America quietly lifted sanctions on some of Myanmar’s pro-junta business groups and individuals last week. It was done without much fanfare, just a routine notice from the US Treasury Secretary.
What is Washington’s sudden interest in Myanmar, an isolated country, that has rich energy reserves but has been in the midst of a civil war since a military coup on February 1, 2021? The military action took place on the first day of a new Parliament session when lawmakers were to take oath, leading to the arrest of political leaders and overturning the election results. The 2020 elections had given the opposition National League for Democracy a thumping victory. The country has since been at war, with people resisting the junta’s crackdown on democracy. The civil war has killed thousands of civilians and combatants and displaced 3.5 million people in the country.
Following the coup, most western democracies led by the then US President Joe Biden and the EU, slapped tough sanctions on the generals and called for the restoration of democracy and respect for the people’s mandate. While the West withdrew, Asian powers including China and India continued to do business with the regime. New Delhi had been dealing with dictatorships in Myanmar since Narasinha Rao’s term in office, when he reversed New Delhi’s policy of boycotting the regime. The pragmatic Rao believed that India had to deal with whosoever was in power in a neighbouring country that shares a border with India. Rao was concerned that China was taking over the space vacated by India. Since 1992, New Delhi had worked with successive military regimes in Myanmar.
The Trump administration’s announcement on Myanmar came as a surprise as Myanmar was rarely publicly discussed by Trump. It is well known that Trump is not interested in spreading democracy in distant parts of the world nor is he an advocate for human rights, so events in far away Myanmar is of little interest. So the question is why the sudden wish to befriend Myanmar?
Countering China in the Indo-Pacific?
It has much to do with geo political strategy and countering China’s all encompassing presence in Myanmar. China has backed always backed Myanmar’s military rulers, but now increasingly is also playing footsie with many of the ethnic rebel groups that had fought the army since independence from the British. Many of the ethnic groups control areas that are rich in minerals including the ubiquitous rare earth much of which have not been extracted yet. The rare earth industry is not developed yet in Myanmar and China is helping to extract in both insurgent areas as well as in government controlled provinces. The US is looking also making a tentative attempt to gradually get into business here. The generals are looking to US markets at a time when its economy is deeply affected by western sanctions and continuous civil war.
As of now, China has spread its wings across Myanmar and is developing critical infrastructure. The Kyaukphyu Deep Sea port in Myanmar’s Rakhine state is being developed by China as part of the Belt and Road Initiative. It is a key component of the Chine-Myanmar Economic Corridor and will provide China with direct access to the India Ocean bypassing the Strait of Malacca. China has a network of ports and naval facilities stretching from the mainland to the Horn of Africa. Washington would want to prevent a Chinese naval corridor in these strategic waterways. By engaging with Myanmar, the U.S. seeks to offer the junta an alternative to dependence on Beijing and offset China’s strategic influence in the state.
Junta Chief Plays the Trump Card.
Significantly, Washington’s action followed a letter to President Donald Trump from senior general and head of the government Min Aung Hlaing. While addressing Trump’s announcement on imposing tariffs, Hlaing wrote to the US President, lavishing fulsome praise on the American leader. He was especially pleased at Trump for shutting down US-funded media outlets covering the civil war in Myanmar that were stridently critical of the military and sided with the democratic opposition. The US treasury announcements came roughly two weeks after the letter arrived.
The US lifted sanctions on Jonathan Myo Kyaw Thaung’s KT Services and Logistics, which were slapped in 2022 for leasing Yangon’s port from a military-owned firm. Other companies include the Myanmar Chemical and Machinery company and Suntac Technologies that had been sanctioned for producing tanks and mortars and supplied to the Myanmar military to use against its own people.
"The individuals involved are not marginal players; they have facilitated the junta's arms imports from countries such as China and Russia," analyst Sean Turnell told Australia's ABC."These are people who are closely tied to Myanmar's war economy."Lifting sanctions on them sends the wrong message," ABC reported him as saying.
