(Mizzima) – The U.S. government on Tuesday eliminated restrictions on financial transactions in support of humanitarian, religious, and other not-for-profit activities in Burma, a move that will open the flood gates for humanitarian projects inside the poverty stricken country.
The action left in place broader sanctions on the export of certain goods and financial services to the Southeast Asian country, and the sale of military weapons.
Officials said the action comes as a reward for Burma’s recent successful by-election and its shift toward democratic reforms.
The U.S. is also “beginning the process of a targeted easing” of the bans on the export of U.S. financial services and investment, and will open an office of the Agency for International Development, in addition to the appointment an ambassador to the country.
A State Department spokesman said Tuesday that the Treasury Department license was the beginning of that process, according to Bloomberg News.
The lifting of the ban on financial transactions and investment could be the first step toward fully opening the resource-rich country to U.S. companies.
Transactions in support of the following not-for-profit activities are now permitted:
(1) projects to meet basic human needs;
(2) democracy-building and good-governance projects;
(3) educational activities;
(4) sporting activities;
(5) non-commercial development projects directly benefiting the Burmese people; and
(6) religious activities.
“These (steps) were action for action in response to what we viewed as very positive parliamentary elections,” State Department spokesman Mark Toner told a news briefing, adding that additional measures would be forthcoming.
“We are taking this step today to support a broader range of not-for-profit activity in Burma by private U.S. organizations and individuals to promote increased cooperation between the Burmese and the American people,” a senior Treasury Department official said.
Officials said additional future steps to ease sanctions could eventually open the door to U.S. investment in Myanmar's agriculture, tourism, telecommunications and banking sectors, U.S. officials told Reuters news agecny.
However, U.S. officials say they want to see clear evidence of further reforms, including the release of all political prisoners, concrete steps toward national reconciliation, especially with ethnic groups that say they have long been oppressed by the central government, and an end to any military ties to North Korea.
Secretary of State Hillary Clinton, in a statement marking Burma’s New Year Water Festival on Tuesday, said the last year had seen the country embark “on a historic new path toward democracy and economic development.”
“We look forward to deepening cooperation on a wide range of issues that promote democratization and national reconciliation, from increasing access to education to expanding health care and encouraging a vibrant civil society,” she said.
Pro-democracy advocates have urged the U.S. to move cautiously, saying sanctions are an important tool to maintain pressure to follow through on pledges of greater democratic openness.
The advocacy group U.S. Campaign for Burma backed the changes, but said it would be too soon to ease the ban on investment and financial services, fearing changes could be exploited by the military and its cronies.
The group's executive director, former political prisoner Aung Din, said the opposition would have only a small voice in Burma’s Parliament until full national elections in 2015. Western nations should keep their toughest restrictions in place for now, he said.
Australia on Monday said it will lift financial and travel restrictions for more than 260 people in Burma, including President Thein Sein, but will keep its arms embargo and sanctions against around 130 other people, including military officials.
On April 23, the European Union is expected to discuss suspending its economic sanctions – an idea endorsed by Suu Kyi when she met with British Prime Minister David Cameron in Rangoon last week. Such a step by the EU could put pressure on the U.S. to do likewise, for competitive business reasons.
The Center for Strategic and International Studies, a Washington-based think tank, said the U.S. is likely to ease investment restrictions in sectors such as tourism, agriculture, telecommunications and banking. But it would retain bans on sectors such as natural resources and precious stones that are perceived to be closely linked to the military. Oil, natural gas and timber are key money earners for Burma.
Lifting sanctions entirely will be contingent on the government consolidating the reforms. The military remains the dominant political force in the country and severe rights abuses are still reported in ethnic minority regions. Despite the release of hundreds of political prisoners in recent months, others remain in detention.