The Costs, Achievements and Collateral Effects of Australia’s Financial Sanctions Against Burma (Myanmar)
Visiting Fellow, Department of Political and Social Change,
School of International, Political and Strategic Studies
Australian National University
When Australia introduced targeted financial sanctions against the Burmese military regime in 2007, in response to the repression of peaceful popular protests led by Buddhist monks in August/September 2007, it was a sharp change of Australian policy towards Myanmar/Burma, but was not the first time Australia had used “autonomous” sanctions against a regime which was not subject of United Nations Security Council sanctions. Up until then, Australian governments of both persuasions had resisted the temptation to impose unilateral economic sanctions against Burma, knowing that such sanctions could never be enforced, but rather would be easily circumvented via Burma’s mainland Asian neighbours, none of which supported or observed such sanctions which were not mandatory. However, Australia had resorted to targeted, or “smart” sanctions against the regime of Robert Mugabe in Zimbabwe, in association with some other Commonwealth countries, and against Fiji. Such sanctions had been increasingly applied by Western nations (mainly Europe and North America) after 1990 and especially following the increase in international terrorism and persistent human rights abuses by authoritarian regimes, mostly in Africa and Asia.
Australian’s financial sanctions against Burma were announced by then Prime Minister John Howard on 27 September, in the midst of an Australian election campaign and two days after US President George Bush announced a tightening of US economic sanctions in an address to the United Nations. (The UN Security Council had considered Burma as an issue in 2005, but has never voted on sanctions, in view of the known opposition of permanent Security Council members Russia and China.) Australia’s new sanctions were not promulgated until a month later on 24 October, taking effect under the Reserve Bank’s Banking (Foreign Exchange) Regulations Act 1959. A list of more than 460 “designated persons” was published in an Attachment to the regulation, very similar to the EU’s list of targeted Burmese individuals, but listing only individuals rather than state or state-related entities. The purpose of the sanctions, Howard said, was “To underline Australia’s dismay at the regime’s actions and our concern for the welfare of the Burmese people, the Government will move to implement targeted financial sanctions against regime figures and supporters.” 
Interestingly, in his 27 September 2007 statement, Prime Minister Howard had said “Our objective remains to maximise the pressure on the regime while avoiding harm to the Burmese people”, but there is no evidence of specific Australian action being taken subsequently to avoid harm to the ordinary people of Burma. No assessments of the actual impact of Australian sanctions against Burma have been published, so it is difficult to estimate what collateral damage might have occurred, let alone what ‘success’ could be attributed to these sanctions.
The operations of Australia’s financial sanctions against the Myanmar Regime
Australia’s financial measures are limited to restrictions on any financial transactions with Burma, but do not include a freeze on assets of regime members, as did the sanctions imposed by the EU and Canada, and as was called for at the time by the then Opposition Australian Labor Party. Targeted are 463 (increased from the original 2007 number) named individuals, including members of the (now dissolved) State Peace and Development Council, regional military commanders and their deputies, Cabinet ministers and deputy ministers, senior members of the military (Brigadier General and above), senior members of the regime front organisation the Union Solidarity and Development Association, ‘persons who benefit from government economic policies’ (mainly regime business cronies), directors of military-owned enterprises, former senior regime figures (many of whom are still in gaol following the purge of former Prime Minister Khin Nyunt in 2004), and a small number of officials from the Ministry of Hotels and Tourism. Like the EU list of designated persons, the Australian list includes by name the wives, sons and daughters of all the principals on the list, presumably on the grounds that otherwise ‘designated persons’ could use family members to circumvent the sanctions.
On behalf of the Australian banking industry, the Australian Bankers’ Association developed generic guidelines for the application of autonomous sanctions, with the stated objective of ensuring broad compliance. The ABA guidelines call for due diligence to be exercised by banks in relations to payments, customers and ‘trade transactions’. As the guidelines say: ‘ABA members will work with relevant government agencies, such as the Department of Foreign Affairs and Trade (DFAT) and the Australian Federal Police (AFP) to develop protocols to aid compliance with, and enforcement of, Australia’s sanctions regime’.
Australia’s economic sanctions do not prohibit trade or investment links with Myanmar, prompting the Burma Campaign (Australia) to protest against the business operations of firms such as the airline Jetstar (which seasonally operates regular flights from Singapore to Yangon) and Twinza Oil. In the Australian parliament, the Greens Party has pushed for the introduction of trade and investment sanctions focusing on the oil and gas sector. In this respect, Australian financial sanctions are much less ambitious than US or the EU sanctions: in 2007 the EU added a ban on imports of timber, gemstones and precious metals to its existing sanctions against Burma; and the US Congress passed the JADE Act imposing similar sanctions. The targets of the EU travel and financial sanctions also include members of the police, the judiciary, state-owned media firms, military officers as low as captains and majors, and some 40 named enterprises.
Australia’s financial sanctions are amended from time to time to update listings, correct changes (designated persons dying, for example) but they are not the subject of regular substantive review, as the EU sanctions against Burma are (under their ‘Common Position’ against Burma), or as some US sanctions are (requiring a Presidential decision to extend them annually). The last time Australia’s lists were adjusted was 2008; it is not clear how they might be further amended since the dissolution of the SPDC on 30 March 2011 and the transfer of power to the ‘new’ government of mostly newly appointed ministers.
According to DFAT, since their inception in 2007 Australia’s financial sanctions have resulted in only two transactions being stopped, one for A$10,742.63 and the other for A$200. Only one bank account has been closed and one frozen, with the amounts of A$60 and $147.76 respectively. However, the Reserve Bank has responded to 1,167 queries about ‘potential matches’ with regime figures and supporters, in respect of both transactions and accounts. DFAT says the RBA is not aware of any breaches of the sanctions. Despite the commendable level of compliance achieved, these figures suggest an extraordinary amount of effort in screening and cross checking of names for a very small number of offending actions. They also tend to bear out the proposition that regime figures are unlikely to be seeking to conduct financial transaction through Australia and that such sanctions in reality have little or no concrete impact.
It is not clear what inconvenience or “disutility” might have been caused to these account holders, or other regime figures who may have to avoid attempting to conduct financial transactions with Australia, since no details or assessments are published by the government. (Australia’s travel restrictions on regime figures are occasionally activated when a designated person seeks to travel to Australia, and this is sometimes disclosed when specific questions are asked in parliament.)
The Australian Government can amend any of its Burma sanctions at any time, either simply for updating them (which last happened in 2008) or for more substantive reasons. In fact, Australia has never relaxed any of its various Burma sanctions with the exception of the longstanding ban on Australian Government scholarships for residents of Myanmar. When Aung San Suu Kyi was released from house arrest in May 2002, this resulted in Foreign Minister Alexander Downer visiting Yangon in October that year, the first such visit in 19 years. No easing of Australian sanctions occurred after her release from house arrest in November 2010 either. According to DFAT: “There is no formal review mechanism required to keep our autonomous sanctions active. But we do keep our sanctions measures under regular review with regard to political developments in Burma. We are watching very closely what emerges from the Burmese political process and will calibrate our sanctions accordingly.”
No Australian government has ever provided a detailed report on the implementation of sanctions against Burma since the first measures in 1989. While Australia’s financial sanctions represent a significant toughening of Australia’s policies towards the Myanmar military regime, they have not been the subject of much publicity either in Australia or in Myanmar. Moreover, without making any change to these sanctions, Foreign Minister Stephen Smith was able to introduce some significant “engagement” measures in his major parliamentary address on Burma on 10 February 2010. These measures include the restoration of Australian government scholarships for people living in Burma to attend Australia universities, the first time in 20 years that this was possible.
Doubtful Efficacy of Australia’s (and Western) Sanctions Against Burma
A mere month before Australia’s economic sanctions were imposed, the then foreign minister Alexander Downer publicly insisted that Australian economic sanctions “would have absolutely no impact (on the regime)”. Arguably, imposing sanctions against financial transfers in a country with a very undeveloped financial sector and where many individuals and firms do not even have bank accounts was never likely to have much impact. More importantly, there was never any evidence that regime members held bank accounts in Australian or were engaged in financial transactions in or through Australia. So a large “catch” of illegal financial transactions would never have been expected.
Australia’s financial sanctions are often not mentioned when media in Burma/Myanmar criticise Western sanctions, nor are they often the topic of government-to-government conversations. However, in February 2011, when the NLD’s review of Western sanctions prompted a response in the official Burmese media, Australia was included with the US, the EU and New Zealand (but not Canada or Japan). When the blatantly pro-government article went on to criticise sanctions for causing harm, they did not mention any harm caused by Australian sanctions. This is not surprising: anecdotally, no suggestions of adverse economic impacts inside Myanmar from Australian financial sanctions have been reported; indeed, the overall economic impact of Australian financial sanctions has been extremely limited. Since their imposition in October 2007, no Australian government has ever claimed any concrete outcome arising from its financial sanctions.
The financial sanctions are usually included in any list of Australia’s policy responses to the situation in Burma, but they are not necessarily the subject of frequent public mention – in Australia or internationally – and are not all that well known. (Australia is often omitted when media articles list countries applying sanctions against Burma.) While the sanctions clearly suit Australian Governments wanting to demonstrate that they have taken firm action in response to the numerous ‘sins’ of the military regime, and obviously send a clear message to the regime itself, they generally do not seem to have been used by Australian Governments for wider purposes, such as to educate Australians about the troubled situation in Burma or to influence international debate about Burma policy. Yet administratively, they are labour intensive and leave little to show in the way of outcomes, presumably why the Reserve Bank itself expressed ‘concerns’ about this use of Australia’s banking regulations.
On the other hand, sanctions against Burma – both economic and political – have frequently been raised in questions in the Australian parliament. Any negative development in Burma triggers call for additional sanctions. Commercial dealings with Myanmar/Burma are often targeted, and Australian companies with operations in Burma/Myanmar have been named on a “dirty list” by the Australian Campaign for Burma. Adverse comparisons are sometimes made with sanctions imposed by other western countries, regardless of the efficacy of those sanctions regimes (none of which is claimed to have been successful). Stricter enforcement of existing sanctions is sometimes called for, and strict bans on any Australian funding of Myanmar government programs and stricter bans on scholarships for or travel by children of regime members (“the sons and daughters of generals”) are often requested (even though many other Western countries offer scholarships to students from Myanmar).
Australian commercial firms with experience of dealing with Burma are openly cynical about what impact they expect from sanctions, comparing it to the negligible impact US sanctions had against Cuba. Australian non-government organisations operating in Myanmar say they cannot attribute any behaviour change on the part of the Myanmar Government to the existence of Australian sanctions. Some “normative” changes to better behaviour have occurred when “sanctions” have been applied in multilateral contexts (often with active Australian support), but these are relatively rare and sometimes incomplete.
However, almost all of the international sanctions that are imposed unilaterally against Burma are not effective, not just Australia’s. US Secretary of State Hilary Clinton famously said in September 2009, after a review of US policy towards Burma, “US sanctions against Burma have failed”. Because the pressure for US sanctions against Burma comes mainly from the Congress, Congressional Research Service reports are equivocal about the efficacy of US Burma sanctions in most of the reports it prepares, while allowing that US sanctions have not produced the results desired. There has been no such frank admission of failure in respect of its Burma sanctions on the part of Australian governments.
Under governments of both persuasions, Australia’s Burma policy has been more complex and involved some elements of engagement. Thus, former Foreign Minister Stephen Smith in November 2009 acknowledged “a consensus view that we need to do more to try and encourage the regime back to a democracy”. Consistent with this view, Smith’s major Burma policy statement of 8 February 2010 lifted a long-standing prohibition on residents of Myanmar being eligible for Australian Government scholarships to study in Australia, but reiterated that other sanctions would remain in place. Significantly, Smith’s 2010 statement confirmed, almost in passing, that sanctions would remain “to exert pressure on the military regime”, but outlined various ways in which Australia found it worthwhile trying to engage the Myanmar regime to initiate reforms.  This reflects the reality that sanctions are not the sole focus of Australian Burma policy as they are in the United States and some other Western countries.
Australia’s Labor Governments have doggedly resisted pressure from other parties wanting to strengthen Australian sanctions, although at times they have been tempted by adverse events to do so. (As Foreign Minister, in 2009 Stephen Smith indicated that members of the judiciary might be included in the Australian list, but in the end no action along these lines was taken.) Moreover, the Rudd Government rejected a 2008 Greens motion to include grandchildren of regime figures on the list of designated persons. Similarly, a Greens proposal in March 2010 to “ensure that Australian companies with links to Burma’s oil and gas industry are not contributing to the financial stability of the military regime” was met by the response: “Australia’s existing sanction measures-financial sanctions and travel restrictions-are carefully targeted to place pressure on senior members of the Burmese regime and their supporters. Until we see significant change from Burma’s authorities, the Australian government will maintain a policy of targeted financial sanctions.” Australian supporters of tougher sanctions against Burma rarely try to demonstrate how tougher sanctions might achieve more than previous sanctions.
Taking their cue from the expatriate Burmese democracy movement, and on the basis that existing sanctions were not producing the intended effect, Australia’s non-government parties have consistently called for tougher measures against the military regime, despite any evidence that such new measures would be any more effective. The holding of the (albeit flawed) elections and release of Aung San Suu Kyi in November 2010 did not soften their hard-line views. In response to these events, Shadow Foreign Affairs Spokesperson, Julie Bishop urged a review of, but no relaxation of Australian sanctions, insisting that “we need to be careful [that] sanctions target members of the regime and don’t cause unnecessary additional suffering for the Burmese people”. Greens Senator Scott Ludlam simply said Australia’s sanctions were ‘not adequate’ and called for a full trade embargo.
Sanctions tend to be easier to impose than to lift. In Burma’s case, given the variety of reasons for imposing sanctions and often the lack of clarity in the first place about what would cause them to be eased, this is particularly true. So far only the EU has relaxed (on a provisional basis, in April 2011) some of its travel restrictions against some ministers in the newly-sworn-in Myanmar government. The Obama Administration has merely said easing sanctions now ‘would be premature’. Yet recently several substantive reviews of sanctions have been carried out, including by the National League for Democracy inside Burma. While the March 2011 NLD statement said it did not wish to see sanctions lifted, Aung San Suu Kyi had initially implied that she might contemplate some adjustment of sanctions, but has now indicated she wished to consult other countries about their sanctions. After the elections an the convening of the new parliament, some political representatives in Burma have petitioned for sanctions to be lifted. Several think tanks operating outside Burma have also called for sanctions to be eased to recognise that some improvements have resulted from recent initiatives by the regime.
Reviewing Australian Sanctions against Burma
Australian governments make no commitment to review any of their sanctions, or to assess the effectiveness of the sanctions, or to report on the implementation of sanctions. DFAT maintains that it routinely keeps sanctions under review, but this must be a very ad hoc and random process. Occasionally, information about the operation of Australia’s sanctions is conveyed in answer to questions in the Senate Budget Estimates process.
However, in Australia, the government maintains that it keeps sanctions under continuous review in the light of ever changing circumstances. At the same time, DFAT acknowledges that: “There is no formal review mechanism required to keep our autonomous sanctions active. But we do keep our sanctions measures under regular review with regard to political developments in Burma. We are watching very closely what emerges from the Burmese political process and will calibrate our sanctions accordingly. (However) We are not aware of any specific benchmarks or criteria for changes to our sanctions being announced publicly.” While this might mean that there are fewer chops and changes in Australian sanctions, it does not necessarily imply a more strategic approach is taken.
Australian sanctions against Burma are notable in not requiring any report or assessment of their effectiveness or their implementation. Few sanctions regimes, other than those applied under the EU Common Position on Burma, are accompanied by any assessment of their efficacy. In contrast, Australian Governments have never published any report on these sanctions and behave as if they are working effectively. So it is not easy to assess whether there may have been unintended impacts from Australian sanctions.
Unintended Targets of Australian Financial Sanctions
Of the few independent assessments into sanctions that have been made, several find significant collateral harm from sanctions. For example, after the United States introduced wider economic sanctions in 2003, the State Department was initially required to report to the US Congress on their impact and in 2004 and 2005 reported that Burmese textile workers had been adversely affected and that many had been trafficked into prostitution in Thailand. Also in 2005 the most detailed scholarly analysis of US economic sanctions concluded: “In conclusion, the Burmese Freedom and Democracy Act is a half-measure that does more harm than good. It reflects fundamental ignorance of Burmese society and underestimates the determination of the junta to stay in power, whatever the cost to the country. The act also contains politically motivated loopholes. The U.S. government, working in cooperation with other countries, including those whose Burma policies differ from Washington’s, should support policies that help, not hurt, the people of Burma.” 
Yet, in many instances sanctions did cause indirect harm to ordinary Burmese people, for example, in the tourism sector, which is perhaps the largest employer in Burma outside the public sector, and one of the few Australian sectors still doing business with Myanmar. Australian tour operators note that Australian travelers are increasingly disinclined to spend money while in Burma. Tourism to Burma is not prohibited by the Australian Government, but it is the general negative image of the military regime, and in particular its unjustifiably harsh treatment of NLD Leader Aung San Suu Kyi, that has resulted in a noticeable decline in business activity after 2003, arguably until the elections and Aung San Suu Kyi’s release from detention in November 2010. Australia’s financial sanctions certainly complicated tourism to Burma, especially after 2008 when Burma’s leading tourism officials were designated persons on Australia’s sanctions list.
One extraordinary case of an innocent victim of Australia sanctions is the daughter of the Burmese Air Force General who was deported from Australia just before completing her masters degree even though she had entered Australia legally as a private student, was not named on any sanctions list, and claimed not to share her father’s views. It is hard to believe that the constant outcry from Burma activists about the possibility that “the sons and daughters of generals” may be studying in Australia was not a large reason why this case was pursued in this way by the Australian Government. This rather hysterical campaign seems to find its inspiration in the desire to punish and extract revenge rather than any objective judgment about the possible positive (or negative) impact that study in Australia might have.
It is also relevant to question in general terms the effectiveness of Australia’s ‘targeting’. The Australian list of targeted Burmese persons was drawn up after fairly close consultation with the US and EU authorities, as well as upon the recommendations of the Australian Embassy Yangon, resulting in a sensible degree of consistency and harmony across sanctions regimes. An obvious problem, if there are insufficient rigorous checking of the name, is that mistakes appearing in the earlier US or EU lists, will be perpetuated in later EU lists. When the Australian list was expanded in October 2008, a few Myanmar tourism officials were Burma added, even though on the face of it officials are only implementing policies of their government and have not engaged in specific activities which might warrant sanctions being taken against them. The only explanation for their inclusion that DFAT can offer is: “While we do not have broad sanctions against tourism, this category of sanctioned individuals was created to acknowledge government-run tourism as a key source of income for the Burmese military regime. We note that the NLD recently decided to lift its opposition to tourism and this will be a relevant factor in future iterations of our list.”
One Australian tour operator explains how Australian tourism to Burma was effectively discouraged, despite the Australian Government claims that it was neutral on the matter. He stated: “In ten years of selling our small group journeys to Myanmar, I have consistently encountered rejection by potential travelers who grapple with the moral question of “Should I go”. Whilst this response cannot by totally attributed to sanctions, the insistence of the European Union and the United States in maintaining sanctions in terms of trade & finance are often interpreted by the general media as a warning to travelers. The assumption follows that by visiting this country you are assisting the regime to maintain its stranglehold over the people. Central to this line of thinking is the backbone of sanctions which the Europeans and the US argue will eventually bring about change in Myanmar. This uncompromising position and the vigorous support it receives in the media discourages many travelers from considering Myanmar as a destination.” 
According to a typical Australian tourism company: ‘The sanctions initiated against Burma by the Australian Government are directed at individuals within the ruling government apparatus, in this case the Australian government’s actions have minimal impact on the operations of [our firm].’ Specifically, the inclusion of Burmese tourism officials on Australia’s targeted list of Burmese associated with the military regime after 2008, had no direct impact on Australian tour operators. The reason for this is the nature of Australian tours to Burma, which are organised as small guided tours in conjunction with private Burma-based travel companies, rather than through government tourist operators, and using private hotels and transport firms. Australian tour operators claim to have no dealings whatsoever with government tourist agencies. But they also have witnessed that any decline in tourism they experience with Burma will immediately be felt by small private operators and individuals, not government bodies. What this means is that sanctions that try to target ‘individuals who benefit from the military regime’ have failed, and that these particular sanctions missed their targets.
It is fairly clear, however, and not altogether surprising, that some routine Australian business dealings with Burma have also been significantly discouraged by the general presence of sanctions. For example, broader Australian commercial dealings with Burma may have been indirectly affected by US and EU economic sanctions, rather than Australia’s own financial sanctions, as one Australian tourism operator specialising in trips to Myanmar explains: ‘…the sanctions imposed by the United States and the European Union have impacted our business in the last ten years… [for example] the lack credit card or [international] banking facilities’. While this is not the stated aim of Australia’s sanctions, it may not have greatly displeased Australian political leaders.
Until 2007, official Australian government statements always claimed that there were no economic sanctions against doing business with Burma, and that Australian policy neither encouraged nor discouraged trade and investment with Burma. However, after 2007 the reality was rather different. As one business representative explained: ‘Our Australian client base has been reluctant to consider Myanmar as an investment target…We are finding it is easier to offer [the very few] commercial opportunities which do become evident to other nationalities, primarily Thai and Indian’. Australian business could not see the point of yielding business opportunities in Burma to others, and watching as bad business practices proliferated. Restrictions on financial transfers made it almost impossible for them to continue to do business with legitimate and decent Myanmar business partners.
A similar problem has occurred with humanitarian NGOs engaged in fund raising activities for Burma/Myanmar. One smaller humanitarian NGO complained that ‘It (fund raising) has been difficult particularly when funds come from a foundation or trust as the boards act on behalf of members. Individual donors do not seem to be concerned.’
Effect on Humanitarian Assistance operations in Burma/Myanmar
According to an informal survey by the author with the main Australia-based international humanitarian assistance NGOs, Australia’s financial sanctions have not had any direct effect on their humanitarian operations in Burma. Unlike other Western financial sanctions regimes, Australia’s financial sanctions regime does not have any specific provision for exemptions for humanitarian operations, so none of the INGOs contacted had sought a humanitarian exemption from the Australian government. Unusually, one of the Australia-based organisations said it had successfully obtained a humanitarian exemption from the US government under the US Treasury sanctions scheme. But almost all Australian INGOs operating in Burma claimed that Australian financial sanctions did not adversely affect their financial transactions in and with Burma.
Some of the INGOs contacted continued to carry cash into Burma for the conduct of their operations, as has been done for many years. While this is awkward and involves obvious risks, it apparently remains an effective way of transmitting funds and formal sanctions regimes seem to ignore the practice. The traditional Burmese informal funds remittance arrangement, the hundi scheme, would also presumably allow the formal financial system (such as it is) to be circumvented, but most INGOs did not seem to be using these arrangements regularly. (Anecdotally, private Burmese residents of Australia make extensive use of the hundi system to transfer funds into Burma.) This helps explain why financial sanctions imposed through the formal international financial system would be less effective in the case of Burma than in many other situations.
One Australia-based INGO said it originally transferred humanitarian assistance funds to Burma through an overseas-based associated INGO. More recently, and after the Australian financial sanctions began, this INGO transferred funds through a Myanmar-based sister body which is actually associated with the Myanmar government. They said the arrangement was working satisfactorily and met auditing and other checks.
Australian humanitarian INGOs said they had no evidence of direct negative consequences from Australia’s financial – or other – sanctions. Australian donors generally had negative attitudes towards the probity of financial transactions in Burma, as well as towards the widespread corruption reported there, but they said these attitudes were not directly affected by Australian policies.
Humanitarian assistance from Australia is possibly another unintended casualty of Australia’s sanctions, although repressive actions by the military regime have probably been more significant in persuading Australians against donating aid for Burma/Myanmar. As the Australian CEO of World Vision, Tim Costello, pointed out after Cyclone Nargis devastated southeastern Myanmar in May 2008: “Australians have not given (assistance)”. “It would be interesting to compare the figures to China after they opened up, responded fast, allowed helicopters and journalists in, the whole lot.” He continued: “There is deep, deep cynicism in the donor public in Australia. They think … it’s going into the Government’s pockets, they (the Burmese people) are not getting the money. In truth, not a cent of our aid is going to the military…Getting that message through is very difficult …But we must not give up on them. They did not choose their government.”
Conclusions: Moving Forward in 2011?
Change has started to happen in Burma, prompted as much by internally driven political needs as by external pressure. In 2008, in a widely criticised referendum a new constitution was adopted which reserved too much power for the army but contained some human rights protections. In 2010 an election was held in which some, but not all, opposition parties participated, although the ballot boxes were blatantly “stuffed“ to give the pro-military party an unconvincing majority. In January 2011, the new parliament was installed with 25 percent of seats held by mid-level military officers, and with federal-like state assemblies for the first time ever. In March 2011, the military regime handed control to a new government some, but not all, of whose members were in the previous government or former military officers. By mid-2011, more public discussion of policy issues was occurring through question time and committees in parliament, through slightly reduced censorship in the media, and through the activities of elected representatives as well as of Aung San Suu Kyi (no longer in detention) and of the National League for Democracy. The new president, a former general but now elected, has called for reforms and appointed experts from outside the government as advisors. These changes are incomplete, very imperfect, not necessarily permanent, and quite a long way from what would be regarded as a functioning democracy, but they hold the promise of further change for the first time in decades.
Much remains to be done: the international community is calling for the release of more than 2,000 political prisoners and an end of human rights abuses; Burma’s neighbours have welcomed the changes made, but called for further political reconciliation; Western countries, including Australia, are monitoring developments while largely retaining their sanctions. In Burma some, but not all, leaders have called for sanctions to be lifted and for international assistance to be increased so that badly needed socio-economic improvements can occur and civil society can rebuild.
Australia’s Burma scholars are divided over sanctions. Some support sanctions, including the financial sanctions; some acknowledge that sanctions have failed and call for a rethinking of Burma policy. No comprehensive studies of the effect of Australia’s Burma sanctions have been carried out since the introduction of financial sanctions in 2007. In reality, there is no political will among the major parties to ease Australia’s Burma sanctions, and the Greens, the minor party who now in effect have a casting vote, sympathise strongly with the pro-democracy activists and are enthusiastically in favour of additional sanctions. However, there is no empirical evidence that Australia’s sanctions have added any direct weight to western sanctions, or had any impact in terms of moderating policies of the military regime. With the military no longer exercising direct control since March 2011, continuing sanctions policies without any change is disconnected from reality and loses any rational basis.
Sanctions against Burma’s military regime were never mandatory or endorsed by the United Nations, were never imposed by Burma’s neighbours, had little direct impact on the military or their cronies, and if anything compounded the deprivation of Burma’s socio-economic infrastructure and human capital development. Trade and investment sanctions imposed by the US and the EU have had indiscriminate effects.
The direct impact of Australian sanctions was not great: at the most, they probably ensured that a consistent, coordinated and reasonably effective network of restrictions and meant that US and EU sanctions could not be easily circumvented. While the symbolic affect of Australia’s sanctions was significant, they were often not much noticed, in public or in practice. Australia’s sanctions naturally gave comfort to the democratic opposition, and expatriate Burmese groups tended to lead the calls for increased sanctions whenever the military regime committed fresh assaults on freedoms.
The changes now occurring in Burma have nevertheless reopened the issue of what to do about sanctions. After her release from detention in November 2010, Aung San Suu Kyi announced that she would initiate discussions with some countries imposing sanctions, including Australia. In the meantime, several groups inside Burma called for sanctions to be lifted and in mid-January 2011, ASEAN Foreign Ministers echoed these calls. When the NLD in February 2011 issued its “review of sanctions” calling for their retention and rejecting claims that sanctions harmed ordinary people, Aung San Suu Kyi indicated that she expected sanctions to remain in effect until substantial changes occurred. In April, the EU retained almost all its Burma sanctions but suspended its travel sanctions against Burmese officials for 12 months.
The Australian Government initially said it would retain sanctions, but has not made any recent public statements on sanctions, although there have been some sanctions-related questions in recent Senate Estimates hearings. The Australian Embassy has had a number of discussions with Aung San Suu Kyi about sanctions since her release from detention last year, but the Australian Government avoided setting any schedule or deadline for such contacts.
One of the biggest problems now faced by all governments imposing sanctions, is that the authoritarian and repressive military regime and many of its leading members are no longer in power. The basic rationale for retaining sanctions against designated individuals, as stated in the NLD February 2011 statement, is: “Targeted sanctions serve as a warning that acts contrary to basic norms of justice and human rights cannot be committed with impunity even by authoritarian governments.”
However, it is difficult to argue than most of the reasons for the targets of smart sanctions are still valid, given that so many of the designated individuals are no longer in the same positions of power. Human rights abuses are still being perpetrated, but almost certainly not to the same extent, and any offences as are still occurring, are not necessarily being carried out be these designated individuals Even though the new Myanmar Government has made no serious effort to stop human rights abuses by the army, and still refuses to punish the perpetrators, how can preserving existing sanctions serve such a purpose?
Largely missing is any accounting of concerted efforts to engage the regime to release political prisoners and carry out further reforms without delay. High-level US and EU representatives (including 2008 US Presidential contender Senator John McCain) have visited Burma for discussions with the new government and Aung San Suu Kyi. No high-level Australian official has visited recently. Given the minimal response so far by the Burmese authorities to pressure to release many more political prisoners, serious negotiations may be needed over the remaining political prisoners. Part of any discussion may be dialogue over future assistance including in new areas where it might directly enhance livelihoods, governance and human capacity.
Sanctions have not featured much in the government-to-government discourse between Australia and Burma/Myanmar, even if the debate about sanctions vs engagement amongst interested observers been intense. Senior members of the military regime rarely raised sanctions directly, although they not infrequently let it be known that they wanted a resumption of scholarships (as did most Burmese) , and sometimes indicated they would like to involve Australia in assistance in the agriculture area. It was fairly typical that an anti-sanctions opinion piece in the official Burmese media in 2009 did not even mention Australia’s sanctions. In the end, Australian Governments themselves dropped both of these sanctions, when Foreign Minister Downer authorised ACIAR to engage in agricultural research cooperation in the early 2000s, and then when Foreign Minister Stephen Smith reintroduced AusAID scholarships after February 2010.
In any event, therefore, the direct impact of Australian sanctions was not great. At the most, they probably ensured that a consistent, coordinated and reasonably effective network of restrictions meant that US and EU sanctions could not be easily circumvented.
However, the symbolic affect of Australia’s sanctions was never insignificant, even if they were often not much noticed, in public or in practice. Australia’s sanctions naturally gave comfort to the democratic opposition, especially while their members were still able to receive scholarships. Expatriate Burmese groups tended to lead the calls for increased sanctions whenever the military regime committed fresh assaults on freedoms. Whenever Aung San Suu Kyi made it clear that she expected sanctions to remain in effect until substantial changes occurred, it was usually assumed that she was including Australian sanctions in this.
After her release from detention in November 2010, Aung San Suu Kyi announced that she would initiate discussions with some countries imposing sanctions, including Australia. Little more was heard publicly about Australia’s inclusion in this list, but it was not especially surprising when the NLD issued its “review of sanctions” in February 2011, that it indicated that Aung San Suu Kyi wished to discuss the future of sanctions with those government imposing them, mentioning Australia by name. The EU quickly scheduled formal talks with the NLD, which as expected attracted considerable media attention (probably ensuring that minimal changes in sanctions were possible).
When asked in April 2011 where matters stood in regard to these consultations, DFAT would only say: “Our post in Rangoon has had a number of discussions with Aung San Suu Kyi about sanctions, since her release last November. We’ll continue to engage her and other stakeholders on sanctions issues… Sensibly, perhaps, the Australian Government avoided setting any schedule or deadline for such contacts. So DFAT merely repeated that “We (Australia) haven’t made any recent public statements on sanctions, although there have been some sanctions-related questions in recent Senate Estimates hearings.”
However, one of the biggest problems now faced by all governments imposing sanctions, is that the authoritarian and repressive military regime and many of its leading members are no longer in power. The basic rationale for retaining sanctions as stated in the NLD statement, is: “Targeted sanctions serve as a warning that acts contrary to basic norms of justice and human rights cannot be committed with impunity even by authoritarian governments.” But if the names are wrong and the offences, such as are still occurring, are not being carried out be these individuals, how can sanctions serve such a role.
While it might still be hard in the West to sell politically the idea of lifting sanctions, given the incomplete and insufficient nature of the political changes that have so far occurred in Myanmar, it is equally difficult to argue than most of the reasons for the targets of smart sanctions are still valid, given that so many of the designated individuals are no longer in the same positions of power. Human rights abuses are still being perpetrated, but almost certainly not to the same extent, even though the new Myanmar Government has not noticeably sought to stop them and still refuses to punish the perpetrators.
The time has come to adjust our strategy to improve the prospects of promoting reform and protecting the changes already achieved. Curiously missing so far is any public accounting of efforts to engage the regime to release political prisoners. Given the minimal response by the Burmese authorities to pressure to release many more political prisoners, the situation could hardly be worse if the results of any negotiations over the more than 2,000 political prisoners were made public.
Ewing-Chow, Michael, 2007 ‘First Do No Harm: Myanmar Trade Sanctions and Human Rights’, Northwestern University Journal of International Human Rights, Vol 5 Issue 2 (July 2007).
Farrelly, Nicholas, 2009. ‘Rethinking the Burmese sanctions’, Inside Story, 12 October 2009.
Frost, Frank 2009. ‘Burma/Myanmar: internal issues and regional and international responses’, Background Note, Parliamentary Library, Parliament House, Canberra.
International Crisis Group, March 2011 ‘Myanmar’s Post-Election Landscape’, Asia Briefing No.118, Brussels.
Martin, Michael F. 2011. ‘U.S. Sanctions on Burma’, CRS Report for Congress, Congressional Research Service, Washington DC.
 The Burma Campaign Australia’s 2009 campaign “Don’t Deal with Burma” listed only eight Australian companies with alleged dealings with Myanmar on its “Dirty List”. See: http://www.aucampaignforburma.org/DontDealWithBurma.htm. Not all of these are normally regarded as Australian companies, and probably none of them would be regarded as carrying out activities in Myanmar that should be challenged.
 See interventions by Greens Senator Scott Ludlam in Senate Estimates hearings for the Department of Foreign Affairs and Trade, 1 June 2009.
 DFAT communication to the author, February 2011.
 DFAT communication to the author, April 2011
 See article by Mark Dodd, “No trade sanctions on Burma: PM”, The Australian 27 September 2007.
 In a communication with the author in April 2011, DFAT said: ‘To the best of our knowledge, no public reports have been made referring to detail of the application of Australia’s autonomous sanctions against Burma.’.
 Speaking in general terms, the Reserve Bank submission to the Senate Foreign Affairs, Defence and Trade Legislation Committee inquiry into ‘Autonomous Sanctions’ states: ‘For some time the Reserve Bank has held concerns about the legal efficacy of the current regime and the inadequate legislative basis for effective enforcement of the sanctions’, June 2010.
 See Australian Campaign for Burma
 Communication in confidence to the author, March 2011.
 See the author’s ‘The Use of Normative Processes in Achieving Behaviour Change by the Regime in Myanmar’ in Ruling Myanmar From Cyclone Nargis to National Elections, (Cheesman, Skidmore and Wilson eds.) ISEAS Press, Singapore 2010.
 Unlike its predecessors, the Congressional Research Service (CRS) report U.S. Sanctions on Burma in 2011 by Michael Martin, does not attempt any assessment of the efficacy of US sanctions on Burma, but states: “Fourth, it is unclear if the imposition of sanctions has had a demonstrable effect on the SPDC or its predecessors. Fifth, it is equally unclear if the absence of U.S. sanctions on Burma would have led to an improvement in the political situation in Burma.” (Washington DC,
 Comments to journalists by Foreign Minister Stephen Smith after attending the UN Secretary General’s Friends of Burma group meeting in November 2009..
 ‘Statement on Burma’ House of Representatives. Successive Australian Ambassadors to Myanmar had called for scholarships to be restored to expose more young Burmese to Australian education and values. See:
 DFAT’s response to the proposal from Greens leader Senator Bob Brown was: ‘Grandchildren fall outside the scope of Australia’s range of sanctions measures against the Burmese regime. The Department does not track or collate this information and it is not usual for the Department to hold such information. The Department is aware, however, of three grandchildren present in Australia of former and current senior regime figures. Two of these children are 14 and 17 years of age respectively. The age of the third child, also a minor, is unknown to the Department… The criteria for listing these individuals remain appropriate in order to maintain a comprehensive and effective sanctions regime.’ Senate Supplementary Budget Estimate, October 2008.
 Response by then Special Minister of State, Joe Ludwig, to the motion by Greens Senator Scott Ludlam, 11 March 2010 (Hansard).
 Notably the International Crisis Group’s March 2011 Briefing Note states: ‘Improved policies must start with the recognition that sanctions have had counterproductive effects and caused ordinary people to suffer, and have impeded the country’s development’.
 DFAT explained: ‘For the time being, our targeted sanctions measures will remain in force. Should there be grounds to change our sanctions measures against Burma (either downscaling or ramping up) under current legislative arrangements this would be implemented through a ministerial directive. If the Autonomous Sanctions Bill and Regulations are put in place, future changes would be via amendment of the Regulations and, where necessary, legislative instruments pertaining to Burma.’ (DFAT Communication to author April 2011).
 In answer to questions in Senate Estimates Committee on 26 October 2009, a senior DFAT referred to an ‘ongoing review’ of Australia’s sanctions against Burma.(Senate Estimates questions by Greens Senator Scott Ludlam).
 DFAT communication to the author, April 2011.
 Donald M Seekins, ‘Burma and U.S. Sanctions: Punishing an Authoritarian Regime’, Asian Survey ,Vol. 45, No. 3, May/June 2005, pp. 437-452. See p. 452
 Queensland Law Society Supplementary Submission to the Senate Foreign Affairs, Defence and Trade Committee Inquiry into Autonomous Sanctions, dated 5 July 2010. http://www.aph.gov.au/Senate/committee/fadt_ctte/autonomoussanctions_43/submissions.htm
 Communication to the author from DFAT June 2011. In fact, the NLD’s “opposition” to tourism was never absolute, but was always qualified, as some NLD MPs participated directly in the tourism sector. The NLD position was frequently misrepresented among the expatriate pro-democracy movement, especially in the UK.
 Communication in confidence with the author.
 Communication in confidence with the author, March 2011.
 Communication in confidence to the author, April 2011.
 Communication in confidence to the author, March 2011.
 Communication in confidence to the author, February 2011.
 ‘Tim Costello dejected over inability to help in Burma.’ Julia Medew, Sydney Morning Herald, 19 May 2008.
 For example, it contains specific provisions for freedom of the press and freedom of association.
 Sean Turnell, founder of Burma Economic Watch at Macquarie University, whose ‘The Efficacy of Economic Sanctions on Burma’ October 2009, is not primarily about Australia’s sanctions regime. It can be found at: http://www.econ.mq.edu.au/Econ_docs/bew/2009/2009_Burma_Sanctions.pdf
 Nicholas Farrelly, ‘Rethinking the Burmese sanctions’, Inside Story, 12 October 2009.
 New Light of Myanmar
 For NLD Press release, see Burmanet: National League for Democracy Sanctions on Burma.htm.