President Bill Clinton soon will issue an order prohibiting new American investments in Burma, also known as Myanmar.
The action will have a major impact on oil firms engaged in production and pipeline projects (OGJ, Feb. 13, 1995, p. 28). U.S. firms have invested about $240 million in Burma, mostly in the oil and gas sectors.
In a law last year, Congress gave Clinton authority to ban new private American investments in the event of Myanmar's "large scale repression or violence" against its democratic opposition in Burma.
Secretary of State Madeleine Albright said Myanmar's military rulers, in power since 1988, have increased their repression of political dissidents.
State Department spokesman Nicholas Burns said since last fall, the country's leaders have arrested more than 100 persons and political opponents, harassed others, and closed universities in response to student protests.
He said, "The Burmese government has built for itself a notorious record of human rights violations. We had hoped that the threat of sanctions might induce them to modify their behavior. But it did not."
He said the U.S. has discouraged American investment in Burma, denying aid for U.S. exports and trying to limit or block Burmese access to international financial aid.
Out of bounds
"It's very clear we are sending a signal to Burma that its human rights situation is woeful and reprehensible and ought to be cleaned up," Burns said. "The other signal is that Burma is now out of bounds for American investment."
Unocal Corp. said it was disappointed the administration "has chosen a policy of isolation and sanctions concerning new investments in Myanmar.
"Unocal, of course, will abide by the administration's order. We will review the order once it is made available to us. We do not expect that the administration's directive against new investments will have a material affect on our current involvement in the Yadana natural gas project."
It said the project is helping the 35,000 people who live along its route, providing 2,000 jobs, a $6 million program for medical care, improved schools, electrical power, and agricultural development.
Unocal's view
Unocal said, "Historically, unilateral sanctions have proven to be ineffective. During our 30-year history in Asia, we've seen that responsible foreign investment is the most effective way to promote long-term economic and social development in countries throughout the region. We are concerned the administration's action may impede, rather than advance, these developments in Myanmar."
Sens. Mitch McConnell (R-Ky.), chairman of a foreign relations subcommittee, and Daniel Patrick Moynihan (D-N.Y.), finance committee chairman, praised Clinton's action.
McConnell said he will push a bill to make the sanctions retroactive, thus forcing all U.S. investors from Myanmar.
Moynihan rejected arguments that investments could influence the country's leaders to change their policies. "`Constructive engagement' is a euphemism for doing business with thugs."
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