By Kate Rustici

Secretary Clinton meets Burmese President Sein. The decision to ease sanctions could have long term effects on Myanmar's archaic economy. Source: U.S. Department of State's flickr photostream.

The United States decision to ease sanctions against Myanmar provides an economic boost to the government of President Thein Sein in response to its political reforms over the past year and bolsters the standing of the president whose trip to New York was overshadowed by the visit of opposition leader Aung San Suu Kyi .

Secretary of State Hillary Clinton announced September 25 that the U.S. government would take further steps to normalize commercial relations with Myanmar by easing the ban on imported goods. She made the announcement during a meeting with Myanmar President Thein Sein, who was in New York for the UN General Assembly.

Congress renewed the ban on Myanmar imports in August which prevented goods produced in the country from being sold in the United States for another three years, but the legislation included a provision allowing the president to waive the law. If the law is waived, it could help manufacturing industries like garment production to develop, create jobs, and reduce poverty and unemployment, particularly around Yangon. It could also encourage growth in sectors beyond the extraction of Myanmar’s plentiful natural resources.

The U.S. government made the move in response to Myanmar’s continued political reforms, and could bolster Myanmar President Thein Sein’s position as the leader of the efforts to open Myanmar’s political space and improve its economy.  It could also quiet domestic skeptics and hardliners who were quick to point out that despite recent moves, including the recent release of more than 500 prisoners, about 80 of whom were political prisoners, President Barack Obama did not meet with Thein Sein while both men were in New York. The president had met in Washington with Aung San Suu Kyi, Myanmar’s opposition leader who increasingly functions as political ally in pushing for more reform.

Many in the U.S. government were hesitant to lift sanctions until they got a signal from Aung San Suu Kyi, a Nobel-laureate and long time prisoner of the military junta that ruled the country until early last year. During her September visit to the United States, she called for the lifting of economic sanctions and further normalizing of relations.

Fully lifting sanctions on Myanmar remains a difficult and complicated task, given the overlapping regimes of executive orders and congressional legislation. Sanctions on U.S. investment and financial services were lifted earlier this year, and a bill passed the House and Senate in late September that would allow the United States to support rather than vote against aid projects in the country by international financial institutions such as the World Bank.

However, other laws, including the JADE Act which bans the importation of rubies and jadeite, require specific actions to occur prior to their lifting, such as the release of all political prisoners, and will require an act of Congress to be changed. Human rights groups estimate that the government continues to hold 200-300 political prisoners, and human rights violations remain a major problem, particularly in ethnic minority areas long wracked by war.

The easing of the import ban could help boost manufacturing and provide new jobs and generate income for many in the impoverished country. Nonetheless, decades of isolation, economic mismanagement, and limited trade ties with the United States and Europe have left Myanmar’s infrastructure and capacity well behind that of regional competitors. It could take several years before most people in Myanmar begin to feel the benefits of the easing of sanctions.

Ms. Kathleen Rustici is a Research Associate with the CSIS Southeast Asia Chair.