US eases sanctions, allowing investment in Myanmar

WASHINGTON (AP) ? The Obama administration gave permission Wednesday for American companies to invest in Myanmar and work with its state oil and gas enterprise, a go-ahead that marks the most significant easing of U.S. sanctions against the former pariah nation.

But the decision exposes differences with democracy leader Aung San Suu Kyi, long a guiding force on U.S. policies toward Myanmar, which also is known as Burma. Last month she advised foreign companies not to invest in Myanma Oil and Gas Enterprise until it became more accountable and open.

Details of the general licenses issued to allow investment and export of U.S. financial services were not immediately available. U.S. officials say investment will be permitted with the oil and gas enterprise, which had been an economic lifeline for the former ruling junta but which is not formally under military control.

Doing business with it is the only way to gain access to Myanmar's potentially lucrative energy resources. U.S. companies fear they will lose out to foreign competitors if the restrictions aren't lifted.

"Today, the United States is easing restrictions to allow U.S. companies to responsibly do business in Burma," President Barack Obama said in a statement. He credited reformist President Thein Sein and Suu Kyi with continuing to make significant progress toward democracy.

"Easing sanctions is a strong signal of our support for reform, and will provide immediate incentives for reformers and significant benefits to the people of Burma," Obama said.

Human rights groups and business advocates have become increasingly at odds over how Washington and other Western powers should respond to the dramatic changes in Myanmar as the Asian country emerges from five decades of authoritarian rule.

Aung Din of the U.S. Campaign for Burma, a Washington-based activist group, gave the announcement a frosty reception, saying it "will be appreciated by the Burmese generals, cronies and U.S. corporations, but not by the people of Burma."

Recognizing concerns over corruption and rights abuses in Myanmar, Obama said the U.S. will require American companies to report on their investments "in line with international corporate governance standards." Investment will not be allowed with military-owned entities, and he has expanded the authority of the U.S. Treasury to punish those who undermine reforms.

Secretary of State Hillary Rodham Clinton said in May that U.S. companies would be allowed to invest in all sectors of the economy. Wednesday's announcement came as she traveled through Southeast Asia, meeting with foreign ministers but also underscoring U.S. efforts to deepen trade and investment ties with a region of rising prosperity and importance as an export market.

It also follows the arrival in Myanmar of Derek Mitchell, who on Wednesday presented his credentials to become the first U.S. ambassador to the country in 22 years as Washington normalizes diplomatic relations.

In a further sign of U.S. efforts to forge closer ties, Robert Hormats, undersecretary of state for economic growth, energy and the environment, and Francisco Sanchez, undersecretary of commerce for international trade, will travel to Myanmar this weekend to promote economic and business engagement.

Western governments are eager to reward Thein Sein for reconciling with Suu Kyi, who has been elected to parliament after spending 15 years under house arrest. The investment penalties, in place since 1997, have contributed to Myanmar's missing out on the region's economic boom.

The U.S. Chamber of Commerce and some U.S. lawmakers have pressed the administration to expedite the general license so American companies can compete with those from Asia and Europe already free to operate in Myanmar.

Advocates argue that allowing investment would give a valuable boost to Thein Sein in winning over some in the military to his agenda. U.S. companies also face more legal constraints on their foreign operations than Asian and European companies and could have a positive influence in opening up the nation's economy.

In her criticism of the state enterprise last month, Suu Kyi said countries could help by not allowing their companies to become partners until Myanmar applies internationally recognized standards such as the International Monetary Fund's code of good practices on fiscal transparency.

She also advocates Myanmar's joining the Extractive Industries Transparency Initiative, which calls for governments to disclose payments from oil, gas and mining companies.

Myanmar's industry minister, Soe Thein, has said the government intends to join. Achieving full compliance is a lengthy process that would require Myanmar meeting benchmarks and partnering with both companies and civil society.

Human rights groups and many Myanmar activists argue that the Obama administration is moving too fast to reward Myanmar and will lose leverage in pressing for more reforms. The country is still plagued by ethnic and communal violence. Despite the releases of hundreds of political prisoners in the past year, hundreds more reportedly remain in detention.

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Associated Press writer Matthew Lee contributed to this report.

Source: http://news.yahoo.com/us-eases-sanctions-allowing-investment-myanmar-175234983.html

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