With continued international concern over the treatment of Rohingyas in Myanmar, some commentators have suggested the use of sanctions to varying degrees. This would not be the first time that Myanmar faced sanctions. The United States imposed sanctions on Myanmar in 2003 and revoked them only in 2016, and Washington has recently also begun imposing some targeted sanctions following the Rohingya crisis. In this article, we discuss the impacts and coping strategies related to the sanctions imposed on Myanmar, which lasted over a decade.
Sanctions aim to restrict the commercial relationship between the imposer country and the target country. Economic sanctions on Myanmar included cuts in financial aid, blocking access to assets, and reversing investment flows. The U.S. Treasury Department classifies sanctions as “selective” or “comprehensive.” Comprehensive sanctions include asset freezes, trade embargoes, and financial restrictions to inflict financial losses. Selective sanctions, on the other hand, are imposed on influential individuals in the target country.
In 2003, the United States and OECD countries imposed comprehensive sanctions on Myanmar. Now that the sanctions are lifted, it is an opportune time to conduct a forensic analysis of the fallout from these long-lasting restrictions on Myanmar, particularly as calls increase for renewing the sanctions regime.
There are several important takeaways.
First, the sanctions enforced were highly asymmetric in nature. After enforcement, Myanmar’s exports to the United States dropped to zero, but the U.S. continued to export its products to Myanmar.
Second, even though sanctions were wide-ranging, an IFPRI study shows that at the aggregate level, the impact of sanctions on Myanmar’s trade was insignificant. In 2001, before the sanctions, Myanmar’s total trade stood at $6.28 billion, which increased to $6.54 billion in 2003. The total trade of Myanmar increased without interruption even after the sanctions. In 2004, its overall trade rose to $7.1 billion and further increased to $8.57 billion in 2006.