The failure of sanctions

By Alex Singleton | 19 September 2005

Well-meaning people wanting to discourage human rights abuses and to promote democracy often argue for sanctions. Those of us who are followers of liberal economics want the same ends: the difference is that we think sanctions rarely work. On our partner website A World Connected, Melinda Ammann talks about her recent trip to Burma:

For the past decade, the US has tried to isolate the ruling generals of Myanmar - the former Burma - into submission - just as it has with countries like Cuba. This in the hope of bringing democracy and liberty to its people. Outlawing trade, however, has done little to goad the regime toward change, as I discovered on a trip down the Burma Road linking China and Myanmar. They simply seek aid and comfort elsewhere - and have no trouble finding it...

Beijing is the Yangon generals' largest military sponsor and most powerful friend abroad. China's influence is readily apparent in the Shan State, the northeastern province bordering China, Laos and Thailand, as well as in Mandalay. Wealthy merchants and cross-border traders live in opulent houses in the Golden Triangle style - cotton candy pastel tile fronts and floors, balconies on each of two to three floors, huge satellite dishes on the roof - next to local shacks of corrugated metal. In towns like Lashio, Chinese own most of the larger businesses, hotels and restaurants, and signs are in Chinese as well as Burmese.

Heavy trucks from China ply the road toward Mandalay carrying cheap blankets, food, electronics, appliances, and most any other manufactured products. Small tractor trucks with loud, smoking Chinese-built engines welded onto Burmese-built steal bodies chug along the road carrying people and raw materials. Lumber, rice and gems are the most prominent legal exports.

The result? Not a lot of American influence, but a lot of Chinese influence. Investment has been lower in Burma for sure, but since other countries trade, sanctions have been a rather feeble economic stick. As Leon T. Hadar of the Cato Institute puts it:

The U.S. policy of imposing unilateral trade and investment sanctions against Burma has proven to be a failure on all fronts. By forcing U.S. firms to disengage from Burma, that policy has harmed American economic interests and done nothing to improve the living conditions or human rights of the people of Burma.

Sanctions have denied Burmese citizens the benefits of increased investment by American multinational companies - investment that brings technoloygy, better working conditions, and Western ideas.