Sunday, March 23, 2008

Foreign Policy, Political Economy, and Sovereign Investment, or Why'd You Say Burma II?

by Ken Houghton

Catching up from a week ago, this CSM story on the failure to achieve a global boycott of Myanmar/Burma dovetails into multiple issues. The CSM places an interesting emphasis on its story:
Who's buying? China, India, Singapore, and Thailand are scooping up Burma's stones. US first lady Laura Bush's efforts at a global boycott of Burma's gems seem to have done little to reduce China's appetite for Burmese jade to make trinkets and souvenirs to sell at the Summer Olympics.

At this recent auction, 281 foreigners attended, leaving behind much-needed foreign currency and generally turning the auction into a resounding success, according to the state-run New Light of Myanmar newspaper.

Mrs. Bush – and human rights campaigners – would not be pleased.

The first lady has taken on the military regime in Burma (Myanmar), urging jewelers not to buy gems from a country where the undemocratic rulers and their cronies amass fortunes selling off the country's stones, as well as many of the county's other natural resources – such as minerals, timber, gold, oil, and gas – but keep Burma's citizens in abject poverty.

She has urged UN Secretary General Ban Ki Moon to act more forcibly on Burma and stood beside President Bush on several occasions recently as he announced the growing list of US sanctions on the country. And, on International Human Right's Day this past December, Mrs. Bush added her voice to those seeking a global boycott on gems from Burma.

"Consumers throughout the world should consider the implications of their purchase of Burmese gems," she said in a statement from the White House. "Every Burmese stone bought, cut, polished, and sold sustains an illegitimate, repressive regime."

Now we might just assume this is because the First Lady always talks about "women's and children's issues" (h/t Lance), but clearly the CSM believes that a lot of Laura Bush's political capital is centered on the issue. And since she's the smart one—the ex-librarian, not the failed businessman—and (as Brad DeLong noted) "even a weak very powerful in foreign affairs," so her husband's popularity (or lack of same) shouldn't in itself have much of an effect. If Laura wants it done, and their marriage is the true partnership it is portrayed as being, then we should be able to assume that the aim of the United States is to limit such trade.*

And if we again stipulate that the United States is the one remaining superpower, then the Office of the President should be able to use its influence to keep countries from bidding. At least, our major trading partners, such as, say, "China, India, Singapore, and Thailand." After all, political capital is only useful if it can be used for the things about which a country cares, no?
At this January's auction in Rangoon, according to the New Light of Myanmar, 600 lots of jade were sold – a third more than at the last auction held in November. By some estimates, jade alone now accounts for about 10 percent of Burma's yearly export earnings.

Cutting off 10% of their export earnings should have a significant effect, no? Especially when most of that money is not getting to the people whose labor creates it, but rather to those who would control them.
Why haven't Western sanctions on Burma's gems – and the country's other products – been more effective, even after so many years?

"The only sanctions that would work would be Chinese," asserts Robert Rotberg, a professor of public policy at Harvard University's Kennedy School. "The Chinese ... supply all the weapons and much of the investment [to Burma]."

But the Chinese are our friends, and 10% of Myanmar's exports probably doesn't cover the profits from the sales of China-made New York Yankee apparel. There must be something else...
"The role of gems is not huge ... compared with oil and gas, and opium smuggling," he says. Overall, China, Thailand, and India reportedly spend about $2 billion a year here on electricity, natural gas, oil and timber.

"China is the culprit here," explains Thai social critic and frequent Burma commentator Acharn Sulak Sivaraksa. "Burma is supported by China. End of story. We need to liberate that country not only from its own military junta but also from the imperialist Chinese."

The limits to growth are the limits to negotiating, or the use of political, power. And even if Operation Iraqi Liberation** had worked, $2 billion a year of valuable imports apparently buys a blind eye or two, even from our alleged allies.

Someone needs to figure out what the Elasticity of Demand for political capital is.

*This is also consistent with George W. Bush's public statements, example cited here. (Sarcastically, but it's my post, so what would you expect?)
**Tom Friedman originally liked this, until the fortieth or fiftieth e-mail suggesting it clued him in to the acronym. I'm thinking about calling it Operation Exogenous Democracy, but fear that the people in Oxford might object.

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