US 'careful' on easing investment ban in Myanmar

The U.S. said Wednesday it will ease its investment ban in Myanmar carefully, noting that recent democratic reforms are reversible and deplorable rights violations persist.

Kurt Campbell, the top diplomat for East Asia, also said in testimony to a congressional foreign affairs panel that the U.S. remains troubled by Myanmar's military trade with North Korea.

His cautious comments come as human rights groups voice increasing concern that the U.S., European Union and other nations are moving too fast to relax economic sanctions to reward Myanmar's shift from five decades of authoritarian rule.

Rep. Donald Manzullo, R-Ill., the panel chairman, said there is still no rule of law in the country also known as Burma, and corrupt officials and the military stand to reap a windfall from the country's rich natural resources.

"Have our European and Asian allies gone too far by rushing headlong into suspending all sanctions and immediately boosting assistance?" Manzullo told the hearing of the committee that oversees U.S. policy in Asia and the Pacific. He cautioned that a "reckless" lifting of U.S. sanctions could feed the cycle of corruption.

The EU this week suspended its economic sanctions, and Japan said it would forgive $3.7 billion in Myanmar's debt following recent special elections that saw democracy leader Aung San Suu Kyi's party sweep most of the contested seats. The U.S. has said it will allow export of financial services and American investment in some sectors of the impoverished economy — such as agriculture and telecommunications — but has yet to announce details.

Campbell described the Myanmar's political opening as "real and significant" but "fragile and reversible." In his testimony he credited economic reforms and said the government has doubled spending on education and quadrupled it on health, but military spending, at 16.5 percent of the total budget, remains "grossly disproportionate."

He noted fighting and reports of severe rights violations in the northern Kachin State — scene of one of Myanmar's most entrenched ethnic insurgencies — and "deplorable" discrimination against ethnic Rohingyas in the western Rakhine State. He said that despite the releases of more than 500 political prisoners by Myanmar authorities since last October, at least several hundred are still behind bars.

Aung Din, of the U.S. Campaign for Burma, alleged that arbitrary detention and torture continues, and questioned the significance of recent political reforms.

Although Suu Kyi's party won all but two of the seats in the recent special elections, it still has less than 7 percent representation in parliament. He said the quick easing of sanctions by the U.S. and other nations meant that "the Burmese government led by President Thein Sein is the real winner" of the vote.

In his prepared testimony, Aung Din complained that U.S. officials had failed to consult with veteran student protest leaders, leaders of Suu Kyi's party and ethnic minorities before announcing its the targeted easing of bans on investment and financial services.

Campbell said the State Department would proceed "in a careful manner" on easing the sanctions, and would work with the Treasury Department to re-examine and refresh its list of sanctioned Myanmar nationals — principally military officials and their associates.

The U.S. has consulted closely with Suu Kyi, who is widely admired in Congress, as it has engaged with Thein Sein's government, lending bilateral support for its shift from diplomatic isolation of Myanmar. Suu Kyi also endorsed the EU's move to suspend its economic sanctions for a year.