[Federal Register Volume 67, Number 244 (Thursday, December 19, 2002)]
[Presidential Documents]
[Pages 77645-77650]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32150]



[[Page 77646]]

                Conditions in Burma and U.S. Policy Toward Burma for 
                the Period September 28, 2001-March 27, 2002

                Introduction and Summary

                Over the past 6 months, Burma's military government and 
                the National League for Democracy (NLD) General 
                Secretary Aung San Suu Kyi have continued confidence-
                building measures that are reportedly aimed at 
                supporting a transition to democracy and civilian rule. 
                Both sides have held the substance of these talks in 
                strictest confidence, but the past 18 months has seen 
                the release of approximately 250 political prisoners, 
                and a halt to the vicious attacks on Aung San Suu Kyi 
                and the NLD by the government-owned press. 
                Unfortunately, the process has moved very slowly. Of 
                particular concern is the continuing house arrest of 
                Aung San Suu Kyi.

                The quality of life in Burma during the past 6 months 
                has deteriorated. Poverty is widespread, and the 
                economy increasingly shows the effects of a growing 
                government deficit, rising inflation, shortfalls in 
                energy supplies and growing foreign exchange shortages. 
                Severe human rights abuses are commonplace, 
                particularly in ethnic minority areas, where there are 
                continuing reports of extrajudicial killings, rape, and 
                disappearances. Due to continuing severe restrictions 
                on religious freedom, Burma was again designated a 
                ``country of particular concern'' in 2001 under the 
                International Religious Freedom Act. Prison conditions 
                are harsh, despite access to the prisons by the 
                International Committee of the Red Cross. One retired 
                university rector was also detained and sentenced to 7 
                years in prison following his one-man protest calling 
                for new general elections.

                Forced labor remains an issue of serious concern. In 
                September 2001, an ILO High Level Team visited Burma to 
                assess the situation and concluded that the SPDC had 
                made an ``obvious, but uneven'' effort to curb the 
                practice; nevertheless, forced labor persisted, 
                particularly in border areas. In March 2002, the 
                government reached agreement with the ILO on 
                appointment of an ILO liaison officer in Burma, pending 
                establishment of a permanent ILO office.

                Burma is also one of the world's largest producers of 
                illicit opium, heroin, and methamphetamines. However, 
                its overall output of opium has declined by two-thirds 
                over the past 5 years, in part as a result of bad 
                weather and in part as a result of eradication efforts. 
                It has also stepped up law enforcement operations 
                against some former insurgent groups (particularly the 
                Kokang Chinese) and considerably improved its counter-
                narcotics cooperation with China, Thailand, and other 
                neighboring states.

                United States policy goals in Burma include progress 
                towards democracy, improved human rights, a more 
                effective counternarcotics effort, counterterrorist 
                cooperation, resolving MIA cases from WW II, and 
                addressing the HIV/AIDS epidemic which threatens 
                regional stability and prosperity. We hope that the on-
                going talks between Aung San Suu Kyi and the military 
                will lead to meaningful democratic change and national 
                reconciliation. We consult regularly, at senior levels, 
                with countries interested in Burma that share our 
                goals.

                In coordination with the European Union and other 
                states, the United States maintains sanctions on Burma 
                aimed at encouraging transition to democratic rule and 
                greater respect for human rights. These include an arms 
                embargo, an investment ban, and other measures.

                Measuring Progress toward Democratization

                From September 2001 through March 2002, Burma's 
                military regime continued talks with the NLD's General 
                Secretary, Aung San Suu Kyi. Since the talks began 18 
                months ago, we have seen the release of approximately 
                250 political prisoners, including all but 20 of the 
                MPs elected in 1990

[[Page 77647]]

                and all of the NLD's Central Executive Committee 
                members with the exception of Aung San Suu Kyi. The 
                regime has also halted the virulent attacks on Aung San 
                Suu Kyi and the NLD which had become a staple of 
                newspaper coverage in Burma. In addition, the military 
                government has allowed the NLD to reopen 32 party 
                offices in Rangoon Division and to resume some normal 
                party activities. These included public meetings on 
                Burma's National, Independence and Union Days, all of 
                which were attended by Ambassadors and Chiefs of 
                Mission from the United States, the United Kingdom, 
                Australia, and other countries. The NLD, in turn, has 
                moderated its public criticism of the regime and 
                announced that it is now prepared to work with the 
                regime on political transition.

                Over the past 6 months, the regime has gradually 
                increased access to Aung San Suu Kyi, who has been 
                under house arrest since the talks began in 2000. 
                Visitors have included U.N. Special Rapporteur for 
                Human Rights Paulo Pinheiro, U.N. Special Envoy Razali 
                Ismail, the ILO's High Level Team, representatives of 
                the European Union and U.S. Deputy Assistant Secretary 
                of State Matthew Daley, among others. Aung San Suu Kyi 
                is also now in daily contact with fellow NLD members, 
                including NLD Chairman U Aung Shwe, and NLD Vice 
                Chairman U Tin Oo. The abrupt postponement of U.N. 
                Special Envoy Razali's planned March 19 visit to Burma 
                is of particular concern, especially in light of 
                approval for other meetings. The connection, if any, 
                between this event and the arrest of members of Ne 
                Win's family is unclear.

                The United States welcomed the confidence-building 
                process between the government and Aung San Suu Kyi and 
                the release of political prisoners and resumption of 
                some NLD activity. However, we have also urged the 
                regime to move beyond confidence building to a genuine 
                political dialogue with Aung San Suu Kyi that would 
                chart the course for a return to democracy and civilian 
                rule. Critical next steps include release of all 
                remaining political prisoners, the unconditional 
                release of Aung San Suu Kyi from house arrest and 
                increased political rights and freedom of operation for 
                the NLD and other political parties.

                Counternarcotics

                Burma is one of the world's largest producers of 
                illicit opium, heroin, and methamphetamines. However, 
                its overall output of opium has declined sharply in 
                recent years. In 2001, Burma produced an estimated 865 
                metric tons of opium, barely one-third of the 2,560 
                metric tons of opium produced in Burma 5 years earlier. 
                Unfortunately, as opium production has declined, 
                methamphetamine production has soared, particularly in 
                outlying regions that are governed by former 
                insurgents. According to some estimates, as many as 800 
                million methamphetamine tablets may be produced in 
                Burma each year.

                There is no evidence that the government is involved on 
                an institutional level in the drug trade. However, 
                there are reliable reports that individual Burmese 
                officials in outlying areas are either directly 
                involved in drug trafficking or provide protection to 
                those who are. In addition, while the government has 
                encouraged ethnic insurgents who have signed cease-fire 
                agreements to curb narcotics production and 
                trafficking, it has only recently begun to take 
                aggressive law enforcement actions to control these 
                activities. Over the past 6 months, the Burmese 
                Government has cracked down particularly hard on the 
                Kokang region controlled by Peng Jiasheng's Myanmar 
                National Democratic Alliance Army (MNDAA), which had 
                pledged to be opium free by 2000. With the assistance 
                of the People's Republic of China, the Burmese 
                Government staged a series of arrests of major 
                traffickers in all areas of the Kokang, including 
                Laukkai, the capital of Kokang State.

                In other areas, the SPDC has moved more cautiously. In 
                areas controlled by the United Wa State Army (UWSA), 
                the principal drug-producing and drug-trafficking 
                organization in Burma, the government has slowly 
                expanded

[[Page 77648]]

                its administrative presence, but has not yet attempted 
                any aggressive law enforcement operations comparable to 
                those in the Kokang region. The Wa have pledged to end 
                all opium production in their territories by 2005. The 
                United States has urged the government to take law 
                enforcement action and exact other forms of pressure 
                against the Wa narcotics operations even before that 
                deadline is reached.

                There have also been significant improvements in 
                Burma's cross-border cooperation with neighboring 
                states. In 2001, Burma signed memoranda of 
                understanding on narcotics control with both China and 
                Thailand. The MOU with China established a framework 
                for joint operations, which in turn led to the series 
                of arrests and renditions of major traffickers in 2001 
                and 2002. The MOU with Thailand committed both sides to 
                closer police cooperation on narcotics control and to 
                the establishment of three joint ``narcotics 
                suppression coordination stations'' at major crossing 
                points on the border. Thailand has also provided a 
                grant for a crop substitution project in the Wa-
                controlled regions of southern Shan State. In addition, 
                Burma participated actively in a series of 
                quadrilateral meetings (China, Burma, Laos, and 
                Thailand) on narcotics control that were held in 
                Thailand, Burma, and China in late 2001 and early 2002.

                Under pressure from the Financial Action Task Force 
                (FATF), which designated Burma as a ``non-cooperating'' 
                state in June 2001, the Government of Burma has a draft 
                of a new money laundering law, which will reportedly 
                address many of the FATF's concerns. That law, as well 
                as a new Mutual Legal Assistance Law, facilitating 
                Burmese legal and judicial cooperation with other 
                states, should be enacted in 2002.

                Despite these recent steps, the United States does not 
                believe that Burma's counternarcotics efforts are 
                commensurate with the scale of the narcotics problem in 
                Burma. We work with the GOB on annual opium yield 
                surveys in Burma, and through UNDCP on opium reduction 
                and crop substitution programs. In September 2001, the 
                United States pledged an additional $1,000,000 to 
                support UNDCP's Wa Alternative Development Project, 
                which has helped reduce opium production in the 
                territories of the United Wa State Army, but made 
                utilization of these funds contingent on the 
                mobilization of matching funds from other donors.

                The Quality of Life in Burma

                Burma remains one of the world's poorest countries with 
                an average per capita GDP of approximately $300, 
                according to World Bank figures. Primarily an 
                agricultural economy, Burma also has substantial 
                mineral, fishing, and timber resources. However, almost 
                4 decades of military misrule and mismanagement have 
                produced a chaotic economy characterized by widespread 
                poverty.

                Over the past 2 years, a growing government deficit, 
                shortfalls in energy supplies and continuing foreign 
                exchange shortages have hampered economic activity and 
                contributed to a rapid depreciation in Burma's official 
                currency, the kyat. Valued at approximately 360 kyat to 
                the dollar in September 2000, that rate has now risen 
                to approximately 840 kyat per dollar in March 2002 and 
                is expected to rise further over the next 3 months. At 
                the same time, inflation has picked up speed. According 
                to an urban retail price index calculated by the U.S. 
                Embassy, cumulative, point-to-point inflation from 
                January 1, 2001 to January 1, 2002 totaled 
                approximately 52 percent.

                Widespread and severe human rights abuses also 
                continued throughout Burma during the reporting period. 
                In ethnic minority areas, in particular, there were 
                many reports of extrajudicial killings, rape, and 
                disappearances. Significant numbers of ethnic minority 
                refugees continue to seek asylum in Thailand. Due to 
                severe restrictions on religious freedom, Burma was 
                again designated a ``country of particular concern'' in 
                2001 under the International Religious Freedom Act. 
                Prison conditions remained harsh, despite

[[Page 77649]]

                access to prisons by the International Committee of the 
                Red Cross. During the reporting period, only one 
                political activist was detained for the expression of a 
                dissenting political view; in early December, Dr. Salai 
                Tun Than, a retired university rector and graduate of 
                the University of Wisconsin, was arrested and sentenced 
                to 7 years in prison for passing out leaflets in front 
                of Rangoon's City Hall which called for a civilian 
                government and general elections.

                Forced labor also remains an issue of serious concern. 
                In November 2000, the International Labor Organization 
                (ILO) Governing Body concluded that the Government of 
                Burma had not taken effective action to deal with the 
                use of forced labor in the country and, for the first 
                time in its history, called on all ILO members to 
                review their policies toward Burma to ensure that they 
                did not support forced labor. The United States 
                strongly supported this decision.

                In recent months, the Government of Burma has indicated 
                that it is more willing to work with the ILO. In 
                September 2001, an ILO High Level Team concluded that 
                the GOB had made an ``obvious, but uneven'' effort to 
                curtail the use of forced labor, but that forced labor 
                persisted, particularly in areas where the government 
                was waging active military campaigns against insurgent 
                forces. It also recommended that the ILO establish a 
                permanent presence in Burma. A second ILO team visited 
                Burma in February 2002 and eventually reached agreement 
                on the appointment of an ILO liaison officer, pending 
                the establishment of a permanent ILO office in Rangoon. 
                However, the government has not been willing to address 
                two other ILO recommendations: appointment of an 
                ombudsman for forced labor issues, and an independent 
                investigation of allegations that villagers in Shan 
                State were killed after complaining to the military 
                about forced labor.

                The regime has released approximately 250 political 
                prisoners since the initiation of talks with Aung San 
                Suu Kyi, including approximately 70 over the past 6 
                months. In response to an appeal from U.N. Special 
                Rapporteur Pinheiro, it has also released, on 
                humanitarian grounds, 318 women prisoners who either 
                had small children or were pregnant. Even with these 
                releases, more than 1,000 political prisoners still 
                remained in prison or under detention in Burma as of 
                March 2002, including over 600 NLD members.

                International monitoring of human rights in Burma also 
                improved to some degree in 2001. For the first time in 
                6 years, the Government of Burma permitted visits (in 
                April and October 2001, and then again in February 
                2002) by the United Nations Special Rapporteur on Human 
                Rights in Burma. It also allowed the International 
                Committee of the Red Cross to visit all prisons in 
                Burma and reportedly has responded to some ICRC 
                recommendations about prison conditions.

                Development of a Multilateral Strategy

                United States policy goals in Burma include progress 
                towards democracy, improved human rights, a more 
                effective counternarcotics effort, counterterrorist 
                cooperation, resolving MIA cases from WW II, and 
                addressing the HIV/AIDS epidemic which threatens 
                regional stability and prosperity. We hope that the on-
                going talks between Aung San Suu Kyi and the military 
                will lead to meaningful democratic change and national 
                reconciliation. We consult regularly, at senior levels, 
                with countries interested in Burma that share our 
                goals.

                The United States has co-sponsored annual resolutions 
                at the U.N. General Assembly and the U.N. Commission on 
                Human Rights concerning Burma. We have also supported 
                ILO's unprecedented decision on Burma given Burma's 
                failure to deal effectively with its pervasive forced 
                labor problems. Most importantly, we strongly support 
                the mission of the U.N. Secretary General's Special 
                Envoy for Burma, Razali bin Ismail, who has helped 
                facilitate the regime's talks with Aung San Suu Kyi. We 
                are increasingly concerned

[[Page 77650]]

                that the Burmese regime is not permitting Mr. Razali to 
                visit Burma with the regularity or frequency needed at 
                this stage of the process.

                In coordination with the European Union and other 
                states, the United States has imposed sanctions on 
                Burma aimed at encouraging democratic transition and 
                greater respect for human rights. These sanctions 
                include an arms embargo, a ban on all new U.S. 
                investment in Burma, the suspension of all bilateral 
                aid, the withdrawal of GSP privileges, the denial of 
                OPIC and EXIMBANK programs, visa restrictions on 
                Burma's senior leaders and opposition to all new 
                lending or grant programs by the World Bank, the IMF, 
                the ADB and other international financial institutions 
                in which the United States has a major interest. We 
                downgraded the level of our diplomatic representation 
                from Ambassador to Charg[eacute] d'Affaires in 1989 and 
                have maintained at that level.

                
[FR Doc. 02-32150 Filed 12-17-02; 8:45 am]

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