White House: must make sure Myanmar sanctions not preventing investment

By Jeff Mason and David Brunnstrom

WASHINGTON (Reuters) - President Barack Obama will consult with Myanmar leader Aung San Suu Kyi during her visit on Wednesday on whether to further ease U.S. sanctions to help investment and democratic transition in her country, the White House said.

The United States eased some sanctions against Myanmar earlier this year to support political reform but maintained most of its economic restrictions with an eye toward penalizing those it views as hampering the democratically elected government.

"We want to make sure our sanctions are not preventing the type of economic development and investment" that would help the people of Myanmar, White House deputy national security adviser Ben Rhodes told a conference on Tuesday ahead of Suu Kyi's visit to Washington.

"We want to get her thinking on what we can do that is most effective in promoting the democratic transition and promoting greater economic growth," he said.

Rhodes listed several areas of concern in Myanmar, formerly known as Burma, that needed to be addressed, including constitutional reform, the treatment of the Muslim minority and military interference in politics.

Waiting for all of those problems to be resolved could mean the sanctions would not be lifted for another decade, he said.

Rhodes noted U.S. officials often are told that the sanctions had a “chilling” effect on investment and they have been a frustration and a concern for U.S. businesses worried that they might inadvertently trade with a blacklisted person or entity.

Rhodes said decisions on lifting sanctions would seek to balance the need to show that more work needs to be done while also giving credit to Myanmar's democratic progress.

Rhodes stressed that certain restrictions would remain, including on engagements with the military, given its “outsize” role in politics.

Some of the remaining sanctions are the result of executive order, meaning that they can be undone by the president, while others were brought about by congressional legislation and can be removed only by such action.

Senior U.S. senators planned on Tuesday to introduce legislation to preserve a focus on human rights issues in Myanmar, amid expectations that the Obama administration will further ease or lift sanctions

According to a summary seen by Reuters, the legislation sets "benchmarks and guidelines" on sanctions relief, by calling on the U.S. Secretary of State to assess and make recommendations regarding modifying or lifting sanctions, with a focus on issues such as democracy and ethnic reconciliation.

The legislation authorizes economic assistance to support civil society organizations and provide humanitarian assistance. It also creates a Burma-America Development Fund to provide incentives for private sector investment in the country.

It also authorizes limited military-to-military engagement between the United States and Myanmar and calls for a report on the country's gemstone industry.

Suu Kyi, a Nobel Peace Prize laureate, meets Obama at the White House on Wednesday in what is likely to be their last meeting of his presidency.

She is barred from holding Myanmar's presidency by a junta-drafted constitution but holds several government posts including state counselor and foreign minister.

Suu Kyi helped persuade the West to impose sanctions during her years as an opposition leader under house arrest. Now she is seeking to balance illustrating the economic rewards of a democratic transition while keeping pressure on her country's still powerful generals for more reform.

(Reporting by Jeff Mason, David Brunnstrom and Patricia Zengerle; Editing by Chizu Nomiyama and Bill Trott)

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