United States Eases Sanctions on Financing for Development Organizations in Burma (Myanmar)

On April 17, the U.S. Treasury issued new General License No. 14-C, which relaxes sanctions on financial services with respect to certain humanitarian and not-for-profit activities in Burma.  

This License allows financial services to support a broader range of development projects than was previously permitted, and includes: (1) projects to meet basic human needs; (2) democracy building and good governance projects; (3) educational activities; (4) sporting activities; (5) non-commercial development projects directly benefiting the Burmese people; and (6) religious activities. 

The License implements Secretary of State Hillary Clinton’s April 4 statement that the United States would begin to ease sanctions on the long-isolated country. Secretary Clinton indicated that the United States will also relax restrictions on some business activities in Burma, but it is still unclear how the United States will implement this policy.

The new License means that Burma, long starved of aid money, will experience an increase in the presence of international non-governmental organizations. Presumably, some of the financing will also flow to local not-for-profits, which have been growing in number in recent years. Burma ranks the lowest of any mainland East Asian country on the U.N.’s Human Development Index, so there is clearly an opportunity to make a difference.

The extent to which development organizations have a positive impact will depend in part on the extent to which they obtain access to conflict areas; the capacity of the government to work with international civil society organizations; and the ability of organizations to hire well-trained local staff, given that Burma’s universities were closed for many years. Additionally, although not-for-profits’ programs certainly have the ability to improve development indicators, a report by the Project 2049 Institute outlines the risk that aid organizations will accidentally foster conflict in Burma, and lays out parameters to help donors and development groups avoid such unintended consequences.

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