YANGON, Myanmar — The image was meant to convey growing friendship
between the United States and Myanmar, the world's hottest frontier
market. Flanked by national flags, Win Aung, the president of Myanmar's
main business association, and U.S. Assistant Secretary of State Jose
Fernandez shook hands in Yangon and agreed to deepen business ties
between their countries.
The awkward part? The United States still dubs Win Aung a "crony" who
allegedly used his close ties to Myanmar's old military rulers to build
one of the country's biggest business conglomerates. He remains on a
blacklist of entities U.S. citizens and companies are banned from doing
business with.
Their handshake Monday illustrates the complex and sometimes
contradictory path the U.S. is forging as it tries to encourage new
business ties with Myanmar while retaining moral sway over powerful
economic, political and military interests it has long censured. Many
praise the ethical stance taken by U.S. policymakers and hope that the
entry of U.S. companies will help forge a more transparent, less corrupt
corporate culture. But some question the effectiveness of Washington's
chosen tools and the impact they have on the ability of U.S. investors
to compete in what has quickly become a hot market.
Unlike the European Union and Australia, which lifted their travel
and financial sanctions against Myanmar, the United States has taken
what U.S. officials call a "calibrated" approach to retain leverage in
case Myanmar's political and economic reforms get derailed. While
Washington has suspended most restrictions, the U.S. still maintains its
list of targeted sanctions, bans some people from traveling to the U.S.
and blocks imports of specific products, such as jade and rubies, for
which trade has been dominated by state and military interests.
Fernandez was in Myanmar as part of a U.S. business delegation, the
first since President Barack Obama's historic November visit. The
delegation was organized by the U.S. Chamber of Commerce and hosted by
Win Aung's group, the Union of Myanmar Federation of Chambers of
Commerce & Industry. Over 50 representatives of U.S. companies
including Chevron, General Motors, Target Corp., ConocoPhillips,
Caterpillar, General Electric International, Honeywell and eBay are
scheduled to spend the week meeting with leading businesspeople and
government officials in Myanmar.
Fernandez, in an interview, declined to comment on Win Aung's
inclusion in the list of so-called "Specially Designated Nationals." The
list forms the backbone of U.S. sanctions against Myanmar now that
general restrictions on investment, imports and financial services have
been suspended in response to the sweeping economic and political
reforms instated since Myanmar's president, Thein Sein, took office in
March 2011.
Fernandez conceded that "maybe some adjustments need to be made" to
the list, but praised it as an important foreign policy tool for
encouraging responsible investment.
"The value of the list is we continue to have concerns about human
rights abuses, as well as continued political prisoners, continued
military ties to North Korea and corruption. That list is a valuable
tool for addressing those concerns," he said.
Win Aung, who also heads the Dagon Group of Companies, with interests
in timber, rubber, energy and construction, urged the United States to
remove all its sanctions against Myanmar, also known as Burma.
"We request your government to support us with a total lifting of
sanctions for the benefit of the majority of our people," Win Aung said.
U.S. companies have welcomed the easing of sanctions, but many say
the fact that sanctions have been suspended, rather than eliminated,
discourages long-term investment and that the welter of remaining
regulations is a drain on time and resources.
"You can't do a lot of direct investment if there's the specter of it
being taken away tomorrow," said Darren Brooks, senior corporate
counsel for Caterpillar Asia. "It's a little bit of a minefield. We're
trying to tiptoe around it and do things correctly."
The latest sign of the ambivalence of U.S. foreign policy came
Friday, when the government responded to pressure from U.S. business
groups by allowing U.S. companies to transact with four Myanmar banks
that are still on the U.S. sanction list. Two of the banks, Myanma
Economic Bank and Myanma Investment and Commercial Bank, are state
owned. Asia Green Development Bank and Ayeyarwady Bank are privately
owned.
Asia Green Development Bank is owned by Tay Za, who was described by
the U.S. Treasury in 2008 as an arms dealer and financial henchman of
the former military regime. Ayeyarwady Bank is owned by Zaw Zaw, who was
described as "one of Burma's up-and-coming cronies" in a June 2009
leaked diplomatic cable from the U.S. Embassy in Yangon. He has not been
publicly linked to arms or drug dealing.
"American corporations are very late in every business sector," said
businessman Aung Aung, whose oil and gas and hotel companies have
alliances with Korean, Indian and Russian partners. "Asian countries,
like India and especially China, have already dominated the market. It's
difficult for American companies to compete."
The U.S. ranked 13th in foreign investment in Myanmar as of Jan. 31,
according to Myanmar's Directorate of Investment and Company
Administration. The U.S. accounted for just 0.6 percent of approvals by
dollar volume – less than the Netherlands, France and Vietnam. China
ranked number one with a 33.9 percent share of foreign investment
approvals, followed by Thailand.
source: Huffington Post
http://www.huffingtonpost.com/huff-wires/20130225/as-myanmar-us-business/?utm_hp_ref=green&ir=green
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