* U.S. hopes reform-minded Myanmar will "buy American"
* First targets could include banks, agriculture, telcoms
* Oil, mining, timber sectors more problematic
By Andrew Quinn
WASHINGTON, April 20 The United States is moving
to ease bans on U.S. companies investing in and providing
financial services to Myanmar, and will first target those
sectors that could support democratic reforms in the country, a
senior U.S. official said on Friday.
The official said that final reviews were under way
following Secretary of State Hillary Clinton's pledge earlier
this month to begin unwinding U.S. business sanctions, with
decisions expected in coming weeks.
"It will be a matter of weeks to months to actually
implement all that, but we are not looking long term," the
official, who spoke on condition of anonymity, told Reuters in
The United States has repeatedly promised to review
sanctions in response to dramatic political reforms in Myanmar
that have seen veteran pro-democracy leader Aung San Suu Kyi
elected to parliament and a raft of other repressive measures
lifted. Myanmar, also known as Burma, was run by the military
for five decades until a year ago.
But the complex web of U.S. sanctions has proved hard to
unravel, leaving some companies fretting they will be left out
of a potential economic boom in the country.
"It has taken a lot of our time to figure out how to
navigate them and therefore how to use them to send the signals
that we want to send," the official said.
Certain sectors of the Southeast Asian country's economy,
notably industries such as mining, oil and timber, remain
riddled with cronyism, making them less appealing candidates for
immediate sanctions relief, the official said.
But he said greater U.S. involvement in other sectors could
help Myanmar transform its economy and establish new standards
for transparency, accountability and corporate social
"We still are concerned about the reversibility and the
sustainability of reform. But we also believe it is time that we
also relieve some of the restrictions that are getting in the
way of our ability to partner on reform," he said, stressing no
specific decisions had yet been made.
The United States has already eased some limits on Myanmar,
announcing this week it would permit financial transactions to
support humanitarian and development projects - a boon to
non-governmental organizations that hope to expand operations
The United States has also moved to support normal U.N.
Development Program, or UNDP, operations, and is working to set
up a local office of the U.S. Agency for International
Government contacts are also expanding as the United States
drops visa bans on senior Myanmar leaders. The country's health
minister was in Washington last week, and its foreign minister
is due in May.
The United States is also expected soon to return a full
ambassador to Myanmar after an absence of two decades.
But U.S. businesses are watching closely for steps to ease
sanctions on investment, which have helped keep the country
isolated and pushed it deeper into the economic embrace of its
powerful neighbor China.
The U.S. official said that banking services, the
agricultural sector and telecommunications were all areas where
U.S. companies could make contributions to Myanmar's economic
reforms and the welfare of its people.
"These are low-hanging fruit," said Suzanne DiMaggio, vice
president for policy at the Asia Society, adding that a
step-by-step strategy could help preserve U.S. leverage but also
ran the risk of allowing other countries to steal the march on
one of Asia's most promising, yet undeveloped economies.
"It is really going to be hard for the United States to
compete with the Chinese in the immediate future, especially if
it takes a sector-by-sector approach," DiMaggio said.
'FIRST, SECOND AND THIRD LOOK'
The U.S. official said Washington remained leery of
Myanmar's extractive industries, saying they were "riddled with
cronyism," deeply involved with corrupt elements of the military
and focused in restive areas where ethnic minority groups say
they have long been oppressed.
"That sector probably shines brightest in terms of having to
give it a first, second and third look," the official said.
He also said the United States had broader concerns over the
commitment of military leaders to reform, and their ties to
U.S. officials and economic analysts have cautioned that,
despite its progress, Myanmar will likely remain a challenging
business environment. Corruption, shaky investment protections
and infrastructure problems promise to slow international
investment and trade even as sanctions fall away.
But China already has extensive economic interests in
Myanmar, Australia has eased sanctions, and the European Union
is expected to suspend its economic sanctions next week, opening
the country to more competition..
Washington hopes that as it opens its own door to economic
ties, U.S. companies will benefit from the halo effect of strong
U.S. support for the reform process and Nobel Peace laureate
Aung San Suu Kyi herself.
"I think our companies will have an equal, level playing
field when they go in," the official said. "They want to buy
American. They want to engage with America."
(Reporting By Andrew Quinn; Editing by Peter Cooney)