EU Removes Sanctions Against Myanmar
Apr. 25 – On Monday this week, the foreign ministers of the European Union (EU) permanently ended the majority of its sanctions against Myanmar. The sanctions have already been suspended for nearly a year, with support for removing them permanently growing in step with recent democratic, economic and human rights reforms in the country.
The move follows in the wake of the United States removing most of their sanctions against Myanmar over the past year, as leaders on both continents seek to reward and further facilitate reforms by Myanmar President Thein Sein. The EU’s arms embargo on Myanmar will continue to stay in place, however, and will not be reviewed for another year.
While the policies of President Thein Sein have largely been welcomed by the international community and businesses looking to invest in the country, several concerns have lingered, especially those regarding the government’s mistreatment and lack of protection of minority groups. This was also noted by EU foreign ministers, who cited “significant challenges” in this and other areas.
Other organizations, such as the Human Rights Watch, have criticized the EU’s decision to remove their sanctions.
“The EU’s scrapping of targeted sanctions on Burma is premature and recklessly imperils human rights gains made so far,” said Lotte Leicht, the EU director for the Human Rights Watch. “EU member states are ditching measures that have motivated the current progress and gambling on the goodwill of Burma’s government and military to keep their word to keep reforms on track.”
Nonetheless, analysts speaking to the Wall Street Journal said that removing the sanctions should encourage investment by European companies who have spent the last year looking into new opportunities in Asia’s most interesting frontier market. They further noted that investment is likely to increase slowly but surely, as Myanmar’s untested regulatory and physical infrastructure is a prominent reason for why many European businesses continue to sit on the sidelines.
In some sectors, however, significant progress has been made. The textile industry hass grown by 30 percent annually since 2009, with exports reaching US$260 million in 2012.
Myanmar is considered a potential destination for relocation, as it has the lowest labor costs in the region and governmental incentives that include a five-year tax holiday for investors that utilize the country’s special economic zones (SEZs).