Last week, the European Union committed an irrational and counter-productive act. It renewed economic sanctions against Burma. The EU foreign ministers, meeting in Luxembourg, also extended an arms embargo and a travel ban on top Burmese officials, as well as a freeze on Burma’s assets in Europe.

It is indisputable that Burma is ruled by an odious military junta that represses the citizens of that country in every facet of their lives. The junta ruthlessly persecutes the National League for Democracy, which won the 1990 elections in a landslide, yet has been prevented from taking power. And it continues to wrongfully detain the league’s leader, the Nobel Peace Prize winner, Aung San Suu Kyi.

But despite all this, Burma-watchers across the entire spectrum of opinion increasingly now agree that in seeking to change that awful situation, there is little point in continuing a policy of economic containment. That policy, driven by Western governments, has not only failed miserably to alter the political dynamic in any way, but instead – and this is what is criminally despicable – it has greatly exacerbated the impoverishment of the Burmese people.

Even the long-suffering Suu Kyi has begun to ameliorate her original robust support for sanctions. Now, when asked if they should be continued, she says that the question should be put to the countries imposing the sanctions.

As her fellow Nobel laureate, East Timor’s President Jose Ramos-Horta, said recently in Washington: "When you use sanctions to punish a country like Myanmar (Burma) for the perceived sins of the regime, it is the people who suffer the collateral damage."

Precisely. And almost everyone, including now the administration of US President Barack Obama, agrees that the sanctions policy has not worked.

Last month, on April 24, the International Crisis Group, a respected global institution headed by former Australian Foreign Minister Gareth Evans, issued a report entitled "Missing the Boat on Myanmar."

Regarding the imposition of sanctions, it stated boldly, unequivocally and rightly: "The EU should abandon a policy maintained by those with an eye on noble points rather than on new opportunities to promote change."

The noble-minded European politicians seem to forget that poverty levels in Burma are extreme, and that in contrast to their massive verbal expressions of outrage at the actions of the military junta, they provide minimal humanitarian aid to the citizens of that nation.

In neighboring Laos, for example, which is ruled by an authoritarian communist party which brooks no opposition whatsoever, the amount of external assistance per capita is around US$30 a year. In Cambodia, where corruption levels are among the highest in the world, it is $50. In poor destitute Burma, it is a shocking $2.70 a year – a figure roughly comparable to what each European cow is worth per day in subsidies.

The rightly condemnatory ICG report also reflects the changing views in Washington, where, following Secretary of State Hillary Clinton’s public admission that sanctions are not working, a serious reassessment of America’s Burma policy is underway.

Already Stephen Blake, director of the State Dept’s Office for Mainland Southeast Asia, has paid an unprecedented visit to Burma’s new capital of Naypidaw, where he met Foreign Minister U Nyan Win and other government officials – the very people who should be drawn into a dialogue, but who continue to be banned from visiting the West.

The New Light of Myanmar, the regime’s appalling mouthpiece of a newspaper, reported that Blake held "cordial discussions on issues of mutual interest and the promotion of bilateral relations." That, at least, is a positive assessment than can serve as a building block.

And thankfully things are now being said in public that were only whispered in private before. As every journalist who has ever visited Rangoon knows, all the Western ambassadors based there always concede – off the record, of course – that sanctions are not working and are counter-productive.

Indeed, President George W. Bush’s first Assistant Secretary of State for East Asian and Pacific Affairs, the highly respected James A. Kelly, believed and often privately said that the US had a failed policy on Burma.

He was right. It is still a failed policy, but at least it is starting to change. As well as Blake’s dialogue, there have been talks in Washington, New York and Rangoon involving American diplomats and former Burma ambassadors to the US.

Certainly, it is an open secret that the Burma regime craves better relations with the US in order to balance its increasingly nervy economic and strategic dependence on China, and to a lesser extent on India and Russia.

Said Ramos-Horta: "I know that the military in Myanmar are desperate for change and so this is a unique opportunity for the US to engage them. The situation there is not intractable. It can be resolved."

Of course, it can. All it needs is a bit of bravery from both sides and a willingness to cut free from the shackles of past bankrupt policies – the kind of bravery that President Obama has shown in changing US policy on Cuba and Iran.

Jaw jaw is better than war war, as Winston Churchill said; and dialogue and engagement are always better than containment and shackling. Now, at last, it appears that the Obama administration in Washington is preparing to seize the opportunity. Humanitarian aid has already been stepped up. A few weeks ago, Washington donated 16,000 tons of rice to Burma to help feed victims of last year’s cyclone Nargis, which devastated parts of the Irrawaddy Delta.

And there are reports that the Geneva-based, but largely US-controlled Global Fund, which fights diseases like AIDS and malaria, may resume its activities in Burma.

{mospagebreak}

It is not enough, but it is a good start. And it has been intimated that the Obama administration, with Secretary Clinton’s approval, may restore the status of the head of the huge new US Embassy in Rangoon from mere charge d’affaires to full ambassadorial rank. And the quality of the US head of mission will be upgraded from the recent lackluster series that has included the likes of Priscilla Clapp and Carmen Martinez.

Clapp was perhaps best known for her cats, Batman and Robin, while the doubly blessed Martinez was noted more for her tennis than her diplomacy – and for wearing deliberately provocative attire in conservative Burma. Said one top State Dept official: "When you appear before Than Shwe to be accredited in stiletto heels and a miniskirt you cannot expect to be taken too seriously."

For most of the past decade, no one has taken the US mission in Rangoon seriously. And that is hardly surprising when you factor in that the US, while imposing strict economic sanctions, managed to give some $16 million to help resistance groups.

And in another shortsighted move, Washington also withdrew the highly effective officials from the Drug Enforcement Administration who were based in Rangoon. Unfortunately, the upfront DEA guys always spoke glowingly of their cooperation with their Burma counterparts in drug eradication in Shan state – and that did not sit well with the 'noble aims' of legislators back in Washington.

But make no mistake, the currently mooted changes in American policy towards Burma are profound. That is evident when it is recalled that Clinton’s predecessor as Secretary of State, Condoleezza Rice, adopted a strategy that deliberately precluded any negotiated settlement in Burma – a country she infamously referred to as one of six ‘outposts of tyranny’ in the world.

Nothing illustrated that previously hard-line stance more graphically than when senior State Dept officials urged Rice, soon after she took over the top post on the 7th floor at Foggy Bottom, to seize the chance for a new initiative on Burma. They counseled her to ask China, which has close ties with the regime, to facilitate a meeting between the generals and Ms Suu Kyi’s NLD to try to broker a deal that might lead to a more acceptable form of government.

Rice brusquely shot down the proposal, saying that a deal of any sort was not what the United States sought. In her view, the US wanted the NLD installed in power and the generals removed and put on trial. Anything less was unacceptable.

It would be hard to downplay the impact that sentiment would have when relayed back to the generals who have always suspected that the West has no intention of dealing with them, despite many promises to the contrary.

Certainly, Rice’s comment would have irked Suu Kyi, who has always stressed that the advent of a democratic government in Burma, at least one in which she has any say, will have no interest in putting the generals on trial.

Asked specifically about this in 1999, Suu Kyi told me personally: "We have always said that we are not interested in vengeance. That’s our official policy."

And that’s as it should be. And we should applaud the US reassessment and the moves of others who are also adopting a new stance, led by the business community which has long realized that sanctions are simply not working in practice.

Said Luc de Waegh, managing partner of Singapore-based West IndoChina Consulting, which promotes business links with Burma: "In Yangon, you can get French cosmetics, British toiletries, Australian wines, Dutch beers, American mobile phones. And no one has ever been prosecuted for breaking sanctions."

Over the past couple of months, there have been several seminars, breakfast workshops and dinner talks held in Bangkok and Singapore about the prospect of doing business in Burma. They have all drawn a better than expected audience, including a senior diplomat from the US Embassy.

And there have been inquiries from Washington, where the American Chamber of Commerce and the US-ASEAN Business Council have always voiced opposition to the policy of sanctions.

As the invitation description to one of the recent dinner talks put it: ‘For decades, European companies have been discouraged from doing business in Burma. Some countries have even imposed sanctions on Burma. And what has been achieved? Nothing.’

Like many others, De Waegh said he believes that everyone has a right to economic development and that prosperity is an important catalyst for social development. That is precisely the point made by the ICG report, which recommends that the West’s restrictions on humanitarian and development aid should stop.

This does not mean, as some short-sighted souls seem to think, that Western governments would be rewarding the regime. Rather, it means they would be attending to the terrible impoverishment of the Burma citizenry which should not have to wait for possible political change before receiving aid.

Clearly, the international financial institutions like the World Bank, the Asian Development Bank and the IMF should be allowed to set up operations in Burma, not so much to provide macro-credit as to facilitate technical assistance and capacity building, and to support economic reform.

That this seems blindingly obvious is one of the reasons why the EU’s recent reimposition of sanctions is so reprehensible and so shallow and hypocritical.

Indeed, as a final coda confirming the mind-boggling hypocrisy of the Europeans, try to get your head around this: North Korea is run by a mad dictator who has brought mass starvation to his people in order to develop rockets and nuclear weapons.

Yet our noble European friends – who cannot even say the word Myanmar, yet happily refer to the "Democratic" People’s Republic of Korea – have an official website at www.dprkguidebook.org which provides helpful and detailed advice for European investors in the kingdom of Kim Jong Il.

So, mes amis, go ahead and invest in North Korea, but don’t you dare go near Burma.