman islands 70km off the coast. The field will send the gas along a 649 km pipeline to Thailand to generate electricity for the Bangkok area.
Another nearby gas field, Yetagun, being developed by Texaco, was sold to the UK's Premier Oil last year. Other major investments include a $90m copper mine being developed by Indochina Goldfields, a Canadian mining company which specialises in the emerging markets.
Debate in US over investment ban
In May l997 the Clinton administration banned new investment in Burma. The US government has also stopped its own foreign aid and blocked economic assistance to Burma through international organisations. It has also been urging other governments to take the same course of action. The ASEAN countries, which have admitted Burma to membership, argue that "constructive engagement" - including economic investment - is the best way to move Burma towards democracy.
Asian companies have partially replaced the foregone US investment, with Singapore and Thailand among the major new investors, especially in the manufacturing and mining sectors, attracted by low wages and abundant reserves. Europe has taken a middle position. The EU has taken away some of Burma's trade privileges, but it has proved reluctant to ban investment entirely, even with Britain urging a more "ethical foreign policy."
Part of the reason is a series of long-standing disputes with the US over investment bans in other countries. The US has sought to block European firms from investing in Cuba, under the Helms-Burton Act, and in Libya and Iran. The EU has taken the US to the World Trade Organisation over the issue, arguing that the US has no powers to impose sanctions on non-US companies, and the restrictions have yet to be imposed.
Economic collapse imminent?
The US government argues that Burma is close to economic collapse partly because of sanctions. It points to falling foreign exchange reserves, a declining exchange rate (350 kyats to the dollar on the informal market, as opposed to the official rate of six), and strict limits on the export of capital abroad. The Burmese government says the economy is healthy and more investment is poised to flood into the economy. The reality is that the rate of foreign investment has slowed down, and the poor state of Burma's infrastructure and the Asian crisis have added to its difficulties. But as a very poor country, still largely agrarian, its very backwardness makes it less vulnerable to economic pressure.
WAITING FOR DEMOCRACY
The frustration which erupted on the streets of Rangoon in August 1988 had been a long time building. The people of Burma had lived for more than two decades in a closed and authoritarian society, while at the same time enduring the debilitating effects of a steadily deteriorating economy.
When they found their collective voice in the short-lived period which has been dubbed the Rangoon Spring, they had plenty to protest about. As well as the restoration of basic human rights, they called for democracy, something their country had only brief experience of in the years after independence.
General Aung San
Burma, a British colony since the 19th century, gained its independence in 1948.
The resistance movement which
fought against Japanese rule during
the Second World War emerged as
the main political force after
Japan's defeat.
It was led by General Aung San, the
father of Aung San Suu Kyi, and a
revered national figure. He was
assassinated in 1947.Aung San's successor, U Nu, became Burma's first prime minister. For the first decade of independence there was a parliamentary democracy, set against a backdrop of revolts by communists and other insurgent groups.
Ne Win's 'Burmese Way to Socialism'
General Ne Win brought this period
to an abrupt end when he took
power in a military coup in 1962.
He set about turning the country
into a centralised, one-party
socialist state.
Freedom of the press was abolished,
along with the constitution. All
political parties other than the one
sponsored by the government were
banned.The economy, once one of the strongest in Asia, suffered from state control and low world prices for rice and other exports.
Economic troubles
Economic grievances became a key factor in the occasional outbursts of social unrest and rioting in subsequent years. By 1987 Burma had been granted least-developed- nation status by the United Nations.
A special meeting of the Burmese leadership in August 1987 resolved to tackle the economic situation. In September, amid rice shortages caused by a poor harvest, the government announced it was withdrawing certain denominations of banknotes from circulation, without compensation.
The move effectively wiped out 80% of the money in circulation. An already poor people were reduced to desperation. Students rioted in the first serious civil unrest since 1976. Further rioting and demonstrations in the first half of 1988 were violently suppressed by police.
The people speak
On 8th August 1988 massive street demonstrations were held in Rangoon, as well as a general strike. Tens of thousands of protesters called for democracy, human rights, the resignation of the government and an end to the centrally-run economic system. The demonstrations spread to dozens of other places around the country.
The response from the authorities was brutal: thousands were arrested or killed by the police and army. The military established a new leadership body, the State Law and Order Restoration Council.
Aung San Suu Kyi
The daughter of Burma's independence leader
Gen Aung San, Aung San Suu Kyi
campaigned around the country in 1988 and
early 1989, calling for democratic rule and
attracting widespread support in spite of the
military's ban on gatherings.In July 1989 she was placed under house arrest. She remained there for six years. In spite of her detention, Aung San Suu Kyi led her National League for Democracy to an overwhelming victory in elections in May 1990. But the military leadership refused to hand over power, and instead responded by arresting opposition leaders.
Aung San Suu Kyi was awarded the Nobel Peace prize in 1991. Speaking on the occasion, her husband Michael Aris said the prize had never been awarded to someone in a situation of "such extreme isolation.
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