18/01/2023 (East Asia Forum) - ASEAN member states should consider using economic pressure to influence the behaviour of the ruling military junta in Myanmar. Myanmar is one of the least developed countries in ASEAN, which has created an asymmetric relationship between Myanmar and other ASEAN member states. This gap creates the opportunity for ‘weaponised interdependence’, through which stronger ASEAN member states can leverage their position to influence less developed members.

States that rely on the importation of essential goods are prone to shocks and manipulation. Myanmar’s most significant imports are refined petroleum and palm oil. Myanmar imports refined petroleum primarily from Singapore followed by Malaysia and Thailand, while its palm oil comes from Indonesia and Malaysia.

Myanmar has been hit hard by high fuel prices and power cuts, prompting its military leadership to import refined petroleum oil for use in its power plants. Gasoline prices in Myanmar have risen by about 350 per cent since the coup. The junta is even considering importing Russian oil through Singapore, as the uninterrupted availability of energy sources at an affordable price is of the utmost importance.

There are examples of countries using oil as a weapon. The 1973 oil shock came when Arab members of OPEC imposed a partial embargo on oil sales to the United States due to its support of Israel during the Yom Kippur War.

Singapore, Malaysia and Thailand could likewise put an embargo on refined petroleum exports to Myanmar and put further sanctions on the Myanmar’s state-owned oil firm. This would effectively choke the military junta’s capacity to function.

Indonesia and Malaysia could also put an embargo on palm oil exports to Myanmar. Between 2012 and 2018, palm oil imports surged by 60 per cent. Myanmar has other alternatives, such as peanut and sesame oil, but most of Myanmar opts for palm oil because it is cheaper. This alone should provide leverage for Indonesia and Malaysia.

An embargo is a trade barrier and may violate international trade rules. But there is an increasing trend of states justifying trade barriers using national security exceptions in World Trade Organisation agreements. For example, in the Russia–Ukraine case, the panel decided that the state of affairs between Russia and Ukraine had reached the level of ‘war or other emergencies in international relations’, fulfilling the criteria for a national security exception.

ASEAN must be wary of the effect of such an embargo on the welfare of the people of Myanmar. ASEAN should first consider imposing targeted sanctions on the military junta. This could take the form of freezing the bank accounts of members of the ruling military junta and seizing assets held in ASEAN jurisdictions.

As ASEAN chair in 2022, Cambodia did not take any decisive action to push Myanmar to implement the Five-Point Consensus — an agreement between ASEAN and Myanmar to take steps to end the conflict and improve the humanitarian situation in Myanmar. Although Cambodian Prime Minister Hun Sen made strong pleas, he could not convince Myanmar to push back the execution of four opposition activists. Cambodia has also not been able to formally engage with the exiled pro-democracy National Unity Government. If an embargo is adopted, it must be clearly linked to Myanmar’s progress in implementing the Five Points Consensus.

There is a lack of consensus within ASEAN on how to address the Myanmar situation. Indonesia, Malaysia, the Philippines and Singapore have openly criticised the junta, called for the release of political prisoners and were the primary sponsors in blocking ruling General Min Aung Hlaing from the most recent ASEAN Summit. Other ASEAN members have either avoided or opposed this approach.

China is another factor in the equation. China has openly stated that it will support Myanmar’s junta, no matter how the situation changes. It remains Myanmar’s largest trading partner and continues to play a crucial part in its economic development. With China’s support, the Myanmar military will be less inclined to back down from their current level of oppression.

ASEAN should emphasise its balancing role in the region by inviting other significant powers, such as the United States, to the dialogue. This move would help to counterbalance Chinese influence in Myanmar.

The United States’ 2021 Burma Act will enable US President Joe Biden to authorise spending on non-lethal support for forces fighting the country’s military junta and allow for engagement with the National Unity Government. But any US involvement will have to align with ASEAN centrality and be careful not further inflame the rivalry with China.

ASEAN departed from its consensus principles when it barred the participation of Myanmar’s ruling military junta in the last ASEAN Summit. It is now time for ASEAN to define the exceptions to its non-interference principle and allow coordination between its economic and trade policies and its political and security policies.

The Myanmar situation warrants an exception to the non-interference principle. An embargo on public products should be the last stage of ASEAN sanctions. ASEAN should first place sanctions on military bank accounts, businesses and people. It is clear that ASEAN’s single largest source of leverage is its economic influence over Myanmar — and Indonesia, as ASEAN’s chair in 2023, should see that this leverage is used.

https://www.eastasiaforum.org/2023/01/18/asean-should-use-its-economic-leverage-over-myanmars-junta/