May 18, 2016 6:30:32 pm
A US decision to pare back economic sanctions on Myanmar could unclog investment as the country claws its way out of poverty, Aung San Suu Kyi’s civilian government said on Wednesday, welcoming the move.
Suu Kyi’s party took power in March after clinching a majority at last year’s election, the freest in generations for a nation that withered under half a century of military rule.
It now faces a daunting task of rehabilitation in the Southeast Asian country, which is hampered by decrepit infrastructure, conflicts in resource-rich borderlands and the continued influence of the military and junta-era cronies, who still dominate the economy.
The United States lifted a host of financial and trade embargoes Tuesday to recognise the “historic milestone” of the country’s transfer to a civilian-led government, according to a statement by the Treasury department. Washington has rolled back many of its sanctions to reward reforms since the end of outright military rule in 2011, but retains scores of names on its blacklists as it seeks to push further changes and promote human rights.
Myanmar government spokesman Zaw Htay said that the administration “really welcomes” the latest move.”It could boost trade between the two countries and this raises hopes for the economy,” he said adding that it could encourage investment by firms previously put off by red tape.
American companies including Coca-Cola and Pepsi, fast food restaurant KFC and carmakers Chevrolet and Ford have already established a sales presence in the country.
But the latest sanctions rollback further eases constraints on Americans wanting to invest.
Seven state enterprises previously blacklisted for being part of the former military regime were delisted mostly because they now report to civilian ministries, the Treasury said.
It also removed three state-owned banks from its sanctions list and authorised dealings with two army-run financial institutions, opening up all Myanmar banks to American business.
The US also extended indefinitely permission made in December enabling firms to trade through Myanmar’s ports and airports – many of which are operated by sanctioned cronies – as it looks to smooth trade into the country.
This applies particularly to blacklisted tycoon Steven Law and his huge Asia World infrastructure firm, which runs Yangon’s busiest port – handling around half the country’s freight – as well as the city’s international airport.
But Law, whose late father Lo Hsing Han was a notorious heroin trafficker, remains sanctioned along with Asia World and six affiliated firms added to the blacklist.
A host of other individuals and businesses remain under embargoes, including those with close links to the former regime.
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