BURMESE DEPUTY FM: "U.S-BURMA RELATIONS AT ROCK

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 000978

SIPDIS

STATE FOR EAP/BCLTV
COMMERCE FOR ITA JEAN KELLY
TREASURY FOR OASIA JEFF NEIL
USPACOM FOR FPA

E.O. 12958: DECL: 08/12/2013
TAGS: EFIN ETRD PGOV PHUM PREL BM
SUBJECT: BURMESE DEPUTY FM: "U.S-BURMA RELATIONS AT ROCK
BOTTOM"

Classified By: COM Carmen Martinez for Reasons 1.5 (B,D)


1. (C) Summary: Burma's Deputy Foreign Minister (DFM) told
us on August 12 that the country's ruling generals are deeply
upset with new U.S. sanctions and concerned about their
impact on the Burmese economy, but feel confident they can
mitigate any negative consequences. He said that the 2003
Burma Freedom and Democracy Act and Executive Order 13310 had
sent U.S.-Burma relations to "rock bottom" and that there
needed to be a cooling off period before progress on
bilateral issues could resume. The DFM demurred on our
request to see detained NLD leader Aung San Suu Kyi and
declined to specify a timetable for the release of ASSK or
other detained NLD leaders. End Summary.


2. (C) The Chief of Mission met at her request on August 12
with Deputy Foreign Minister Khin Maung Win to discuss a
variety of bilateral issues and to inquire about his July
travels throughout the region. The DFM said that SPDC
Chairman General Than Shwe had sent him as a personal envoy
to "let friends know about the situation (in Burma) and to
address their concerns." He did not offer specific details
about his meetings with regional leaders, but intimated that
his discussions in Japan and Malaysia had been difficult. He
said he received a "sympathetic" hearing in Brunei,
Singapore, and the Philippines, noting that Philippine
President Arroyo had made herself personally available
"despite serious domestic challenges."

ASSK Transfer?
--------------


3. (C) The DFM said that he had faithfully reported to the
SPDC generals the content of his July discussions in New York
with EAP DAS Matt Daley, including his message that the GOB
would transfer detained opposition leader Aung San Suu Kyi
(ASSK) to her Rangoon compound for continued "protective
custody" if the authorities were not in a position to release
her altogether. The COM urged the DFM to obtain permission
for her to visit ASSK and to immediately release NLD
executive committee members under house arrest. When the
Pol/Econ chief pressed for a specific timeline to transfer or
release ASSK, the Deputy FM cringed and said "I will not push
(the generals) on this issue." The COM urged the DFM to
arrange for her to meet personally with General Khin Nyunt
(SPDC Secretary One) with whom she would directly pursue the
issue of ASSK's detention.

The Generals Finally Get the Message
--------------


4. (C) The DFM said he had told DAS Daley in New York that
the GOB hoped to return to the political status quo that
existed before the May 30 "incident" (note: the premeditated
attack on ASSK and her convoy),but that the Burma Act and
Executive Order had sent U.S.-Burma relations to rock bottom.
The Deputy FM described the SDPC generals as "very upset"
with the sanctions and said they were deeply offended by a
photo of the Oval Office signing ceremony and the "apparent
joy" of those present (President Bush and several Members of
Congress). The Deputy FM said that as a result of the
sanctions, nothing at the moment could be accomplished
bilaterally, particularly on those issues discussed with DAS
Daley. He said the GOB did not feel compelled to make
concessions because of the sanctions, but noted that his
government was realistic and expected there to be a serious
impact on the economy. He added, though, that the GOB is
"confident we can mitigate the consequences" of the new
sanctions.


5. (C) The COM told the Deputy FM that it was indeed the
intent of the E.O. to make the Burmese leadership concerned,
noting that it is incumbent upon the GOB to release ASSK and
other NLD detainees in order create the conditions necessary
for a return to dialogue. She added that the Deputy FM
should tell the senior SPDC leadership that despite the
severity of the executive order, there are provisions to lift
sanctions if conditions warrant, which demonstrates the hope
of the USG that the SPDC will act accordingly. DFM Khin
Maung Win replied that "we need a cooling down period" and
said he was not in a position to comment on the status of the
NLD leaders, but that his availability to meet with the COM
was a sign that "the door is open to dialogue" (note: the GOB
has been more unresponsive than usual over the past month to
our requests for meetings with senior officials).


6. (C) The COM also inquired about visits to Burma by U.N.
envoys, noting in particular that the U.S. fully supports the
return of UNCHR Special Rapporteur Pinherio and his human
rights team to follow up on his most recent mission. The DFM
said he had spoken that morning with U.N. Special Envoy
Razali and, although Razali had expressed his desire to
return to Burma immediately, the DFM said it was a "matter of
timing" before any visits of either U.N. envoy could be
arranged.


Comment: Flatfooted?
--------------


7. (C) We have long suspected that GOB officials are
reluctant to deliver bad news to the ruling generals. Deputy
Foreign Minister Khin Maung Win's repeated references to the
ire of the SPDC leaders over new U.S. sanctions leads us to
believe that no one adequately prepared the isolated generals
for the broad impact of the import ban and the assets freeze.
The DFM himself seemed surprised that, in his words, the
executive order had cast a wider net than the Burma Act
passed by Congress. The GOB has been very slow to recover
from the initial impact of the sanctions (and they have
repeatedly declined our open offer for a briefing on the
technical aspects of the executive order). Perfectly
illustrating the GOB's state of ignorance regarding
sanctions, the Deputy FM inquired "off the record" as to how
his business "friends" could apply for a general license to
gain access to funds frozen in U.S. bank accounts. That, we
told him, is just the point: the sanctions are intended to
send a clear and unambiguous message that the time is over
for business as usual. End comment.
Martinez