By Larry Jagan BBC Burma analyst

There are fears that sanctions hurt the most vulnerable

In a congressional committee report, US deputy assistant secretary of state Matthew Daley said the sanctions - imposed in late July - had immediately disrupted Burma's industry.

He added that the country's military rulers had been unable or unwilling to help the affected businesses.

The country's garment industry was hardest hit, according to Mr Daley, and more than 40,000 people may have been thrown out of work, many of them ending up in the sex industry.

Beleaguered economy

Businessmen in Rangoon say the economy began to dip badly within days of the sanctions coming into effect.

Import and export industries, already hard hit by licensing problems, almost ground to a complete stop overnight. Prices of imported goods skyrocketed.

Even the newspaper and magazine industry was hard hit. The price of newsprint increased by almost 50% within the first month that the sanctions were implemented, the editor of the Myanmar Times told the BBC.

But it was the garment and textile industry that were worst affected.

More than 100 of the small factories around the outskirts of Rangoon have closed in the last two months, according to Burmese businessmen.

As a result, they say, more than 80,000 workers - mainly young women - have been thrown out of work.

International development organisations working in Burma say that many of the young women who found themselves jobless have entered the illegal sex and entertainment industries.

There has certainly been an increase in the number of prostitutes in Rangoon seeking customers in the city's hotels, bars and karaoke clubs.

There has also been a visible increase in the number of working women on the streets of the city after dark.

The government has acknowledged that the US sanctions have deprived thousands of Burmese workers of a regular source of income.

But the authorities do not admit that many of them may have ended up working on the streets.

Government officials say there are plans to generate alternative employment for those who have been made unemployed, but nothing has been put into effect as yet.