Sipping a cool lime soda in the colonial splendor of a Rangoon hotel, Seattle-born lawyer John Pierce doesn't regret setting up business in Burma. "It's the quality of life," he muses, contentedly. "There's entrepreneurial freedom here. There are opportunities."
Nine months after President Clinton announced sanctions prohibiting American companies from making new investments in Burma (known here as Myanmar), the young lawyer's enthusiasm chimes incongruously amid a chorus of international criticism, particularly from the United States. Eleven US cities and one state, Massachusetts, already have banned government contracts with companies operating in Burma.
To be sure, Burma's military rulers have done little to court popularity. In 1988, the government, now euphemistically called the State Peace and Development Council, gunned down thousands of unarmed pro-democracy demonstrators.
Two years later, Burma's generals refused to recognize the results of elections that gave a landslide victory to the opposition National League for Democracy (NLD).
Despite the litany of accusations leveled against them, Burma's leaders protest that they are "sincere" in their quest to develop this nation of 50 million, where GDP per capita still hovers between $200 and $300 per year.
"The people like us very much because we are working with them at the grass-roots level," explained one Burmese general in Rangoon, the capital.
The human rights watchdog group Amnesty International puts a different spin on the situation. Last year, Amnesty says, more than 1,000 political prisoners languished in Burmese jails. And there are still repeated reports of the government using forced labor to complete civil works projects.
Mr. Pierce, meanwhile, is unimpressed. "Of course, there are substantial human rights abuses here. But democracy is a maturing process," he argues. "You have to remember that this country was totally isolated for 30 years from 1962 on. If there was a sudden sea change in the government, there would be massive violence."
While most observers agree that Burma needs to change, opinion is still divided on how that change should best be achieved. Pierce, and other American business people like him in Rangoon, charge that sanctions won't do the trick.
"Unilateral sanctions have never worked," Pierce says. "By introducing sanctions, the US just gave up its right to have influence here."
'They like Americans'
Later, across town, another American businessman, who declined to be named, nods in agreement. "I certainly think there are better ways of exercising diplomacy," he says. "After all, this is a very good place to do business from an American point of view. They like Americans."
Advocates of sanctions say international investments bolster a regime that has no democratic legitimacy and scant respect for the basic rights of its people.
That's a view openly supported by Burma's best-known dissident, Aung San Suu Kyi, a Nobel Peace Prize laureate and secretary-general of the NLD.
Responding to her call, Western consumer activists have successfully boycotted products from a number of companies with investments in Burma, forcing giants such as Pepsi, Phillips Petroleum, and Heineken to withdraw in embarrassment.
But others remain. Among Burma's largest foreign investors is American oil giant Unocal, a joint-venture partner with TOTAL of France and the Petroleum Authority of Thailand in a $1.2 billion gas-pipeline project.
The Burmese government says it can ride out American sanctions. Junta officials estimate that $6.6 billion has been pledged in foreign investment since Burma began opening up its economy in 1988.
"I would like to tell my American friends that sanctions will hurt you more than us," says a government official in Rangoon. "After all, we virtually imposed sanctions on ourselves for 30 years, and we're still here."
Western diplomats here counter that only about a third of pledged investment has been disbursed. They also estimate inflation is close to 40 percent and warn that economic growth has virtually ground to a halt.
A number of Americans in Rangoon maintain that sanctions do little to harm the junta.
Mirinda Bennett, an American whose husband works for an oil company in Rangoon, argues sanctions hurt the very people they are supposed to help. "As US citizens, we can't stop what's happening ... just by saying, 'We're not going to feed your children,' " she says.
Burmese officials also say that their country has become a scapegoat for America's politics of morality, and that its common interests with the US have been forgotten. "We are a small country, but we've always been against communism," grumbles a Burmese general in Rangoon. "We're not like China or Cuba."
"If this were Hanoi, Aung San Suu Kyi would never have even had the chance to speak to her supporters," adds Pierce, referring to political speeches that Ms. Suu Kyi used to give to crowds of supporters outside her house on weekends.
Engagement or isolation?
At its root, the sanctions debate asks whether it is better to bring change through engagement or isolation.
Reflecting the deep differences between Western and Asian attitudes, the Association of Southeast Asian Nations has lent its official support to a policy of "constructive engagement" in Burma. Ignoring Western critics, in July ASEAN accepted Burma as a full-fledged member.
With Britain, France, Japan, and Singapore among the investors in Burma, it is clear that the sanctions are creating opportunities for US competitors.
"I think it's great that the US is not allowed here," comments a businessman from Singapore, who says he exports timber products from Burma to the US by simply changing shipping documents in Singapore.
Most here agree that US sanctions are unlikely to bring quick results.
The Burmese "have grown used to hardship, and the government will ensure the people have enough rice," notes an Asian diplomat in Rangoon.
Adds a bookseller in Rangoon, with a shrug: "If you had the power, would you hand it over?"