US embassy cable - 03RANGOON646

S E C R E T SECTION 01 OF 03 RANGOON 000646 
 
SIPDIS 
 
STATE FOR EAP/BCLTV, EB 
NSC FOR KAREN BROOKS 
USPACOM FOR FPA 
 
E.O. 12958: DECL: 06/02/2013 
TAGS: PREL, KDEM, PGOV, ETRD, BM 
SUBJECT: INSIDERS' VIEWS ON HOW TO INFLUENCE BURMA'S RULING 
GENERALS 
 
 
Classified By: COM Carmen Martinez for Reasons 1.5 (B,D) 
 
1. (S) Summary: Burma's businessmen have been telling us in 
no uncertain terms that neither economic sanctions nor 
constructive engagement will expedite political reform under 
the current circumstances.  With surprising unanimity, these 
insiders have asserted that "coercive persuasion" is the only 
possible solution.  End summary. 
 
An Informal Poll of Movers and Shakers 
 
2. (S) In light of the increasing intransigence of the regime 
in general, we've been listening closely to our most reliable 
private sector contacts who work closely with the regime, on 
how to influence the political process.  We pass on these 
views not as a policy prescription, but to add to the ongoing 
debate, sparked by UN Envoy Razali during the February 
Informal Consultative Group (ICG) meetings in Tokyo, over how 
to better advance the process of transition in Burma. 
 
3. (S) Some of our sources are former military officers, both 
recently retired and of the Ne Win era, now using their close 
contacts still in service and in the government to advance 
their economic careers.  Others are long-standing private 
businessmen, both Burmese and foreign, who, manipulating 
close ties with ministers, military intelligence, and others 
in power, have learned the ropes and are now living high on 
the hog.  Despite their success, some of the sources are 
growing disenchanted with the regime's mismanagement of the 
economy and the country.  Others view each GOB economic 
misstep as something on which to capitalize for increased 
profits.  None expressed any particular love for ASSK or the 
NLD leadership, often citing their advancing age and 
inability to express a clear policy vision.  However, most 
agreed that there was currently not any other option. 
 
4. (S) The results of our soundings were surprisingly 
unanimous: to expedite political change, economic sanctions 
don't work, but neither would pure constructive engagement. 
The results of sanctions -- as measured by changes in the 
regime's behavior and achievement of U.S. policy aims -- have 
been quite limited.  According to the observers, the failure 
is due the sanctions' inability to hit the ruling generals 
"where they live," that is by threatening directly their hold 
on power. 
 
Economic Sanctions: Laughed Off 
 
5. (S) Our contacts told us that economic sanctions have 
missed their target for three main reasons.  First and 
foremost, unilateral sanctions cannot succeed.  U.S. 
sanctions have failed because of the inability to win 
multilateral cooperation, particularly from regional states. 
In the past several years, the Burmese government has worked 
hard and successfully to spin a cocoon of economic protection 
by strengthening trade, investment, and other ties with its 
neighbors.  The net result is that Burma now has friendly 
relations with all its neighbors.  This includes even 
democracies like India, Thailand, and Bangladesh, which 
continue to support, at least verbally, political transition 
in Burma.  For all of these neighbors, Burma simply holds too 
many of the keys to regional security and development to be 
sanctioned, embargoed, or isolated.  Even such anti-regime 
stalwarts such as the UK and the Nordic countries have 
started expanding their aid programs in Burma, though for 
reasons entirely different than those of the regional states. 
 While regional states are all focused on their basic 
political and economic interests in Burma, for the Europeans 
the growing humanitarian crisis has become an issue that 
parallels their interest in political transition. 
Businessmen are confident that should the United States 
impose a trade ban, the regime would shrug it off, benefiting 
as they do, both legally and illegally, far more from massive 
border trade with Thailand and China than from the minuscule 
amounts shaved off exports of garments and seafood to the 
United States. 
 
6. (S) A second factor is that sanctions have been 
politically useful to the regime, providing cover for its 
economic failures.  The regime is certainly vexed by 
reductions in foreign exchange earnings, whatever the cause, 
however the GOB's own policies are more to blame for these 
problems than any economic measures taken by foreign states. 
Evidence of this is the mass divestments of companies from 
all over the world, regardless of their home government's 
Burma policy. 
 
7. (S) Third, all of our contacts pointed out that, as they 
saw it, the government has nothing to win and everything to 
lose by making major concessions in the current environment. 
With this view of life or death, it's no surprise that the 
regime is able to easily weather the slight discomfort caused 
by unilateral U.S. sanctions. 
 
Constructive Engagement? 
 
8. (S) So what will work?  Most agreed that the regime might 
respond to carrots for non-political reforms.  However, the 
carrot would have to be sizable and clearly stated -- such as 
a large aid package or agreement to support an international 
financial institution effort to fund economic reforms -- and 
tied to specific reforms.  The consensus was clear that the 
regime would not be willing to take carrots, no matter the 
size, in exchange for major political reforms.  Even with the 
promise of money the rulers of Burma had little to gain, and 
much to lose, by agreeing to changes in the power structure. 
 
Coercive Persuasion 
 
9. (S) Our discussions always turned to the projection of 
force.  Contacts of various political stripes concurred that 
the only way to convince the senior generals to cede power 
was through "coercive persuasion," that is wielding a large 
stick aimed directly at the heart of the leadership.  Time 
and again, we heard the assertion that this regime 
understands only the language of force, and would be 
influenced only if it is convinced it has more to lose 
personally from holding out than from coming to the table. 
The most important point, though, is that any coercive 
persuasion would need to be explicit and serious, and come 
with a firm timetable and deadline.  The regime, with its 
large cushion of regional relations and its experience facing 
down external pressure, would not respond to bluffs and vague 
gestures. 
 
10. (S) Despite our contacts' strong views, none could give a 
clear example of how this kind of pressure has been 
successfully applied to the top leadership.  They explained 
their conviction in the Burmese cultural context, where even 
powerful men grudgingly do what they're told because someone 
more powerful extends an unrefusable offer.  No one would be 
specific on what the most useful stick for the current junta 
should be.  However, through a mix of allegories, metaphors, 
and obfuscation each implied that the only solution would be 
a direct challenge to the junta, possibly including force, if 
it did not agree to negotiate.  There was consensus that the 
regime would respond better to this stick if it were mixed 
with tangible carrots (help to relocate, guarantees of 
protection from revenge or prosecution, economic assistance, 
etc.) 
 
The Silent, Quaking Majority 
 
11. (S) Another common theme we've heard is the existence, 
but inaccessibility, of a silent majority of high ranking 
military officers and civilian administrators who are unhappy 
with the current regime.  During the February ICG meetings, a 
hypothetical approach to reform minded "Officer(s) X" was 
debated as a possible alternative policy direction.  One of 
our contacts, who was a decorated army officer, said that 
many of the active duty officers from his "batch" (now 
colonels and brigadiers) and high-ranking civil government 
employees (including some Ministers) with whom he socializes, 
have expressed quiet but serious discontent with the regime. 
This sentiment stems largely from the SPDC's heavy handed 
management style, and the insecurity in which the ruling 
class must live its life.  Also, we've heard from former and 
serving military contacts alike that officers feel that the 
regime is not taking adequate care of the troops, but instead 
spending vast sums on literal and figurative white elephants. 
 The ruling junta's evident recent decision to reduce 
expected salary raises to military officers and enlisted men 
only adds to this discontent. 
12. (S) The contact opined, though, that this discontented 
group is likely unreachable because while it dislikes aspects 
of the current system, it is enslaved to it.  First, though 
disenchanted, this group is unwilling to make sacrifices for 
the good of the country.  These officials owe their power and 
wealth to the current rulers, and thus are unwilling to take 
any anti-regime initiative that could lead to disaster for 
them and their families.  The second reason, according to our 
source, is that none of these officers and civilian officials 
has reached their positions of power and influence without 
accumulating some skeletons in their closets.  Thus, they, 
like the top leadership, are fearful that working for a 
change to the system (no matter how despised) could lead to 
prosecution or revenge on them or their families from any new 
civilian government. 
 
Comment 
13. (S) There are a few important caveats to note when 
considering the conclusions of these observers.  First, 
despite our contacts' clear hinting that a military solution 
would be the most effective, such an adventure would be of 
questionable interest to the USG.  For obvious reasons, the 
risks of a military expedition on the borders of China, and 
at the juncture of two nuclear-armed states (China and India) 
would probably outweigh possible rewards.  Second, many 
educated Burmese these days are grasping at the idea of U.S. 
military action as a tidy solution to intractable and complex 
political problems.  However, our sources assert that they 
supported direct action long before the U.S. campaign in 
Iraq.  Third, it is difficult to completely write off the 
potential for other policies working to effect change here. 
While neither sanctions nor constructive engagement has been 
totally successful, neither has ever really been tried in a 
coordinated fashion by the entire international community. 
Martinez