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Burmese flagBurma Country Brief - May 2008

Cyclone Nargis

Introduction/overview

Australia has diplomatic relations with Burma and the two countries maintain small embassies in each other's capital cities. However, for many years the development of Australia's relations with Burma has been overshadowed and constrained by the actions of Burma's authoritarian military regime. Australia has a longstanding ban in place on defence exports to Burma and restrictions on visits to Australia by senior regime figures.

Australians viewed with grave concern the Burmese regime’s violent crackdown on democracy protestors in late September 2007 and subsequent repressive actions, including large scale detentions and other acts of intimidation. In response to this crisis, Australia implemented bilateral financial sanctions targeted against members of the Burmese regime and their associates and supporters on 24 October 2007. Australia has also urged the Burmese regime to respect the legitimate right of Burmese citizens to peaceful protest and repeatedly called for the regime to embrace genuine political reform and national reconciliation.

Australia has supported a robust wider international response to this latest wave of repression in Burma. The Prime Minister, Mr Kevin Rudd, and Foreign Minister, Mr Stephen Smith, raised Burma with UN Secretary-General Ban Ki-moon in Bali in December 2007, and Mr Smith discussed Burma in meetings in New York, Washington and Tokyo in January 2008. Mr Smith also raised Burma with the Chinese Foreign Minister in Canberra on 5 February, and with the Indonesian Foreign Minister during talks in Perth on 7 February.

Australia’s diplomatic missions have also made representations in a range of relevant capitals to encourage these countries to bring pressure to bear on the Burmese regime to heed the voice of its people for change. In addition, Australia has endorsed firm UN action on Burma, including the good offices role being undertaken by UN Special Envoy Ibrahim Gambari, and further consideration of Burma in the UN Security Council. Australia is a participant in the UN Secretary-General’s Group of Friends on Burma which has met twice in New York since December 2007.

Australia supports strong multilateral action to encourage protection and promotion of human rights in Burma. Australia supported a firm resolution adopted by a special session of the UN Human Rights Council which convened in Geneva on 2 October 2007 to address the situation in Burma. Australia also co-sponsored a resolution condemning human rights abuses in Burma adopted by the UN General Assembly in December 2007. In March 2008, Australia again raised its concerns about Burma in the UN Human Rights Council. In June 2007, Australia delivered a statement at the 96th Session of the International Labour Conference (ILC) of the International Labour Organization (ILO) urging the Burmese regime to deepen its cooperation with the ILO in support of the new mechanism to investigate complaints of forced labour in Burma.

These multilateral actions have reinforced regular bilateral representations, including those made directly to senior Burmese authorities by the Australian Ambassador in Rangoon, and to Burma’s Embassy in Canberra.

Bilateral Relationship

As noted above, the development of Australia's relations with Burma has been overshadowed and constrained by the actions of Burma's authoritarian military regime. Australia has a longstanding ban in place on defence exports to Burma and restrictions on visits to Australia by senior regime figures and their associates. Australia introduced targeted bilateral financial sanctions against members of the Burmese regime and their supporters on 24 October 2007.

Humanitarian Needs: Australia seeks to address the humanitarian needs of the Burmese population while not giving support to the military regime in that country. Australian assistance to Burma primarily targets vulnerable populations, especially women and children, ethnic minorities, and refugees on the Thai/Burma border. The focus of this aid, delivered through UN agencies and local, international and Australian NGOs, is at the community level - in basic health, giving people livelihoods, and protection. For more information see the AusAID website.

Displaced Persons: Australia is particularly concerned about the welfare and human rights of Burmese displaced persons from a range of ethnic groups driven across the border to Thailand or relocated within Burma because of internal conflict there. Australia has had a long-term program with the Thai-Burma Border Consortium (TBBC), through the National Council of Churches Australia to provide humanitarian support, including food, shelter and health support, to Burmese refugees located in camps along the Thai-Burma border.

Other assistance activities: Australia’s regional program has also provided assistance to address significant trans-boundary development issues such as HIV/AIDS, people trafficking, illicit drugs and transnational crime. The Australian Centre for International Agricultural Research (ACIAR) conducts a small program in Burma focused on increasing food security and farmer livelihoods through enhanced legume cultivation.

Anti-narcotics: Burma remains the world’s second largest producer of illicit opium (estimated production in 2005 was 312 metric tons) and is the source of a significant percentage of heroin seized entering Australia. As part of Australia’s strategy to combat the trade in narcotics, the Australian Federal Police maintains an office in Burma. Its primary role is to coordinate and support Australian law enforcement interests in Burma.

Trade: Australia's trade and investment with Burma is very limited. In 2006-07, Australian merchandise imports from Burma totalled $23.7 million (0.01 per cent of total Australian merchandise imports); major imports were seafood products worth $17.1 million. For the same period, Australian merchandise exports to Burma amounted to $30.8 million (0.02 per cent of total Australian merchandise exports) with the principal export being wheat valued at $19.7 million. Australian investment in Burma is also very limited. Official support for Australian commercial interests in Burma is commensurate with the small relationship. For example, there is no Austrade office in Rangoon, but the Australian Embassy in Rangoon and Austrade staff in Bangkok provide advice to Australian companies enquiring about Burma. Such advice includes a frank account of country risk factors (see Economic Developments section), including shortcomings in economic governance, forced labour practices, and consumer boycotts.

Political Overview

Summary of political and human rights developments in Burma since 1990

Elections were held in Burma in May 1990, two years after the 1988 coup staged by the State Law and Order Restoration Council (SLORC). The National League for Democracy (NLD) won almost 60 per cent of valid votes and 80 per cent of seats. However, the SLORC subsequently imposed martial law and said it would continue to hold power until it had ensured that a sufficiently strong constitution had been drafted according to the guidelines laid down by a National Convention. The military responded to the election results with a campaign of intimidation. It arrested and detained members of the NLD (including NLD General Secretary Aung San Suu Kyi who was awarded the Nobel Peace Prize in 1991) and other perceived political opponents, and prevented the convening of the National Assembly.

In March 1992, then SLORC Chairman Senior General Saw Maung retired in favour of General (later Senior General) Than Shwe. A number of positive developments followed, including the introduction of a 'market-oriented' economic system, the lifting of the curfew, some release of political prisoners, the conclusion of cease-fires with all but one major ethnic insurgent group, and the commencement of a process of drafting a new constitution through a National Convention (including representatives elected in the 1990 elections, representatives of ethnic cease-fire groups, as well as delegates hand-picked by the government). This liberalisation process culminated in the release in July 1995 of Aung San Suu Kyi and, for a time, tolerance of the NLD's political activity.

However, the situation again deteriorated. In 1996, the NLD withdrew from the National Convention, saying that its views and objections were being ignored and that the Convention's procedures were undemocratic. Later that year, Aung San Suu Kyi and many NLD members were arrested and imprisoned, and most higher education institutions closed, following student protests in Rangoon and other centres.

In 1997 the SLORC was dissolved and replaced by the State Peace and Development Council (SPDC), with the SLORC's top members remaining at the top of the SPDC. The SPDC also included many high-level military commanders.

Relations between the SPDC and NLD continued to fluctuate, with occasional positive gestures by the regime, such as in September 1998 allowing the NLD to hold its first Party Congress in almost nine years, albeit in tightly controlled circumstances. Universities were reopened in August 2000 and classes gradually resumed, but undergraduate students were forced to travel to new campuses in outlying areas of Rangoon or to study by distance learning. After a long campaign against the NLD organisation, in October 2000 the SPDC began secret talks with Aung San Suu Kyi, the contents of which both sides declined to disclose. The SPDC and NLD also ceased their individual hostile propaganda campaigns and the SPDC began to release NLD political prisoners and to permit the reopening of NLD offices around the country. In May 2002, Aung San Suu Kyi was released from house detention, and given freedom of movement. She travelled quite extensively around the country.

Despite some preliminary contacts between the SPDC and the NLD in the months following Aung San Suu Kyi's release, the process of dialogue did not develop momentum and eventually stalled altogether. On 30 May 2003, Aung San Suu Kyi and others were taken into 'protective custody' in prison after the convoy she was travelling in was attacked by regime-aligned groups near Depayin, in northern Burma. A number of NLD supporters were also imprisoned and many others were killed or injured during the incident. The international community, including Australia, condemned the unjustified action and called for the immediate release of Aung San Suu Kyi and her supporters. Subsequently, all NLD offices in Burma were closed.

In late August 2003, a number of changes within the SPDC and Cabinet (which are different entities) occurred including the appointment of former Secretary One, General Khin Nyunt, as Prime Minister. Lt General Soe Win became Secretary Number One and five ministers retired from the Cabinet.

On 31 August 2003, Prime Minister Khin Nyunt outlined a 'roadmap to democracy' involving seven stages. These were: the convening of the National Convention; taking the necessary steps to establish a democracy after the National Convention is concluded; the drafting of a constitution based on the principles laid down by the National Convention; a national referendum to approve the redrafted constitution; holding free and fair elections for a Parliament; convening of Parliament; and the building of a modern, developed and democratic nation by leaders elected by the Parliament.

On 30 March 2004, the Burmese regime announced the resumption of the National Convention aimed at framing a new constitution. In preparation for the National Convention, the SPDC on several occasions permitted all nine members of the NLD Central Executive Committee to meet Aung San Suu Kyi and NLD vice chairman U Tin Oo (both still under house detention). The NLD was also allowed to reopen its office in Rangoon. The NLD decided to boycott the Convention after the SPDC refused to meet its demands including that: the 'six objectives' and '104 principles' for a new constitution released previously by the SPDC be open to debate; all political parties be allowed to choose their representatives for the Convention; all NLD offices closed after 30 May 2003 be reopened; and that Aung San Suu Kyi and U Tin Oo be released. Other minor parties and some ethnic groups also boycotted the National Convention for similar reasons.

Regardless of the boycotts, the SPDC re-opened the National Convention on 17 May 2004 with just over 1,000 delegates hand-picked by the SPDC. The international community was generally critical of the National Convention, pointing to the lack of broad participation and free debate and the regime's failure to release Aung San Suu Kyi. The National Convention was adjourned on 9 July 2004, resumed on 17 February 2005, adjourned again on 31 March 2005, reconvened on 5 December 2005, recessed on 31 January 2006 and reconvened on 10 October 2006 and adjourned on 29 December 2006. The final session convened on 18 July 2007 and the regime declared the talks complete and closed the Convention on 4 September 2007. The regime announced that detailed principles were in place for a new charter and appointed a committee to work on drafting a new constitution.

A number of key ministers resigned on 18 September 2004 resulting in several new appointments, including U Nyan Win as Minister for Foreign Affairs, Brigadier-General Tin Naing as Minister for Commerce, and Colonel Maung Myint as Deputy Minister for Foreign Affairs. Subsequently Khin Nyunt was sacked as Prime Minister and chief of military intelligence on 19 October 2004, receiving a 44 year suspended sentence on bribery and corruption charges. Lieutenant General Soe Win was then promoted to Prime Minister.

The Burmese regime commenced moving the seat of national administration on 7 November 2005 from Rangoon to an area near Pyinmana since renamed Naypyidaw (seat of kings). Naypyidaw is located approximately 400 kilometres north of Rangoon.

On 25 May 2007, the regime extended the period of Aung San Suu Kyi’s detention for a further 12 months.

On 21 August 2007 organisers of a peaceful public protest against the regime’s sudden hike in fuel prices on 15 August 2006 were arrested. Among those re-arrested were recently-freed leaders of the 88 Generation Student Group and long-term political prisoners who had been detained since September 2006.

Subsequent protests against the fuel hikes led by Buddhist monks evolved into mass protests in Rangoon and some other cities in Burma on 22 September 2007. The numbers of demonstrators in Rangoon swelled to tens of thousands over the subsequent days. On 27 September, the military regime resorted to violent measures to suppress the protests, and followed up with mass arrests, beatings and other intimidatory actions. This campaign appears to have been effective in breaking up street demonstrations, but levels of popular frustration and anger remain high. In the wake of the mass protests, the junta made a heavily conditional offer of dialogue with Aung San Suu Kyi.

Thousands of people were arrested during the seven days of mass protests, and while a number were subsequently freed, many remain in detention in difficult conditions. These prisoners join an estimated 1,100 long-term political prisoners held in Burmese prisons.

Given the large number of political prisoners now incarcerated in Burma, the regime’s track record of brutality, and the poor conditions in that country’s gaols, the fate of these detainees remains of grave concern. While the ICRC previously had access (from 1999) to political prisoners, no prison visits have been permitted since December 2005. Australia remains a strong supporter of the unique and important humanitarian role the ICRC plays internationally and has provided regular funding for the ICRC’s work in Burma since 2003.

These recent developments have reinforced the widely held view that the Burmese regime is one of the most brutal and repressive in the world. Freedom of assembly and expression are severely circumscribed. Censorship is the norm and very few Burmese have access to the internet, which was further disrupted by the authorities during the September-October 2007 crackdown. Restrictions are placed on access to certain sites and allegations have been made that the military monitors the email system.

The death of then Prime Minister Soe Win on 12 October 2007 resulted in the promotion of General Thein Sein to this position on 25 October 2007. This development was widely anticipated and is not expected to change the character of the regime.

On 3 December 2007, the regime publicly described the September 2007 protests as “trivial”, further underlining its unrepentant stance.

On 9 February 2008, the regime issued a brief statement announcing that a constitutional referendum would be held in May 2008, followed by elections in 2010. The announcement was unexpected and was made without prior consultation with opposition groups inside Burma, or with the UN. The regime announced a Referendum Law and the formation of a Referendum Commission on 26 February 2008.

The final text of the proposed draft constitution has not yet been made public. However the draft principles on which the constitution is to be based are deeply flawed. The drafting process has been conducted by a regime-appointed committee, without genuine consultation with opposition or ethnic groups in Burma. The draft principles are aimed at perpetuating the dominant role of the military in Burma. The NLD and other pro-democracy and ethnic groups both inside and outside Burma are calling for the rejection of the constitution at the referendum.

Summary of recent international activity on Burma

The brutal suppression of peaceful protests in September 2007 provoked international outrage. After the protests, the United Nations Secretary General dispatched his Special Adviser on Burma, Ibrahim Gambari, who visited Burma in early October and again in early November 2007. Mr Gambari is mandated by the UN General Assembly to use the United Nations’ good offices to pursue discussions on human rights and the restoration of democracy with Burma’s government and people.

After a briefing from Mr Gambari, on 11 October the UN Security Council adopted a Presidential Statement which strongly deplored the use of violence against peaceful demonstrators in Burma and stressed the need for the Burmese regime to create the necessary conditions for a genuine dialogue with all concerned parties and ethnic groups. It endorsed Mr Gambari’s ongoing good offices role, including his return to Burma. The Security Council released a press statement on 17 January 2008 expressing disappointment at the slow rate of progress and noting the importance of an early return visit to Burma by Mr Gambari.

On 11 February 2008 UN Secretary-General Ban called on the Burmese regime to “make the constitution-making process inclusive, participatory and transparent”.  Mr Gambari returned to Burma from 6-10 March 2008. 

In mid-November 2007, Special Rapporteur on Human Rights in Burma, Sergio Pinheiro, also visited the country. This was the first visit the regime had permitted Mr Pinheiro in four years. Mr Pinheiro reported to the Human Rights Council in December 2007.

Australia participates, along with 13 other countries, in the UN Secretary-General’s Group of Friends on Burma, which has met three times in New York since December 2007. Australia’s participation in this new group reflects the priority the Government places on working through the United Nations to address international issues, and also Australia’s continued focus on the situation in Burma which remains of profound concern.

Forced labour practices in Burma have been another longstanding and serious concern. The International Labour Organization (ILO) has called on Burma to eliminate the practice of forced labour for over 40 years but to date slow progress has been made despite significant effort on the part of the ILO. An ILO Liaison Office was set up in Rangoon in September 2002. However progress towards a 'Joint Plan of Action' between the ILO and Burma stalled following the arrest and detention of Aung San Suu Kyi and senior NLD members on 30 May 2003. A mechanism to investigate complaints of forced labour in Burma was finally agreed between the ILO and the regime in February 2007.  This “Supplementary Understanding” between Burma and the ILO was extended on 26 February 2008 for a further 12 months.

Economic Overview

The outlook for the Burmese economy remains bleak, despite the country’s rich endowment of agricultural, mining and forestry resources. 70 per cent of the population remain subsistence level farmers, while conditions for most of Burma’s city dwellers remain tough. The strong popular reaction to the increase in fuel prices announced by the junta in August 2007 which led to subsequent mass protests reflects the hardship being experienced by many Burmese.

Difficulties such as large public sector debt, a local currency weighed down by Burma’s political and economic circumstances, poor economic management, rampant inflation, and poverty remain unresolved. Burma's economic policy continues to focus on central planning and import substitution. Government spending priorities are skewed towards the military to the detriment of provision of basic services such as health and education for those most in need. Despite the magnitude of the humanitarian problems gripping the country, education and health expenditures have been cut to curb public sector deficits, while defence 2007 expenditures remain bloated. The size of the black economy in Burma limits the ability of the government to raise tax revenues, and tax evasion is widespread. Exchange rate management is poor, with the official exchange rate of the kyat grossly overvalued. Financial sector policies are also ineffective.

Lack of progress towards political reform, poor economic performance, unclear economic policies and worldwide consumer boycotts have meant that Burma has failed to attract foreign investment. The country is justifiably regarded as a high risk destination and a difficult location to do business due to governance issues, non-existent rule of law, arbitrary policy-making, and severe trade restrictions. Corruption is also a major concern.

Burma's official statistics are unreliable. The Economic Intelligence Unit (EIU) forecasts that the Burmese economy will grow at around 2-3 per cent a year in 2007-08, a comparatively very low rate among countries of the region. It predicts continued growth in the oil and gas sector in terms of both production and exploration activity, but the rest of the economy will remain weak. Based on data available, the EIU estimated inflation would reach 18 per cent in 2006 but prices for most commodities are likely to have risen at a higher rate. Severe power shortages and a fall in the importation of necessary production inputs also restrict domestic economic activity.

Burma relies on fuel imports which are sold at subsidised prices. The Burmese government tends to opt for knee-jerk policy responses to economic problems. For example, fuel subsidies were suddenly ended in October 2005, leading to an immediate 900 per cent rise in fuel prices. Poorly paid civil servants and military personnel received salary increases in April 2006 of between 500 and 1200 per cent. Fuel prices were again raised without warning by up to 500 percent on 15 August 2007.

Published estimates of Burma’s foreign trade are greatly understated due to the size of the black market and border trade, which is estimated to be one to two times the official economy. Official statistics indicate that Burma's total exports were valued at over US$2.7 billion in 2005, including natural gas, forest products, garments, legumes and marine products. Imports equalled US$1.6 billion, focusing on machinery, transport equipment, manufactured goods and fabrics.

In 2005, Thailand accounted for 44.9 per cent of exports, followed by India (11.5 per cent) and China (6.9 per cent). Exports to Australia amounted to 0.3 per cent of Burma’s total exports. Imports from Australia totalled A$16 million, including wheat, machinery and transport equipment. Burma’s principal import sources were China (29.3 per cent), Thailand (22.2 per cent) and Singapore (18.7 per cent).

Natural gas is one of Burma's largest sources of legal export revenue, accounting for about 30 per cent of total exports, with further growth expected and energy demand increasing from neighbouring countries, predominantly India, China and Thailand.