US embassy cable - 03RANGOON949

UNCLAS SECTION 01 OF 02 RANGOON 000949 
 
SIPDIS 
 
SENSITIVE 
 
STATE FOR EAP/BCLTV, EB, PRM 
COMMERCE FOR ITA JEAN KELLY 
TREASURY FOR OASIA JEFF NEIL 
USPACOM FOR FPA 
 
E.O. 12958: N/A 
TAGS: ETRD, ECON, PREF, PHUM, PGOV, BM, NGO, Economy, Human Rights 
SUBJECT: NEW BURMA SANCTIONS EQUAL NEW BURMA REFUGEES? 
 
REF: A. RANGOON 832 
     B. BANGKOK 4236 
     C. BANGKOK 4025 
     D. CHIANG MAI 141 
     E. BANGKOK 2776 
     F. RANGOON 4 
 
1. (SBU) Summary: The new U.S. sanctions on Burma will have a 
negative impact on the economy as a whole, and the garment 
sector in particular.  NGOs believe that the unemployment 
caused by the sharp decline of the garment industry will lead 
to an increase of trafficking in persons and attempted 
emigration.  However, the already massive flood of unemployed 
young women and men seeking economic alternatives will likely 
largely swallow this uptick.  Nonetheless, the U.S. 
government should act quickly to ensure the activities of 
NGOs providing outreach to potential and actual trafficking 
victims are not diminished by the new sanctions.  End summary. 
 
Sanctions Put a Bullet in Garment Sector 
 
2. (SBU) The new Burma sanctions, which among other 
punishments ban imports of Burmese products into the United 
States, are already beginning to have a visible impact on a 
local garment sector already weakened by declining demand and 
poor global competitiveness.  As reported in Refs A and F, 
the predominately private sector-controlled Burmese garment 
industry relies almost exclusively on the U.S. market, and 
the garment manufacturers here have asserted that it will be 
very difficult to replace U.S. customers with European Union 
or Japanese buyers. 
 
3. (SBU) With the garment sector collapse, we estimate that a 
large percentage of the sector's estimated 100,000 jobs, 
mostly in the Rangoon area, will be at risk.  In Burma's 
dismal economy, these workers, mostly young women, some of 
whom are the primary wage earner for their families, will 
have very few positive economic prospects.  Certainly some 
will be absorbed by the agricultural and informal economic 
sector (selling tea or forest products in the marketplace). 
Others will migrate to the vigorous karaoke and nightclub 
sector of Rangoon to take jobs as hostesses and/or 
prostitutes.  A third group, of indeterminate size, may head 
for the borders to seek opportunities in Thailand or China. 
 
NGOs Uncertain Over Workers' Future 
 
4. (SBU) According to international NGOs in Rangoon that work 
to prevent trafficking in persons, the new sanctions will 
likely cause an uptick in the number of women seeking to find 
entertainment or sex industry jobs inside Burma, and sex and 
manufacturing industry jobs over the border in Thailand and 
China.  The NGO representatives admitted, though, that the 
ranks of young, unemployed job seekers -- and cases of human 
trafficking as a result -- will swell only slightly by the 
closure of the garment factories.  Job brokers, both 
legitimate and sinister, operating in Burma already benefit 
from a huge supply of potential laborers due to the chronic 
economic problems in Burma, and the relatively strong 
currencies and economies of Thailand and China.  The NGOs 
report that already brokers have increased their fees from 
50,000 kyat (about $50) to 100,000 kyat.  The average garment 
factory employee earns about 12,000-20,000 kyat/month 
($12-$20/month). 
 
5. (SBU) NGOs are concerned about the paucity of legitimate 
employment opportunities inside Burma for the former textile 
workers and other young women.  One NGO told us as part of 
its outreach program it previously assisted young women at 
risk to get jobs at garment factories.  This will no longer 
be an option.  NGOs do not foresee the government taking any 
steps to create new jobs for young women.  In fact the 
government's anti-trafficking watchdog, led by SPDC Secretary 
One's wife, has announced a campaign to shut down all karaoke 
shops and massage parlors (most of which do not offer sex); a 
step that would cut off a major alternative to outright 
prostitution for jobless girls and women. 
 
GOB Actions Indifferent 
 
6. (SBU) Thus far, the government has done nothing to prepare 
for, or soften, the impact of the factory closures.  Instead, 
senior leaders and their journalistic mouthpieces have been 
making political hay of the "weapon of mass destruction" 
launched by the United States to cause "human rights abuses" 
and force Burmese girls into "sexual slavery."  Garment 
manufacturers tell us the government has ordered the factory 
owners to pay all employees a severance package equal to 
3-months salary.  However, it's yet unclear whether the 
businessmen, already suffering from a 6-month banking crisis 
and a generally poor business situation, will be able to make 
these payments. 
 
7. (SBU) The government also seems prepared to redouble 
efforts to crack down on migration, particularly by women, 
along the most traveled routes to the Thai and Chinese 
borders.  However, NGOs fear, this type of interdiction will 
only force would-be economic migrants to seek alternative, 
more dangerous escape routes. 
 
8. (SBU) It is always possible that the regime will take 
administrative measures to sop up some of the new 
unemployment, such as expanding public works projects or 
forcing private investors to hire a certain number of new 
employees.  However, we've heard only hints and rumors of 
this, and think it possible only if the unemployment begins 
to cause some political ferment in the poorer parts of 
Rangoon. 
 
Comment: Assistance Needed 
 
9. (SBU) While the Burmese government bears ultimate 
responsibility for softening the economic blow to garment 
sector workers, neighboring states and the U.S. government 
should also look at ways of assisting those NGOs who are 
aiding trafficked women and those at risk of being 
trafficked.  There may be opportunities to contribute 
additional U.S. aid to credible INGOs working independently 
of the GOB in the area of trafficking.  However, the 
immediate need is for a liberal general license, waiving 
restrictions imposed by the latest sanctions, for those NGOs 
that remit dollars into Burma.  Punctuating this need, on 
August 8 twenty-six health, education, and environment NGOs 
met with the DCM to complain that without a resolution of the 
remittance problems, they would have to shut down their 
operations within 2-3 weeks.  Indeed, many NGOs reported that 
they were already cutting back their outreach because of the 
inability to replenish funds. 
Martinez