BANGKOK — Recent executions of four democracy activists in Myanmar have fueled efforts to get the United States and other countries to impose further sanctions on military leaders who overthrew an elected government early last year.
Human rights advocates and comments from US lawmakers suggest the Senate is on track to pass the Burma Act, legislation already passed by the House of Representatives. Among other things, it would pave the way for sanctions against Myanmar Oil and Gas Enterprise, or MOGE, a state-controlled company that is a vital source of hard money for the impoverished nation.
That makes MOGE a prime target in the effort to cut funding for the military’s efforts to negate a widespread public backlash against the February 2021 takeover.
Myanmar, also known as Burma, has been ruled by the military for the past 70 years. The takeover of the military interrupted a gradual transition to a democratic civilian government and a more modern, open economy and resulted in a slew of sanctions against the military, which controls many industries, army relatives and cronies.
The hangings of four political activists in late July sparked condemnation and increased calls from US lawmakers and others for Myanmar’s neighbors, notably the 10-member Association of Southeast Asian Nations, to put more pressure on the military rulers of the country.
“It’s time they impose meaningful consequences on the junta in Burma that literally gets away with murder,” Senate Leader Mitch McConnell, a supporter of deposed civilian leader Aung San Suu Kyi, said in a recent statement. If Myanmar’s neighbors and ASEAN don’t want to do more, the US will have to “fire up” the military and its sources of financial support, he said.
“This should include sanctions against Myanmar Oil and Gas Enterprise,” McConnell said.
In February, the European Union announced sanctions against MOGE, saying the military’s control means the company “contributes to its capabilities to carry out activities that undermine democracy and the rule of law in Myanmar/Burma.”
Two of Myanmar’s other largest state-owned companies, Myanmar Economic Holdings Ltd. and Myanmar Economic Corp., have already been identified for US sanctions.
Proponents of sanctions say they can make a difference if targeted and enforced. So far, Myanmar’s economy has been somewhat isolated from the sanctions imposed by the US and other Western governments following the military takeover. Most of his trade – especially the lucrative sale of gems, rare earths and wood – takes place with nearby countries, especially China, which points to growing support for the military-controlled government. Most major Western energy companies have already pulled out of oil and gas projects in the country.
That leaves only financial leverage. Oil and gas exports to China and Thailand make about $2 billion a year, according to state media reports, and are a major source of foreign exchange that Myanmar has to pay for all types of imports, including weapons used to fight opposition forces that use the weapons. after the military cracked down peaceful protests.
EU sanctions have prompted the Bank of China to advise operators of the Shwe oil and gas field in northwestern Myanmar that it will not handle payments in euros to MOGE for fear they could abide by those restrictions. hold, according to activists by two of the companies implementing the project, Posco International and Kogas. Two other people familiar with the situation confirmed that payments in euros to MOGE were kept in escrow accounts. The people spoke on the condition that they not be identified out of concern about risks to themselves, family members and employees.
The billions paid by other global banks for violating sanctions against other countries is a strong incentive for compliance.
Announcing its sanctions, the EU said MOGE is controlled by and generates revenue for the military, and that it “contributes to its capabilities to carry out activities that undermine democracy and the rule of law in Myanmar/Burma”.
A 770 kilometer (475 mi) pipeline connects the Shwe field to China’s Yunnan province. It is the only major project whose contracts require revenue from gas sales to be paid in euros rather than US dollars.
A spokesperson for Posco International, which has a 51% stake in the project, confirmed that those earnings were deposited into an escrow account. Posco will be paid its share as normal, Song Chan, the spokesman, said in an email response to questions. He said he could not comment on the status of payments to the other companies participating in the oil and gas pipeline.
Otherwise, the project was operating as normal, he said, referring further questions to China National United Oil Co., which buys gas from the Shwe project and pays the sales proceeds. That company, a subsidiary of the state-owned China National Petroleum Corp., did not immediately respond to a request for comment. Neither CNPC nor the Bank of China.
Korea Gas Corp., which has an 8.5% stake in the Shwe fields, did not respond to a request for comment.
The fact that the Shwe project has continued to send gas to China suggests that sanctions can be implemented without disrupting Myanmar’s livelihoods or supply of natural gas, said Keel Dietz, a policy adviser at the environmental group Global Witness.
Critics of sanctions have often argued that they could harm employees of companies involved in the projects or exacerbate power shortages in the country. The Burma law itself calls for an assessment of the potential impact of any sanctions against MOGE on people in Myanmar. The president could impose such sanctions if they hindered abuses by Myanmar’s military, after ensuring they would be in the US national interest, with benefits that outweigh any damage.
While the EU sanctions, imposed in February, only affected the Shwe project, “it is clear that EU sanctions had a meaningful impact on the thinking of at least one bank in a way that would at least reduce the costs for the junta. access to their money,” Dietz said. “All of this was done without negative humanitarian impact in Myanmar and Thailand.”
A lack of impact on gas supplies to Thailand from other projects would allay concerns that US sanctions against MOGE could harm relations with Bangkok.
Myanmar’s recent executions have increased frustration among its neighbors. Human rights advocates say dozens of democracy activists are still on death row in Myanmar.
“As more executions happen, things will have to be reconsidered,” said Prak Sokhonn, Cambodia’s foreign minister and ASEAN special envoy to Myanmar.
Outside of ASEAN, the countries with the closest ties and most dominion over Myanmar, China and Russia have expressed support for the military and are unlikely to do much to put pressure on them.
The nine other ASEAN members are waiting to see what will happen in the coming months ahead of an annual summit in November, Malaysian Foreign Minister Saifuddin Abdullah told reporters in Bangkok last week.
Saifuddin acknowledged that ASEAN countries, which tend to refrain from imposing economic sanctions on other members, are discussing that option as they look for ways to influence Myanmar’s military leaders.
“We discussed this measure, but there was no conclusion,” Saifuddin said.
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