June 27, 2012

SO FAR, the Obama administration has carefully modulated its Burma policy, easing sanctions to welcome fragile democratic progress while recognizing the long distance still to cover. Now the modulation is at risk.

Administration officials are debating whether to allow U.S. oil companies to do business with Burma’s state-owned energy company. U.S. companies reportedly have been lobbying hard. But opening this area of investment would contradict the spirit of the policy that Secretary of State Hillary Rodham Clinton announced a couple of months ago. It would contradict the explicit advice, articulated at no small risk to her internal position, of democracy leader Aung San Suu Kyi. Why would President Obama want to undercut her at this delicate moment?

Burma, also known as Myanmar, is a resource-rich Southeast Asian nation of 50 million or so people that has been ground into poverty during decades of military misrule. Now, at the initiative of President Thein Sein, a former general, it is allowing more freedom and seeking economic and political connection with the world. Thein Sein and Aung San Suu Kyi, the Nobel Peace laureate who spent most of the past 23 years under house arrest, are trying to find common ground to push reform forward. The hopeful analogy is of South Africa’s F.W. de Klerk and Nelson Mandela.

Speaking to the British parliament a few days ago, Aung San Suu Kyi welcomed “democracy-friendly investment . . . that prioritizes transparency, accountability, workers’ rights and environmental sustainability.” The state-owned oil company represents the antithesis of these values; it has been a funder and enabler of the worst abuses of military rule.

The company “lacks both transparency and accountability at present,” Aung San Suu Kyi said recently. “The government needs to apply internationally recognized standards . . . on fiscal transparency. Other countries could help by not allowing their own companies to partner” with the Burmese firm “unless it was signed up to such codes.”

Finding the right pace to ease sanctions can be tricky. Thein Sein and his faction need to demonstrate, both to hard-line opponents and to the public, that democratic progress will bring benefits. On the other hand, reformers are helped if they also can argue that further reforms are needed to win further concessions. Burma’s judges and media still are controlled, hundreds of political prisoners have yet to be released, violence continues against ethnic minorities and fewer than one in 10 parliamentarians were chosen through free elections.

But this isn’t one of the tricky calls. In April, Ms. Clinton promised “a targeted easing . . . to help accelerate economic modernization and political reform. Sanctions and prohibitions will stay in place,” the secretary vowed, “on individuals and institutions that remain on the wrong side of these historic reform efforts.”

The state-owned oil company has been on the wrong side. Until it takes steps to shift over, the United States should show that it meant what Ms. Clinton said. Rather than give in to oil-industry arguments against leaving the field to other nations, the United States should lead those nations in insisting on transparency as a condition of investment.