US eases sanctions on Myanmar

Obama lifts curbs on American firms doing business with Asian nation, but row erupts over go-ahead to deal with oil interests.

The Obama administration has given permission 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 US sanctions against a nation once considered a pariah.

However, at the same time the administration expanded US Treasury authority to punish those who undermine political reforms and sanctioned a Myanmar military industry involved in a deal for ballistic missile technology from North Korea.

The new restrictions, imposed even as the 15-year-old ban on investment and export of financial services was eased, underscored how far the country also known as Burma has to go before it truly cleans shop after five decades of military rule.

"Today, the United States is easing restrictions to allow US companies to responsibly do business in Burma," President Barack Obama said in a statement that credited reformist President Thein Sein and democracy leader Aung San Suu Kyi for continued progress toward democracy but also voiced deep concern over the murky investment environment.

The announcement came hours after Derek Mitchell, the first US ambassador to Myanmar in 22 years, presented his credentials in the Asian nation's remote capital.

But human rights groups and business advocates are increasingly at odds over how Washington should respond to the changes in Myanmar, and Wednesday's announcement exposed a rare difference between the administration and Suu Kyi, long a guiding force on US policies toward the country.

Last month, the Nobel Peace laureate advised foreign companies not to invest in the state-run Myanmar Oil and Gas Enterprise until it became more accountable and open. Doing business with the oil company is the only way to gain access to Myanmar's potentially lucrative energy resources, and US companies fear with that without that opportunity, they will lose out to foreign competitors.

The administration argued that working with US companies — that face tough anti-corruption constraints under US law — could improve the situation.

Rights activists were unconvinced.

"By allowing deals with Burma's state-owned oil company, the US looks like it caved to industry pressure and undercut Aung San Suu Kyi and others in Burma who are promoting government accountability," said Arvind Ganesan of Human Rights Watch.

The US Chamber of Commerce commended the easing of sanctions. Its vice president of international affairs, John Murphy, said every other major economy, including Australia, Canada, and the European Union, has moved more swiftly than the US, and continuing sanctions would have only added to the head start for Asian and European companies.

"It's a false choice to say we have to choose between human rights and business interests in Burma," he said in a statement. "Ensuring US companies have a strong presence in Burma will help raise labour and environmental practices and corporate social responsibility."

Western nations have moved swiftly in recent months to roll back sanctions, particularly after special elections that saw Suu Kyi elected to parliament after 15 years of house arrest. Governments have expressed hope that can bolster Thein Sein and help him win over military hardliners suspicious of the reform agenda and improve life in the impoverished nation.