*EPF403 10/02/2003
Text: Political Dialogue in Burma Must Include Aung San Suu Kyi
(Assistant Secretary Daley's Oct. 2 testimony to House panel) (3290)

There can be no genuine political dialogue in Burma without Aung San Suu Kyi, says Matthew Daley, deputy assistant secretary of State for the Bureau of East Asian and Pacific Affairs.

Aung San Suu Kyi, the leader of the National League for Democracy (NLD), is currently under house arrest under the orders of the junta calling itself the State Peace and Development Council (SPDC). NLD won national elections in 1990, but the military regime prevented it from taking leadership of the country.

Daley testified October 2 before a joint hearing of the House International Relations Subcommittee on International Terrorism, Nonproliferation and Human Rights and the Subcommittee on Asia and the Pacific.

Daley told the subcommittees that the U.S. position "remains unambiguously clear: Aung San Suu Kyi and all others who have been detained for nothing more than peacefully exercising such fundamental rights as the expression of their political views must be released immediately. The offices of the National League for Democracy should be reopened, and all Burmese allowed to voice their views and participate freely in the political process of their country."

According to Daley, the U.S. government has taken "an active role on many fronts to address the many empty promises made by the SPDC with regard to a transition to democracy and improving human rights."

He noted that on July 28, President Bush signed both the Burmese Freedom and Democracy Act of 2003 and a companion Executive Order. "Together they impose measures including placing a ban on the import of all Burmese products, a freeze of the assets of certain Burmese institutions, and a ban on the exportation of financial services to Burma," he said.

"These measures immediately disrupted the economy in Burma," Daley reported, "particularly affecting industries reliant on exports to the United States. The garment sector was hardest hit and the junta has been unable or unwilling to assist affected businesses or their employees. The prohibition on financial services created instant difficulties for businesses, government agencies, foreign embassies, NGOs (nongovernmental organizations) and other institutions reliant on the U.S. financial system for trade facilitation and dollar remittance services. The tourist industry has been affected, with travelers unable to use credit cards or U.S. dollar travelers' checks. As of August 1, the asset freeze had captured $680,000."

The United States continues to persevere in its efforts to develop multilateral approaches to the SPDC, Daley said.

"Following an unprecedented statement by ASEAN (the Association of Southeast Asian Nations) at its meeting in June in support of national reconciliation and dialogue and calling for the lifting of restrictions on Aung San Suu Kyi, we have continued a dialogue with key ASEAN member states," he said. "We have made clear to ASEAN that the circumstances that exist in Burma today affect negatively international perceptions of ASEAN and of the individual ASEAN states. It has already complicated our efforts to make progress on a Trade and Investment Framework Agreement with ASEAN."

Daley said that "a great many countries have joined in denouncing the SPDC and calling for democracy in Burma. However, none have yet adopted an investment ban, import ban or financial services ban as has the United States."

"We continue our conversations with our partners in the international community, in particular the European Union, in an effort to make these measures as multilateral as possible and, thus, increase their effectiveness," he said.

The Bush administration, he added, is seeking "new avenues to progress in Burma through multilateral institutions."

"Ambassador Negroponte raised the situation in Burma at the United Nations Security Council in July," Daley reported. "We are now exploring how best to deal with this challenge in multinational fora, including the U.N. Security Council."

Following is the text of Daley's remarks, as prepared for delivery:

(begin text)

Committee on International Relations
U.S. House of Representatives
Washington, D.C. 20515-0128

Testimony by Deputy Assistant Secretary Matthew P. Daley Bureau of East Asian and Pacific Affairs U.S. Department of State
To the House International Relations Committee
Subcommittee on International Terrorism, Nonproliferation & Human Rights And the Subcommittee on Asia and the Pacific
October 2, 2003

Thank you Mr. Chairman for the opportunity to speak today.

I wish to begin by noting the transfer of Aung San Suu Kyi to her residence and the reports that she recovered quickly from surgery. At the same time, we need to suspend judgment on the exact import of this step. Many key questions remain unanswered. Will ordinary Burmese, foreign diplomats, journalists and others have free access to her? Will Aung San Suu Kyi be free to travel? Will her colleagues who were incarcerated after the May 30 attack on her motorcade be released? To these questions, I would add others that predated May 30. Will the State Peace and Development Council provide for a meaningful role for the National League of Democracy in shaping the political evolution of Burma? What approach will be taken to national reconciliation, dealing with Burma's emerging humanitarian crisis, its health emergency and its economy? We will not be able to answer these questions today.

Mr. Chairman, our concern at the end of August about the possibility of Aung San Suu Kyi being on a hunger strike was effectively addressed by the International Committee of the Red Cross (ICRC) which was able to visit her on September 6. The ICRC reported that she was not then on a hunger strike and was "in good health," but allowed that they could not say whether that included "the past and the present." Our expression of concern prompted suspicion and allegations that we were attempting to divert attention from the "roadmap" that had just been announced by Prime Minister Khin Nyunt. Those suspicions were simply wrong. There was no connection between the two issues. I will address the roadmap later in my remarks.

However, the fundamental problem remains that Aung San Suu Kyi, her colleagues and other political dissidents remain under detention. As best we can determine, her circumstances today are those of house arrest, while many NLD leaders who were arrested following the May 30 attack on her motorcade are in prison. Our position remains unambiguously clear: Aung San Suu Kyi and all others who have been detained for nothing more than peacefully exercising such fundamental rights as the expression of their political views must be released immediately. The offices of the National League for Democracy should be reopened, and all Burmese allowed to voice their views and participate freely in the political process of their country.

We have taken an active role on many fronts to address the many empty promises made by the SPDC with regard to a transition to democracy and improving human rights. On July 28, President Bush signed both the Burmese Freedom and Democracy Act of 2003 and a companion Executive Order. Together they impose measures including placing a ban on the import of all Burmese products, a freeze of the assets of certain Burmese institutions, and a ban on the exportation of financial services to Burma. These measures immediately disrupted the economy in Burma, particularly affecting industries reliant on exports to the United States. The garment sector was hardest hit and the junta has been unable or unwilling to assist affected businesses or their employees. The prohibition on financial services created instant difficulties for businesses, government agencies, foreign embassies, NGOs and other institutions reliant on the U.S. financial system for trade facilitation and dollar remittance services. The tourist industry has been affected, with travelers unable to use credit cards or U.S. dollar travelers' checks. As of August 1, the asset freeze had captured $680,000.

The measures now in place send a clear signal to the junta to release Aung San Suu Kyi and other political prisoners and move down the path to democracy. By reducing the hard currency available to the SPDC, we hope to exert pressure on them to restore democracy and bring an end to their extensive human rights abuses. This approach may become less effective if Burma succeeds in shifting its trade to other currencies. Unfortunately, the sanctions also affect ordinary Burmese. I note that some international NGOs have expressed concern that the destruction of already troubled export industries, especially the garment sector, will lead to significant unemployment and a spike in economic migrants seeking illegal work inside Burma or over the border in Thailand or China. Within the first month of sanctions, we estimate that more than 40,000 garment sector jobs were lost. In the long term, the garment sector will likely lose 100,000 jobs, most of which are filled by young women. We have credible reports that the concern voiced by some INGOs concerning the fate of these women is well founded and that some have entered the flourishing illegal sex and "entertainment" industries. Such effects are unfortunate, but Burma's greatest misfortune is the junta's misrule and the suffering of all the Burmese people, every day, under this military dictatorship. Much of the garment industry in Burma was already threatened by the impending end of quotas under the WTO's Agreement on Textiles and Clothing in 2005. It is therefore unlikely that the textile companies and their associated employment will return to Burma even if we elect to lift sanctions at some future point.

We persevere in our efforts to develop multilateral approaches to the SPDC. Following an unprecedented statement by ASEAN at its meeting in June in support of national reconciliation and dialogue and calling for the lifting of restrictions on Aung San Suu Kyi, we have continued a dialogue with key ASEAN member states. We note that former Indonesian Foreign Minister, Ali Alatas has recently visited Rangoon as part of ASEAN's effort to deal with the circumstances in Burma. We have made clear to ASEAN that the circumstances that exist in Burma today affect negatively international perceptions of ASEAN and of the individual ASEAN states. It has already complicated our efforts to make progress on a Trade and Investment Framework Agreement with ASEAN. ASEAN invited Burma to join ASEAN in part to encourage it to adopt international norms; Burma has failed to do so.

Meanwhile, Thailand has proposed a "roadmap" toward democracy, envisioning the participation of the democratic opposition. However, I must stress the importance of seeing concrete steps taken with full participation of the democratic opposition and a real time frame established for a return to democracy in Burma. The international community, with a few exceptions, has strongly supported our goals of seeing real movement toward and real improvement in the human rights situation in Burma. We work particularly closely with our counterparts in Japan, the European Union, and Canada, and we are working with them on appropriate next steps. We continue to have dialogue with other countries in the region including China and India, encouraging them to join the rest of the international community in calling for Aung San Suu Kyi's release and for the junta to take concrete steps that would demonstrate its commitment to national reconciliation in Burma. I note that a broad array of countries from Asia, including China, supported the release of Aung San Suu Kyi in a statement released in conjunction with the Asia-Europe Meeting in July.

China's relationship with Burma has undergone a radical transformation in the past decade as previously Sinophobic Burma has turned to China for arms, investment, assistance and trade. China, in turn, has gained important strategic access to and influence in an area that in the past was largely inaccessible to it. Beyond its strategic access, China is active in economic development, investment and trade. Its counter-narcotics efforts in law enforcement and development assistance in the opium producing regions beyond the direct control of the SPDC far exceed our own modest support for UN Office of Drugs and Crime projects in Burma. But China's increased role could also be harnessed as a force for change in Burma. We hope China too will encourage reform even as it differs sharply with us on tactics, preferring a quiet, behind-the-scenes effort, while rejecting sanctions.

I would also like to add a brief observation on Burma's relationship with North Korea. The DPRK, along with China, Russia, and a few other countries have a military supply relationship with Burma. We are mindful that North Korea has a proclivity for ignoring international norms and concerns for regional stability in its effort to sell arms, including missile systems. An extra measure of concern thus attaches to transactions that involve North Korea. Burma is fully aware of these concerns.

Our own relations with Burma are obviously under increasing strain. Nonetheless, we have received effective cooperation from the SPDC on issues involving counter-terrorism. Our requests for enhanced security at our Embassy in Rangoon were addressed effectively and promptly. Rangoon has continued to facilitate our efforts to account for the American servicemen who lost their lives during the Second World War. We remain in dialogue with Rangoon regarding the circumstances that would permit us to be more active in addressing the challenge of HIV/AIDS in Burma and in neighboring countries. At present our funding of HIV/AIDS assistance activities in Burma is limited to independent, international NGOs, and we provide no funds directly or indirectly to the government itself. We obviously have differences with Burma on some important foreign policy issues. In those areas, such as the treatment in multilateral fora of Iraq, Burma has expressed its views without launching efforts that would complicate our own diplomatic initiatives. Burma in recent decades has generally kept a low profile in multilateral fora.

The dimensions of the narcotics problem in the Golden Triangle have changed in important ways. The production of opium has declined significantly in Burma over the last five years. In 1998, it was an estimated 1750 metric tons; this year, recent estimates place production at only 484 metric tons. Surveys indicate that heroin produced from Burmese opium is of comparatively small importance in the U.S. heroin market. By that I mean that Burmese heroin appears to account for less than ten percent of heroin sold in the U.S. Although methamphetamines produced in Burma also do not enter the United States in significant numbers, they do pose a significant threat to the countries of the region, especially Thailand, an important American ally. The President determined again this year that Burma had failed demonstrably during the previous twelve months to adhere to its obligations under international counter-narcotics agreements. Our current level of activity in Burma on the narcotics issue is limited for both legal and policy reasons.

It is impossible to understand the nature of the narcotics problem in Burma without addressing the ethnic insurgent aspects. The opium growing and methamphetamine production problem is centered geographically in ethnic areas where the writ of the Rangoon government does not substantially prevail. In the Shan State, the United Wa State Army, the major narcotics syndicate in Southeast Asia fields an unusually well equipped army of over 20,000 men. While there are additional steps that Rangoon could take in the area of law enforcement that would complicate the life of the UWSA, there is no way in the near term to eliminate UWSA opium and meth production short of major military operations that would be problematic from a number of perspectives. We understand, therefore, that resolving the narcotics problem within the borders of Burma will take time and involve activities such as crop substitution and will require the active support of neighboring states that thus far have not halted the flow from their countries of essential chemicals to the narcotics organizations. It will also require progress on national reconciliation to reduce the perceived need by some ethnic groups to maintain their own military forces that are funded by the proceeds of narcotics trafficking.

In response to the events of May 30, a great many countries have joined in denouncing the SPDC and calling for democracy in Burma. However, none have yet adopted an investment ban, import ban or financial services ban as has the United States. We continue our conversations with our partners in the international community, in particular the European Union, in an effort to make these measures as multilateral as possible and, thus, increase their effectiveness.

Whatever the effects of sanctions, Burma and its people desperately need economic policy reform, a subject that often seems to be beyond the reach of military expertise. Economic reforms are necessary to curb inflation, provide civilian employment and higher standards of living. The SPDC has indeed been active in infrastructure development projects and perhaps judges that the international community has not sufficiently appreciated its efforts. But such expenditures have had other effects, such as producing pressures for forced labor, a centuries old practice in the area, and taking funds that would be better used for education and health. When meaningful political change comes to Burma, the international community will be quick to extend a robust and generous helping hand. Some have asked us for our thoughts on the recent shifts in the makeup of the SPDC. These changes will only be meaningful if they are accompanied by a meaningful change in policies. The hopes of the Burmese people for freedom and democracy have been put on hold for too many years. The United States and the world call on the junta in Rangoon to make good on its pledges to fulfill these hopes.

The Administration also seeks new avenues to progress in Burma through multilateral institutions. Ambassador Negroponte raised the situation in Burma at the United Nations Security Council in July. We are now exploring how best to deal with this challenge in multinational fora, including the UN Security Council. To this end, we stay in close contact with the Secretary General's Special Envoy for Burma, Ambassador Razali Ismail, as he seeks to encourage the development of a dialogue in Rangoon. I note that Ambassador Razali recently encouraged the international community to allow the SPDC time to make progress on its own "roadmap" for change in Burma, once again offering the generals an opening to bring positive change to their country. Ambassador Razali has just departed Burma and we look forward to receiving a readout on his mission. But I wish to reiterate that the immediate release and full participation of Aung San Suu Kyi and the other leaders of the NLD will be of paramount importance to the success of any such roadmap. The democratic opposition, including the NLD and the representatives of the ethnic minorities, must be allowed to play their indispensable role in Burma's future. To be meaningful, any roadmap will have to have a timeframe. In all of this, we are realists. We know that democracy and human rights will not be achieved in the coming weeks. We know also, as the NLD has made plain to us, that there will be an important role for the military institution in the future of Burma. We know that national reconciliation will also entail national forgiveness for past actions. But these are not principles that we can elaborate in detail for Burma. The Burmese themselves must elaborate them. But this must be an inclusive process.

There can be no plan, no roadmap, no convention to consider a new constitution, and no genuine political dialogue without Aung San Suu Kyi, the representatives of the National League for Democracy, and other members of the democratic opposition currently held under house arrest or in prison along with the other political prisoners.

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(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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