Two leading congressmen are calling on the Obama administration to use its leverage in international financial institutions to press for greater fiscal transparency in Burma, formally known as Myanmar, and ensure progress in the human rights situation in the Southeast Asian country as it emerges from decades of isolation.
The two leaders of the House Committee on Financial Services, Chairman Spencer Bachus (R-AL), and ranking Democrat Barney Frank (D-MA) wrote a letter Aug. 22, obtained by The Cable, to Treasury Secretary Timothy Geithner asking him to safeguard the fragile reform process in Burma and ensure that Burma's opening to the world is done according to international financial management standards and with respect to the welfare of the Burmese people. Today Burmese President Thein Sein reshuffled his cabinet, replacing key ministers with reform minded appointees.
The lawmakers specifically called out the Myanmar Oil and Gas Enterprise (MOGE), which saw sanctions relief from the U.S. government despite suspected corruption and ties the Burmese military. Obama lifted the ban on U.S. companies doing business with MOGE in July, over the objections of Nobel Peace Prize winner Aung San Suu Kyi, now a member of the circumscribed Burmese legislature.
"We are cautiously optimistic that Burma will continue to implement necessary reforms, but we believe vigilance on questions of government transparency and human rights remain critical," the lawmakers wrote. "We urge the administration to use its leadership at the IFIs [international financial institutions] to emphasize fiscal transparency, systems of accountability and respect for human rights and to insist that the institutions pay close attention to the urgent social needs of the Burmese people."
They want the IMF's Code of Good Practice on Fiscal Transparency enforced on all branches of the Burmese government, including the military and MOGE. The code would require the government and its state enterprises (including MOGE), in essence, to publish their revenues and expenditures and subject them to public and parliamentary oversight, as well as an independent auditing process.
"Such transparency is necessary is necessary not only to allow the IFIs to properly supervise the use of multilateral aid but also to help end corruption and the off budget funding of the Burmese military," the letter states.
Burma is a resource-rich county that could provide for its people but remains mired in corruption and mismanagement, Tom Malinowski, Washington director of Human Rights Watch, told The Cable.
He said that IFI lending for big infrastructure projects, absent fiscal transparency reforms, could reinforce those bad habits, making the promotion of fiscal transparency central to the IFIs' mission. The IFIs hold good leverage over the Burmese government because infrastructure development is one of the regime's key goals.
"The key question in Burma's reform process is whether elected civilians will wrest full control over the country from the military establishment, including control of revenues from Burma's lucrative oil and gas and mineral exports. It's not just Aung San Suu Kyi who wants this - Burma's reformist president and its new parliament also have a huge stake in figuring out where the money is and asserting their authority to oversee how it's spent," Malinowski said. "It would help them if the IFI's prioritized fiscal transparency - providing technical assistance to help the Burmese get there, and holding up lending for big infrastructure projects until they do."
John Hudson reports on national security and foreign policy from the Pentagon to Foggy Bottom, the White House to Embassy Row, for The Cable.