Title 3--The President cluded that it had shifted from an epidemic limited to high-risk groups to a widespread epidemic affecting the general population. The government continued to downplay the extent of the epidemic in the country; however, both the government and the NLD are very interested in international as- sistance to combat HIV/AIDS. USAID is initiating a new $1 million HIV/ AIDS prevention program in the country; assistance will be provided through international NGOs--no assistance will be directed to the govern- ment. There are few signs of any government commitment to economic reform, despite rapidly deteriorating economic conditions. Two problems stand out. In the energy sector, a run of disastrous public investment decisions has left the economy largely without fuel for either its electric generating facilities or many of its basic industries. In the fiscal budget the situation is even more desperate. There, the deficits of Burma's state-owned enter- prises are estimated to absorb all of the revenues collected by the govern- ment, 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 in turn has produced a rapid expan- sion in the money supply, a commensurate surge in inflation, and a sharp depreciation in the value of the domestic currency (the kyat). It has also undermined public confidence in the military government's ability to man- age the economy over the long run. U.S. policy goals in Burma include progress towards democracy and na- tional reconciliation, respect for human rights, a more effective counter- narcotics effort, counterterrorism efforts, regional stability, HIV/AIDS miti- gation, and accounting for missing servicemen from World War II. We en- courage talks between the leader of the National League for Democracy (NLD) Aung San Suu Kyi and the military, recognizing that these are the best hope for meaningful democratic change and protection of human rights. Part of our strategy is to consult regularly, at senior levels, with countries with major interests in Burma and/or major concerns regarding Burma's current human rights practices. In coordination with the European Union and other states, the United States has maintained sanctions on Burma. These include an arms embargo, an investment ban, and other measures. Our goal in applying these sanc- tions is to encourage a transition to democratic rule and greater respect for human rights. Should there be significant progress towards those goals as a result of dialogue between Aung San Suu Kyi and the military govern- ment, the United States would look seriously at measures to support this process of constructive change. Measuring Progress toward Democratization At the time of the dramatic release of NLD General Secretary Aung San Suu Kyi on May 6, 2002, the government promised that she would be free to move about the country--a promise it has generally kept in the months since. Initial difficulty in visiting some UN projects appears to have been resolved. Over the past four months Aung San Suu Kyi has traveled to Moulmein, Mandalay, and Hpa'an. On each trip she coordinated travel and security arrangements with the government, but otherwise set her own 318
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