Blanket sanctions possible, but not likely

The U.S., E.U. and other Western powers will almost certainly take action in response to this week’s military takeover, and a repeat of the harsh, blanket sanctions of the 90s and 00s would devastate Myanmar’s economy. Yet there are key differences between now and 1990 that make such harsh sanctions unlikely.

First, these powers, and their Asian allies, are far more invested in Myanmar. The coup of 1990 came after decades of economic isolation under General Ne Win’s Burmese Way to Socialism. The U.S. and others could disavow Myanmar with limited damage to their own business communities. The main cost was in opportunity, not in damage to fully-realized investments.

Second, Myanmar is an important piece in the ongoing trade war between China and its Western rivals. The U.S. in particular has gone to great lengths to check China’s economic hegemony in Myanmar, both directly and indirectly through India, South Korea and other economic allies. Harsh sanctions would almost certainly drive Myanmar further into China’s fold.

Third, the Myanmar army (Tatmadaw) is not as politically toxic as it once was, although this will depend on actions taken by the military-led government over the coming weeks and months. The 1990 coup came in the wake of the violent 8888 Revolution and at a height of nationwide ethnic conflict. Furthermore, the pro-democracy movement had a strong, global hero in Daw Aung San Suu Kyi. Although the Tatmadaw are still pariahs to the global human rights community, the peace process has progressed and Daw Suu and the NLD have lost their luster as democracy icons. The West’s lukewarm response to the Rakhine Crisis shows that the current coup will likely not inspire any greater action.

Sanctions are certainly possible, and some action from the West is almost certain. However, this will more likely come in the form of limited sanctions against the Tatmadaw and key partners rather than the country as a whole.

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