Human rights and international business.

• Author: Howell, Llewelyn D.

In the midst of Southeast Asia's recent financial crisis, Malaysian Prime Minister Mahathir Mohamad pointed an accusatory finger at American money speculators as a primary source of the problem. He implied that one or more of them had a political agenda which was being served by economic punishment of Malaysia and other members of the Association of Southeast Asian Nations (ASEAN). Commentators, reading between the lines for the most part, determined that the Prime Minister's ire was directed in particular at George Soros, a businessman-speculator with a strong political bent whose activities in support of a variety of causes long have drawn attention around the globe. The cause in this particular case was the matter of human rights in Burma (renamed Myanmar by the challenged government, though the world mostly has ignored the change). Malaysia had been instrumental in bringing Burma into full membership in ASEAN despite its record of human rights abuses and authoritarian and arbitrary rule. Mahathir seemed to think that international business interests had intervened on the side of human rights activists.

The Clinton Administration already had imposed restrictions on U.S. business in Burma, stopping all new investment until the government restored some measure of democracy and began to observe human rights standards. The objective was to punish Burma by limiting economic development, which these days is advanced by private foreign direct investment as much as by aid projects or loans from international banking institutions. The limits on economic development, in turn, are intended to pressure the ruling military junta in Burma to change its ways on human rights. The most immediate limit is not on Burma, though.

The impact will be felt first by the U.S. companies that are prevented from initiating operations in Burma, a nation of nearly 50,000,000 people and considerable potential as a manufacturing site and long-term market. Businesses from other countries--including ASEAN members Malaysia, Indonesia, Thailand, and Singapore--are sure to step in to take advantage of opportunities left by American firms. Japanese companies and the Japanese government continue to place opportunity over the perception of cost of human rights infractions.

Some interesting questions are raised by this configuration of penalty, perceived penalty, and limited and missed opportunities. One is critical: Do U.S. and other international businesses have good reason to...