Report

Hillary’s Burma Problem

It’s the crowning achievement of her tenure as secretary of state, and it’s unraveling at the seams.

One morning in late 2011, Hillary Clinton visited Aung San Suu Kyi's weathered, lakeside villa to talk politics. It was the early days of Myanmar's transformation from an authoritarian pariah state to a budding democracy, and the meeting was historic: No senior U.S. official had visited the country in 50 years and Suu Kyi had spent the last 15 of those under house arrest. The talks between the U.S. secretary of state and the leading icon of Myanmar's embattled democracy movement became a powerful symbol of progress for a country trying to climb out from under decades of political and economic misrule.

But today, the promise of a free and democratic Myanmar is rapidly receding as sectarian violence escalates and the government backslides on a number of past reforms. That's causing genuine alarm on Capitol Hill among lawmakers from both parties. The House Foreign Affairs Committee unanimously passed a resolution this week calling on Myanmar's government to respect the human rights of all minority groups in the country and end the persecution of the Rohingya people, an essentially stateless and largely Muslim ethnic group that has been singled out by both Rakhine Buddhists and the government of Myanmar.

"As the government of Burma transitions from decades-long military rule to a civilian government, it is important to hold them accountable for persistent human rights abuses," New York Congressman Eliot Engel, the most senior Democrat on the House panel, said Tuesday.

What happens in Myanmar has implications for Clinton as she prepares for a potential presidential bid for the White House in 2016. Until now, the Myanmar portfolio has been widely viewed as the "one clear-cut triumph" of her tenure as secretary of state -- a tenure in danger of being viewed as underwhelming and overly cautious when compared to that of her successor, John Kerry, who has taken on the Gordian knot of the Mideast peace process.

Now, as the civilian regime that replaced Myanmar's military junta embraces increasingly brutal tactics against Muslim minority populations, the jewel in the crown of Clinton's tenure risks vanishing into thin air. "Things have gone from bad to worse," said Tom Andrews, president of United to End Genocide, a group that monitors violence between Buddhists and Muslims in the country.


The dip in progress in Myanmar comes as Clinton and her phalanx of political supporters race to paint her tenure at the State Department in as positive a light as possible ahead of her prospective presidential run. This June, Clinton will publish a memoir chronicling the highlights of her work as secretary of state for Simon and Schuster. In the meantime, a group founded by Clinton foot soldier David Brock called Correct the Record has employed researchers to examine her State Department tenure and cherry pick its finest moments.

Her career is under an equal amount of scrutiny from America Rising, a Republican opposition research firm founded by former Mitt Romney campaign manager Matt Rhoades and political operative Tim Miller. The firm is reportedly studying up to dispel any embellishments or half-truths that Hillaryland might churn out in the next two years related to her State Department career. Many Republicans, for their part, view the unrest in Myanmar as a counter-narrative to the hyperbole surrounding Clinton's diplomatic record.

"The United States' engagement with Myanmar over the past couple years has helped to aid the country's progress towards a democratic society, but it is too early for any U.S. official to put Myanmar on their resume of successes," Republican Sen. James Inhofe of Oklahoma said.

Myanmar is making progress on several fronts, but the success of the transition hinges on the government's ability to meet three primary challenges: reining in a corrupt and rapacious military, resolving a decades-long civil war with ethnic minority states, and revising a flawed and undemocratic constitution. Of those challenges, the issue of human rights has proven to be the biggest stumbling block by far for Myanmar's leaders as well as a persistent thorn in the side of U.S. diplomacy.

After Clinton's first visit to Myanmar in December 2011, the country's political transformation proceeded swiftly. During her trip, she had promised to establish new U.S.-led development programs, provide tens of millions in medical aid, and consider the exchange of ambassadors. The following March, a mostly free by-election saw Aung San Suu Kyi appointed to parliament, while her long beleaguered party, the National League for Democracy (NLD), won 43 of 46 parliamentary seats. In light of that victory, Clinton announced that the United States would undertake new steps to foster reform in Myanmar, including the opening of a USAID mission and the relaxation of restrictions on U.S. nonprofit activities in the country.

By summer 2012, the Obama administration had begun easing sanctions on Myanmar, waiving bans on U.S. investment and the export of financial services to the country.

Myanmar's ruler, Thein Sein, responded in kind by freeing hundreds of political prisoners, engaging the NLD in parliament, and formally lifting press censorship before abolishing the censorship board altogether in 2013. And, in one of the biggest economic reforms intended to stabilize the economy and encourage foreign investment, the Central Bank floated its currency's exchange rate for the first time.

In September 2012, before a meeting with Thein Sein in New York, Clinton announced that the U.S. government would soon ease a ban on Burmese imports "in recognition of the continued progress towards reform." Now, most sanctions have been eased and the United States has already allocated more than $180 million in foreign aid to Myanmar.

But the initial groundbreaking successes have given way to vicious ethnic flare-ups that continue to alarm international observers.

Since Clinton's first visit, sectarian violence between Buddhists and Muslims has gradually escalated, culminating in a series of deadly attacks on Muslims across the country. More than 600,000 people have been displaced by civil conflict, and nearly 1 million are in need of humanitarian aid, according to USAID. And in Rakhine, Human Rights Watch has accused state security forces of carrying out a campaign of "ethnic cleansing" against the Rohingya people.

These setbacks peaked in 2014, beginning with reports in January that a mob of police and Rakhine villagers had massacred up to 49 Rohingyas, including children. The U.N. called on the government to immediately investigate. But Thein Sein's office, to the dismay of both human rights groups and U.S. officials, continues to deny that any such event occurred. The following month, the State Department highlighted the plight of the Rohingya in its 2013 human rights report, saying there were "credible reports of extrajudicial killings, rape and sexual violence, arbitrary detentions and torture" against the group. The report also noted continued abuses by government soldiers, "including killings, beatings, torture, forced labor, forced relocations, and rapes of members of ethnic groups in Shan, Kachin, Mon, and Karen states."

Making matters worse, the government in March ousted Doctors Without Borders from Rakhine state, claiming that the humanitarian organization was "biased" toward the Rohingya, a group that Myanmar authorities do not officially recognize. Sentiment against aid workers sympathetic toward Rohingya reached a head on Thursday, when a mob of over 1,000 Buddhists attacked the homes and offices of international aid workers in Rakhine state.

To be sure, the overall changes in Myanmar in the last three years have been impressive, even if grave challenges remain. "Things have improved phenomenally," said Murray Hiebert, a Southeast Asia expert at the Center for Strategic and International Studies, citing the country's more vibrant political system, freer press, and gradually thinning ties to China. "But it's going to take a while," he added. "We can't expect [Myanmar] to reach Jeffersonian levels of democracy overnight after 50 years of authoritarian rule."

But many in Congress have grown increasingly frustrated with what they see as an Obama administration effort to claim success in Myanmar at the expense of addressing dire problems in the country.

"The administration has lost sight of the reality on the ground because they've been trying to tout successes," Rep. Steve Chabot, chairman of the Foreign Affairs Subcommittee on Asia and the Pacific, said in an interview. "I think the administration has rushed a lot of rewards and concessions and deals when they're just not warranted."

A key sticking point is the issue of military-to-military engagement with Myanmar's armed forces, which have a long history of human rights abuses. In February, army officials from Myanmar participated in a U.S.-led military exercise in Thailand called "Cobra Gold," the largest annual multinational exercise in Asia. For the first time, Myanmar officials were allowed to observe the exercise, which included joint maneuvers such as amphibious attacks with fighter jets, helicopters and boats. Given the state of human rights abuses in the country, both Democrats and Republicans on the committee said the engagement was inappropriate.  

The U.S. needs to "keep the pressure on the Burmese military to reform," Chabot said, otherwise, "a lot of civilians in the country are going to pay a high price for this."

But the State Department is pushing for greater engagement. In particular, it wants to invite members of Myanmar's military to study under the International Military Education and Training (IMET) program.

That doesn't sit well with human rights observers and some members of Congress who worry about how the Burmese military would use that education -- and about what message that type of American support would send to the country's government. "The administration doesn't want to stop anything they're doing despite progress slowing down in Burma," said a Democratic congressional aide, skeptical of the benefits of military-to-military engagement. In the 1980s, 167 Burmese military officers trained under IMET, but that did little to rein in the military.

Recent democratic reforms have proven similarly ineffective at reducing the military's role in everyday life. This past January, a group of 13 women's rights groups in Burma released a damning report documenting more than 100 recent cases of rape committed by state security forces against women in conflict areas -- highlighting the military's apparent immunity from rule of law.

"The military doctrine has not changed," said Christina Fink, an expert on Myanmar's military at George Washington University. Though she acknowledges that the country's armed forces should be engaged on some level, Fink argues that the military is, in some ways, being left behind in the transition -- able to remain the same, potentially at the expense of other reforms.

David Mathieson, a Human Rights Watch researcher based in Myanmar, argues that further military support will only embolden Myanmar's armed forces. "The military has got off scot-free," he said. "And the West is in a position where they don't want to speak out more because they don't want to endanger the programs they've already invested in."

But the State Department maintains that concerns about military assistance are misplaced. "We wouldn't be doing any of the standard tactical logistical training that we've done in the past," a senior State Department official said, emphasizing that any bilateral training would chiefly focus on human rights, civilian oversight, democratization, and professionalization.

Hiebert of the Center for Strategic and International Studies contends that this sort of deeper engagement is the only way forward: "You can punish these guys, they're bad guys, but if you wait until they've repented and walked to the river Jordan, that's just not going to happen."

What Myanmar's regression means for Hillary is unclear. Without Myanmar, there's a paucity of foreign-policy achievements to tout -- marking a stark contrast with her successor John Kerry's potential diplomatic breakthroughs on Iran's nuclear program and Syria's chemical weapons arsenal, as well as his willingness to wager his tenure on a long-shot effort to bring about an Israeli-Palestinian peace deal. According to reports, Clinton's memoir will try to promote her leadership role in the Arab Spring, including the ouster of Libyan strongman Muammar Qaddafi. But the democratic uprisings in the Middle East have lost much of their luster given Egypt's return to military rule, Syria's catastrophic descent into civil war and the deadly assault on U.S. officials in Benghazi, Libya following Qaddafi's overthrow.

Others argue that foreign-policy achievements don't win elections, so any harm to her electability will be minimal. "I don't know the long term odds of whether this effort [in Myanmar] will be successful," said Tommy Vietor, a former spokesman for the National Security Council. "I do believe with 100 percent certainty that not a single voter will make their decision based on her policy towards Burma. You'll be lucky if they know where the fuck it is."  

SAUL LOEB/AFP/Getty Images

Report

Too Much, Too Soon

The International Monetary Fund is giving billions of dollars to Ukraine's cash-strapped government. Will that make the country's new rulers even weaker?

The International Monetary Fund's rescue package for Ukraine, worth up to $27 billion, is good news for the nearly bankrupt country and a potentially huge win for the country's fragile, pro-Western central government. But the belt-tightening the IMF requires could be disruptive as Ukraine tries to move forward and prepare for elections in May -- and it could wind up threatening the survival of the government it is meant to help save.

The IMF reached a tentative agreement with Kiev's new government Thursday that includes $14 billion to $18 billion in aid directly from the IMF and the rest of the $27 billion from individual countries that promised to chip in. But it comes with strings: long-needed, but politically difficult, changes to the Ukrainian economy including cutting energy subsidies, cracking down on corruption, and strengthening the country's banks.

"If the political will is there and you have the population on board for turning the ship that's probably the best thing that you could hope for at the outset," said Heidi Crebo-Rediker, a senior fellow with the Council on Foreign Relations and a former State Department chief economist.

But will the population be on board? Ukrainians took to the streets of Kiev when former President Viktor Yanukovych rejected a European political and economic deal with similar conditions, in favor of a $15 billion no-strings-disclosed deal from Russia. It's not clear that the reverse will be true -- that they will now rejoice at the idea of paying higher taxes and watching their heating bills increase if Kiev removes generous but extremely costly natural gas subsidies.

In addition to raising natural gas prices to market levels, the IMF also wants Ukraine to rein in government spending, be more transparent, and close loopholes that make it easy for officials to hand out lucrative government contracts to their cronies. But cutting natural gas subsidies will likely be the most difficult. Right now the government buys gas from Russia at high prices and then sells it to companies and consumers at low prices, a holdover practice from Soviet days that continuously leaves a gaping hole in the national budget.

Ukraine's leaders, left with little alternative, have agreed to the conditions. "We have no choice but to tell Ukraine the truth," Ukrainian Prime Minister Arseniy Yatsenyuk said Thursday in an address to parliament.

Yatsenyuk said he wouldn't allow the country to go bankrupt and introduced a set of what he called "very unpopular, very complex, hard reforms" to parliament that would raise taxes on the wealthy and big business, as well as on the sale of alcohol and tobacco.

The huge increase in heating bills Ukrainians are set to see over the next few years will be far more painful. State-owned Naftogaz said Wednesday that it would raise gas prices by 50 percent starting May 1, the first of many rate hikes promised between now and 2018 as Kiev tries to close the budget gap left by the heavily subsidized natural gas it sells to its citizens.

Those subsidies eat up about 8 percent of gross domestic product (GDP), a whopping percentage for such a poor country.

The huge amounts of money Kiev is spending each year to subsidize gas sales is a similar problem to the one the IMF has identified in a spate of countries in the Middle East and North Africa, where governments routinely underwrite cheap, domestic energy as a way to placate their citizens -- but at a tremendous economic cost. In both the Middle East and Ukraine, ending those subsidies could curb profligate energy use and restore a measure of fiscal health, but only at the risk of sparking popular anger which could undermine the governments trying to carry out the reforms in the first place.

The IMF wanted Ukrainian leaders to make some changes right away to prove that they're serious. That's because the IMF has started loan programs for Ukraine before and previous leaders have not followed through on changes they agreed to make.

But some observers think the IMF pressed for too much reform too fast and the changes could divide the fragile country.

"I don't think the IMF should have insisted on an immediate rise in the residential price of natural gas in the first place," said Mikhail Korchemkin, the head of consulting firm East European Gas Analysis. "The situation in Ukraine is very unstable and there was no need to destabilize it more by unpopular decisions of the government."

Chris Weafer of Moscow-based consultancy Macro-Advisory said the gas hikes "will be hugely unpopular and are likely to prove very divisive in the upcoming elections." Weafer said the changes could be particularly problematic in eastern Ukraine, a region already on the radar screens of many world leaders because of mounting evidence of a potential Russian invasion.

"A large number of people there are unhappy with the political changes which they see as being imposed on them by Kiev," Weafer wrote in an email. "The austerity measures will only deepen that discontent."

In a way, the IMF's insistence on painful economic reforms is a consequence of its own high-profile, and much-criticized, role in steering other countries such as Argentina through tough times. When depression hit the Argentine economy in the late 1990s, the IMF continued supporting Argentina with loans, even as fiscal discipline and macroeconomic indicators spiraled downward.

While the IMF took plenty of criticism later on for its role in dealing with Argentina's crisis, most notably from Argentine politicians, the IMF's own conclusions about its performance were starkly different. In an internal review, it concluded that it should have attached more conditions, not fewer, to the financing it provided Buenos Aires.

Even then, the IMF concluded in its review, getting political buy-in for its reform program is the starting point for any successful financing package: "It is debatable whether greater structural conditionality -- or stricter enforcement -- would have succeeded in ensuring that structural reforms would be undertaken, given that political consensus and ownership were lacking." That seems to apply as much today to Kiev as it did then to Buenos Aires.

In recent years, the IMF has pushed other struggling countries to quickly implement painful macroeconomic reforms, usually prioritizing fiscal health over economic growth. The IMF's recipe for Spain as it reeled with 25 percent unemployment and a budget deficit near 10 percent of GDP was to slash pensions and accelerate deficit reduction, for example. While the IMF then and now urged deep labor-market reform as a pathway to future growth and job creation, it essentially put austerity at the center of its playbook.

Similar measures have caused political unrest in Greece and other European countries that have needed bailouts during the continent's debt crisis. Yet German Finance Minister Wolfgang Schaeuble said that Greece could serve as a template for a future lifeline for Ukraine.

"If ever we were to reach a situation in which we had to stabilize Ukraine, we would have many experiences from Greece" to draw on, Schaeuble said Wednesday, according to Bloomberg.

The requirements in the IMF deal, which still has to be approved by the fund's board, are the same that were attached to the deal discussed last fall with Yanukovych before his ouster. Russia, which sees Kiev's new government as illegitimate, has since withdrawn all financial support and natural gas discounts, which could make Ukraine's economic recovery even more of a long shot.

"It was difficult enough looking at getting Ukraine's economy back on track without an outside spoiler, so I don't think anybody's underestimating just how difficult this will be," said Crebo-Rediker.

AFP/GETTY