Derek Tonkin (author of the response to our opendemocracy.net piece published earlier) has responded to our response (in a comment). As usual, our response follows in a comment to this post.
It may surprise you that I agree generally with the logic of almost everything you say. But you concentrate too much on the theoretical aspects of economic and financial sanctions and overlook both the reality in Burma today and the psychological and political effects.
The reality is that the generals are not suffering, but the ordinary people are. What the US and EU didn’t and perhaps couldn’t reasonably have been expected to take into account when they first imposed sanctions was the emergence of a tremendous bonanza in the shape of revenues from natural gas, which has eclipsed other export earnings and goes straight into the pockets of the generals. Already touching US$ 3 billion annually, they are likely to touch US$ 6 billion when the pipeline to China is opened. So the punitive role to which you refer is mitigated to the point of insignificance. Another reality is that Burma’s neighbours, including those two powerful and dynamic economies China and India, cocoon the Burmese economy from the effects of trading sanctions. You cannot conduct an effective sanctions policy against a country when all the countries within a radius of 2,000 miles are opposed to the policies you advocate. Finally, if you have been to Burma recently, you might have found that the people grumbling most genuinely about the actual the effects of sanctions are not the generals (though they grumble like hell and use sanctions as an excuse to argue away their own incompetence), but the burgeoning private business community who feel they are being forced into “cronyism” in order to survive. They are also increasingly deprived of the added-value from manufactures while the State sells off its raw materials. The most dotty recent example of sanctions has been the targeting by the EU of some 1,207 private businesses, and if you extract the few which are State or crony, you are still left with over 1,000 mostly small to medium-sized enterprises whose sole misfortune is to be involved in the furniture (timber), jewellery (gems) and metals (private foundries) businesses even though most of the families concerned would have voted for pro-democracy parties in the 1990 Elections. Whose side, after all, are we on?
As regards the psychological and political effects of sanctions, these have been so negative that any responsible overall assessment would in my view conclude that the damage of sanctions generally to Western interests and to the humanitarian welfare of the Burmese people has negated the theoretical "benefits" of sanctions which you adduce. A very clear reflection of the growing isolation and eccentricity of the Burmese leadership may be found in their denial of US, British and French offers of humanitarian aid when their warships appeared off the coast of Burma. Defense Secretary Robert Gates has called this denial "criminal neglect", but a number of commentators have recently asked some very pertinent questions about the extent of Western responsibility, however unwitting, in inducing a state of mind in Burmese leaders which has undoubtedly cost so many lives through delays in the provision of aid and logistics. When warships appear off the coast of Burma from countries already engaged in economic warfare against you, should we be surprised that the Burmese leaders are perhaps likely to doubt their motives?
So long as we ostracize the military regime and deny them the expertise, tools and facilities to reform their economy, so long will they continue to retreat into their shells. The window of opportunity afforded by Cyclone Nargis for a more open relationship is closing fast. We should be doing everything we can in our own interests as well as those of the Burmese people to establish critical contact.
All I would argue is that the West should back-pedal on the sanctions issue for the present. Clearly, it would be politically impossible to remove them just like that, but to ratchet them at the present time makes absolutely no sense in terms of furthering the interests of the international community and the welfare of the Burmese people.