Keynote Remarks at Business Policy Panel U.S. - ASEAN Business Council Mission

Robert D. Hormats
Under Secretary for Economic Growth, Energy, and the Environment 
Rangoon, Burma
July 14, 2012

(As Delivered)

Thank you for those kind words. It is a real privilege for me to be here in Rangoon with the U.S.-ASEAN Business Council. I also want to recognize the distinguished ministers who have joined us today. You are important leaders of the reform process.

This visit by our U.S. government delegation, including myself, Under Secretary Francisco Sanchez, Principal Deputy Assistant Secretary Joe Yun, Deputy Assistant Secretary of State for Democracy Rights and Labor Dan Baer, and our colleagues, signifies our deep and abiding commitment to build stronger relations with your country. I am especially pleased that we are joined here tonight by recently arrived Ambassador Derek Mitchell – our first Ambassador here in 22 years.

Advancing the Bilateral Relationship

This is the highest level U.S. government economic delegation to visit this country in several decades. Its timing is no accident. Over the past year, President Thein Sein and his government, Aung San Suu Kyi and other political and civil society leaders, and, most importantly, the people of this country have made substantial progress towards a more democratic government and a commitment to achieve national reconciliation.

The United States is committed to partnering in these efforts. And, we will continue to respond in kind to positive developments here. Secretary Clinton’s visit last year was an important part of this process to strengthen our bilateral relationship. And yesterday, Secretary Clinton and President Thein Sein met in Siem Reap to discuss a wide range of issues.

Our visit today is another step in the process – with a specific focus on building economic and business ties. And our visit is taking place days after President Obama’s announcement that the United States is easing restrictions to allow U.S. companies to responsibly do business here. As the President stated, easing sanctions is a strong signal of our support for reform, and will provide immediate incentives for reformers here and significant benefits for the people of this country. I specifically want to underscore this point – that the policies and actions of the United States are carefully calibrated and clearly aimed at supporting the democratic reform and reconciliation efforts here. They say to the reformers inside and outside of government: you are on the right path. Our intention is not only to acknowledge the progress that has been made thus far but also to pave the way for enhanced economic engagement that will contribute to a brighter future for this country.

The Role of U.S. Businesses

We believe the participation of U.S. businesses in this economy can and will complement U.S. policy initiatives. This is because we believe that American businesses will contribute to the economic development of this nation and the welfare of its people, and will enhance transparency and good governance. The participation of American companies in trade and investment will bring new jobs, raise standards of living, and make a qualitative improvement in how business is conducted.

In order for companies entering this economy to be successful, and for the people of this country to realize the benefits of investment and financial services from international firms, the leadership of those firms will have to take steps to plan and carefully manage their entry into, and activities in, this market. U.S. companies must make every effort to understand the sensitive and complex political environment in which they will be operating here. Different areas of this diverse country have their own unique dynamics, particularly in ethnic minority regions. The State Department stands ready to support and guide you as you explore opportunities in this country.

In addition, the authorities here will need to improve the economic outlook by setting the right economic policies, including strengthening the rule of law, and making genuine and sustained progress in areas such as transparency (especially in the energy sector), the environment, labor rights, and human rights.

As I said at the U.S.-ASEAN Business Forum in Siem Reap yesterday, there is tremendous potential to build stronger ties between U.S. businesses and companies here – and in so doing support the positive reforms now underway. Responsible investment by American companies and responsible policies by the government of this country will be two major keys.

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I want to underscore that American companies “make good partners.” American companies sell innovative, high-quality goods and services that are highly valued around the world. And whether working at home or abroad, U.S. firms engage with local communities and civil society, recognize the importance of broader social and environmental responsibility, and create economic opportunities and upward mobility for employees through on-the-job training and ongoing workforce development.

Importantly, they also have high standards regarding human rights, anti-corruption measures, respect for a wide range of social and ethnic groups, and high levels of accountability. In so doing, they establish themselves as good corporate citizens, strengthen their own reputations, enhance their own business prospects, and contribute to positive growth and social progress in countries where they operate. In short, successful U.S. companies “do well by doing good.” And we expect that they will do the same thing here – and are confident they will.

That’s why our U.S. government delegation is pleased to be able to join the U.S.-ASEAN Business Council Mission of very highly respected American companies. They include many of the finest companies – and corporate citizens – in the world. And by the same token, we look to the government and businesses of this country to open the door to this new opportunity to conduct business with the United States.

American companies can play an important and responsible role not only in the energy sector, but also – and perhaps at least as importantly – in helping this country to diversify its economy to promote growth in jobs and opportunity in a variety of new or emerging sectors. American companies are eager and highly experienced in these areas. And while I am on the subject of diversification – U.S. businesses can enable this country to diversify its international economic ties and relationships. Diversification is a prudent and wise policy for all countries.

Easing Sanctions

On May 17, President Obama and Secretary Clinton encouraged American businesses to responsibly invest in Burma. And as I mentioned a moment ago, President Obama announced on Wednesday that the United States has implemented legal measures to make this possible. We have used executive authorities to ease the U.S. investment ban and issue two general licenses, enabling both the exportation of financial services and new investment in this country.

Our intention is two-fold:

  • to acknowledge the progress that this country has been made thus far, and
  • to pave the way for enhanced economic engagement that can contribute to a brighter future for citizens in all parts and among all communities in this country.

The people and government of this country are coming out of a period of isolation, joining the international community, and benefiting from the global economy. We want to be their partners as they do so – as I noted earlier.

As we look to the future, we have high expectations and high standards for U.S. companies that will operate here – as we do in other countries and, indeed, as in our own country – by adhering to strong principles for responsible investment, transparency, and accountability.

And, as I mentioned a moment ago, American companies also set high standards for themselves – from transparency and ethics standards, to environmental and social safeguards, to policies that help local workers succeed. That is why we have such confidence in the important contribution they will make here. And we will ask them to help contribute to transparency and help demonstrate that investment can and will be done responsibly in this difficult environment by reporting on their activities.

The people of this country, its businesses, and its government will find our companies good partners in enhancing reforms and prosperity. We are excited about the prospects for the development of U.S. business ties here, and we look forward to a rapid growth of business relationships between our two countries.

Easing Sanctions is Just The Start

It is worth noting, however, that our visit and the corresponding easing of investment restrictions is not the end of a process. Rather it is the beginning of a longer—and indeed, more challenging—process. Only one year ago, there appeared to be little hope that reforms would take root here. There was little or no dialogue between the government and opposition. And the government’s announced intention to reform had not yet been met by concrete actions. So we are cognizant that despite the rapid pace of change, we also are on somewhat fresh ground.

It is incumbent upon the governments, private sectors, and civil societies in both of our countries to expend greater efforts here to:

  • encourage responsible investment,
  • promote good governance,
  • advance the rule of law,
  • combat corruption,
  • respect human rights,
  • protect the environment,
  • improve transparency, and
  • ensure a level playing field for investors.

In short, just as we are here today as a signal of the U.S. Government’s commitment to help partner with the people, businesses, and government of this country to advance the reform process, we also recognize that we and they still have a long road to travel to reach our goals.

Calibrating and Monitoring

Even as we diligently work to realize the full intent of the announcements by President Obama and Secretary Clinton earlier this week on easing sanctions and enhancing economic engagement, we also will be carefully calibrating our actions in order to promote democratic reform and reconciliation efforts here.

On the U.S. side, our core sanctions authorities remain in place. The Department of Treasury’s Specifically Designated Nationals (SDN) list remains in effect. And we have expanded our ability to use this tool to help ensure that while those who implement and support reforms will benefit from economic engagement, those who block or undermine reforms will not. We will not authorize companies to contract with the military or other armed groups for the provision of security services.

In addition – though not specific to investments here – the U.S. Securities and Exchange Commission is expected next month to strengthen transparency requirements for oil, gas, and mining companies. This will apply to all extractive resource companies listed on U.S. stock exchanges, regardless of where they operate.

And we’ll be closely following developments here in your country:

  • A new Investment Law here that is in line with global best practices would be a welcome step, as would allowing businesses and civil society to comment on proposed new laws and regulations. This should not be rushed. Taking time to obtain comments from international stakeholders is needed to produce a good law. Rushing it can produce the opposite result;
  • Improved transparency in government procurement and tendering processes, including especially those involving the Myanma Oil and Gas Enterprise;
  • Promulgation of laws and regulations that meet the highest international standards in the areas of competition, intellectual property rights, and arbitration; and
  • Sustained effort to combat corruption and promote transparency such as through accession to the Extractive Industries Transparency Initiative (EITI);
  • Continued reform of labor laws and the implementation of those reforms. As Secretary Clinton said yesterday in Siem Reap, labor rights will help a middle class emerge and pave the way for broad-based prosperity.

Moving Forward

This week – the announcements by President Obama and Secretary Clinton, our visit, and the U.S.-ASEAN Business Council delegation – marks a major step forward for our bilateral relationship. Speaking on behalf of the U.S. government, I want to emphasize that we want to work with this country by offering expertise and technical assistance that will help this country reach its full potential. And we look forward to engaging with the people, government, and civil society in this country in the weeks and months and years ahead to forge a shared prosperity built upon mutual economic benefit, strong business ethics, a spirit of collaboration, and respect for universal human rights and values. Thank you very much.