Opening for Investment, Burma Faces Human Rights Challenges

STATE DEPARTMENT — More foreign firms are moving into Burma with the easing of U.S. and European sanctions, following recent political reforms. But the Obama administration says it expects U.S. investors to lead by example in improving labor conditions, amid concerns that a more open Burma could worsen human trafficking.

U.S. and European sanctions hurt Burma's banking sector, making it harder for foreign firms to invest.

But with those sanctions eased, Google, Coca-Cola and General Motors are leading the charge into Burma. Meeting with corporate leaders before the largest-ever U.S. trade mission to the country, U.S. Secretary of State Hillary Clinton said she expects them to be agents of positive change by doing business responsibly.

Clinton has told Burmese President Thein Sein that Washington will respond to reforms on an action-for-action basis, as his government legalizes trade unions, eases media censorship, and frees political prisoners.

But with a 30 percent poverty rate, UNICEF's Burma representative Ramesh Shrestha says one of the biggest risks in Burma is child exploitation. "If government opens up as it said, democratically, then obviously it opens up for everything. That would mean the existing bad control of the situation might be loosened up. That would mean people would do what they want to do. This could be legal or illegal, all these things could happen," he said.

Jesse Eaves, the senior policy adviser for child protection at the aid group World Vision, says the important thing is that positive steps are being made. "We have seen countries like Burma starting to really take a look at what is happening in its own borders, what is happening to their citizens and trying to take the proper response to it," he said.

Eaves says World Vision is raising awareness about human trafficking and child exploitation in Burma by working with survivors to speak out. "It is amazing the change that you can see just by addressing the issue, by bringing it out in the open and shining a light on it," he said. "I think the biggest problem we see is that most people do not know what it is that they are looking at. They may just think, 'This is normal. This is what we have always done.'"

Lex Rieffel, an economic expert at the Brookings Institution, says the speed of Burma's economic reform could challenge welfare and development programs. "We have seen a pattern where countries that invest heavily in natural resources tend to under invest in human resources.  Experience tells us that it is the investment in human resources that pays off in the long term," he said.

But Britain's investment chief Nick Baird says foreign firms can make a big impact in Burma. "It is not just economic, but working together in an open and transparent and responsible business way, will actually help the stability of this country," he said.

The message is echoed by the new U.S. ambassador to Burma, Derek Mitchell, who says outside investment can move the country toward greater transparency and accountability.