Western sanctions unlikely to restore democracy in Myanmar -- Report

By Linda Khoo Hui Li

BANGKOK, April 8 -- Soft diplomatic pressure from the West in the form of sanctions will likely be ineffective in forcing a restoration of democracy in Myanmar, a report said.

Fitch Solutions Country Risk and Industry Research (a product of Fitch Solutions Group Ltd) in its outlook for Myanmar said sanctions on key military personnel, related persons, and business entities; withholding of developmental aid capital; and public fund freeze will likely be ineffective.

It said attempts to cripple the armed forces' access to funds will continue to be a challenge as they continue to have access to funds from their two affiliated conglomerates – Myanmar Economic Holdings Public Company Limited and Myanmar Economic Corporation.

“These entities are active in many parts of the economy, including transport, tourism, and banking, and have provided the military with billions of dollars since 1990, according to Amnesty International.

“Even in the ongoing pandemic, which has crippled revenue from transport and tourism, among many other sectors, the armed forces still has significant oil and gas revenues to count on in the form of taxes and ‘production rights’,” it said.

According to the Electricity and Energy Ministry, Myanmar has awarded 38 offshore oil and gas blocks to majors such as Royal Dutch Shell Plc, Total SE, Woodside Petroleum Ltd., China National Petroleum Corp., Reliance Industries Ltd. and Eni SpA over the past three decades.

In early April this year, French oil major Total SE said that it has to continue producing gas in Myanmar and pay taxes to the junta to protect its staff from forced labour and imprisonment, while also maintaining electricity supplies to Yangon city and western Thailand.

Myanmar's military launched a coup on the morning of Feb 1, hours before the Parliament was set to sit, and had detained State Counsellor Aung San Suu Kyi, President Win Myint, and other senior members of the National League for Democracy (NLD), triggering widespread anti-coup protests and bloodshed throughout the country.

Fitch Solutions expect the political upheaval in Myanmar to last for many years with the situation set to worsen before it gets better.

“We see Myanmar likely becoming a failed state over the medium term. In our view, the escalating violence on civilians and ethnic militias show that the armed forces is increasingly losing control of the country.

“With workers from the private and public sector not turning up for work in protests, the economy will also collapse,” it said.

The report said there still remains the risk of another round of civil/separatist war, given many ethnic communities’ desire for self-determination, should the people’s revolution succeed in toppling the military government.

“Should the armed forces emerge victorious, we believe that Myanmar, especially after all the bloodshed and perhaps even war crimes by the armed forces during the process, will see a fate not dissimilar to North Korea and be ostracised by most of the international community,” it said.

-- BERNAMA