The Futility of Economic Sanctions

The U.S. should promote change in Myanmar by working with the ASEAN

Here we go again: Western governments condemn the actions of this or that authoritarian regime and decide that the best way to force it to change its conduct and encourage the country to move towards democracy is by targeting it with economic sanctions.

In the latest case of using economic sanctions to punish authoritarian leaders and promote democracy, the United States and other western governments responded to the seizure of power by the military in Myanmar (Burma) from Aung San Kyi’s elected government and the continuing crackdown on pro-democracy demonstrators, by applying “targeted” sanctions against members of the military junta.

U.S. Secretary of State Anthony Blinken has called on all countries to consider measures such as arms embargoes and ending commercial cooperation with military-owned entities.

And in the most recent move, the European Union (EU) and Britain announced last week new sanctions targeting individuals and entities linked to the military regime.

But based on past experience, economic sanctions have been ineffective in changing the behaviour of authoritarian regimes, including when that weapon was used against the military junta in Myanmar in the three decades leading to the beginning of the transition to democracy in 2008.

In response to a crackdown on protesters. U.S. administrations suspended all aid and arms sales to Myanmar and later banned imports from that country, with the EU and other western governments following suit.

But Asian governments, including the Association of Southeast Asian Nations (ASEAN) and China rejected those policies then -- as they do now.

In fact, the U.S.-led policy of imposing unilateral trade and investment sanctions against Myanmar proved to be a failure on all fronts.

If anything, by forcing U.S. firms to disengage form Myanmar, that policy had harmed American economic interests and done nothing to improve the living conditions and human rights of the people of Myanmar, Just the opposite, it denied them the benefits of increased investment by American multinational companies that bring with them new technology and better working conditions.

Moreover, the sanctions policy ended up alienating America’s allies in the region led by the ASEAN, and strengthened the hands of China in terms of its economic and strategic interests.

There is no reason to believe that things would turn out to be different this time around. In a way, a more assertive China, which has said it supported Myanmar “choosing a development path that suits its own circumstances” could now take advantage of western economic disengagement from Myanmar to advance its interests. It would certainly veto any global consensus on sanctions on the UN Security Council.

At their meeting in Jakarta in April, the leaders of the ASEAN, of which Myanmar has been a member since 1997, reiterated their support for “constructive engagement” with Rangoon.

Even America’s leading ally in the region, Australia, has refused to follow Washington’s lead in prohibiting dealings with businesses controlled by Myanmar’s military and by targeting its officials.

The Biden Administration should perhaps try an alternative to the failed policy of sanctions: It should encourage the ASEAN to take the lead in setting the policy toward Myanmar.

In addition to helping strengthen U.S. relations with these key allies in the region such an approach could counter the influence on China in Myanmar.

And in the long run, it could encourage a gradual process of political change in Myanmar, a goal that would not be achieved through new sanctions. END