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 Other Presidential Documents the GOB without any basis for running the government over the long term, as profits have turned to losses in one state-owned enterprise after another. In fact, in Burma's fiscal year 2001/2002, the reported deficits of the state- owned enterprises actually absorbed all the revenues collected by the gov- ernment, leaving the government proper (i.e., the army, the navy, the health and education services, and all ministerial operations) to run on monies borrowed from the Central Bank. This has in turn produced a rapid expan- sion of the money supply, a commensurate increase in inflation and a sharp depreciation in the value of the domestic currency (the kyat). Over the past two years, the kyat's unofficial value has depreciated from a rate of approximately 360/dollar in September 2000 to %\17700/dollar now, while inflation has accelerated to an annualized rate that is now approaching tri- ple digit levels. The government has attempted to deal with these pressures with a series of ad hoc restrictions on economic activity that reinforce (at least tempo- rarily) its system of control while punishing private sector trade and invest- ment. Thus far, however, the only consequence has been a crippled private sector and a weakened banking system. Inflation has not ebbed and the kyat, after a brief rally in early June 2002, has resumed its downward slide. Looking ahead, there is really no prospect for relief for Burma without for- eign financing support. The problems within the economy, and particularly within the fiscal budget, are simply too vast and too deeply entrenched to be treated now on the basis of Burma's own resources. However, access to that foreign financing support will likely depend on progress in regard to structural reforms and political transition. Development of a Multilateral Strategy U.S. policy goals in Burma are progress towards democracy, improved human rights, more effective counternarcotics efforts, counterterrorism ef- forts, regional stability, HIV/AIDS mitigation, and accounting for missing servicemen from World War II. We encourage talks between Aung San Suu Kyi and the military government in the hope that it will lead to meaningful democratic change and national reconciliation in Burma. We also consult regularly, at senior levels, with countries with major interests in Burma and/or major concerns regarding Burma's human rights practices. The United States has co-sponsored annual resolutions at the UN General Assembly and the UN Commission on Human Rights that focus on Burma. We have also supported ILO's unprecedented decision on Burma given its failure to deal effectively with its pervasive forced labor problems. Most importantly, we strongly support the mission of the UN Secretary General's Special Representative for Burma, Razali Ismall, whose efforts have been instrumental in facilitating communication between the government and Aung San Suu Kyi. In coordination with the European Union and other states, the United States has imposed sanctions on Burma. U.S.-imposed sanctions include an arms embargo, a ban on all new U.S. investment in Burma, the suspension of all bilateral aid, including counternarcotics assistance, the withdrawal of GSP privileges, the denial of OPIC and EXIMBANK programs, visa restric- tions on Burma's senior leaders, and a hold on all new lending or grant 325

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