Three Years of Military Rule in Myanmar: Looking Back at 2023 and Navigating the Uncertainties of 2024

Myanmar's current state is marked by intense complexity and instability, with continued conflicts, widespread displacement, economic difficulties, and humanitarian issues. Since Operation 1027, the military government has been confronted with resistance from multiple ethnic armed groups, particularly Three Brotherhood Alliance. Efforts towards political dialogue have been largely unsuccessful. The prolonged aftermath of the coup continues to cast a shadow over the nation's long-term economic outlook. Myanmar has emerged as the leading opium producer globally. While Western countries have imposed sanctions, neighbouring nations and key regional actors such as China, Thailand, India, and Russia maintain interactions with the military regime. The nation's trajectory remains highly uncertain, amidst ongoing conflicts and a challenging diplomatic environment. The international and regional response options are constrained, leaving Myanmar's future in a precarious state.

Domestic and Political Situation

Myanmar celebrated 75th Independence Day in January 2023, and the military government indicated it intends to conduct an election in 2025, contingent on the completion of a national census and the regime's aim to establish a "genuine, discipline-flourishing" democracy. Similarly in August 2023, the military introduced changes to its cabinet, the "five-point roadmap," and the "12 objectives."^[1] The revised priorities elevated "election" to the top position, a shift from its previous placement as the fifth point in the roadmap. The military abandoned its longstanding "independent and non-aligned" foreign policy, and the commitment to ensuring economic prosperity through a stable market economy and foreign investments. Moreover, the term 'full justice' was omitted from the objective related to building a union based on democracy and federalism. These changes signal a shift in the military's approach to the domestic economy, political landscape, and international relations.

The military introduced a new political parties’ law, imposing stringent criteria and restrictions, potentially excluding opposition forces.^[2] The parties who registered under the new law intensified efforts to strengthen its position ahead of the polls.^[3] Among the approved parties, the Union Solidarity and Development Party (USDP), National Unity Party, and several others decided to establish offices across Myanmar. Notably, the National League for Democracy party along with 39 other parties have been dissolved, and numerous members are either arrested or detained. In this backdrop, in January 2024, Myanmar's Senior General Min Aung Hlaing, engaged with officials from registered political parties.^[4] To fulfill its commitment for conducting elections, Myanmar's military reached out to Russia and China. Myanmar and Russia signed a memorandum on election cooperation, additionally, the military regime sought China's assistance in implementing an electronic identification system for an upcoming census.^[5] However, critics have expressed concerns that the census could be exploited by the military to intensify surveillance of those opposing the coup, particularly civil servants, doctors, and teachers who have not returned to work in protest.

It is interesting to note developments with regard to Aung San Suu Kyi in the year 2023. Myanmar's military officials held discussions with Aung San Suu Kyi, seeking her assistance in peace negotiations with armed resistance groups. The meetings occurred on May 27 and June 4, involving three military officers—Lieutenant Gen. So Htut, home affairs minister, Lieutenant Gen. Yar Pyae, and retired Lieutenant Gen. Khin Zaw Oo.^[6] Despite the lack of an official announcement from the military, sources close to Suu Kyi's legal team mentioned that they were not informed about these meetings. Her term was also reduced from 33 to 27 years. However, post these developments, Myanmar's Supreme Court, rejected Aung San Suu Kyi's special appeals against her corruption conviction.^[7] The trials are not open to the media or diplomats, which adds to Suu Kyi's difficulties, as her legal team has been denied permission to meet with her since December 2022.

Talking about the escalating violence and conflicts in the country, Acting President Duwa Lashi La of the National Unity Government (NUG) had delivered a speech in January 2023, declaring 2023 as a turning point in the fight against military rule and outlining a one-year plan for revolution.^[8] Rightly so, the attacks by the Three Brotherhood Alliance under Operation 1027 and subsequently by other ethnic armies have inflicted significant challenges to the military's position by taking over more than 400 bases and multiple towns. The conflict has expanded to various states and regions, and spread to urban areas indicates a strategic shift. Ethnic armed groups, including Karenni forces, Arakan Army (AA), Chin forces, and Karen forces, have gained significant territory, especially at China and India border areas. For instance, the TNLA seized Namhsan and the 105-Mile Trade Zone, a crucial border trade area near Muse.^[9] The control of the trade zone is considered significant as it plays a crucial role in Myanmar's cross-border trade with China. Similarly, AA has seized all bases at India Myanmar border in Rakhine state, and most importantly the Paletwa town.^[10] This is significant for India as it is part of India’s Kaladan Multi Modal Project.

However, the military responded with increased artillery and aerial bombing, causing higher civilian casualties. It must be noted that in 2023, the UN High Commissioner for Human Rights released a report, "The Billion Dollar Death Trade," detailing post-coup arms transfers to the Myanmar military. The report exposed that at least USD 1 billion worth of weapons, dual-use technology, and materials used for weapons from Russia, China, Singapore, India, and Thailand.^[11] The TNLA, MDNAA and AA have also reported that the military has used chemical weapons. As the conflict is ongoing, China attempted thrice to facilitate negotiations between the Myanmar military and the Three Brotherhood Alliance; twice in December 2023 and third time in January 2024.^[12] However, the talks failed as despite the cease-fire, clashes continued to occur.

Worsening Economic and Humanitarian Situation

In 2023, Myanmar's economic situation remains challenging, with the World Bank projecting only a 1% growth for the year up to March 2024. The country has experienced escalating conflict, leading to the displacement of around half a million people, disruptions in key trade routes, and increased logistics costs.^[13] Myanmar's economy is expected to be around 10% smaller than in 2019, with subdued growth prospects into 2025. Myanmar's foreign trade for the first eight months of 2023 decreased compared to 2022, with exports and imports contributing over 10 billion and 11 billion dollars, respectively. The country's trade primarily involves agricultural exports and imports of capital, intermediate, and consumer goods, mostly conducted via sea routes with partners like China, Thailand, Bangladesh, and India.

Consumer prices have risen by nearly 29%, impacted by the kyat's devaluation and ongoing conflict. Business activity is also suffering, with firms operating at significantly reduced capacity. The garment industry, a key economic driver, faces difficulties due to conflict, high logistics costs, trade restrictions, and electricity disruptions, affecting its global competitiveness. The power sector is in crisis, with widespread power cuts and challenges in achieving universal electricity coverage by 2030. Financial issues have led Chinese power companies to cease operations, and the kyat's devaluation has made LNG-based power generation economically unfeasible.^[14]

The World Bank report highlights the strain on household incomes, particularly for the poor, and warns of long-term detrimental effects on Myanmar's development. Ongoing conflict since late 2023 has further aggravated the situation, disrupting trade, causing labour shortages, and increasing logistics costs, especially in areas like northern Shan state.^[15] Myanmar is experiencing widespread migration, both internally and externally, driven by economic hardship, climate change, and armed conflict. The SAC's governance issues and corruption further hinder economic recovery. High-profile corruption cases, like that of Lieutenant-General Moe Myint Tun, reflect these challenges.^[16]

Facing economic difficulties, the SAC is attempting to control the economy through non-market tools, but is constrained by sanctions, FATF blacklisting, and reputational risks, limiting foreign earnings access. To attract foreign investment, the Myanmar Investment Commission approved six new projects in various sectors, with significant involvement from Singapore, China, and Thailand.^[17] The central bank has also relaxed control over foreign exchange rates, allowing banks and dealers to set their own rates.^[18] To manage the US dollar scarcity, the SAC imposed regulations on migrant workers' remittances, requiring a minimum of 25% of their income to be sent through the country's banking system, a move opposed by the NUG.

In 2023, Myanmar faced a deepening humanitarian, economic, and social crisis, as reported by various organisations including the Independent Investigative Mechanism for Myanmar, the UN High Commissioner for Human Rights, and Human Rights Watch. The 2023 Humanitarian Response Plan for Myanmar, seeking $887 million in aid, was critically underfunded, with only 29% of the required funds secured. In response, the UN Central Emergency Response Fund allocated $7 million for urgent aid.

The military was accused of human rights abuses, including setting villages on fire and using airstrikes and landmines, leading to massive displacement both within and outside the country. The situation was further exacerbated by Cyclone Mocha in May, which killed 145 people and prompted a $333 million UN emergency funding appeal.^[19] India responded with "Operation Karuna" to provide relief. The cyclone revealed significant safety challenges for affected communities, and the military's suspension of humanitarian access to certain regions hindered aid efforts.^[20]

The military tightened its grip on media and communications, assuming control over the Broadcasting Council, prosecuting individuals using unlicensed satellite devices, and shutting down independent media outlets.^[21] This led to Myanmar becoming one of the worst jailers of journalists globally. Additionally, Myanmar surpassed Afghanistan as the world's largest opium producer, according to the UNODC.^[22] Opium cultivation and yield have significantly increased due to factors like poverty, economic instability, and lack of government services. The lucrative nature of opium production is evident in the rising prices paid to growers.

International Responses

On August 23, the UN Security Council (UNSC), excluding China and Russia, issued a statement condemning the Myanmar military's killing of civilians and ongoing airstrikes. The joint statement followed closed consultations on the Myanmar situation, including briefings from Under-Secretary-General Martin Griffiths and Assistant Secretary-General Khiari.^[23] The UNSC expressed deep concern about the humanitarian situation in Myanmar, with over 18 million people requiring assistance and 2 million displaced. Emphasising the need for full, safe, and unhindered humanitarian access, the statement reiterated the call for implementing UN Security Council Resolution 2669 and supporting ASEAN's efforts.

As the year proceeded UN Special Envoy for Myanmar, Noeleen Heyzer, concluded her 18-month tenure, during which she worked to encourage the military to end the coup and participate in political dialogue with opposition groups. In August 2022, she visited Myanmar and held discussions with Min Aung Hlaing and other top military officials. In June 2023, she had met with Zin Mar Aung, the foreign minister of the National Unity Government (NUG). However, the military was critical of this meeting, and it had denounced the United Nations as "rotten."^[24]

The United States, United Kingdom, Canada and Australia have imposed coordinated as well as individual sanctions on Myanmar nationals as well as entities.^[25] The most significant were sanctions on Myanmar's Ministry of Defence, Election Commission, two banks, Myanma Foreign Trade Bank (MFTB) and Myanma Investment and Commercial Bank (MICB) and Myanmar Oil and Gas Enterprise (MOGE).^[26] Notably, there were no sanctions on these banks under previous military regimes. And while MOGE was not added to the Specially Designated Nationals (SDN) list, denying access to the U.S. banking system, it marked the first direct U.S. targeting of the enterprise, crucial for Myanmar's foreign currency earnings from natural gas revenues.

While Western nations are imposing sanctions, Russia and Myanmar marked the 75th anniversary of diplomatic relations on February 18. During the year, economic, defence and strategic engagements increased. Trade delegations from both countries visited each other to emphasise trade and investment opportunities as well as MoU was signed for enhancing nuclear infrastructure.^[27] While economic engagements were significant, the delivery of the first shipment of two Russian Su-30 fighter jets was significant.^[28] The increased supply of fighter jets raises concerns about potential military actions against opposition forces and civilians, considering the military's recent use of jets in operations against rebel forces. Furthermore, on November 5, the first Myanmar-Russia Maritime Security Exercise (MARUEX) took place in the Andaman Sea, emphasising the prevention of air, water surface, and underwater threats, along with maritime security measures.^[29]

ASEAN

In 2023, ASEAN has become more conscious of its divided approach towards Myanmar. Indonesia took over chairmanship in November 2022. Indonesia, focusing on restoring democracy, barred Myanmar military representatives from attending ASEAN summits and meetings. However, there were instances of Myanmar's military participation in few meetings such as Ministerial meeting on Transnational Crime, non-combat exercises hosted by Indonesia in September, and even co-hosted ASEAN Defence Ministers’ Meeting (ADMM) Plus Experts’ Working Group on Counter Terrorism with Russia, the ASEAN Foreign Ministers Meeting in July and the 43rd ASEAN Summit in September highlighted divisions, with Thailand engaging in consultative dialogues with Myanmar's military representatives. Most importantly, what came as a major astonishment was the meeting between the Thai deputy prime minister and foreign minister, Don Pramudwinai, and Daw Aung San Suu Kyi.

To further address the crisis in Myanmar, a troika system was introduced, with Indonesia, Laos, and Malaysia jointly leading efforts to implement the ASEAN Five-Point Consensus in Myanmar. The leaders also denied Myanmar its turn in the rotating presidency in 2026. At the end of both the meetings, joint statements were released which reiterated the need to maintain 5PC as ASEAN’s “main reference to address the political crisis in Myanmar” and released an assessment recognising the need for a specific timeline with practical and measurable indicators to support the FPC.

Indonesia also engaged with various stakeholders, including the National Unity Government and ethnic armed organisations, signalling a step toward inclusive dialogue. Despite efforts, Myanmar's military rejected ASEAN statements and accused the bloc of one-sidedness. Myanmar also accused ASEAN of issuing country specific paragraphs which contradicts the bloc’s principle of non-interference in the country's internal affairs. Indonesia's approach as chair demonstrated both divisions and attempts at inclusive engagement in addressing the Myanmar crisis. But ASEAN has faced criticism for its perceived failure in pressuring Myanmar's military to restore democracy and halt violence.

China’s Involvement in Myanmar

Chinese Assistant Foreign Minister Nong Rong visited Myanmar following attacks by ethnic armies in the north, urging the military to cooperate for a ceasefire. Despite China's outreach for crisis resolution, it's suggested that the Brotherhood Alliance's attacks, dependent on Chinese support, which indicates China's frustration with Myanmar's inaction on online scams and slow progress on the Belt and Road Initiative (BRI). While China employs dual tactics in Myanmar, an unprecedented protest staged outside Yangon City Hall accused China of supporting an ethnic alliance defeating regime troops in Shan State.^[30] The protest, approved by the military regime, indicated public displeasure with China's role. However, the military later downplayed the protest's anti-China sentiment, accusing Western media of attempting to damage Myanmar-China relations.

While Myanmar's military leader, Min Aung Hlaing, was not invited to the third BRI Forum, representatives like Transport and Communications Minister General Mya Tun Oo and cabinet minister Ko Ko Hlaing attended.^[31] Chen proposed collaboration on the "eight major steps" outlined by Chinese President Xi Jinping at the BRI forum. China has initiated a survey for a railway connecting Kunming to Kyaukphyu, and both countries are set to renegotiate the Kyaukphyu deep-sea port project, with an estimated cost of USD 1.3 billion. The existing agreement involves 70 percent ownership by China's CITIC group and the remaining 30 percent by the Myanmar government. Recently, China and Myanmar also reached an agreement to resume the Kyaukphyu deep-sea port project, a strategic initiative for China's maritime and economic interests.^[32]

Diplomatically, Chinese Ambassador Chen Hai met Myanmar officials in May to coordinate efforts against telecom fraud and urged for more action against such illegal activities. State Councilor Qin Gang also called for Myanmar to intensify its crackdown on internet fraud, particularly along the border. During his meetings in Myanmar, including with UN Special Envoy Noeleen Heyzer and Senior General Min Aung Hlaing, Qin emphasized the need for a careful and realistic approach to Myanmar's challenges within its constitutional framework.^[33] He reaffirmed China's commitment to the China-Myanmar Economic Corridor and support for Myanmar's development, while also acknowledging China's concerns about the ongoing unrest in the country.

It is also interesting to note that in the first half of 2023, China significantly increased its imports of rare earth minerals from Myanmar, with a 70% rise compared to the latter half of 2022, reaching 34,241 metric tons.^[34] This growth is attributed to China's expanding automotive and wind energy sectors. Myanmar has become a crucial supplier for China, providing approximately 40% of heavy rare earths like dysprosium, yttrium, and terbium. Despite initial trade disruptions due to COVID-19 border controls, shipments increased notably in December 2022 following the easing of pandemic measures in China.

India-Myanmar Engagements

The 75th anniversary of India-Myanmar diplomatic relations was celebrated by the Myanmar embassy in India on 23 December 2023, with Myanmar's Ambassador to India, Moe Kyaw Aung, emphasising the potential for increased Indian investment in Myanmar.^[35] Talks are in progress for establishing a rupee/kyat payment system. India is a significant economic partner for Myanmar, being its 11th largest source of foreign investment and fifth-largest trading partner. Additionally, in their 20th round of Foreign Office Consultations, India and Myanmar discussed various issues, including border security, trade, connectivity, and transnational crime, with India expressing support for Myanmar's transition to a federal democracy.^[36]

In May 2023, India's External Affairs Minister S Jaishankar and UN Special Envoy on Myanmar Noeleen Heyzer discussed the situation in Myanmar.^[37] The same month, the India-funded Sittwe Port was inaugurated, boosting connectivity between India's Northeast and Myanmar and serving as a strategic counter to China's regional influence.^[38] However, work on the Sittwe to Paletwa stretch remains incomplete.

The ongoing conflict in Myanmar and especially in border towns since Operation 1027 have inflicted severe problems in India's Northeast. The Indian Defence Secretary's visit to Myanmar aimed at addressing the ongoing violence in Manipur. Meetings with Senior General Min Aung Hlaing and other military officials emphasised the commitment to preventing the use of their territories for illegal activities.^[39] The northeastern states of India are facing a growing threat from the drug menace, exacerbated by an influx of refugees from Myanmar. Mizoram has become a major corridor for drug trafficking, and various states, including Assam, Manipur, and Tripura, are grappling with the issue. Law enforcement agencies have seized over Rs 1,000 crore worth of drugs and arrested more than 200 individuals, including Myanmarese nationals, in connection with drug-related activities in 2023.^[40] The region's proximity to Myanmar, the world's largest opium producer, contributes to the rise in drug-related challenges. The conflict has not just led to crossing of refugees but also of military soldiers. To date, more than 400 military soldiers have crossed borders after being outrun by the opposition forces.^[41]

Due to escalating conflict along the border, India plans to install an advanced smart fencing system covering 100 km along the Myanmar border, as outlined in the 2022-23 annual report of the Ministry of Home Affairs (MHA).^[42] It is also interesting to note that India also continues to engage with the military government. Between November 2022 and April 2023, Bharat Electronics Limited (BEL), a public sector company under the Indian Ministry of Defence, reportedly exported military end-use goods, technology, and technical documents worth USD 5 million to the Myanmar military.^[43] As part of the India-Myanmar Government-to-Government cooperation in the power sector, NTPC Ltd, a state-owned company, initiated the final phase of a training program for power sector professionals from Myanmar.^[44] Additionally, negotiations are underway between the Central Bank of Myanmar and the Reserve Bank of India to finalise terms and procedures for the payment mechanism.

Navigating the Uncertainties of 2024

These developments highlight the complex situation in Myanmar and its impact on regional dynamics. Predicting the future of Myanmar in 2024 is fraught with uncertainty, below are some possible predictions:

1. Stalemate and Protracted Conflict: The most likely scenario is a continuation of the current stalemate, with ongoing fighting between the military and NUG/ethnic armed groups. This would lead to continuation of the humanitarian crisis, economic stagnation, and displacement. There could be some movement towards dialogue, driven by internal or external pressure which may lead to partial ceasefires or limited power-sharing agreements, especially with some ethnic groups. Aung San Suu Kyi's release or involvement in negotiations could be a catalyst, but her potential limitations in addressing concerns beyond the Bamar majority could complicate progress. Though this scenario would offer some respite from violence and improve humanitarian access, it would likely fall short of establishing a fully democratic or federal system.
2. Support for the NUG and Ethnic Armies: External actors could also intensify support for the NUG or specific armed groups, leading to a high-end proxy conflict. The recent use of drones in their fight against the military suggest that the opposition forces are getting support from outside sources such as the United States, China and many others.
3. ASEAN’s Limited Progress on Myanmar: Laos might prioritise small, achievable goals like facilitating prisoner releases or humanitarian access improvements which could lead to some easing of tensions but wouldn't address core issues like political dialogue or power-sharing. How far the troika system would work is also something that needs to be keenly watched.
4. Increased Regional Intervention: Lack of international consensus and limited effective intervention options might allow the conflict to simmer without resolution and increase the role of regional players. Regional powers, particularly China, Russia and Thailand, might increase their economic or political engagement with the junta, fearing instability at their borders. This could provide the military with resources and legitimacy, further frustrating NUG/ethnic groups.
5. India’s Continued Engagements with the Military: India will have to walk a tightrope given its border security concerns, refugee influx and drug trafficking. Also, the ongoing conflict and instability in Myanmar could pose risks for Indian investments and projects. Within this for 2024, India should find ways to support the NUG and ethnic armies especially in our border areas without antagonising the military which might be crucial for a long-term solution and ensuring stability in Myanmar.

Ultimately, the path Myanmar takes in 2024 depends on numerous factors, including the military’s internal stability, the effectiveness of NUG/ethnic resistance, the level of international engagement, and regional power dynamics. While a peaceful resolution or complete victory for any side seems unlikely in the near future, the ongoing struggle for power and competing visions for Myanmar's future will continue to shape the country's fate in the months and years to come. While achieving a lasting resolution in 2024 seems highly unlikely, even small steps towards dialogue and humanitarian improvements could be important milestones in the long road towards peace and stability in Myanmar.

References

^[1]https://www.irrawaddy.com/news/burma/what-do-changes-in-myanmar-regimes-roadmap-and-objectives-mean.html
^[2]The military replaced the 2010 law with the new law on political parties, which bars parties and candidates deemed to have links to individuals or organisations “designated as committing terror acts” or seen as “unlawful”. The parties also need to secure at least 100,000 members within three months of registration and have funds of 100 million Myanmar kyat, 100 times more than previously. The new law also states that the existing parties must apply for registration within two months of the legislation being announced, or they will be “automatically invalidated”. Furthermore, the law restrains the parties from lodging any complaints against the Union Election Commission (UEC) decisions on registration. https://thediplomat.com/2023/01/myanmars-military-junta-takes-step-toward-controversial-election/ [3]
^[3]Under the Political Parties Registration Law, parties running in a general election have 180 days to open offices in at least 50 percent of Myanmar’s townships after their registration is approved. Parties contesting in a single region or state are required to open at least five township offices. Parties contesting in a single region or state are required to open at least five township offices. https://www.irrawaddy.com/news/politics/myanmar-junta-holds-talks-with-political-parties-to-open-offices.html [4]
^[4]https://www.gnlm.com.mm/upcoming-elections-must-maintain-political-prestige/
^[5]The military-backed election commission officials from Myanmar visited Russia to discuss election methods, procedures, and campaign conditions. The junta's minister for immigration and the head of the electronic registration department visited China.
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^[36] https://www.hindustantimes.com/india-news/conveyed-full-range-of-security-concerns-india-on-fighting-in-myanmar-101701960356715.html [35]
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^[40] https://nagalandpost.com/index.php/myanmar-based-narcotics-trade-replaces-insurgency-as-bigger-threat-in-ne-region/ [39]
^[41] https://www.hindustantimes.com/india-news/over-150-myanmar-soldiers-flee-to-mizoram-village-after-rebel-forces-capture-camps-some-critically-injured-101703988934380.html [40]
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^[43]https://thewire.in/south-asia/india-psu-bel-arms-myanmar-export
^[44]The other four programmes have been on Smart Grids; Cross Border Energy Trading; Electric Vehicles, Batteries and Charging Stations; and Microgrids https://energy.economictimes.indiatimes.com/news/renewable/ntpc-trains-myanmar-power-professionals-on-solar-energy/101119353 [42]

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