Myanmar Round Up: December 2023

The situation in Myanmar remains highly complex and volatile as the conflict continues leading to significant displacement, economic challenges, and humanitarian concerns. The military, led by Min Aung Hlaing, is facing resistance from multiple ethnic armed groups, including the Three Brotherhood Alliance. During the month, Min Aung Hlaing, called on armed ethnic groups engaged in the offensive against the military to address their concerns through political means. But in response, the parallel National Unity Government, supporting certain ethnic armies, rejected the dialogue proposal, emphasising the necessity for the military to withdraw from its political role. The economic situation is strained, with disruptions to border trade, labour shortages, and increased logistics costs. While the Western international community has imposed sanctions; the neighbouring countries like China and Thailand are engaging with Myanmar's military government. Additionally, Myanmar has become the world's largest opium producer. India and Myanmar celebrated 75 years anniversary of establishing diplomatic relations and held their 20th round of Foreign Consultation talks where India emphasised on the need to return to federal democracy. The article below analyses the national and international developments in Myanmar in December 2023.

Domestic and Political Situation

During the month, in a closed trial, Myanmar's Supreme Court rejected Aung San Suu Kyi's special appeal against her corruption conviction, where she was accused of receiving a bribe in the form of gold and money from Phyo Min Thein, the former chief minister of Yangon in 2017. The trial was not open to the media, diplomats, or spectators, and Suu Kyi's lawyers were prohibited from discussing it due to a gag order.^[1] The rejection of initial appeals adds to the legal challenges Suu Kyi faces, including charges of election fraud, breaching official secrets, and other corruption allegations. Suu Kyi's legal team has encountered difficulties, including being denied permission to meet with her since December 2022. They have applied multiple times for a meeting without receiving a response.

Since October, the violence has spread from northern Shan State to Karenni (Kayah), Rakhine and Chin states and Sagaing Region. The violence in Myanmar has also shifted towards urban areas, marking a strategic turning point in the conflict. In the east, Karenni forces launched Operation 1111 and now control nearly 80 percent of Kayah state, engaging in battles in the capital Loikaw. The Arakan Army (AA), in western Myanmar, terminated its ceasefire in Rakhine state, capturing major bases. Chin forces have gained ground along the Indian border, claiming civil administration in 70 per cent of the state. Karen forces in Kayin State disrupted border trade by taking control of parts of the main road to the Thai border. The National Unity Government declared civil administration in Kawlin town, and with the opposition forces nearing Highway 1, connecting Yangon and Naypyidaw. Similarly, the KNLA and local PDFs took over Mone, Bago state.

The military in Myanmar responded to recent battlefield setbacks with an increase in long-range artillery and aerial bombing, resulting in higher civilian casualties. Despite acknowledging setbacks, Min Aung Hlaing attributed them to foreign interference. Reports suggest the military is reinforcing defences in major cities like Naypyidaw, Yangon, and Mandalay. But the recent opposition gains now enable them to target Naypyidaw. Notably, the assassination of the chairman of the pro-military New National Democracy Party on 01 December conveyed about the growing coordination of operational intelligence by opposition forces.^[2] In addition to increased airstrikes, the AA alleged that Myanmar’s military deployed chemical weapons in Chin State. ^[3] Earlier in November 2023, the Ta’ang National Liberation Army (TNLA) and Myanmar National Democratic Alliance Army (MNDAA) also reported the military’s use of chemical weapons, while Major General Zaw Min Tun, denied the use of the same.

Min Aung Hlaing has been facing significant challenges as military troops suffer heavy defeats on multiple fronts in various regions of Myanmar. Due to these setbacks, he has resorted to boosting the morale of his forces by awarding honorary titles and medals, including the Thura medal, for gallantry. This includes 147 personnel from the military, police, correctional department officers, and other government employees.^[4] However, the regime's forces have been weakened, leading to hundreds of soldiers surrendering or defecting, and the junta urging deserters to return to barracks. The inclusion of civil servants among the medal recipients is also because recently around 400 civil servants working under the military defected in Sagaing Region.

As the violence continued, China brokered a deal between the Myanmar military and the Three Brotherhood Alliance to reduce armed conflict in northern Shan state on 22-24 December. However, the discussions did not result in an agreement due to significant differences in the parties' demands and both sides have agreed to meet again in January. The meeting was a follow-up to the first round of talks that took place in Kunming on 07-08 December, during which the parties agreed to a temporary cease-fire until 31 December. Despite a previous temporary cease-fire until 31 December, clashes persisted.^[5]

Economic Situation

Myanmar's economy is expected to grow only one percent over the year to March 2024, according to the World Bank's Myanmar Economic Monitor. The country faces significant challenges, including disruptions to border trade due to resistance against the military regime, labour shortages, and increased logistics costs. The conflict has impacted trade with neighbouring countries, causing blockages in key transport routes and shortages of essential items. The report highlights the kyat's volatility, persistent power outages, and high inflation as additional factors hampering economic growth. Even if the conflict eases, the World Bank anticipates subdued growth in agriculture, manufacturing, and trade, with inflation remaining around 20 per cent until March 2024. The balance of payments is under pressure, with widening trade and current account deficits projected.^[6]

During the month, Myanmar's central bank decided not to control over setting exchange rates for foreign currencies, while allowing banks and licensed dealers to determine their own rates.^[7] This move marks a rare easing of the country's tight controls on currency exchange. The decision comes amid the economic challenges faced by Myanmar following the 2021 coup, with authorities attempting to exert more control over foreign currencies to manage demand and combat black market trading. The shift represents a departure from the previous managed floating exchange rate system towards increased reliance on administrative controls under military rule.

Furthermore, Myanmar has become the world's largest opium producer, surpassing Afghanistan, according to a report from the United Nations Office on Drugs and Crime (UNODC). Opium output in Myanmar has increased due to the ban on opium production imposed by the Taliban in Afghanistan, resulting in a 95 per cent drop in cultivation. In Myanmar, the estimated area under cultivation has risen by 18 percent, reaching 47,100 hectares. The opium yield has also increased by 16 per cent to 22.9 kilograms per hectare. The economic, security, and governance disruptions following the military takeover in Myanmar have driven farmers towards opium cultivation. The report notes the reasons for opium poppy cultivation is poverty, lack of government services, challenging macroeconomic environments, instability, and insecurity. The average price paid to opium growers increased by 27 per cent to about USD 355 per kilogram (USD 161 per pound), demonstrating the attractiveness of opium as a crop and commodity and strong demand. The figures mean farmers earned around 75 per cent more than in the previous year.^[8] Northeastern Myanmar is part of the infamous “Golden Triangle,” where the borders of Myanmar, Laos and Thailand meet and production of opium and heroin has historically flourished.

International Reactions

The United States, United Kingdom, and Canada have imposed coordinated sanctions on 14 individuals and entities involved in Southeast Asia's online scamming industry. The sanctions target those connected to human trafficking linked to online "scam farms" in Cambodia, Laos, and Myanmar, where individuals are forced to work as scammers. Among the sanctioned are individuals connected to Shwe Kokko, a development in Myanmar's Karen State involved in online gambling and telecom scams.^[9] The sanctions aim to address the extensive human misery and generate revenue of billions of dollars from Southeast Asia's scam centers each year.

On 27 December, a diplomatic meeting was held between Senior General Min Aung Hlaing, the military chief of Myanmar, and Thai Lieutenant General Jakkapong Janpengpen, Director of the Directorate of Joint Operations for the Royal Thai Armed Forces. The meeting in Naypyitaw focussed on enduring military relations, covering security cooperation, border issues, and plans for joint operations to address online gambling and scams in the border region. The discussions also touched on the circumstances of refugees and displaced persons amid Myanmar's ongoing unrest. Myanmar and Thailand plan to intensify efforts to crack down on online scam operations along their border, emphasising collective action for peace and stability.^[10] The meeting signifies regional dynamics in Southeast Asia as neighbouring countries engage with Myanmar's military government despite complexities.

Earlier during the month, Thailand and Myanmar reached an agreement to establish a task force aimed at enhancing humanitarian assistance for displaced individuals along their border. If successful, there are plans to potentially expand this collaboration to involve other aid agencies. The decision was announced following talks between the foreign ministers of both countries, held during the Mekong-Lancang Cooperation meeting in China.^[11] Thailand sees this initiative as a way to encourage Myanmar's engagement with the ASEAN bloc and the broader international community.

Myanmar is set to participate in the ASEAN Tourism Forum 2024 in Laos, as confirmed by the Myanmar Tourism Entrepreneurs Association. Four travel companies have registered to represent Myanmar at the forum, providing an opportunity to showcase and promote the country's tourism sector. The event, themed "Quality and Responsible Tourism — Sustaining ASEAN Future," is scheduled to take place in Vientiane from 22-27 January 2024, and will include a tourism ministers' meeting.^[12] Myanmar has been implementing various measures, such as organising travel fairs and familiarisation trips, to boost its tourism industry.

China-Myanmar Engagements

China's attempt to broker a temporary ceasefire between Myanmar's military government and three rebel groups has seemingly failed, as the insurgents continued fighting the military. After a meeting in Kunming, Myanmar's military and the Three Brotherhood Alliance agreed to a temporary ceasefire in northern Myanmar. This has led to a notable de-escalation in the conflict, particularly in areas controlled by the MNDAA. But despite Beijing's announcement of a mediated pause on 14 December, clashes persist, and doubts arise regarding the effectiveness of the ceasefire. The rebels, on the other hand, denied awareness regarding any such deal. The TNLA seized Namhsan and the 105-Mile Trade Zone, a crucial border trade area near Muse.^[13] The control of the trade zone is considered significant as it plays a crucial role in Myanmar's cross-border trade with China. These developments highlight the complex and fluid situation in northern Myanmar and its impact on regional dynamics.

Ahead of the Lancang-Mekong Cooperation Foreign Ministers Meeting in Beijing, Chinese senior diplomat Wang Yi held a meeting with Myanmar's deputy prime minister, U Than Swe. Wang emphasised the leading role of Lancang-Mekong Cooperation in implementing these principles and expressed China's commitment to strengthening comprehensive strategic cooperation with Myanmar, ensuring border stability, and promoting mutual development.^[14] Furthermore, he expressed China's hope for Myanmar to achieve national reconciliation swiftly and continue its political transformation. Wang emphasised the need for both countries to enhance law enforcement cooperation to eliminate telecom fraud. China has been actively addressing telecom fraud syndicates in Myanmar, alleging they defrauded Chinese nationals. Chinese state media highlighted the prevalence of telecom fraud in Myanmar, with over 100,000 people engaging in fraud daily across at least 1,000 scam centers.^[15] The recent collaborative efforts in cracking down on telecom fraud and rescuing individuals in northern Myanmar were acknowledged, with Myanmar authorities reportedly handing over 31,000 fraud suspects to China.

During the month, Myanmar and China also reached an agreement to resume construction of the Kyaukphyu deep-sea port project. The USD 7.3 billion project, led by China's state-owned CITIC Group, aims to provide China with access to the Indian Ocean for direct trade links with West Asia, Europe, and the Atlantic region. The port will be connected to Kunming, the capital of Yunnan province, through a rail and road link as part of the China-Myanmar Economic Corridor.^[16] The strategic project had faced delays due to the COVID-19 pandemic and the military coup in Myanmar. Upon completion, the Kyaukphyu Port will join other China-controlled points in the region, facilitating China's maritime and economic interests.

At the annual Lancang-Mekong Cooperation Foreign Ministers’ meeting which was held virtually, China and its five Southeast Asian neighbours, Myanmar, Thailand, Cambodia, Laos and Vietnam, agreed to intensify security cooperation, with a focus on combating cross-border crime, particularly cyber fraud and gambling. For the first time after the military coup in 2021, Myanmar's leader, Min Aung Hlaing, co-chaired the leaders meeting with Chinese Premier Li Qiang. The Nay Pyi Taw Declaration was adopted, focusing on collaborative efforts to address common challenges in infrastructure, agriculture, and supply chains. Discussions included topics such as China's Belt and Road Initiative, climate change, and cybercrime response.^[17] The region holds geopolitical significance for China, with economic importance, as the five Mekong Basin nations contribute 40 percent of ASEAN's total population and around 30 percent of its GDP.

Following the meeting, China's Foreign Minister Wang Yi highlighted the joint commitment to eradicate security threats affecting public safety and development in the region. China has pledged to double down on cyber scam crackdowns across the Mekong River basin, addressing issues such as forced online criminality, romance-investment scams, crypto fraud, and illegal gambling. The cooperation comes amid growing concerns over cybercrime and forced labour in the region.^[18] China's border along the Shan and Kachin states in Myanmar spans 2,000 km, making it a critical area for border security. While expressing non-interference in Myanmar's internal affairs, China hopes for national reconciliation and political transformation in Myanmar. The Lancang-Mekong countries are also part of China's Belt and Road Initiative and part of ASEAN, China’s biggest trading partner.

India-Myanmar Engagements

On 23 December, the Myanmar embassy in India celebrated the 75th Anniversary of India-Myanmar diplomatic relations. Myanmar's Ambassador to India, Moe Kyaw Aung, highlighted the significant potential for increased investment in Myanmar by India during the event. He noted that India is the 11th largest contributor to Myanmar's investment inflow, accounting for 0.84 percent of total foreign investments, with industries such as textiles, mining, oil and gas, healthcare, information technology, and agrochemicals presenting opportunities. India is also Myanmar's fifth-largest trading partner, constituting 4.01 percent of the country's international trade. Negotiations are underway to establish a rupee/kyat payment system to facilitate direct payments in respective currencies, fostering increased trade and investment opportunities. Meenakshi Lekhi, Minister of State for External Affairs and Culture, Ambassador of Russia, Thailand, Mongolia and Head of Missions of various countries and Indian bureaucrats were also present on the occasion. Apart from cultural programmes involving dance performances and fashion shows, the event also involved panel discussions to promote business and culture between countries.^[19]

During the month, India and Myanmar also held their 20th round of Foreign Office Consultations (FOC), and discussed various issues such as border and security concerns, trade, commerce, connectivity, and transnational crime. The Indian delegation led by Foreign Secretary Vinay Kwatra, emphasised India's support for Myanmar's transition towards a federal democracy. Against the backdrop of escalating conflict between armed resistance groups and the Myanmar military in several provinces, India urged Myanmar to return to the path of federal democracy during the consultations. The discussions also covered security concerns, including challenges at the border such as refugee flows. Additionally, both sides discussed the security implications of issues like drug trafficking and refugee flows.^[20] India reiterated its support for people-centric socio-economic developmental projects, including connectivity initiatives, under programs like the Rakhine State Development Programme and the Border Area Development Programme in Myanmar.

As the gunfights between Myanmar Army and Arakan Army fighters intensified in October 2023, this month a group of 151 Myanmar soldiers sought refuge in Mizoram's Lawngtlai district after their camps were reportedly overrun by the Arakan Army. The soldiers, carrying arms, approached the Assam Rifles at Tuisentlang in Lawngtlai district. Some of them were critically injured, and they received first aid from the Assam Rifles.^[21] Earlier in November, a total of 104 Myanmar soldiers fled to Mizoram after their camps were overrun by the People's Defence Force (PDF) in different incidents. In that case, they were airlifted by the Indian Air Force to Moreh in Manipur and from there they crossed the international border and entered Tamu, Myanmar.

Another challenge faced by the northeastern states of India is a growing threat from the drug menace. The influx of refugees from Myanmar has also led to increased illicit drug trade across the Myanmar-India border and Mizoram has turned into a major corridor for drug trafficking. Various northeastern states, including Assam, Manipur, and Tripura, are also grappling with the same. Law enforcement agencies have seized over Rs 1,000 crore worth of drugs, and arrested more than 200 individuals, including Myanmar’s nationals, in connection with drug-related activities in 2023.^[22] In addition, the Directorate of Revenue Intelligence (DRI) has identified a new trend in heroin smuggling along the Indo-Myanmar border. The smuggling involves concealing small packets of heroin within soap boxes, which are then hidden inside trolley bags, special cavities in car seats, and concealed spaces in car frames in border areas. The DRI made 131 seizures of NDPS substances during 2022–23. The report highlights an increase in the use of courier and postal routes for drug smuggling and the heightened use of body mules carrying concealed narcotics.^[23] The region's proximity to Myanmar, the world's largest opium producer, as stated earlier, according to the UNODC Southeast Asia Opium Survey, contributes to the rise in drug-related challenges.

Conclusion

December 2023 witnessed continued conflict, economic hardship, and humanitarian concerns in Myanmar. International engagement remains complex, with conflicting approaches towards the military. Addressing the escalating crisis and supporting civilians are urgent priorities. The UNOCHA reported an escalation of armed conflict in Myanmar since October 27, leading to the displacement of 1.5 million people. The OCHA called for one billion dollars in donations for 2024 to address the escalating needs. The UN warns that 18 million people, a third of Myanmar's population, require aid, urging one billion dollars in donations for 2024. The need for humanitarian assistance is crucial, but challenges persist due to insecurity and restricted access in conflict-affected areas, blockages in transportation, and movement restrictions. The situation of conflict would go unabated unless all the stakeholders make an effort to start negotiations.

References

^[1]https://nagalandpost.com/index.php/myanmar-sc-rejects-ousted-leader-suu-kyis-special-appeal-in-bribery-conviction/
^[2]https://www.rfa.org/english/commentaries/myanmar-war-urban-12092023103412.html
^[3]https://www.dhakatribune.com/world/asia/333091/myanmar-junta-accused-of-chemical-warfare
^[4]https://www.irrawaddy.com/news/burma/myanmar-coup-leader-showers-medals-on-troops-as-string-of-defeats-erodes-morale.html
^[5]https://www.rfa.org/english/news/myanmar/armed-conflict-talks-12282023145308.html
^[6]https://asia.nikkei.com/Spotlight/Myanmar-Crisis/Myanmar-economy-to-stagnate-as-fighting-escalates-at-border
^[7] https://www.malaymail.com/news/money/2023/12/06/myanmar-central-bank-to-no-longer-set-forex-rates/106069 [2]
^[8]https://thepublicsradio.org/article/war-wracked-myanmar-is-now-the-worlds-top-opium-producer-surpassing-afghanistan-says-un-agency
^[9]https://thediplomat.com/2023/12/us-uk-canada-sanctions-target-southeast-asian-scam-operations/
^[10]https://bnnbreaking.com/world/myanmar/myanmar-and-thailand-military-chiefs-meet-amidst-ongoing-unrest/
^[11]https://www.devdiscourse.com/article/law-order/2739273-thailand-myanmar-agree-to-form-taskforce-for-humanitarian-aid-delivery
^[12]https://indiatribune.com/myanmar-to-participate-in-asean-tourism-forum-2024/
^[13]https://thediplomat.com/2023/12/myanmar-ethnic-alliance-continues-gains-despite-china-brokered-ceasefire/
^[14]https://news.cgtn.com/news/2023-12-06/VHJhbnNjcmlwdDc2MzI5/index.html
^[15]https://kdal610.com/2023/12/06/china-hopes-myanmar-achieves-rapid-national-reconciliation-wang-yi/
^[16]https://www.theweek.in/news/world/2024/01/01/myanmar-china-agree-to-kickstart-stalled-vital-port-project.html
^[17]https://asia.nikkei.com/Spotlight/Myanmar-Crisis/Myanmar-s-leader-co-chairs-China-backed-Mekong-summit
^[18] https://www.scmp.com/news/china/diplomacy/article/3244388/china-vows-closer-security-ties-mekong-states-cyber-scams-myanmar-unrest-have-cross-border-impact [3]
^[19]https://www.asiancommunitynews.com/myanmar-seeks-global-investment-in-hrd-tech-transfer-amb-moe-kyaw-aung/
^[20]https://www.hindustantimes.com/india-news/conveyed-full-range-of-security-concerns-india-on-fighting-in-myanmar-101701960356715.html
https://www.thehindu.com/news/national/india-reminds-myanmar-to-return-to-federal-democracy/article67612022.ece [4]
^[21]https://www.hindustantimes.com/india-news/over-150-myanmar-soldiers-flee-to-mizoram-village-after-rebel-forces-capture-camps-some-critically-injured-101703988934380.html
^[22]https://nagalandpost.com/index.php/myanmar-based-narcotics-trade-replaces-insurgency-as-bigger-threat-in-ne-region/
^[23]https://www.sentinelassam.com/topheadlines/dri-spots-new-trend-of-heroin-smuggling-in-small-packets-through-indo-myanmar-border-682836