Notes by Kevin Heppner, Karen
Human Rights Group
October, 1995
Everyone has heard the argument that economic sanctions never work, that the best way to encourage dictators to change their policies is to give them lots of money, then ask them to change, then give them even more money if they refuse. Economic sanctions only hurt the poor, the big investors tell us, while investment dollars "trickle down" from the generals and help everyone. Not only is there no evidence anywhere to support this argument, but in the case of Burma foreign investment directly leads to suffering.
First of all, SLORC completely controls the Burmese economy. The "opening up" of the economy reported in the foreign business press is primarily a myth. True, the rules are opening up for foreign business, but if anyone who lives in Burma tries to sell controlled goods or open a business without the proper SLORC connections, bribes, and "licenses", they end up in jail and the Army takes over the business. Burmese prisons and forced-labour worksites are full of people who have tried to capitalize on Burma's "free market". Meanwhile, the families of military officers set up businesses in the cities and enter into foreign joint ventures, all capitalized with money the officer has extorted or looted from rural villagers in the area where he's posted. SLORC dictates that foreign companies who want to hire 5 or more people must obtain a list of "suitable candidates" from the junta and choose their employees from that list.
The only thing that "trickles down" to the average family is the annual 50% inflation rate, largely spurred by foreign investment. Even mid-level civil servants and longtime professors can no longer buy enough plain rice to feed a family of four on their entire salaries, not counting other expenses. Worse yet, entire neighbourhoods are now being forcibly relocated, on pain of death, out of the cities to make room for foreign joint venture factories and hotels. They are forced from their homes without compensation to "new towns", swamps or dustbowls with no running water or electricity far from the city and their jobs. People who refuse to go end up becoming homeless beggars, who are easy targets in the Army's porter roundups. Meanwhile, the foreign hotels and factories set up in their bulldozed neighbourhood get priority for water and power, causing blackouts and water shortages to surrounding neighbourhoods.
The profits from these joint ventures stay with the military and are used to expand the Swiss bank accounts of junta members and to expand and arm the grossly oversized Army, which exists in the absence of any foreign threat, only to crush its own people. Some examples bear specific mention: PepsiCo, which pumps millions a year into SLORC, is also used by SLORC for intense nationwide propaganda; Pepsi's red-white-and-blue is actively presented to the Burmese people as a symbol of American support, while Pepsi cooperates by putting on Miss Pepsi contests and SLORC trade fairs. Pepsi also engages in "countertrade", buying agricultural produce for export in order to repatriate profits - there is increasing evidence that they are buying from SLORC, whose Army is confiscating farmland and using forced labour to produce these crops. Pepsi refuses to disclose where it buys the produce. Heineken, in cooperation with Asia-Pacific Breweries, is about to build a brewery in Burma - its partner, "private" company Union of Myanmar Economic Holdings Ltd., has its head office in the Defence Department building. The company was set up as a military front - it is 60% owned by military men, with the 40% controlling interest owned by the Defence Department's Directorate of Procurement, which buys weapons and ammunition for the armed forces. UMEH is also known as a money-laundering company for cash stolen from rural villages as well as (probably) drug money. Foreign oil companies Unocal and Total are building a gas pipeline in southern Burma for which SLORC is mounting entire military offensives and forcibly relocating villages. The 12-15 Battalions sent to secure the foreigners' camp and the pipeline route are terrorizing people into fleeing the area to become refugees. While the companies claim to be creating jobs, they are letting SLORC do all their hiring, and forced labour is now also being used. In fact, some new refugees say they had to abandon existing jobs to flee the area because of the pipeline project. Villagers along part of the pipeline route say SLORC officials have already notified them that they are all to be called out for forced labour to clear a "road" in the coming dry season right along the pipeline route. The oil companies are contractually forbidden from even meeting with representatives of the people who live in the area, and as a result every opposition group has vowed to destroy the pipeline if it is built. In an attempt to prevent this, SLORC will most likely be using the villagers to clear a swath about 1 mile wide through the rainforest as a "killing ground" along the pipeline, booby-trapped with sentry towers, barbed wire and landmines. In accordance with usual SLORC practice, villagers will then be used as forced labour "sentries" along the pipeline route.
Even the Wall Street Journal admitted that foreign investment in Burma is wrong, stating "We have argued for commerce and investment where it strengthens civil societies vis-a-vis dictators. But these deals, by putting money directly into SLORC's pocket, only make a richer prize out of political power. The prospect of vast petrodollars gives the generals yet another reason to cling to office no matter how many bodies of their fellow citizens pile up." There is no argument for raping Burma's resources and handing money to SLORC, and it is about time investors and their governments started admitting it.