TOKYO -- The international community faces a delicate balancing act in responding to Myanmar's worst crisis in decades -- and dwindling time to get it right -- experts explained on Thursday in a webinar organized by Nikkei Asia.
Titled "Myanmar's coup: How should the world react?" and hosted by Managing Editor Christopher Grimes, the event covered the implications of current sanctions and possible further curbs likely to be imposed by mainly Western governments.
"Blanket sanctions do not work," said Thiri Thant Mon, managing partner of Pegu Partners, a capital and strategy advisory firm in Yangon. A Myanmar national, she cited the country's long history under international restrictions that she said only crippled the private sector.
"You can't talk about the economy being separate from the people, because it's the people that need to earn a living, the people [that] need to be able to provide for their families and at least be able to feed themselves if they are going to do anything," she said. "So just turning off all the taps and squeezing the country out of its ability to have a living is not helping ... and is not going to hurt the people that the outside world wants to hurt."
Alexander Dmitrenko, head of Asia sanctions at multinational law firm Freshfields Bruckhaus Deringer in Tokyo, was more optimistic about the potential for sanctions to have the desired effect. He pointed to the collapse of the Soviet Union and, more recently, the Iran nuclear deal as evidence that they can work.
"It's a difficult dilemma for the international community because the options are limited for just how you can respond to the situation on the ground," Dmitrenko said. He added that the sanctions imposed so far are mainly targeting those who are responsible, paying consideration to business interests and geopolitical reasons.
But Romain Caillaud, principal at advisory firm SIPA Partners, said the military leaders being sanctioned may use proxies to help them hold assets overseas. He emphasized the difficulty of imposing the right sanctions, which "requires a lot of digging, a lot of evidence gathering and is extremely, extremely challenging."
For now, more than six weeks after seizing power, the junta has failed to stop the daily protests and civil disobedience movement pushing to reverse the coup and secure the release of elected de facto leader Aung San Suu Kyi. Businesses are more worried about operational issues, according to Thiri Thant Mon, while sanctions have yet to become a priority concern.
Gwen Robinson, Nikkei Asia's editor-at-large based in Bangkok, touched on the dire situation for banks, detailed in her latest story. They are caught between the civil disobedience movement, which has shamed some for trying to bring staff back and reopen, and the regime and central bank, which are threatening to seize deposits if they stay closed. At the same time, bank closures and new limits on cash withdrawals have affected companies' ability to pay their employees, sending damaging ripples through the economy.
Despite the economic pain and prospect of more international pressure, Robinson predicted the clashes will last a while because "the population is extremely accustomed to hardship and denial." She said the civil disobedience movement is stopping the military from getting what it had aimed for -- control of the country and economy. "And no amount of brutality, violence, torture and arrests is stopping that. Workers are not going back to work. ... That is practically the most effective, powerful weapon the protesters could deploy," she said.
Yet as the violence continues, March 27 -- Armed Forces Day -- looms as a potential critical date.
Caillaud expressed fears that the bloodshed could intensify as the day approaches, as the military junta will be aiming to have the country back in order.
"The economic disaster is growing every day and political risks are increasing as well," he said. The longer the international community waits, he stressed, the more difficult it will be to solve the crisis.