Burma: companies, NGOs and the new diplomacy

Burma: companies, NGOs and the new diplomacy

Sanctions versus constructive engagement in Burma

Burma, also known as Myanmar, is an important case study in wider international debates on the politics of sanctions versus constructive engagement, as well as the role of companies and NGOs, when trying to encourage political dialogue and progress in controversial states. The pressure placed by advocacy groups on governments to implement economic sanctions on Burma has raised important questions such as: what role should advocacy groups play in foreign policy-making? And what are the real responsibilities of international companies in controversial states?

International governmental responses to Burma have varied. Whilst the US, UK and other EU countries have imposed sanctions and suspended aid, Japan and Australia have sought to establish some form of engagement with the regime. However, neither confrontation nor engagement has been proven to work.

The role of international companies is also hotly debated. Advocacy groups argue that at the national level, the presence of foreign companies lends political and financial support to the regime. At the local level, it must also be questioned whether foreign companies benefit from unacceptable practices such as forced labour and thereby contribute to human rights abuses. By contrast, the proponents of business engagement argue that investors will bring wealth into the country, providing employment as well as new ideas. In the long term, engagement is more likely to bring real change.

Aid agencies are faced with a dilemma too. Despite malnutrition, high infant mortality rates and a growing HIV/AIDS problem, Burma has received insignificant amounts of foreign assistance since 1988. The arguments for against aid agency involvement mirror those for international companies. However, in view ofthe obvious humanitarian need, the collective view appears to be moving more towards some form of cautious engagement with Burma.

The ‘new diplomacy’ of the Burma advocacy groups will remain an important factor in Western governments' policy-making and, still more, in companies' investment decisions. However, it isdifficult to demonstrate that either confrontation or commercial engagement has made a decisive impact on SPDC policy. It is possible to argue that neither approach has been tried with sufficient consistency to ensure that it works.