[Federal Register Volume 68, Number 69 (Thursday, April 10, 2003)]
[Presidential Documents]
[Pages 17529-17538]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-8677]


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  Federal Register / Vol. 68, No. 69 / Thursday, April 10, 2003 / 
Presidential Documents  

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 Title 3--
 The President

[[Page 17529]]

                Memorandum of March 28, 2003

                
Report to the Congress Regarding Conditions in 
                Burma and U.S. Policy Toward Burma

                Memorandum for the Secretary of State

                Pursuant to the requirements set forth under the 
                heading ``Policy Toward Burma'' in section 570(d) of 
                the Fiscal Year 1997 Foreign Operations Appropriations 
                Act, as contained in the Omnibus Consolidated 
                Appropriations Act (Public Law 104-208), a report is 
                required every 6 months following enactment concerning:

(1)

 progress toward democratization in Burma;

(2)

 progress on improving the quality of life of the Burmese people, including 
progress on market reforms, living standards, labor standards, use of 
forced labor in the tourism industry, and environmental quality; and

(3)

 progress made in developing a comprehensive, multilateral strategy to 
bring democracy to and improve human rights practices and the quality of 
life in Burma, including the development of a dialogue between the State 
Peace and Development Council and democratic opposition groups in Burma.

                You are hereby authorized and directed to transmit the 
                attached report fulfilling these requirements to the 
                appropriate committees of the Congress and to arrange 
                for its publication in the Federal Register.

                    (Presidential Sig.)B

                THE WHITE HOUSE,

                    Washington, March 28, 2003.

Billing code 4710-10-P


[[Page 17530]]

                Conditions in Burma and U.S. Policy Toward Burma For 
                the Period September 28, 2002--March 27, 2003

                Introduction and Summary

                Efforts to foster peaceful democratic change in Burma 
                essentially ground to a halt over the past six months. 
                The regime has become more confrontational in its 
                exchanges with the National League for Democracy (NLD), 
                led by Aung San Suu Kyi, and has offered few signs of 
                progress toward their stated commitment to a political 
                transition to democracy and not interest in pursuing 
                political dialogue with the elected opposition. UN 
                Special Envoy Razali continued his mission, the 
                National League for Democracy opened up a significant 
                number of township and divisional party offices, and 
                NLD General Secretary Aung San Suu Kyi was able to 
                continue her travels in Burma, visiting both Shan and 
                Rakhine States. However, the visit to Rakhine State was 
                marred by incidents instigated by government-affiliated 
                organizations and believed to be based on orders from 
                Rangoon; political prisoner releases stopped as of late 
                November, and there were new arrests of political 
                activists. Aung San Suu Kyi was nearly jailed in 
                February on charges arising from a civil lawsuit filed 
                by a relative. Most seriously, the regime has not 
                demonstrated its willingness to begin a real dialogue 
                with the NLD on substantive political issues.

                Economic developments were punctuated by the banking 
                crisis that followed the collapse of approximately 20 
                informal financial institutions, which had taken 
                deposits in return for promises of returns of five 
                percent per month or more. Stimulated by the rampant 
                inflation in recent years, and the repressed financial 
                conditions that had stifled the growth of legitimate 
                financial institutions, these informal financial 
                institutions had grown rapidly for two years, before 
                collapsing in January, sparking a run on the private 
                banks. The banks have coped by restricting withdrawals, 
                calling in loans, and requesting emergency central bank 
                support. Several may nonetheless fail. Only private 
                banks have been affected thus far. All of the 
                government-owned banks and all of the banks in which 
                government corporations participate as joint venture 
                partners have continued to run normally. Inflation has 
                also come down sharply as the asset price inflation 
                fueled by the activities of the informal financial 
                institutions has collapsed.

                The Government of Burma (GOB) severely abuses the human 
                rights of its citizens. There is no real freedom of 
                speech, press, assembly, association, or travel. 
                Burmese citizens are not free to change their 
                government. Religious minorities (particularly 
                Christians and Muslims) are discriminated against and 
                any form of proselytizing is discouraged. Security 
                forces also regularly monitor citizens' movements and 
                communications, search homes without warrants, and 
                relocate persons forcibly without just compensation or 
                legal recourse. In June 2002, the Shan Human Rights 
                Foundation (SHRF) accused the Burma Army of using rape 
                systematically as ``a weapon of war'' in ethnic 
                minority areas along the Thai border. The regime denied 
                those charges and has not agreed with UN Special 
                Rapporteur for Human Rights in Burma Paulo Sergio 
                Pinheiro on the ways and means for an effective, 
                impartial international investigation of these 
                allegations. However, the government did recently 
                intervene and punish both an army officer found guilty 
                of rape and his commanding officers. Forced labor also 
                remained an issue of serious international concern, 
                despite some limited government efforts to control the 
                practice. An International Labor Organization (ILO) 
                Liaison Officer was appointed to Burma in October 2002 
                and, at the direction of the ILO Governing Body, has 
                attempted to hammer out a ``viable program of action'' 
                with the government to eliminate forced labor. Thus 
                far, those efforts have not achieved the stated 
                objective.

                Burma remains one of the world's largest producers of 
                opium, heroin, and amphetamine-type stimulants. Its 
                overall output of opium and heroin has declined for six 
                straight years; in 2002 Burma produced less than one-
                quarter of the opium and heroin than it did six years 
                before. At the same

[[Page 17531]]

                time, however, the production of methamphetamines has 
                soared, particularly in the area controlled by the Wa 
                ethnic group. According to some estimates, as many as 
                400 million to 800 million methamphetamine tablets may 
                be produced in Burma each year, although these 
                estimates are difficult to verify. Burma has joined 
                with China, Thailand, and India in attempting to curb 
                this traffic; as yet, however, there are few signs that 
                this regional effort is succeeding.

                U.S. policy goals in Burma include a return to 
                constitutional democracy, restoration of human rights, 
                including fundamental civil and political rights, 
                national reconciliation, implementation of the rule of 
                law, a more effective counternarcotics effort, HIV/AIDS 
                mitigation, combating trafficking in persons, 
                accounting for missing servicemen from World War II, 
                counterterrorism efforts, and regional stability. We 
                continue to encourage talks between Aung San Suu Kyi 
                and the regime in the hope that the regime will live up 
                to its stated commitment to political transition, 
                leading to meaningful democratic change. We also 
                consult regularly, at senior levels, with countries 
                with major interests in Burma and/or major concerns 
                regarding Burma's current deplorable human rights 
                practices.

                In coordination with the European Union and other 
                states, the United States has maintained sanctions on 
                Burma. These include an arms embargo, ban on new 
                investment, and other measures. Our goal in applying 
                these sanctions is to encourage a transition to 
                democratic rule and greater respect for human rights. 
                Should there be significant progress towards those 
                goals as a result of dialogue between Aung San Suu Kyi 
                and the military government, then the United States 
                would look seriously at measures to support this 
                process of constructive change. Continued absence of 
                positive change would force the U.S. to look at the 
                possibility of increased sanctions in conjunction with 
                the international community.

                Measuring Progress toward Democratization

                Efforts to foster peaceful democratic change in Burma 
                have once again ground to a halt over the past six 
                months. While there have been some positive 
                developments, the regime has become more 
                confrontational in its exchanges with the NLD, led by 
                Aung San Suu Kyi, and has offered few signs of progress 
                toward their stated commitment to a political 
                transition to democracy.

                UN Special Envoy Razali Ismail continued his mission, 
                visiting Burma for the eighth time in November 2002. On 
                the positive side, the NLD also continued to rebuild 
                itself as a national party, opening up offices 
                throughout Burma. Altogether, the NLD has now reopened 
                about one-quarter of its township and divisional 
                offices (92 offices out of approximately 360). In 
                addition, the Committee to Represent the People's 
                Parliament (CRPP), a group of parties elected to 
                Parliament in 1990, expanded to a total of 18 elected 
                Members of Parliament (MP). In 1998, the opposition's 
                decision to establish the CRPP led to the arrest of 
                many of the MPs by the regime.

                Finally, the NLD's General Secretary Aung San Suu Kyi 
                continued her travels, visiting Shan and Rakhine States 
                and opening NLD offices in both states. In Shan State, 
                this travel went relatively smoothly; in Rakhine State 
                in December, however, efforts by the United Solidarity 
                Development Association (a ``mass organization'' 
                affiliated with the regime) to discourage any large 
                turnout of crowds for Aung San Suu Kyi, turned ugly. In 
                the town of Mrauk Oo Aung San Suu Kyi intervened with 
                local authorities by climbing atop a fire truck to 
                prevent them from dispersing a crowd of 20,000 
                supporters with water hoses.

                Political prisoner releases stopped as of late 
                November, despite continued appeals from the 
                international community (UN Special Envoy Razali and UN 
                Special Rapporteur Pinheiro, as well as the EU, U.S., 
                and others) for the unconditional release of all 
                political prisoners. Approximately 550 political 
                prisoners have been released since October 2000, 
                including 380 NLD

[[Page 17532]]

                party members. However, another 1,300 ``security 
                detainees'' still remain in detention, including 
                approximately 110 NLD party members and 17 elected MPs.

                There were also new arrests. Approximately 60 political 
                activists, mostly teachers, lawyers, and students, were 
                detained by the government between August 2002 and 
                March 2003 on charges including conspiracy to commit 
                terrorist acts for the simple peaceful expression of 
                political dissent. Due to international pressure, most 
                of these activists were released within days, but one 
                died while in detention (apparently from a lack of 
                medical care), while several were convicted of offences 
                carrying sentences of seven years or more.

                In February 2003 Aung San Suu Kyi was involved in a 
                minor civil law suit brought by a relative that 
                appeared to be politically motivated. Aung San Suu Kyi 
                counter-sued. Both were found guilty. She and other NLD 
                leaders characterized the initial suit as being 
                instigated by the regime and politically motivated. She 
                was given a choice of paying a small fine or being 
                jailed for a week. She refused to admit guilt by paying 
                the fine and indicated her willingness to be jailed for 
                a week as a result. The government then issued a 
                ``suspension of judgment'' decree as several thousand 
                NLD supporters gathered outside the courthouse.

                Most seriously, the regime has shown no inclination to 
                engage the democratic opposition in meaningful 
                political dialogue. The government arranged meetings 
                between Aung San Suu Kyi and the Minister of Education 
                and others, but the NLD leader made clear to UN Special 
                Envoy Razali in October that there was ``no real 
                dialogue'' with the regime. There were also signs of 
                Senior General Than Shwe's frustration with the lack of 
                increased aid or reduced sanctions.

                The hamstrung status quo has frustrated a number of 
                concerned countries. Australian Foreign Minister 
                Downer, Japan's Deputy Foreign Minister Tanaka, and the 
                EU Troika visited Burma over the past several months 
                and Japan's Prime Minister Koizumi reportedly weighed 
                in on behalf of reform at ASEAN Summit in Phnom Penh in 
                November; however, no one has yet been able to move the 
                process forward. At the most recent meeting of the U.N. 
                Contact Group on Burma, held in Tokyo in February, 
                there was little consensus on next steps and what new 
                strategies could be effective. Both the EU and the 
                United States are now considering the advisability of 
                increasing sanctions on Burma.

                Counternarcotics

                The United States judged earlier this year that Burma 
                had ``failed demonstrably'' to make substantial efforts 
                to cooperate on narcotics matters, primarily due to the 
                failure to stem the production and flow of amphetamine-
                type stimulants into neighboring countries. At the same 
                time, the USG has sustained a successful program of 
                cooperation between police authorities in Burma and the 
                U.S. Drug Enforcement Administration. Since 1993 the 
                USG and GOB have cooperated on annual opium yield 
                surveys in Burma and with UNODC and other donors on 
                opium reduction and crop substitution programs. In June 
                2002, the United States pledged an additional $700,000 
                to support UNODC's Wa Alternative Development Project, 
                which helped reduce opium production in the territories 
                of one of the most notorious former insurgent groups, 
                the United Wa State Army.

                While Burma is the world's second largest producer of 
                illicit opium, its overall production in 2002 was only 
                a fraction of its production in the mid-1990s. 
                According to the joint U.S./Burma opium yield survey, 
                opium production in Burma totaled no more than 630 
                metric tons in 2002, down 26 percent from 2001, and 
                less than one-quarter of the 2,560 metric tons produced 
                in Burma in 1996. Burma's success in reducing the 
                production of opium and heroin, however, has been 
                offset by increasing production of amphetamine-type 
                stimulants, particularly in outlying regions governed

[[Page 17533]]

                by former insurgents that are not under the effective 
                control of the Rangoon government. According to some 
                estimates, as many as 400 to 800 million 
                methamphetamine tablets may be produced in Burma each 
                year. Due to the mobile, small-scale nature of the 
                methamphetamine production facilities both reliable 
                data and effective law enforcement measures are 
                difficult. Burma does not have a chemical industry, and 
                as far as we know, does not produce any of the 
                precursors for synthetic drugs. This highlights the 
                regional character of this problem and the need for 
                regional cooperation to put an end to drug flows from 
                the region.

                There are reliable reports that individual Burmese 
                officials in outlying areas are involved in narcotics 
                production or trafficking or offering protection for 
                these activities. In addition, while the government 
                says it urges former ethnic insurgents to curb 
                narcotics production and trafficking in their self-
                administered areas along the Chinese border, it has 
                only recently, with the support and assistance of 
                China, begun to crack down hard on some of these 
                groups. Since September 2001, it has begun to enforce 
                pledges from these former insurgent groups to make 
                their self-administered areas opium-free and has 
                pressured groups (including the Wa and the Kokang 
                Chinese) into issuing decrees outlawing narcotics 
                production and trafficking in areas under their 
                control. According to early reports from UNODC's opium 
                surveyors, the cultivation in traditional growing areas 
                has been reduced. However, the Wa have not committed to 
                eliminating narcotics production until 2005. The 
                Burmese junta gauges that any military operation to end 
                production would be extremely costly.

                In recent years, Burma continues to improve its 
                cooperation with neighboring states, particularly 
                China. 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 a series of arrests 
                and renditions of major traffickers in 2001 and 2002, 
                many of whom were captured in the former insurgents' 
                self-administered areas. Over the past two years Burma 
                has returned over 30 Chinese fugitives to China, 
                including principals from one group that China 
                described as ``the largest armed drug-trafficking gang 
                in the Golden Triangle.'' Burma's MOU with Thailand has 
                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. Recent visits 
                by Thai Prime Minister Thaksin and other Thai officials 
                to Rangoon made narcotics cooperation a centerpiece of 
                bilateral relations. In addition, India participated in 
                a January 2003 meeting with China and Burma in Rangoon 
                on precursor control. As a result, India is now 
                exploring the possibility of establishing a 100-mile 
                wide ``restricted area'' within which any possession of 
                ephedrine, acetic anhydride, or other drug precursors 
                would be criminalized. If adopted by Thailand and 
                China, such action could have a major impact on 
                amphetamine production in areas not under Rangoon's 
                effective control.

                Burma is part of every major multilateral narcotics 
                control program in the region. It is a party to the 
                1961 UN Single Convention, the 1971 UN Convention on 
                Psychotropic Substances, and the 1988 UN Drug 
                Convention. It has also announced that it will shortly 
                adhere to the 1972 Protocol to the 1961 Single 
                Convention. Burma has also supported UNODC's 1993 
                Memorandum of Understanding that was signed among the 
                six regional states--Burma, China, Thailand, Laos, 
                Vietnam, and Cambodia--to control narcotics production. 
                Finally, as China and Thailand have become more active 
                multilaterally, Burma has joined all trilateral and 
                quadrilateral programs organized by either to 
                coordinate counter-narcotics efforts among the four 
                states of the Golden Triangle (Laos, Burma, China, and 
                Thailand).

                Under pressure from the Financial Action Task Force 
                (FATF), the Government of Burma has taken action on 
                money laundering issues. In June 2002 the GOB enacted a 
                new money laundering law that criminalized money 
                laundering in connection with most major offenses, 
                including terrorism and

[[Page 17534]]

                narcotics trafficking. A Central Control Board chaired 
                by the Minister of Home Affairs was established in 
                July; training for financial investigators was 
                conducted in Rangoon and Mandalay in August and 
                September, and the initial investigations were begun in 
                July 2002. Using the provisions of the law, assets have 
                been frozen and/or seized in several major narcotics-
                related cases. With assistance from UNODC, the Burmese 
                government is also in the process of drafting a new 
                mutual legal assistance law, which should lay the 
                groundwork for judicial and law enforcement cooperation 
                across borders in the prosecution of money laundering 
                and other cases.

                The Quality of Life in Burma

                The Economy: Economic developments in Burma were 
                punctuated in February and March 2003 by a banking 
                crisis centered on several major private banks. 
                Undermined by soaring inflation and government 
                restrictions on interest rates, Burma's private banks 
                were shaken to their roots by the collapse of several 
                unofficial financial institutions in January 2003. 
                During February, approximately 40 percent of the banks' 
                deposits were withdrawn, obliging the banks to restrict 
                withdrawals, call in loans, and apply to the Central 
                Bank for emergency assistance. The run has focused on 
                private banks, especially those with Chinese or 
                Chinese-Burmese ownership. Government-owned and joint 
                venture banks with government participation have not 
                been affected, presumably because the public is more 
                confident of government support in those cases. 
                Burmese-owned private banks have also escaped the 
                extreme pressures applied to the Chinese-owned banks, 
                presumably again because depositors are more confident 
                of government support in those cases.

                Looking ahead, several private banks may fail within 
                the next several months. Since the private banks hold a 
                majority of bank deposits in Burma, this will have a 
                major impact on their customers' savings and on the 
                payments system throughout Burma. A good portion of the 
                inflation that plagued Burma over the past two years 
                was generated by the uncontrolled credit and investment 
                operations of the informal financial institutions, 
                which have now collapsed. With them gone and the 
                banking system crippled by the current run, inflation 
                should decline, while the kyat, now suddenly in short 
                supply, strengthens. Since the start of the crisis in 
                February, the values of both gold and the dollar have 
                fallen by about 20 percent against the kyat, while 
                general price inflation has moderated. Both trends 
                should continue in the months ahead.

                In the energy sector, some good luck has saved the 
                government from the consequences of a string of 
                disastrous public investment decisions. As it turns 
                out, a crash government exploration program has turned 
                up enough natural gas onshore to ensure against a 
                recurrence of the severe load shedding and blackouts 
                that plagued the economy in 2002. Where in January 2002 
                the nation's peak generating capacity was sufficient to 
                meet only about two-thirds of the nation's peak demand, 
                it now appears that all, or virtually all customers in 
                Rangoon and other major cities are getting electricity 
                on a regular basis. In 2004, several major hydropower 
                projects are due to come on line and, provided that the 
                new-found gas holds out that long, Burma may finally be 
                able to put its long-running energy problems behind it.

                In the fiscal budget, the situation continues to be 
                desperate, but not so desperate as thought earlier. 
                There, a failed fiscal concept, in which the GOB 
                attempted to run the entire government on the basis of 
                the profits of the state-owned enterprises, has left 
                the GOB without any basis for long-term planning, as 
                profits have turned to losses in one state-owned 
                enterprise after another. In fact, in Burma's fiscal 
                year 2001/2002, the deficits of the state-owned 
                enterprises actually absorbed all the revenues 
                collected by the government, leaving the government 
                proper (i.e., the army, the navy, the health and 
                education services, and all ministerial operations) to 
                run on the basis of monies borrowed from the Central 
                Bank. This has over the

[[Page 17535]]

                past two years produced a rapid expansion of the money 
                supply, a commensurate increase in inflation and a 
                sharp depreciation in the value of the domestic 
                currency.

                The collapse of the informal financial institutions has 
                had a deflationary effect. Previously propped-up asset 
                values have collapsed and relatively high interest 
                rates for savers have also gone away. Thus, the 
                inflation associated with the government's mismanaged 
                fiscal expansion will have less impact.

                Human Rights: The Government of Burma severely abuses 
                the human rights of its citizens. Burmese do not have 
                the right to change their government. Nor is there any 
                real freedom of speech, press, assembly, association, 
                or travel. Religious minorities (particularly 
                Christians and Muslims) are discriminated against and 
                any form of proselytizing activity is actively 
                discouraged. Burma was designated a Country of 
                Particular Concern for particularly severe violations 
                religious freedom in 2002. Security forces also 
                regularly monitor citizens' movements and 
                communications, search homes without warrants, and 
                relocate persons forcibly without compensation or legal 
                recourse.

                Patterns of abuses are worse in ethnic minority areas. 
                These abuses include censorship, persecution, beatings, 
                disappearances, extrajudicial executions, the 
                curtailing of religious freedom, forced relocations, 
                rapes, and forced labor, including conscription of 
                child soldiers. Several reports by non-governmental 
                organizations have been published this year alleging 
                human rights abuses by the Burmese military on Burmese 
                civilians including rapes of hundreds of women between 
                1992 and 2001. The regime initially denied these 
                charges but, after conducting investigations, conceded 
                that it had identified five cases (out of the 173 
                presented by SHRF) whose circumstances approximate 
                those described by SHRF. The international community is 
                calling for an independent investigation by competent 
                officials from outside Burma conducting private 
                interviews with victims in an atmosphere of security 
                and free of reprisals. In March 2003, UN Special 
                Rapporteur for Human Rights Pinheiro visited Burma to 
                discuss the human rights situation there, including 
                prospects for an independent, credible investigation of 
                the rape allegations. However, he cut his visit short 
                when he learned that his supposedly confidential 
                discussions with political prisoners were being 
                monitored by Burmese authorities.

                In August 2002, a Burma Army Captain raped a four-year-
                old girl in a village in Kayah State, and local 
                officials attempted to cover up the crime when 
                villagers first complained to them. However, the 
                government has since taken action. The Captain was 
                brought back to Rangoon in handcuffs, and the Commander 
                and Deputy Commander of the Captain's battalion were 
                relieved of command for their mishandling of the 
                incident. Reportedly, there have been no reprisals 
                against the villagers.

                There had been no releases of political prisoners since 
                late November 2002 until shortly before Pinheiro 
                arrived in March 2003. The regime claimed to have 
                released 45 prisoners on March 16, including ``elderly 
                inmates, females either pregnant or with young 
                children, and those incarcerated for disturbing peace 
                and tranquility.'' Three to four of those released were 
                NLD members. Approximately 550 political prisoners have 
                been released since October 2000, including 
                approximately 380 NLD party members. However another 
                1,300 ``security detainees'' (including pro-democracy 
                activists, lawyers, students, teachers, journalists, 
                insurgents, and those accused of aiding insurgents) 
                still remain in prison. Of these, about 110 are NLD 
                members and 17 are elected Members of Parliament. 
                Another 400 prisoners (mainly mothers with young 
                children) were released on humanitarian grounds. U.N. 
                Special Rapporteur Pinheiro and U.N. Special Envoy, 
                along with members of the international community, have 
                consistently and strongly pressed for the unconditional 
                release of all political prisoners. This appeal has 
                thus far not been answered. The United States continues 
                to recognize

[[Page 17536]]

                the results of the 1990 elections and will continue to 
                push for the full restoration of the civil and 
                political rights of the people of Burma.

                Instead of more releases of prisoners, as pledged, 
                arrests of political activists continued in late 2002 
                and early 2003. Between August 2002 and March 2003, the 
                government detained approximately 60 activists for 
                peaceably promoting democracy and freedom. While most 
                of these activists were released within days of their 
                arrest, there were reports that several were beaten or 
                otherwise abused while in detention. In addition, one 
                detainee died (apparently as a result of a lack of 
                medical attention), while others were convicted and 
                sent to prison for periods of seven years or more. 
                However, the aggregate number of political prisoners 
                and security detainees has decreased by dozens at least 
                in the period covered by this report.

                The regime has allowed the United Nations High 
                Commission on Refugees to maintain a presence in 
                northern Rakhine State, providing support and 
                protection services to more than 230,000 Rohingya 
                Muslims who have returned from Bangladesh. After nearly 
                a decade, however, some 22,000 Rohingya refugees still 
                remain in two refugee camps in Bangladesh and another 
                estimated 200,000 Rohingya live illegally in 
                southernmost Bangladesh. In spite of ongoing 
                repatriation efforts, for the last few years 
                repatriations to Burma have not kept up with the camp 
                birthrates and restrictions on movement in Burma have 
                made life exceedingly difficult for this population. 
                There are concerns that members of this disenfranchised 
                population have been recruited by terrorist 
                organizations.

                Furthermore, more than 132,000 other Burmese ethnic 
                minority displaced persons live in several refugee 
                camps along the border in Thailand, and an estimated 
                two million Burmese, both ethnic minorities and ethnic 
                Burmans, live illegally in Thailand; many of these are 
                economic migrants rather than political refugees. The 
                tens of thousands of Burmese and ethnic minorities 
                living illegally in the countries surrounding Burma are 
                willing to endure an often perilous existence because 
                they believe it is even more dangerous to return to 
                Burma.

                Forced labor also remained an issue of serious concern 
                to the international community, despite some (still 
                relatively ineffective) government efforts to control 
                the practice. In June 2000, the International Labor 
                Conference 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 
                the history of the International Labor Organization 
                (ILO), it called on all ILO members to review their 
                policies to ensure that those policies did not support 
                forced labor. The ILO Governing Body implemented this 
                decision in November 2000. The United States strongly 
                supported this decision.

                Over the past 18 months, the Government of Burma has 
                slowly begun to work with the ILO on procedural 
                measures to address the problem. In September 2001, it 
                allowed an ILO High Level Team to visit Burma to assess 
                the situation. That 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 Burma Army was waging 
                active military campaigns against insurgent forces. The 
                team recommended that the ILO establish a presence in 
                Burma, a step that was finally completed in October 
                2002 with the opening of an ILO Liaison Office in 
                Rangoon. In August 2002, the ILO began field visits to 
                sites along the Thai/Burmese border that have been 
                identified by Amnesty International and other 
                organizations as ``hot spots'' for forced labor and 
                Burmese Army abuse of ethnic minorities. The ILO 
                Liaison Officer has also attempted to engage the GOB in 
                discussions to develop a ``viable plan of action'' to 
                eliminate forced labor as demanded by the ILO Governing 
                Body in November 2002, but so far these efforts have 
                been unsuccessful. While the GOB has made some 
                procedural concessions to ILO demands, the GOB has 
                still not prosecuted any individual for use of forced 
                labor, and there is abundant evidence that the 
                centuries-old tradition of forced labor in Burma 
                continues. As a result, the ILO has continued to press 
                for an effective investigative

[[Page 17537]]

                body, the appointment of an independent ombudsman to 
                report on violations, and the elimination of forced 
                labor in law and practice. The use of forced labor to 
                build infrastructure for tourist sites appears to be 
                reduced from levels reported in the late 1990's. In 
                recent years, there have been isolated reports of 
                forced labor at tourist sites.

                Burma was ranked as a Tier 3 country in the 
                Department's 2002 Trafficking in Persons Report. Since 
                the publication of that report, the GOB has tried to 
                make more transparent that it is taking steps against 
                sexual exploitation trafficking, which most often 
                involves the clandestine movement of Burmese women and 
                children from ethnic minority areas into Thailand. The 
                Myanmar National Committee on Women's Affairs has taken 
                measures to help educate vulnerable populations on the 
                dangers of trafficking by distributing booklets, 
                producing some media programming and organizing 
                community talks. The Ministry of Home Affairs and the 
                Attorney General's office have carried out arrests and 
                prosecutions of traffickers. The effectiveness of these 
                efforts appears to be uneven and difficult to evaluate 
                given the government's overall credibility and the 
                political climate in the country, but this represents 
                what seems to be a genuine engagement of some senior 
                government officials to fighting sex trafficking. The 
                GOB has also allowed some limited but important NGO and 
                international organization activity to assist returning 
                trafficking victims and educate officials, but the 
                government needs to be open to much more of this kind 
                of cooperation. The GOB has concentrated its efforts in 
                fighting sex trafficking, although officials are aware 
                that the international definition of trafficking in 
                persons also encompasses labor exploitation.

                The regime did allow a visit by Amnesty International 
                (AI) in February 2003. During the visit, the AI 
                delegation met with government ministers and other 
                officials, as well as with Aung San Suu Kyi and other 
                members of the NLD. AI used their meetings with 
                government officials to discuss the conditions under 
                which political prisoners are held and to call for the 
                immediate release of 19 prisoners on humanitarian 
                grounds.

                The Environment: Illegal logging and illicit trade in 
                wildlife and wildlife products are overwhelming efforts 
                at protection. To help deal with both of these issues, 
                the Ministry of Forestry has instituted a program to 
                increase the size of protected areas, but pressures are 
                mounting as agricultural lands expand. Other concerns 
                include threats to reefs and fisheries and overall 
                water resource management.

                Development of a Multilateral Strategy

                U.S. policy goals in Burma include a return to 
                constitutional democracy, the institution of a rule of 
                law, improved human rights, national reconciliation, 
                counterterrorism efforts, regional stability, HIV/AIDS 
                mitigation, combating trafficking in persons, 
                accounting for missing servicemen from World War II, 
                and more effective counternarcotics efforts. We 
                encourage talks between Aung San Suu Kyi and the 
                military government in the hope that it will lead to 
                meaningful democratic change in Burma. We also consult 
                regularly, at senior levels, with countries with major 
                interests in Burma and/or major concerns regarding 
                Burma's human rights practices.

                The United States has co-sponsored annual resolutions 
                at the UN General Assembly and the UN Commission on 
                Human Rights that target Burma. We have also supported 
                the ILO's unprecedented decision on Burma given its 
                failure to deal effectively with its severe and 
                pervasive forced labor problems. Most importantly, we 
                strongly support the mission of the UN Secretary 
                General's Special Representative for Burma, Razali 
                Ismail, whose efforts are key in facilitating the start 
                of any meaningful political dialogue between the regime 
                and the NLD.

                In coordination with the European Union and others, the 
                United States has imposed sanctions on Burma. These 
                sanctions include an arms embargo, a ban on all new 
                U.S. investment in Burma, the suspension of all 
                bilateral

[[Page 17538]]

                aid, the withdrawal of GSP privileges, the denial of 
                OPIC and EXIMBANK programs, visa restrictions on 
                Burma's senior leaders, and a vote against any loan or 
                other utilization of funds to or for Burma by 
                international financial institutions in which the 
                United States has a major interest. We have also 
                maintained our diplomatic representation at the 
                Charg[eacute] d'Affaires level since 1990.

                Our goal in applying these sanctions is to encourage a 
                transition to democratic rule and greater respect for 
                human rights. Nevertheless, we remain concerned about 
                the growing humanitarian crisis in Burma. In 2002, we 
                initiated a $1 million program to address the growing 
                HIV/AIDS epidemic in Burma by funding only 
                international non-governmental organizations (INGOs) to 
                undertake prevention activities; no assistance is 
                direct to the regime. Discussions with the government 
                continue on allowing INGOs to conduct voluntary HIV 
                testing and counseling, as well as a greater commitment 
                to more effective prevention, treatment, and care 
                programs, including for pregnant mothers and high risk 
                groups. We also use a portion of the funding from the 
                U.S. Burma earmark to develop programs in support of 
                democracy in Burma, as well as democracy, social, 
                educational, and governance-related programs outside 
                Burma. None of these funds are disbursed to or through 
                the Government of Burma. We will also continue to 
                examine the potential for cooperation with Burma on 
                terrorism and narcotics issues. Should there be 
                significant progress in Burma in coming months on 
                political transition, economic reform, and human 
                rights, the United States would look seriously at 
                additional measures that could be applied to support 
                the process of constructive change. Absent progress, we 
                will be forced to consider, in conjunction with the 
                international community, additional sanctions and/or 
                other measures.

                [FR Doc. 03-8677 Filed 4-9-03; 8:45 am]

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