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DE RUEHGO #0494/01 2171037
ZNR UUUUU ZZH
P 051037Z AUG 09
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC PRIORITY 9308
INFO RUEKJCS/DIA WASHDC
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 04 RANGOON 000494 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR H (CODEL WEBB), EAP/MLS 
 
E.O. 12958: N/A 
TAGS: OREP PREL PGOV PHUM ECON ETRD BM
SUBJECT: SCENESETTER FOR CODEL WEBB TO BURMA 
 
¶1. (SBU) Senator Webb, Embassy Rangoon looks forward to your 
visit, the first CODEL to Burma since Senator Kerry came in 
¶1999. 
 
A Strained Bilateral Relationship 
--------------------------------- 
 
¶2. (SBU)  The lack of CODELs reflects years of tension 
between the U.S. and Burma, mostly related to human-rights 
and democracy issues.  Burma has had military-dominated, 
often harsh governance since 1962.  The U.S. has criticized 
the regime's suppression of political dissent, including 
lengthy periods of house arrest for Aung San Suu Kyi (ASSK), 
and has urged freeing political prisoners, respecting the 
basic human rights of Burma's people, and entering into 
meaningful dialogue with democratic and ethnic groups. 
 
¶3.  (SBU)  U.S. economic sanctions, begun in 1997, have aimed 
to target regime finances, while limiting effects on the 
populace.  The sanctions now include bans on Burmese exports 
to the U.S. and on American investment and exportation of 
financial services to Burma, plus targeted financial and visa 
bans for certain high-profile individuals.  The 2008 JADE Act 
built upon existing executive orders and directives and 
imposed an additional ban on the import of jadeite and rubies 
of Burmese origin. 
 
Policy Review 
------------- 
 
¶4.  (SBU)  Secretary Clinton announced a policy review in 
February, noting that neither sanctions nor unconditional 
engagement (as practiced by many in the region) have 
convinced the regime to reform.  The review slowed when the 
regime put ASSK on trial due to an incident involving an 
American citizen's intrusion into her house.  Many observers 
believe the regime, through the trial, seeks to isolate ASSK 
from next year's elections.  The verdict is scheduled for 
August 11.  Secretary Clinton discussed Burma with regional 
counterparts at ASEAN meetings in Phuket in July.  On the 
margins, State Department officials had a private 
conversation with GOB officials on implementation of UNSCR 
1874 and the situation of Aung San Suu Kyi, including 
signaling that we would be prepared to respond in concrete 
terms to concrete progress on the part of the Burmese 
government.  As you well know, the U.S. has achieved mutually 
beneficial relationships with a number of former adversaries. 
 Theoretically, Burma could be next; but we have difficulty 
discussing course changes with the senior generals who make 
all the key decisions, seldom show an inclination to bend on 
important substance, and rarely agree to see Westerners. 
 
Political Concerns 
------------------ 
 
¶5. (SBU)  POLITICAL PRISONERS:  Burma has an estimated 2,100 
political prisoners, nearly half of whom have been detained 
since demonstrations over fuel price hikes and subsequent 
monk-led protests (the so-called Saffron Revolution) in 
August-September 2007.  Last fall the regime sentenced many 
to lengthy jail terms -- ranging up to 65 years -- for a 
variety of "speech crimes."  The most dynamic and active 
leaders of the pro-democracy movement are either imprisoned, 
in exile, or in hiding.  ASSK has been detained for 13 of the 
last 20 years, and continually since May 2003. 
 
¶6. (SBU) THE 2010 ELECTIONS:  A new constitution, part of by 
the regime's seven-step "Road Map to a Discipline-Flourishing 
Democracy," received 92.48% "approval" via a deeply flawed 
referendum in May 2008.  The new constitution appears 
intended to ensure continued military control from behind the 
scenes after elections for a new Parliament planned for 2010. 
 The GOB has yet to announce the timing of the vote, who can 
compete, and how elections will be organized.  In the absence 
of hard facts, many potentially key players -- among 
opposition, pro-regime, and ethnic groups alike -- are 
struggling to determine the best approach to the elections 
and are holding off on any concrete action. 
 
¶7.  (SBU)  Aung San Suu Kyi's National League for Democracy 
(NLD), which won 81 percent of seats in Burma's 1990 
elections (with the regime then ignoring the results), has 
publicly declared it will only participate in the 2010 
elections if the regime agrees to release political 
prisoners, discuss amending the constitution, and accept 
international monitors for the elections.  It is unlikely the 
regime will accommodate.  Some other opposition figures -- 
including a "third force" of democracy advocates tied neither 
 
RANGOON 00000494  002 OF 004 
 
 
to the regime nor to the traditional 1990-era parties -- are 
considering participating, believing that the admittedly 
flawed process could offer some opening to press for change. 
 
¶8. (SBU)  ETHNIC GROUPS:  Many of Burma's minority ethnic 
groups once had significant rebel forces.  Seventeen official 
ethnic groups have reached ceasefire agreements with the 
government since the late 1980s.  Most retain their arms and 
some have large, young, and active memberships.  A number of 
ceasefire ethnic groups have accepted the regime's road map 
in theory, but have major difficulty with particulars, 
wanting to retain significant autonomy and aspiring to retain 
control over economic opportunities.  Some ceasefire groups 
could wield significant leverage against the GOB if 
dissatisfied with the results of the regime's road map.  The 
regime argues that concerns about instability necessitate 
tough constraints on political activity. 
 
Economic Environment 
-------------------- 
 
¶9.  (SBU)  Despite Burma's vast resource base in timber, 
natural gas, gems, and fisheries, crony capitalism and policy 
mismanagement stifle economic growth and opportunity.  The 
regime blames Western sanctions, though its own impediments 
to free markets -- including sweetheart deals, bureaucratic 
inefficiencies, corruption, and rigid, self-serving controls 
on agriculture, import/exports, and the financial system -- 
are the major factors.  Most of Burma's citizens subsist on 
an annual income of approximately USD 400 and spend 70 
percent of their income on food.  Burma's GDP per capita is 
half that of neighbors Bangladesh and Laos, a major shock to 
a country that was once a regional economic powerhouse.  High 
malnourishment, illiteracy, and infectious disease rates 
accent the society's poverty and vulnerability. 
 
¶10.  (SBU)  The regime, its commercial entities, and its 
associated cronies dominate the economy.  China, Thailand, 
India, and other regional countries are investors in a few 
key sectors as well as trade beneficiaries.  Foreign 
investments outside the extractive industries remain low. 
GOB economic statistics are unreliable and exaggerate the 
Burmese economy's performance.  The GOB claimed economic 
growth of 13 percent for 2007-2008; experts estimate the real 
rate was closer to 1 percent.  Inflation hovers around 30 
percent a year. 
 
¶11.  (SBU)  Although the government denies it, Burma has 
suffered from the global financial crisis.  Anecdotal reports 
indicate that remittances from Burmese abroad have declined 
markedly.  Economists estimate that hundreds of thousands of 
migrant workers have returned to Burma after losing their 
jobs abroad; few are likely to find work here.  Layoffs in 
the tourism, textile, and other sectors have been 
significant, while credit, particularly for agriculture -- 
which has always been extremely expensive -- is more 
difficult to obtain. 
 
¶12.  (SBU)  Under current sanctions, U.S. companies with 
investments in Burma prior to May 20, 1997 may maintain their 
holdings.  A hostile investment climate, disappointing 
returns, and a desire to project a positive corporate image, 
have resulted in very few U.S. companies electing to remain. 
The notable exception is CHEVRON (UNOCAL), which maintains a 
28 percent interest in the Yadana natural gas project, 
operated by French oil company Total.  State-owned Myanmar 
Oil and Gas Enterprise (15 percent stake) and a Thai company 
are also partners in the Yadana project. 
 
Burma's Foreign Relations 
------------------------- 
 
¶13. (SBU)  Burma has a strategic location: long borders with 
China, Thailand, and India, and shorter ones with Bangladesh 
and Laos, as well as a lengthy coastline that is the nearest 
ocean access for China's Yunnan Province.  Due to Burma's oil 
and gas deposits, as well as significant quantities of 
precious gems and hardwoods, China, Thailand, and India 
continue to expand their commercial relationships in Burma 
and compete for influence and resources.  Burmese natural gas 
supplies nearly 30 percent of Thailand's energy needs, and 
China is preparing to construct oil and gas pipelines from 
the Burma coast to Yunnan Province. 
 
¶14. (SBU)  Burma became a member of ASEAN in 1997.  ASEAN's 
reluctance to criticize the GOB' domestic policies has 
recently receded, as the Thai Chair, Indonesia, and the 
Philippines have all publicly urged the GOB to release 
 
RANGOON 00000494  003 OF 004 
 
 
political prisoners and institute political reforms.  In a 
July 20 joint statement, the 42nd ASEAN Foreign Ministers 
meeting encouraged the GOB to hold "free, fair and inclusive 
elections" and called on the regime to release political 
prisoners, including Aung San Suu Kyi, immediately. 
 
¶15. (SBU)  The GOB has announced its intention to develop a 
"peaceful" nuclear program under IAEA auspices with Russian 
assistance.  Additionally, a large number of Burmese military 
personnel reportedly travel to Russia each year to undergo 
technical training.  We continue to follow reports that 
Russia, China, India, and North Korea have provided material 
assistance to the Burmese military, including conventional 
weapons. 
 
Rays of Light 
------------- 
 
¶16.  (SBU)  Even as we criticize Burma for human rights 
abuses, insufficient counter-narcotics and anti-trafficking 
efforts, and dealings with North Korea, we strive at the 
Embassy level to maintain constructive relationships with all 
segments of Burmese society, including government officials. 
Furthermore, the USG is firmly committed to humanitarian 
assistance to Burma's long-suffering populace.  The regime 
has subtly indicated this humanitarian assistance, intended 
to relieve suffering and contribute to "social development," 
might be a possible avenue for future engagement. 
 
Law Enforcement and Military Relationship 
----------------------------------------- 
 
¶17. (SBU) DRUG ENFORCEMENT COOPERATION:  The Embassy's DEA 
office has positive working relations with Burmese 
counternarcotics officials.  Burmese police continue to 
supply DEA with significant information on drug seizures 
recorded by the local Anti-Narcotics Task Forces (ANTF) 
throughout Burma.  Additionally, DEA has had access to 
inspect major narcotic seizures and evidence processing.  On 
July 10, an ANTF unit in Tachileik, Burma seized over 34 
kilograms of methamphetamines and 762 kilograms of heroin, 
the largest heroin seizure inthis region since 1988. 
Burmese counterparts briefed our DEA agents immediately.  DEA 
has linked this organization to several major cases in the 
South East Asia region, and continues to work this case with 
Burmese police officials. 
 
¶18.  (SBU) MIL-MIL RELATIONS:  In contrast, Burma-U.S. 
military relations are limited.  With the exception of 
Russia, ours is the only Western embassy with resident 
military attachQs.  The Burmese military tightly controls all 
official contacts between Burmese and U.S. military 
officials.  The few interactions that do occur are largely 
ceremonial.  Official requests to visit military commanders 
or bases are routinely ignored.  Travel near sensitive areas 
can quickly generate intensive surveillance activity. 
Restrictions temporarily eased during Cyclone Nargis recovery 
operations in May-June 2008, when U.S. military attachQs 
interacted directly with local officials, and the Burmese 
granted permission for PACOM's Admiral Keating to visit. 
 
¶19.  (SBU)  Burmese military officers are generally cordial, 
and many privately indicate they would like better relations 
with the U.S. but are limited by the perspectives of senior 
leadership.  A few officers who studied in the U.S. under 
IMET before 1988 are still on active duty; a few are now 
Ministers.  They usually have fond memories and would welcome 
an improvement in mil-mil relations.  On the other hand, an 
entire generation of military officers knows only the 
regime's anti-U.S. stance. 
 
¶20. (SBU) POLICE/RSO COOPERATION:  Over the past year, we 
have observed improvement in cooperation between GOB law 
enforcement and security elements and the Embassy.  The 
Special Branch of Police regularly informs the RSO of 
demonstrations, street closings, and incidents involving 
American citizens.  Occasionally, this extends to information 
sharing on arrests of opposition and pro-democracy activists. 
 The Embassy has benefited from this improved relationship. 
 
Bilateral Assistance 
-------------------- 
 
¶21.  (SBU)  The Burmese Government has neglected its people, 
spending shockingly little on health, education, and social 
safety nets.  Embassy Rangoon and the regional USAID mission 
in Bangkok implement a number of programs to alleviate the 
humanitarian crisis and prepare people for meaningful change. 
 
RANGOON 00000494  004 OF 004 
 
 
 Cyclone Nargis in May 2008, while tragic, did allow the U.S. 
to demonstrate vividly its commitment to the welfare of 
Burma's citizens.  The USG has provided nearly USD 75 million 
in post-cyclone assistance to date, with more in the 
pipeline.  Implementation has been impressive.  The 
assistance has reached the needy, and has accented the 
magnitude of grass roots despair.  Internal USG discussion of 
additional assistance options is in progress.  A crucial 
question, though, is how receptive the regime will be. 
Ongoing programs outside the cyclone-affected areas target 
the most vulnerable groups, including refugees, IDPs, 
communities affected by trafficking, the disabled, and ethnic 
minorities.  We fund several health programs to combat 
infectious diseases, including HIV/AIDS, tuberculosis, 
malaria, and Avian Influenza. 
 
¶22.  (SBU)  The Embassy's American Center in Rangoon and our 
former consulate in Mandalay provide space for people to read 
books unavailable elsewhere and a forum for discussion.  We 
host regular speaker programs and attract increasing numbers 
of students in English and a range of other topics.  The 
Embassy's small grants program provides funds -- average USD 
10,000 -- to organizations in all regions of the country that 
foster local decision-making and civil society programs in 
their communities.  Embassy assistance also supports training 
of journalists. 
 
Your Visit 
---------- 
 
¶23.  (SBU)  Some months ago, we had the impression the Burma 
regime was intrigued by President Obama's stated willingness 
to converse with those with whom the U.S. disagrees. 
Secretary Clinton's announcement of the Burma policy review 
added to the regime's interest.  More recently, with ASSK's 
continued detention and trial having engendered vocal 
criticism globally, including public notice from Washington 
that the trial result will affect the outcome of the policy 
review, the mood in Nay Pyi Taw has cooled.  If the Rangoon 
court announces its verdict on August 11 as currently 
scheduled, and if the verdict continues ASSK's detention, 
international criticism of the regime will only increase. 
That obviously could complicate the atmospherics for your 
meetings. 
 
Ready to Assist 
--------------- 
 
¶24.  (U)  Everyone at Embassy Rangoon looks forward to your 
visit.  We stand ready to do everything we can to make your 
trip as productive as possible. 
DINGER