Mar. 8, 2004 – Burmese exile Aung Din fought for democracy in his home country, a nation of 50 million that has been ruled for more than 15 years by a military dictatorship. As vice chair of the All Burma Federation of Student Unions, a group declared illegal by the junta, Din helped organized democratic opposition â€“ until he was arrested on April 23, 1989. He spent four years in prison doing hard labor at the hands of the regime.
To bring freedom to Burma and its people, Din and others believe, the world community must isolate the military government diplomatically and economically. But now, an international consortium of financial institutions â€“ including two prominent American banks â€“ has begun doing business with banks in Burma, contrary to the wishes of pro-democracy activists and in possible defiance of a new US law.
The Belgium-based conglomerate SWIFT has offered four Burmese banks membership in its comprehensive financial network, a move which observers say will dramatically increase Burmaâ€™s ability to trade internationally. This action may be illegal under US law, activists contend, and will certainly solidify the juntaâ€™s hold on power. Foreign trade of this nature offers the totalitarian regime an â€œeconomic lifeline,â€� says Din, who left his homeland in 1995 and is now policy director of the US Campaign for Burma.
â€œWe spent so much time and energy to get economic sanctions passed in the United States,â€� said Din. â€œThis totally undermines our democratic forces, undermines the US sanctions, and undermines pressure from the international community.â€�
The four Burmese banks joining the SWIFT network will be able to transfer funds abroad quickly and efficiently with other members. American financial giants J.P. Morgan-Chase and Citigroup are SWIFT members and representatives from the two banks serve on SWIFTâ€™s 25-member board of directors.
Burmaâ€™s military government â€“ which refers to itself as the State Peace and Development Council, and has re-named the nation â€œMyanmarâ€� â€“ is considered by international human rights groups to be among the most repressive in the world. Among other abuses, the regime uses forced labor and has killed and imprisoned pro-democracy organizers.
After years of work, activists for Burmese democracy successfully pressured the US Congress into passing comprehensive sanctions on the Burmese dictatorship last August. The economic isolation strategy has been working, they say: According to the US Campaign for Burma, the bipartisan American sanctions prevent the regime from earning about $450 million per year.
The group estimates that more than half of this income would be used to fund military buildup. By contrast, less than two percent of the juntaâ€™s income is allocated to social spending such as education and health care.
â€œThey use all this money for weapons, but they donâ€™t care about the welfare of the people,â€� said Din. â€œUntil the sanctions passed, generals and their cronies got richer and richer, while the people got poorer and poorer.â€�
SWIFT is an industry-owned cooperative group that provides the technology for financial messaging services. The four Burmese banks joining the SWIFT network will be able to transfer funds abroad quickly and efficiently with other members. American financial giants J.P. Morgan-Chase and Citigroup are SWIFT members and representatives from the two banks serve on SWIFTâ€™s 25-member board of directors.
Admission of the four banks was approved in November, 2003, just months after the US sanctions took effect in August. A bank needs two-thirds of SWIFTâ€™s directors to join, but the vote breakdown is confidential. Neither Citigroup nor J.P.Morgan-Chase returned calls seeking comment about how their representatives voted.
Since the SWIFT organization serves over 7,500 financial institutions in 200 countries, this promises to dramatically increase prospects for foreign financial transactions â€“ and, say human rights activists, to help Burma expeditiously transfer the countryâ€™s undesirable kyat currency into euros, an easier currency to trade in.
Reached by telephone, a SWIFT spokesperson in Belgium said that no Burmese or European Union laws prohibit this type of arrangement.
â€œSWIFT respects the laws of the countries in which it operates, and there are no applicable laws that prevent SWIFT from doing business with these institutions,â€� he said.
Thatâ€™s just another reason, says Jeremy Woodrum of the US Campaign for Burma, that the sanctions campaign â€œmust become more international.â€� While the United States has tough laws against doing business with Burma in place, the EU as yet does not.
â€œWe hope the EU will follow suit by passing similar [sanctions] measures,â€� adds Din, â€œbut so far, the EU has failed.â€�
European organizers have also expressed outrage at SWIFTâ€™s action. Mark Farmaner of Burma Campaign UK told the Observer newspaper that his group is â€œshocked that such an important financial institution is doing secret deals with one of the most brutal regimes in the world,â€� and that the campaign believes â€œany US directors of SWIFT are in breach of US law and could be prosecuted.â€�
Burma activists in America are more circumspect on the legality issue, saying only that theyâ€™ve asked the Treasury Departmentâ€™s Office of Foreign Assets Control to investigate. Even if the letter of the law hasnâ€™t been violated, though, both Woodrum and Din say its spirit has â€œdefinitelyâ€� been compromised.
SWIFT, according to the spokesman, is â€œa totally apolitical organizationâ€� that deals only with financial institutions in countries, not the countries themselves. â€œSWIFT is sensitive to the position of the various groups that are expressing concerns, but thereâ€™s nothing we can do at this time,â€� he said.
Still, activists with the US Campaign for Burma say, actions like this one threaten the economic isolation called for by Burmaâ€™s democratically-elected government. Nobel Peace Prize winner Aung San Suu Kyiâ€™s National League for Democracy, which the military junta has steadfastly denied power despite a landslide victory in the countryâ€™s last elections in 1990, consistently urges international sanctions against the junta as a means of nonviolently bringing about a change in governance. Capital flowing into the regimeâ€™s coffers merely solidifies its hold on power, say observers like Woodrum and Din, undermining prospects for change.
â€œWe only ask that the international community stay away from the military junta,â€� Din said. â€œThen, when the military junta recognizes that they have no friends â€¦ they will come to the dialogue table.â€�