Myanmar has made remarkable progress in its transition to democracy. Since a general election in 2010, the country has moved slowly, but firmly, toward civilian rule and the military junta has bowed to the will of the people. The military has respected democratic elections, freed political prisoners and handed over power to the National League of Democracy (NLD). While its power is institutionalized in the current constitution, it has demonstrated a readiness to find workable compromises with the NLD to address political problems on an ad hoc basis.

This progress has not gone unnoticed. The U.S. government has announced it is lifting some of the economic sanctions it has levied against Myanmar businesses and individuals. At the same time, however, Washington will maintain some restrictions on doing business with powerful people and their companies. This partial relief is appropriate: For all the progress, there is still work to be done.

The United States imposed tough sanctions on Myanmar for nearly two decades. In 1997, the U.S. prohibited new investment in the country by Americans or their businesses. In 2003, the Burma Freedom and Democracy Act banned all imports from Myanmar, cut off all financial services exports to the country, froze the assets of certain individuals and restricted the visas of some officials. Individuals and companies that were targeted were either tied to corruption, human rights violations, the drug trade or provided financial support to the government.

The notable developments since 2011 have prompted debate in the U.S. While many feel that progress has been made, that the new government deserves assistance and the lifting of sanctions would demonstrate that good behavior is rewarded, some fear that pressure is still needed to compel continuing progress. And, they note, abuses and illegal behavior continue. The U.S. must maintain its leverage.

U.S. President Barack Obama split the difference this week, lifting sanctions on 10 state-run companies and banks, allowing Americans residing in Myanmar to pay the ordinary costs of living in the country, and raising the threshold at which companies investing in Myanmar have to report to the U.S. State Department from $500,000 to $5 million. At the same time, six more companies were added to the sanctions list, meaning that now more than 100 individuals and companies are banned from doing business in the U.S. or with American companies.

Obama said his decision acknowledges “significant progress across a number of important areas since 2011, including the release of over 1,300 political prisoners, a peaceful and competitive election, the signing of a Nationwide Ceasefire Agreement with eight ethnic armed groups, the discharge of hundreds of child soldiers from the military, steps to improve labor standards and expanding political space for civil society to have a greater voice in shaping issues critical to Burma’s future.” But the military retains a veto over government decisions as a result of a constitution that gives it 25 percent of the seats in the parliament — enough to block any attempt to reform that charter — as well as control of key ministries. In addition, human rights abuses continue, smuggling and other illegal activities have not stopped and ethnic conflicts persist.

The reaction of the NLD government has been muted. While it welcomes money that will spur the development that Myanmar badly needs, NLD supporters also know that the retention of the sanctions is their best leverage to loosen the military’s grip on politics and society.

Foreign companies are eager to invest and exploit Myanmar’s riches. Its isolation has meant that wages are low. Its geographical location makes it well-suited to serve as a hub for Southeast and South Asia. One concern is the country’s underdeveloped infrastructure, but Japan has reportedly indicated that it is prepared to provide more than ¥100 billion in official development assistance. Foreign Minister Fumio Kishida visited Myanmar earlier this month. During that visit he voiced Japan’s support for the reform process and pledged to support Myanmar’s development, in particular the development of special economic zones that are intended to stimulate growth.

Friends of Myanmar must continue to scrutinize that government’s behavior, demanding that it protect the human rights of all its citizens and do more to fight corruption. They should encourage continuing compromises to further loosen the military’s grip and ensure civilian rule. Those same friends must also resist the temptation to see Myanmar as another front in the battle to contain Chinese influence in Southeast Asia. China shares a border with Myanmar and has a substantial economic presence there. To cast engagement with Myanmar in geopolitical, zero-sum terms will only strengthen the hands of those cynical enough to play that card — and those individuals rarely have the larger national interest at heart. Such thinking will help erase the gains of the last five years. It must be resisted.

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