Myanmar’s ongoing polycrisis has accelerated inflation and poverty, placing growing pressure on households and increasing the urgent need for inclusive recovery and social protection measures.

Key Takeaways

1. Myanmar’s post-2021 polycrisis has driven persistently high inflation, weakening household incomes and purchasing power.

2. Inflation reflects structural problems in fiscal management, currency policy, trade systems, and political instability. At the same time, rising living costs have forced households to rely on harmful coping strategies that weaken their long-term economic resilience.

3. Without coordinated reforms and stronger social investment, Myanmar risks long-term poverty and inequality.

Nature of the Polycrisis (Post-2021 Context)

Since 2021, Myanmar has been experiencing a complex “polycrisis” driven by overlapping political, economic, social, and environmental shocks. Political instability and armed conflict have weakened public institutions and disrupted markets. The COVID-19 pandemic further strained already fragile health and education systems. At the same time, forced conscription, insecurity, and limited job opportunities have encouraged young and skilled workers to migrate, leading to serious human capital loss.

By 2024–2025, around half of the population was living below the poverty line, with another one-third close to it. Electricity access fell below 50 percent, while agricultural productivity declined due to rising input costs and restricted market access. Environmental degradation also increased climate risks. As incomes fell, households increasingly relied on selling assets and reducing consumption. These coping strategies have become long-term survival mechanisms rather than temporary responses, indicating deep fragility as a system.

Inflation in Myanmar

Inflation has been one of the defining features of Myanmar’s economic crisis. In 2023 and 2024, inflation remained extremely high, reaching nearly 30 percent year-on-year. By October 2024, end-period inflation stood at 29.7 percent. From April 2025, inflation began to ease as the kyat strengthened and food supply conditions improved. By October 2025, year-on-year inflation had declined to 19.8 percent, while average inflation fell from 27.9 percent in 2024 to 23.1 percent in 2025. This decline was driven mainly by slower food inflation, supported by humanitarian assistance and tighter price controls. At the same time, continued economic cooperation with China, including project financing and alternative financial arrangements after the 2021 coup, has provided the military government with an additional source of external funding despite Western sanctions. However, non-food inflation remained high, especially in energy, health, and transport, reflecting ongoing import restrictions and conflict-related disruptions. Overall, inflation has moderated from its peak but remains structurally elevated.

Several structural factors explain this pattern. First, monetary financing has fueled inflation. In 2023, two-thirds of the budget deficit was financed by the Central Bank of Myanmar, with the deficit reaching 5.6 percent of GDP. This expanded the money supply without corresponding growth in production. Second, supply constraints reduced the availability of goods. Import restrictions, conflict-related transport disruptions, and energy shortages limited both domestic and external supplies. Third, policy responses were largely ineffective. Price controls failed to manage inflation and instead created shortages, while the issuance of high-denomination notes in 2023 weakened public confidence in monetary management. Finally, depreciation of the kyat increased import costs, transmitting currency instability into higher domestic prices.

Together, these factors show that inflation in Myanmar reflects a combination of fiscal weakness, supply disruptions, and policy distortions rather than short-term market fluctuations.

Effects on Households

Inflation has severely affected household welfare, mainly because incomes have not kept pace with rising prices. In 2023, 57 percent of households reported no income growth, and 30 percent reported declines. Real household income fell by 15 percent between 2022 and 2023, while median incomes remained close to survival levels. Job losses, business decline, and farm disruptions were key causes. Informal employment increased, and job quality deteriorated, reversing earlier economic progress. The minimum wage has remained unchanged since 2018.

At the same time, prices of basic goods rose sharply. Food inflation reached 39 percent in late 2024. Non-food inflation was also high, especially in health, transport, and energy. Conflict-affected regions faced higher inflation due to transport disruptions and market fragmentation.

Urban households faced heavy cost burdens. Rent rose by 24.6 percent, petrol prices increased by 44 percent between Q4 of 2023 and 2024, and city inflation ranged between 21 and 26 percent. In cities, prices increased more rapidly than in rural areas because businesses faced higher transport and operating costs, while the arrival of displaced people also raised demand for housing, food, and services. Urban consumption fell by nearly 20 percent between 2017 and 2023. In March 2026, the military government introduced an even-odd” licensing scheme driving rule for private vehicles to conserve fuel amid global supply disruptions linked to conflict in the Middle East. This policy suggests limited fuel reserves and could further increase transport costs and inflationary pressure in Myanmar.

Rural households were affected by declining agricultural viability. Agricultural employment fell from 43 percent to 34 percent, while rising input costs reduced farm incomes. Rural consumption declined by 6 percent.

Marginalised communities experienced frequent shortages, displacement, and restricted market access. Low-income households across all areas lacked savings and secondary incomes. Overall, inflation has deepened inequality and weakened household resilience.

Coping Strategies

As economic pressure increased, households relied more on negative coping strategies. Many reduced their food intake and cut spending on health and education. Among the poorest households, 42 percent reported eating less. These practices weakened nutrition and human capital development.

Savings were rapidly depleted. By late 2024, only 20 percent of households had any savings or bank deposits. Informal borrowing became widespread. About 64 percent of loans came from relatives and friends, while 22 percent came from moneylenders who usually charge high rates. Most loans were used for food and health expenses, indicating distress borrowing. Many households sold productive assets such as land, bicycles, and tools, reducing their future earning capacity.

As financial pressure increased, some households turned to risky income-generating activities, with about 5 percent reporting engagement in such strategies nationwide. Economic stress has also been linked to rising drug and alcohol use, domestic and gender-based violence, and increased vulnerability among adolescents and young people, who face greater risks of harmful behaviours due to disrupted education and limited job opportunities.

Migration became one of the most important coping mechanisms. Around 10 percent of households sent migrants in 2024, and about 3.7 million Myanmar migrants lived in Thailand. Migrants to Thailand and Malaysia earned two to three times domestic wages, while those in Japan and Korea earned much more. The introduction of compulsory military service in 2024 has also accelerated outward migration, as many young people left the country to avoid conscription. Remittances supported about 7.5 percent of households and improved nutrition. However, forced currency conversion and taxation reduced net benefits and encouraged informal transfers.

Overall, while these coping strategies help households survive immediate shocks, they are largely unsustainable and weaken long-term resilience.

Consequences

The combined effects of inflation and conflict have severely damaged health, nutrition, and education. Many households reduced meals, relied on cheaper food, or borrowed food. Around 25 percent of households experienced acute food insecurity in early 2024. Adult diet quality deteriorated, and more than 20 percent of children had inadequate diets. Unmet healthcare needs reached 8.1 percent nationally and over 14 percent in conflict-affected regions. Limited access to medicines and medical services further increased health risks.

Education has also been deeply affected. In 2023/24, 21 percent of children were out of school. Low-income households spent only 2 percent of their budgets on education, compared with 4 percent among wealthier households. Financial pressure forced many families to withdraw children from school.

As household incomes declined, some families relied on child labour and early marriage to cope with financial stress. The introduction of the conscription law has further intensified these pressures, as some families arrange early or forced marriages for young women to avoid military service obligations. Informal and community-based education systems struggled with limited resources and security risks. These trends have reduced learning outcomes and skill development.

Together, deteriorating health and education outcomes threaten Myanmar’s future productivity and social mobility. Loss of human capital increases long-term vulnerability and limits the country’s capacity to recover from a crisis.

Poverty Trap

Myanmar’s poverty levels have risen sharply over the past decade due to overlapping political and economic crises. By the end of 2023, 49.7 percent of the population lived below the national poverty line, while another 25 percent remained just above it, meaning around 42 million people were living at or near subsistence levels. This marks a dramatic increase from 24.8 percent in 2017. Child poverty has also worsened, with 53 percent of children, about 8.9 million, living in poverty by 2022.

At the same time, the poverty gap has widened, showing that poor households are becoming more vulnerable. Reduced spending on health, education, and nutrition is reinforcing long-term disadvantage, while the middle class continues to shrink. Without the post-2021 crisis, poverty would likely have been close to 11 percent in 2023, with around eight million fewer poor people (WB04). These trends indicate that Myanmar is entering a self-reinforcing poverty trap.

Conclusion

Between 2021 and 2026, Myanmar’s economy has been shaped by structural inflation, currency instability, and prolonged trade disruptions. These pressures have weakened household resilience and accelerated the erosion of human capital. As incomes stagnated and prices surged, families increasingly relied on negative coping strategies that undermine long-term well-being. The combined effects of poor governance, policy distortions, and conflict have reinforced poverty and inequality, pushing many households into a cycle of vulnerability.

These trends not only deepen domestic hardship but also highlight major challenges in achieving SDG2 (Zero Hunger), SDG3 (Health), SDG4 (Education), and SDG8 (Decent Work). Without political stabilisation and institutional reforms, as well as improvements in monetary governance, exchange rate management, trade facilitation, social protection, and sustained investment in health and education, Myanmar will face prolonged stagnation and intergenerational poverty.

Hsu Latt Phyu is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). She holds a Master’s degree in Social Innovation and Sustainability from Thammasat University, Thailand.

“Advocating Sustainability, Shaping Our Future”

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Elephant Foot Yam is a way out for Chinland to build resistance amid the ongoing civil war while sustaining a healthy environment.

Key Takeaways:

• Chinland, an upland and landlocked region, had gradually shifted from swidden agriculture to cultivating a more sustainable crop, Elephant Foot Yam, which provided both environmental benefits and financial stability for local communities.

• After the coup, the socio-economic situation deteriorated sharply, forcing many households to return to swidden practices, contributing to increased deforestation and environmental degradation.

• Ethnic armed organisations in Chin should explore ways to leverage the Elephant Foot Yam sector to achieve long-term sustainability, ensuring both livelihood security and environmental protection.

Chinland is located in the northwestern part of Myanmar, at an elevation of 5,000 to 8,000 feet above sea level. The staple foods of the region are corn and rice, but local communities also cultivate two important millet varieties known as Satni and Satwa. Among them, Satni is primarily used to brew the traditional local alcohol, ‘Khaung’.

Chinland is one of the least developing states in a least developing country like Myanmar. The Chin people primarily practice traditional swidden agriculture in mountainous terrain. This practice causes deforestation in Chin state and has lost 700 sqmi of total forest cover area in 70 years since independence, the total forest cover area. But in 1997, a market for elephant foot yam, also known as Konjac, emerged. Initially, local people, mainly swidden farmers, collected wild yams from natural forests, but by 2003, these became scarce due to overexploitation. As a result, local people began cultivating Konjac in old fallow fields that had been abandoned as the number of swidden farmers declined. The region’s environmental conditions are highly favourable for konjac yam cultivation.

Socio-economic Benefits from Konjac Yam Plantation

After the 2010 political transition, Myanmar opened up to more foreign opportunities, including konjac yam farmers receiving greater access to financial and technical assistance from NGOs and INGOs. The country soon became one of the major exporters of konjac to China, Japan, and Korea. Myanmar is home to three distinct yam types, differentiated by their colour: white, yellow, and reddish-pink. Although the crop can be grown in regions such as Mon, Karen, Shan, Tanintharyi, and Kachin, it thrives particularly well in Chin State as it requires no special fertiliser treatment to grow successfully. Chin State was once the major producer of konjac in Myanmar.

In addition, elephant foot yam (konjac) production can be highly profitable and become a cash crop for local people, and it also generates foreign revenue. In the 2016–2017 fiscal year, konjac exports earned over US$2.5 million. By 2016–2017, many households in the village had cultivated the crop on 2 to 3 acres of land, earning up to US$5,000 per acre at harvest. Konjac is a long-duration crop and can be harvested at various stages of development, from as early as 6–7 months to as late as 4 years. As a consequence, village producers have seen improvements to their farm revenue and standard of living. There is now a rising tendency among upland rice farmers to switch from cultivating rice to growing konjac. It has been an agrarian change for them.

Exporting wet, raw yams does not generate a high price. However, value-added products, such as dried or powdered yams, can provide significantly higher profits. In 2020, the Chin Hill Treasure Company established a konjac yam drying factory, processing 12–15 tons of raw yams per day. The company had planned to produce yam powder in its second or third year and to develop other value-added food products in subsequent years. However, following the 2021 military coup, the factory has become inactive.

Environmental Benefits from Konjac Yam Plantation

The yams not only raised the socio-economic standard, it is also helpful to the environment. Its large underground corm and broad leaves help protect the soil surface, reducing erosion on slopes, especially important in mountainous regions like Chin State. And it reduces water requirements. Drip irrigation combined with konjac cultivation has been shown to maximise water productivity. The Central Tuber Crops Research Institute from India did research over a 5-year period on konjac and improved the water-holding capacity by 28.4% and the porosity of soil by 16.5%.

The leaf litter decomposes easily, contributing to organic matter and improving soil fertility over time and really good for intercropping short term vegetation such as legumes. Thereafter, konjac is naturally shade-tolerant, and it can be grown under existing tree canopies. This encourages farmers to retain existing trees on their land, contributing to agroforestry systems and biodiversity that enhance environmental sustainability.

Some konjac farming systems leave residues or corms in the soil for years, especially when growing seed yams. These residues slowly decompose, contributing to long-term carbon storage in soil. Elephant foot yam thrives without chemical fertilisers or pesticides, making it a low-input, environmentally friendly crop. This reduces the risk of soil degradation, pollution, and dependency on external agricultural inputs.

Story by A local konjac farmer

Southern Chin State experienced the benefits of konjac yam cultivation before the coup. However, the community also faced the negative consequences of the civil war, as the price of yam plummeted from around 3.3 USD per viss to just 0.1 USD due to ongoing clashes between military troops and local Chin defence forces. However, the region came under the control of ethnic armed groups last year, and the price of konjac has increased slightly.

A local Konjac farmer from Kan Pet Let, Mr. Htang Bu, shared his experience with yam cultivation and market changes. “The price of yam is a little bit higher this year. In previous years, the price of wet yam dropped to around 500 MMK per viss, but it has now risen to approximately 1,200 MMK” said Mr. Htang Bu.

According to Mr. Htang Bu, it is found out that the price of yam is a little bit higher this year, from around 0.1 USD per viss to 0.26 USD. Before COVID-19, wet yam was around 1.6 USD and dried yam ranged from 12.5 to 13 USD per viss. The price of seed yam varied based on their size, 3 to 6 USD. The dry yam had dropped to 1 USD, the lowest price from 12.5 to 13 USD. Now the price has increased a bit to around 2 USD.

He explained, “After the coup, we experienced frequent clashes, and it became difficult to sell yam. As a result, many people returned to shifting cultivation, growing corn and rice to feed themselves. Some still continue to cultivate yam and store it by sun-drying, hoping to sell it when the road opens up from clashes. Fortunately, the price increased a little last year. I still don’t know the price for this year because people usually harvest and sell yam from November to March, before the rainy season begins. On average, an acre produces around 300–500 viss of yam.”

He continued by explaining the taxation system of the local revolutionary forces: “By collaborating with the revolutionary forces and local administrative groups, they collect a tax of 30 and 100 MMK (around 0.01 and 0.02 USD) per viss of wet and dry yam from yam sellers and 1,000 MMK (around 0.2 USD) per sack from car drivers or collectors. This money is used to repair and maintain the roads. Because of the current situation, purchasers from Mandalay cannot come to the area; instead, they connect with local collectors and buy the yams through truck shipments. The exact amount of tax depends on the organisation. Some armed groups take 10% of the selling price as tax, while certain checkpoints from revolutionary forces charge around 6.7 USD per truck.” From his account, it is obvious that konjac farmers have been severely affected by the civil war.

Sustainability Sector Degradation

Although the current yam price appears slightly higher, it has still significantly declined compared to the years before COVID-19. In terms of Myanmar currency value, the Myanmar Kyat has lost over 50% its pre-COVID worth. Despite this sharp inflation, the price of yam remains far below its pre-COVID level. As a result, local people continue to struggle to cover their daily expenses, and their income from yam cultivation remains insufficient to match the rising cost of living.

It is evident that, after the 2010 transition, the level of sustainability improves when people have a stable income from elephant foot yam and no longer rely on shifting cultivation. This shift contributed to improved social-economic status for local communities and strengthened environmental sustainability in the region. However, following the 2021 military coup, the yam market declined, local socio-economic conditions deteriorated, and many households returned to shifting cultivation of corn and upland rice, leading to deforestation and a significant decline in sustainability.

To conclude, while the konjac business is one of the proper business ways out for Chin state due to its lack of natural resources and landlocked geographic location, local administration and ethnic revolutionary forces should not use taxes only for road maintenance or military purposes. They should seek solutions that add value to raw yam, such as establishing processing facilities or machinery within safer areas from air strikes. As the civil war is likely to continue for the long term, it is essential to develop sustainable income opportunities for local communities. By supporting these initiatives, local authorities could enhance local sustainability and improve livelihoods in Chinland, a landlocked and economically vulnerable region amid the political crisis.

Hnin Eaindra Khine is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). She is also currently interning at RecyGlo Myanmar, where she supports various environmental sustainability projects.

“Advocating Sustainability, Shaping Our Future”

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Since Myanmar’s 2021 military coup, civil society organisations working on environmental and climate issues have faced mounting restrictions, limiting their access to international climate finance and their ability to support local resilience efforts.

In this article, I discuss the major limitations, in terms of political, financial, institutional, and operational aspects, that local actors face in accessing climate finance in this challenging setting.

Key Takeaways:

1. Local civil society organisations in Myanmar experience political, financial, and institutional barriers, and difficulty in benefiting from international climate funds as a result of the 2021 military coup.

2. Banking transfers, sanctions, and donor hesitation have created a localisation gap, leaving communities without the resources they need to adapt to climate change and build resilience.

3. To build sustainable and climate resilience, climate finance must transition from centralised, state-oriented models to flexible, locally-oriented systems that empower civil society organisations.

What is climate finance?

Climate finance refers to local, national, or transnational financing obtained from public, private, and alternative sources of financing. These funds are aimed at supporting climate change mitigation and adaptation efforts for vulnerable communities. Simply, it means that all financial flows are for building community resilience, protecting ecosystems, reducing greenhouse gas emissions, and preparing societies for the unavoidable impacts of climate change.

Myanmar, one of the world’s vulnerable countries to climate change, is currently facing political instability. The 2021 military coup not only led to a humanitarian crisis but also impacted climate action. The country consistently ranked among the top 10 countries that are most affected by extreme weather over the last two decades. Moreover, its low-lying Ayeyarwady Delta is seriously threatened by the rise of sea level, while the central Dry Zone experiences droughts and food insecurity.

According to the 2023 OECD report, the prosperous nations have promised to provide USD 100 billion per year in climate finance for developing countries. However, access to funds remains uneven. For example, in 2022, only about 10% of the total climate finance went to low-income countries. Myanmar received USD 3.5billion of the climate-related development finance between 2015 and 2021. Climate finance is indeed essential for developing countries like Myanmar to promote long-term development and environmental sustainability.

Normally, the distribution of climate finance, particularly for adaptation, has been through local civil society organisations (CSOs). These organisations have specific knowledge, community trust, and access to large international associations. Thus, they are a critical delivery mechanism for climate finance, ensuring these funds go toward localised resilience.

However, local civil society organisations that are the responders to humanitarian and environmental crises now face challenges to secure climate finance due to systemic barriers. The 2021 military coup has created limitations and restrictions for this process, leading to obtain financing from difficult to impossible. As a result of the post-coup political instability, multilateral climate funds such as the Green Climate Fund (GCF) and Global Environment Facility (GEF) are unable to transfer funding through traditional pathways. Thus, local CSOs that are working with ethnic minorities or displaced populations struggle with rising climate disasters, with limited financial access.

Furthermore, armed conflict and forced displacement are intertwined with worsening environmental deterioration. Following the 2021 military coup, there are changes in donor strategies, banking constraints, and security concerns, as well as alterations in how donations can flow, where they can be spent, and who is eligible.

Barriers to Climate Finance in Myanmar after the 2021 coup

1. Political and Legal Barrier

Large-scale climate financing is aimed to be nationally determined, which means funds from donors such as the GCF and GEF go through a country’s government ministry, National Designated Authority (NDA). This primary channel is closed as donors do not want to work with the junta to distribute climate funds. On the other hand, the State Administrative Council (SAC) has secured laws and mechanisms for NGOs and CSOs following the coup.

Tin Shine Aung, Consulting Director of the Shwetaungthagathu Reform Initiative Centre (SRIc), who worked for a UN agency in Myanmar under a GEF-funded project during the 2021 military coup, explained:

“A few months after the coup, the military government began demanding financial disclosures through the Myanmar Foreign Trade Bank (MFTB), the main channel for UN agencies to receive funds from their parent organisations. They even asked UN offices to submit detailed breakdowns of all financial transfers, including individual staff salaries and project expenditures. These demands violated UN labour practices and severely limited operational transparency.”

SAC implementation and restrictions lead to challenges for CSOs and UN agency operations to receive climate finance and to function effectively in Myanmar. Additionally, many groups face the risk of arrest, freezing bank accounts, or suspension if they manage independently. If a local CSO wants to seek a climate grant, it requires registration with the junta. CSOs operating in resistance areas are technically illegal organisations, and thus cannot apply for any formal, verified funding stream.

Financial barriers such as banking, sanctions, and transfers

Another significant factor is the financial barrier, which includes banking, sanctions, and transfers. In 2023, the Financial Action Task Force (FATF), the global anti-money laundering (AML) watchdog, named Myanmar to its blacklist. This results in forcing the international banks to apply enhanced due diligence, as they refuse to process any transactions connected to Myanmar due to non-compliance fines.

Furthermore, an international bank finds it difficult to transfer payments to a Myanmar bank account, even if the source is a recognised humanitarian organisation and the recipient is a registered local CSO. The risk of funds being interrupted or breaking AML/CTF (Counter-Terrorism Financing) regulations is too high. Thus, it has blocked all formal transactions, which are the lifeblood of international grants. The collapse of domestic banking is also contributing as a financial barrier. The junta limits cash withdrawal, and the value of the currency, the Kyat, has fallen dramatically.

2. Institutional and Capacity Barriers

Most local civil society groups (CSOs) face significant problems that extend beyond political and financial barriers, including a lack of institutional competence that international donors demand. These obstacles include poor governance and financial management institutions, insufficient technical expertise to develop the project in accordance with frameworks such as the Green Climate Fund’s logic models, insufficient experience in managing climate change concepts, measurements, and proposals, and a lack of specific monitoring and evaluation frameworks.

3. Risk, Security, and Operating Environment

Civil society organisations (CSOs) that are working in conflict zones face significant challenges. These include disrupted logistics, staff displacement, and changes in territorial control. Travel restrictions and military checkpoints also make community engagement risky, while the destruction of essential infrastructure makes project delivery difficult. Additionally, donors often perceive Myanmar as a high-risk environment, resulting in shorter project cycles, stricter oversight, or even the complete withdrawal of support. According to Refugees International (2022), humanitarian and climate initiatives along the Thailand-Myanmar border encounter difficulties related to both access and legal uncertainty. These factors create a situation where local CSOs struggle to maintain continuity in climate adaptation projects, which rely on multi-year investments and building trust within communities.

Consequences of the obstacles on climate resilience

The combined effect of these obstacles leads to a localisation gap, indicating that the majority of international climate funding fails to reach the community level in Myanmar. This not only undermines local resilience but also reduces the overall effectiveness of global investments in climate initiatives. When local civil society organisations (CSOs) are neglected, interventions tend to be imposed from outside and tend to be less enduring. This causes communities to lose ownership, trust, and relevance to their context—essential factors for effective adaptation. Since Myanmar’s rural inhabitants depend significantly on natural resources, it is crucial to improve local CSOs’ access to funding to safeguard both livelihoods and ecosystems.

Conclusion

The ongoing political crisis in Myanmar also represents an environmental crisis. Since 2021, the gap between climate vulnerability and access to financial resources has widened significantly. Local civil society organisations (CSOs), which are closest to the communities affected by these issues, face exclusion from formal climate finance due to political repression, financial barriers, and institutional weaknesses.

To address this divide, we need to rethink the climate finance structure by transitioning from centralised, state-led systems to flexible, locally grounded mechanisms. For example, in the Myanmar case, ethnic minority communities and conflict-affected areas are left behind because of its current political instability, and traditional national channels for climate finance are inaccessible. Therefore, innovative approaches such as cross-border climate financing or area-based support models are required for operating outside of military government control. These alternative ways have been discussed in humanitarian and development contexts to guarantee aid reaches conflict-affected areas when state systems are compromised.

If climate finance continues to prioritise bureaucracy over authentic human and environmental security, commitments to international agreements like the Paris Accord will ultimately fall short for the people of Myanmar. In short, empowering Myanmar’s civil society to access and manage climate finance is crucial not only for fostering inclusion but also for building genuine and lasting climate resilience in one of the world’s most vulnerable nations.

Pyae Phyoe Mon is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc) and an M.A. Candidate in Social Sciences at the Faculty of Social Sciences, Chiang Mai University, Thailand.

“Advocating Sustainability, Shaping Our Future”

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Myanmar exemplifies the structural challenges for Environmental, Social, and Governance (ESG) implementation in a country long characterised by crony capitalism, underscoring the importance of responsible investment.

Key Takeaways

1. Military-linked enterprises control virtual industries in Myanmar, resulting in expenses to local communities and the environment.

2. Local businesses frequently misunderstand ESG adoption. Foreign investors risk entanglement with cronies, and reporting tends to be superficial or “ESG-washing.”

3. Political realities such as sanctions, trade shocks, and reliance on questionable partners complicate responsible investment, transparency, accountability, and block ESG efforts.

Crony capitalism is an economic system in which a business’s success is heavily dependent on the close relationships between business owners and government officials. They receive profits and advantages such as government grants, tax breaks, or permits based on political connections rather than market competition. Wealth and opportunities are concentrated in the hands of the elite, leading to a monopolized and uneven playing field. Furthermore, crony capitalism grows in fragile states where the institutions are weak, the rule of law is ineffective, and no accountability. It is particularly harmful in fragile contexts as it worsens existing problems in governance and economic stability.

Global investors, on the other hand, employ Environmental, Social, and Governance (ESG) frameworks to analyze ethical business behavior and accountable practices that contribute to a sustainable society. Over the last decade, the global investment community has adopted ESG principles as a new model for responsible capitalism. The framework promises to guide investments toward firms that are sustainable, ethical, and well-governed, resulting in a reciprocal cycle of profit and progress. In an era when ESG principles are increasingly being pushed as the standard for responsible investment, implementing them in fragile states is a significant challenge.

Myanmar, particularly after the 2021 military coup, presents a case study of significant tension between crony capitalism and ESG principles as a fragile state. Military-linked cronies long dominated Myanmar’s economy with cycles of authoritarianism and fragile democratization. It also demonstrates how crony capitalism can hinder ESG adoption by perpetuating opaque and corrupt practices.

Furthermore, a recent report from the Myanmar Centre for Responsible Business (MCRB), namely the Pwint Thit Sa (TiME) report 2024, highlights how Myanmar enterprises are evaluated for sustainability and transparency. It also exposes improvements and significant gaps in corporate transparency. Misunderstandings of ESG within local companies, the reality that many businesses must interact with “un-authentic partners” such as cronied banks, and increased US tariffs on Myanmar exports all limit ESG implementation in practice.

Myanmar’s Political Economy and Crony Networks

Myanmar’s crony capitalism is not a recent phenomenon. For more than 50 years, the military, often referred to as the Tatmadaw, has been systematically involved in every profitable sector of the economy. At the center of Myanmar’s crony capitalism are two military-owned companies: Myanma Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC). These are led by active and retired military personnel. In March 2021, the U.S. Treasury Department designated both corporations as sanctioned entities due to their involvement with the military regime. According to that department, MEHL alone oversees industries such as banking, mining, consumer products, food and beverage, tobacco, logistics, and others. Their revenues are diverted to military budgets and paid out as dividends to military personnel. On the other hand, MEC controls numerous subsidiaries in vital areas, including its own bank (Innwa Bank) and assets in telecommunications and manufacturing.

Extractive Industries and Local Impact

The jade, gem, and hydropower industries are well-known for causing environmental damage, corruption, and conflict. For example, in Kachin State, toxic rare earth mining has had a significant impact on forests and streams. Moreover, gold mining in Sagaing Region and Banmauk has been connected to mercury and arsenic pollution.

Corporations with military links and crony companies dominate these extractive sectors. All the profits go to the elites while local communities suffer the environmental costs. From an ESG perspective, it illustrates how crony capitalism undermines ecological and social accountability. Furthermore, these industries address the urgent need for stronger environmental safeguards, transparent governance, and community consultation in Myanmar. Companies working in these areas make little to no disclosures, highlighting the gap between ESG principles and ground realities.

ESG in Myanmar: Genuine Change or “ESG-Washing”?

During Myanmar’s political transition from 2011 to 2021, many foreign companies entered the market with a commitment to ESG. They built schools, funded health projects, and published corporate social responsibility reports. Although local communities benefit from some projects, the companies failed to address the structural corruption inherent in the crony system. They often have no choice but to partner with military-linked enterprises to gain market access. By paying taxes, fees, and land-use payments to the government and economic system controlled by the military regime, these investments provided legitimacy and financial resources to the institutions responsible for systemic human rights abuses.

Additionally, local enterprises often misinterpret ESG initiatives in Myanmar. Many communities view corporate ESG activities as traditional charity work or philanthropic endeavors, instead of a broader corporate framework for accountability, transparency, and sustainable governance. This misconception results in a practice known as “ESG-washing.” It also often allows companies to promote their image of social responsibility rather than addressing deeper, more fundamental ethical and structural issues.

ESG challenges in Myanmar

Pwint Thit Sa 2024 Report assessed 254 companies on sustainability and corporate disclosure. Notable performers include UAB Bank, FMI, and MAHA. Although disclosure has improved, the data presented were from company websites and reports, without third-party verified ESG assessments. Additionally, not all companies adhere to internationally recognized reporting standards, such as the Global Reporting Initiative (GRI). Moreover, local enterprises often misunderstand ESG principles (implications for systemic governance, environmental protection, and human rights) as mere philanthropy initiatives.

In August 2022, Vicky Bowman, the former UK Ambassador to Myanmar and Director of the Myanmar Centre for Responsible Business (MCRB), was detained by the junta. It was a significant concern for Myanmar’s responsible business environment. Many people believed that her arrest was politically motivated, which harmed efforts to promote responsible business practices and corporate accountability in the country.

Following these events, MRCB announced its wind-down at the end of 2024, which was a significant loss for Myanmar’s ESG ecosystem. The closure of this key institution leaves a void in corporate transparency advocacy, creating challenging efforts to align Myanmar’s private sector with global ESG standards.

In addition to this, a lack of trustworthy alternatives forces many businesses to collaborate with “un-authentic partners,” particularly banks with powerful cronies. As a result, regulatory enforcement is weak, allowing companies to produce inaccurate data. Furthermore, watchdogs such as Inclusive Development International revealed that billions of dollars in ESG-labeled investments have unintentionally financed companies associated with the junta. In this way, foreign investors may unintentionally become entangled in these problematic networks, undermining ESG compliance.

An additional challenge is the recent U.S. Tariffs on the garment industry, employing ~500,000–800,000 workers, primarily young women. After President Trump’s inauguration for the second term, the U.S. imposed a 40–44% tariff on Myanmar’s garment, shoe, and bag exports. As a result, factories like the Samsonite bag plant in Yangon closed, orders have dropped, and workers face layoffs. While tariffs align with sanctions, they also raise concerns about collateral damage to labor rights and the implementation of ESG principles in the garment supply chain.

Conclusion

Environmental, social, and governance (ESG) considerations cannot be a solitary exercise, separated from the political reality in fragile states like Myanmar. A corrupt military system has long dominated the country. Unless addressing the root causes of oppression, global efforts for ESG compliance and long-standing crony capitalism would conflict. Although we can see some improvement in corporate transparency based on the Pwint Thit Sa 2024 report, international trade shocks constrain broader adoption, forcing reliance on compromised partners and perpetuating misconceptions about ESG. However, if ESG is localized and strengthened by supply chain pressures, sanctions, and civil society advocacy, it can be a tool for accountability. In conclusion, ESG is not a solution in Myanmar. Still, it can help mitigate crony dominance, increase transparency and accountability, and encourage companies to adopt more ethical and sustainable business practices.

Pyae Phyoe Mon is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc) and an M.A. Candidate in Social Sciences at the Faculty of Social Sciences, Chiang Mai University, Thailand.

“Advocating Sustainability, Shaping Our Future”

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In Myanmar, corporate social responsibility (CSR) plays a complex role by balancing community development, ethical business practices, and the challenges posed by political instability and cronyism.

Key Takeaways

1. CSR in Myanmar has shifted from philanthropic to more strategic, internationally aligned practices, but the 2021 military coup disrupted its progress.

2. Multinational enterprises face ethical challenges, focusing on community resilience and a ‘do no harm’ approach, while domestic crony firms use CSR as a PR tool to legitimise their operations.

3. Today, impactful CSR is measured by local communities’ benefits and contributions to long-term stability.

Corporate social responsibility (CSR) is a responsibility of businesses to take up accountability for their impacts on society, a social responsibility to themselves, their stakeholders, and the general public. It also means companies' commitment to work in a socially, environmentally, and ethically responsible way while contributing to sustainable development. Indeed, CSR is an active force in community development as its activities are focused on enhancing the quality of society's life. The CSR initiatives cover education, infrastructure, healthcare, and skills development.

Given the country's socio-political and economic context, CSR in Myanmar is relatively new compared to international standards. Under decades of military rule, isolation, and international sanctions, CSR in Myanmar was neither encouraged nor institutionalised. Myanmar folk philanthropy is traditionally based on the ideas of Buddhism, according to which gift-giving is interpreted as a way to gain merit and ensure a fortunate reincarnation. Myanmar people tend to think that rich people have somehow done something good in their past lives, which earned them the current wealth, and that they need to do the same to achieve a good status in their next life. While businesses frequently participate in philanthropic contributions to monasteries or other religious initiatives, these actions are often disconnected from formal community development or sustainability efforts. Moreover, both crony business people and military elites have been known to manipulate these religious principles to justify and legitimize their wealth and activities, portraying themselves as responsible and benevolent actors while engaging in practices that can harm society and the environment.

CSR Landscape in Myanmar

Before 2011, businesses in Myanmar were often dominated by state-owned enterprises and crony companies that were closely linked to the military regime. At that time, corporate social responsibility existed as philanthropy driven by the religious community or a desire for social standing rather than a strategic commitment to responsible business practices. This checkbook approach, which provides tangible benefits such as building pagodas or schools, lacked the modern CSR's structured, long-term focus characteristic. In Myanmar, these charitable works tended to be directed towards the idea of prhitt (parahita). This word is based on Pali: para means “other”, and hita means welfare or benefit. In this way, parahita means the actions undertaken for the welfare of others, without expectation of return. The concept is culturally and religiously entrenched among the Myanmar people, particularly among Theravada Buddhism—many Burmese regard such voluntary activities as more authentic and moral.

Later, Myanmar’s dual transition from state socialism to capitalism and dictatorship to democracy in 2011 experienced changes in the country’s political economy. This transformation encouraged foreign investment and the implementation of Corporate Social Responsibility (CSR) practices, which were critical in defining the country's socioeconomic landscape. With Myanmar becoming a part of the global economy, CSR has become the center of attention among businesses looking to align with international standards and positively contribute to society.

The Myanmar Centre of Responsible Business (MCRB) followed the definition of CSR implemented by the European Union in 2011, emphasizing companies' responsibility regarding the impact on society. The emergence of extractive industries, development projects, and special economic zones highlights the need for CSR practices to address land rights, environmental protection, labour standards, and community engagement.

One of the key assets is the report by MCRB, entitled Pwint Thit Sa ( Transparency in Myanmar Enterprises, TiME ), in which the researchers evaluate the transparency and corporate governance of the largest corporations of Myanmar. In its 2022 release of 271 companies, including 31 banks, 71 criteria were assessed based on the ASEAN Corporate Governance Scorecard (ACGS) and the Integrated Reporting Framework. The report showed that the average disclosure score was 8%, slightly better than the previous year’s 7%. It is noted that City Mart Holdings Limited, UAB Bank, and FMI (First Myanmar Investment) were identified as best performers, especially in corporate governance and sustainability reporting. These results underscore the increasing significance of transparency and CSR in the Myanmar business environment, particularly in the context of corruption and weak enforcement of regulations.

Furthermore, CSR is essential for multinational enterprises (MNEs) to maintain their reputation and social license to operate in host countries. Operating in a country with a history of human rights abuses and land conflicts brings evaluation from international investors, stakeholders, and civil society organizations. Thus, transparency and responsible corporate practices are crucial in reducing reputational risk. On the other hand, even though the domestic firms adopt international standards, many still view CSR through the lens of philanthropy in Myanmar.

CSR Practice: The Challenges Faced by Multinational Enterprises After the 2021 Military Coup

The 2021 military coup brings a new era of instability, affecting CSR and the community development context. The pre-coup CSR framework provided legal, environmental, and social impact assessment basics. It is difficult for companies to operate responsibly and for communities to seek justice.

The coup has also created an ethical dilemma for foreign companies. Many face pressure from human rights organisations and their home governments to withdraw their businesses from Myanmar. The reason is that their presence can be seen as legitimising the military regime and its actions. This has resulted in several high-profile withdrawals, including those by Chevron and TotalEnergies.

The challenge for remaining companies is navigating the uncertain environment while committing to human rights and community well-being. This requires a shift in focus from traditional CSR projects to more direct support for civil society, humanitarian aid, and initiatives that empower local communities, without providing resources to the military.

The current CSR framework is founded more on human rights and local resilience. Instead of large-scale infrastructure projects, businesses focus on small initiatives for local communities, providing local livelihoods to vulnerable populations. This "do not harm" approach is more critical than ever, as corporations must guarantee their operations do not directly or indirectly contribute to human rights violations or escalate violence.

CSR Practice: Crony Firms in Myanmar Today

Crony firms in Myanmar are businesses that have achieved success while maintaining close ties to the military government via corrupt partnerships. In Myanmar's "crony context," Corporate Social Responsibility (CSR) has a different meaning than its global definition. Instead of being a genuine commitment to ethical business practices and social good, crony firms often use CSR as a strategic tool to legitimise their operations and protect their political interests.

Crony companies use CSR as a way of public relations by providing funds for schools, clinics, monasteries, and disaster relief initiatives. They invest in high-profile philanthropy to build their brand image and distract from unethical or illegal activities, such as environmental destruction. Their CSR programs often align with the UN Sustainable Development Goals, particularly with health (SDG 3), education (SDG 4), clean water (SDG 6), and decent work (SDG 8). However, they neglect peace, justice, and strong institutions (SDG 16) or fail to deal with fundamental structural issues.

CSR in this crony context can also be seen as a public relations tool for their image and reputation. Engaging in community development and humanitarian initiatives, they seem like responsible corporate citizens, making building relations with international investors easier. This kind of act not only legitimizes their businesses but also helps them to enter the global economy. The fund for CSR programs is a relatively small investment compared to their profits from monopolistic positions. Furthermore, CSR practices frequently lack Monitoring and Evaluation (M&E) frameworks and transparent reporting systems. This absence makes it challenging to assess the actual social impact of these programs. In short, CSR in the Myanmar crony context is only for the interests of the elite group, not the general public. This practice also reflects a system deeply rooted in corruption and inequality.

Conclusion

Today, corporate social responsibility in Myanmar is a complex challenge defined by its historical background and precarious socio-political setting. The transition of an outdated, philanthropic, checkbook-style approach to a more strategic, internationally aligned one was prematurely stopped by the military coup in 2021.

The views of the major stakeholders portray a complicated reality. Although some companies care about communities, their actions are not usually taken seriously by the local people, who have a history of distrust towards companies and their claims. On the other hand, domestic crony firms have been using CSR as a PR instrument to justify their operations. Civil society organisations, important intermediaries, are facing a threat to put effort into delivering aid to people in need without strengthening the military regime.

Apparently, CSR in Myanmar is currently not as much about development on a large scale. It is about navigating ethical challenges and ensuring that corporate practices do not contribute to the deterioration of existing conflicts. Its success will be measured by how it truly serves local communities' interests and helps create long-term stability in a country with critical issues.

Pyae Phyoe Mon is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc) and an M.A. Candidate in Social Sciences at the Faculty of Social Sciences, Chiang Mai University, Thailand.

“Advocating Sustainability, Shaping Our Future”

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Since the 2021 military coup, Myanmar has been facing constant political instability, exacerbating a polycrisis in its environment, economy, and society. Wars, mass displacement, and livelihood hardship led to an involuntary reality, which is referred to as “degrowth.” The term “degrowth” is typically associated with purposeful initiatives towards economic downscaling for ecological and social reasons.

Key Takeaways

1. Involuntary Degrowth: In Myanmar, degrowth occurs not by choice but due to ongoing polycrisis..

2. Local Resilience: Communities use self-resilience, informal social safety nets, and small-scale projects with limited resources to cope and ensure survival.

3. Systemic Support: A long-term recovery strategy is essential to rebuild the structural frameworks and create economic opportunities.

What is Degrowth?

Degrowth is a socio-economic movement and theoretical framework that means intentional downscaling of production and consumption to emphasize ecological sustainability and human well-being. It criticises the goal of infinite growth as unsustainable and intimately related to environmental deterioration and social inequity.

Economic growth brings benefits like poverty reduction and improved living standards; however, without integrating sustainability, it leads to serious consequences such as resource depletion, pollution, climate change, and biodiversity loss—threatening both ecosystems and human health. It also leads to social injustice by disproportionately affecting vulnerable groups. Thus, the degrowth movement criticises growth without limits as unsustainable and demands prioritising ecological balance and well-being. The value of degrowth encompasses sufficiency, care, and community, independent of an emphasis on GDP (Gross Domestic Product) and material consumption.

Additionally, the degrowth is rooted in ecological economics. It promotes a societal shift where social justice, quality of life, and environmental health are valued more highly than material wealth. Nonetheless, degrowth is typically presented as a voluntary, policy-focused strategy that wealthy and stable societies adopt.

Degrowth Theory vs Polycrisis in Myanmar

Myanmar has faced a series of interconnected polycrises since 2021. Myanmar’s economy is declining from its previous status as an emerging market with growing industries and a youthful population. According to the theoretical approach, degrowth is associated with the intentional economic downscaling for environmental and social safety. However, the current economic reduction in Myanmar is mainly involuntary due to its political instability and structural collapse.

The crisis-induced degrowth in Myanmar has resulted in adverse economic outcomes. The continuous political instability has impacted trade and logistics, resulting in a sharp drop, with exports falling by 13% and imports falling by 20% during the six months from October 2023 to March 2024. Also, Myanmar’s GDP dropped by 9% from 2020 to 2024, showing an economic downturn.

The currency also fell from 1,330 kyat per USD in 2021 to 4,520 kyat in 2025, increasing import costs and domestic prices, while inflation increased sharply to 25.4% in 2024. The Financial Action Task Force (FATF) also blacklisted Myanmar for anti-money laundering efforts, advancing the crisis and shutting the country off from international financial systems.

Half of the population now lives below the poverty line, and the need for basic necessities and financial security is widespread in many areas. As a result of continuous political instability, economic backwardness, high inflation, and the current conscription law, many people and families have been displaced and forced to relocate both locally and abroad. When skilled workers are lost due to migration, the local human resource is weakened, productivity suffers, and the potential for economic growth is limited. Therefore, communities left behind may face difficulties escaping poverty and building sustainable households.

As the legal economy of Myanmar continues falling apart, the illegal economy has grown a lot. Trafficking, drug production, and unregulated markets are spreading across the country, and now it is the world's biggest producer of heroin and opium. The crimes, such as illegal gambling, human trafficking, and scams, have increased due to the lack of proficient policies and easy border crossings. The rise in illegal activities made the country’s socioeconomic crisis worse, which has made things more complicated for local communities.

Local Resilience: Community Strategies and Innovation

Even though the economic and social systems break down in this polycrisis, local communities are trying to be resilient as a means of adaptation. Some forms of resilience strategies include community-driven coping mechanisms and organized resilience initiatives.

1. Community-Driven Coping Mechanisms

Community-driven coping strategies, including self-resilience, livelihood diversification, and social safety nets, are now crucial for rural communities, which are dealing with social and economic challenges in Myanmar.

1.1 Self-Resilience

Many households have adopted self-reliant ways to survive, as it is hard to receive reliable government help. Their ways of surviving include relocating for employment, selling household properties for money, engaging in traditional farming to meet basic food needs, and implementing food coping methods such as skipping meals or eating less nutritious food. These strategies show how communities in Myanmar are vulnerable and resilient to long-term stressful situations.

1.2 Livelihood Diversification

Livelihood diversification became essential for local resilience as the rural population increasingly relies on small-scale businesses, agriculture, and informal labor markets to replace income lost from industrial and urban jobs. These tactics not only help households meet their everyday needs but also create a safety net against uncertain future situations.

1.3 Social Safety Nets

Informal social safety nets have emerged or grown in response to institutional gaps. Religious communities, diaspora networks, and community-based organizations provide material and emotional support to families that must maintain social cohesiveness and a basic living level. These grassroots initiatives show the importance of local collaboration in developing community resilience during crises.

2. Organized Resilience Initiatives

Organized resilience is crucial in helping vulnerable communities recover from current crises and build long-term sustainability. Community recovery projects and women empowerment programs are examples of organized resilience initiatives.

2.1 Community Recovery Projects

Community recovery projects such as UNDP's ENCORE program have been initiated to restore local livelihoods, improve essential infrastructure, promote social cohesion, and prepare for future shocks in highly affected cities. These strategies address actual needs and pave the way for long-term resilience.

2.2 Women Empowerment

Women's empowerment is one of the key initiatives to help and recover from crises by supporting women-led businesses. These projects help women sustain their livelihoods, contribute to household income, and build community resilience by providing financial, training, and technical assistance. By investing in women, these efforts promote the social fabric, boost local economies, and improve food security. Indeed, all these initiatives contribute to short-term resilience and inclusive and sustainable development during and after crises.

Challenges to Sustainable Resilience

While local efforts show strong determination and adaptability, they often face serious challenges such as a lack of funding, ongoing conflict, displacement, and climate disasters. In many areas, these community initiatives can only partly ease the broader economic decline and are still at risk from external pressures. Poor governance, limited support from authorities, and unforeseen challenges continue to threaten their progress. Even though these efforts help communities survive and thrive, they are still weak without a long-term recovery plan and better coordination. Therefore, stronger international humanitarian support is needed to run these local efforts more effectively and lastingly.

Conclusion: Survival is not a strategy

Degrowth has not been a choice in Myanmar’s crisis economy. However, it was shaped by a complex reality during a polycrisis, such as conflict, rising poverty, and the disintegration of daily life. Many communities in Myanmar have adopted their own ways to address these challenges as they are dealing with the shift in social and economic systems. Many households remain stuck in cycles of debt, food insecurity, and uncertainty. Without proper support, both from within the country and internationally, these coping strategies may not be enough to sustain people in the long term. More efforts are needed to improve essential services and create economic opportunities. Local resilience can serve as a foundation, but must be accompanied by a long-term commitment to rebuilding the systems and structures upon which people rely.

Pyae Phyoe Mon is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc) and an M.A. Candidate in Social Sciences at the Faculty of Social Sciences, Chiang Mai University, Thailand.

“Advocating Sustainability, Shaping Our Future”

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The reinvocation of ILO Article 33 in May 2025, while potentially delivering a significant blow to Myanmar’s military junta, has also raised serious concerns about further destabilizing the country's already fragile economy amid its ongoing polycrisis.

Key Takeaways:

1. Myanmar is the first country ever subjected to ILO Article 33 twice, reflecting global alarm over forced labour under military rule.

2. While Article 33 aims to increase pressure on the junta, it risks worsening Myanmar’s fragile economy and humanitarian crisis.

3. To avoid unintended harm, global actors must target military-linked businesses and support workers through responsible disengagement.

Myanmar and the ILO: The Historic First Invocation of Article 33

To understand the gravity of the ILO Article 33 decision, it is essential to revisit the historical context of the first invocation and its consequences. In 1997, the ILO established a Commission of Inquiry investigating Myanmar's systematic violation of the Forced Labour Convention 1930. The Commission's 1998 report revealed the widespread systematic use of forced labour imposed by the authorities for infrastructure, logging, and the use of civilians as porters. Women, children, and ethnic minorities were among the victims, subjected to harsh conditions under this forced labor system. In response, the ILO urged the Myanmar Military Government to enact legislative reform by May 1999 and abolish forced labour.

However, Myanmar failed to comply with the ILO's recommendations despite the existence of penal code section 374, which prohibits forced labour. This action led the ILO to invoke Article 33 for the first time in 2000. Under Article 33, the ILO called on member countries to review their relations with Myanmar and consider appropriate measures.

While most Western countries supported the decision to use Article 33, ASEAN, China, Russia, and India opposed it against Myanmar. These countries favored dialogue and advocated a cooperative approach instead due to their strategic interests and geopolitical relationships with Myanmar. This marked the first-ever use of this enforcement clause in ILO history, resulting in limited economic isolation, suspension of labour-led aid, reduced technical cooperation, and reputational damage that discouraged foreign investments.

In June 2013, the ILO lifted Article 33 measures against Myanmar following political reforms and legal changes implemented under a government led by former military generals. This helped attract foreign direct investment (FDI) until 2017 before the Rohingya humanitarian crisis, and supported Myanmar's greater reintegration into the global economy.

What is ILO Article 33?

ILO Article 33 is part of the International Labor Organization's (ILO) Constitution. It is the most serious enforcement tool and is only used when a member state fails to comply with ILO recommendations regarding complaints of serious violations of international labor standards - Article 26.
ILO Article 33 states that if a member country fails to follow the recommendations of a Commission of Inquiry (COI) or a decision made by the International Court of Justice (ICJ) within the given time, the ILO Governing Body can suggest to the leading conference what actions should be taken to ensure compliance. These actions are neither compulsory nor legally binding, but can impose various diplomatic pressure and economic restrictions on the violating country.

In contrast, the ILO 33 allows its member states to review and sever their relationship, suspend technical cooperation, and impose coordinated sanctions and restrictions. Although compliance is voluntary and follow-up depends on the political will of each member state, ILO Article 33 serves as a tool for collective pressure and international solidarity toward non-compliant countries.

The 2021 Coup and ILO actions

Following the 2021 military coup, the Myanmar military targeted trade unions and their associated members. These claims included the oppression of the freedom of association, rights to organise, and anti-union discrimination. Due to the rising concerns, the ILO takes various actions in response to Myanmar's worsening mass repression -

• In June 2021, the ILO adopted a resolution rejecting the junta's claims to represent the country at the 109^th Conference.

• In June 2022, the ILO established the 14^th ILO Commission of Inquiry (COI), the highest-level investigation body to examine Myanmar's non-compliance with freedom of association and forced labor conventions.

• In October 2023, the COI found far-reaching violations and urged the junta to immediately cease violence against its own people, end forced labour, and release imprisoned unionists.

• In 2024, 352 sessions of the ILO Governing Body concluded that the junta had made no progress and proceeded to enforce ILC resolutions and COI's recommendations.

• In June 2025, the ILO reinstated Article 33 on Myanmar at its 113^th International Labour Conference.

Military Regimes' feedback and actions

In November 1998, Myanmar responded to the Commission of Inquiry (COI) report by claiming that the information was politically motivated, highly biased, lacked objectivity, and was without any goodwill. On the other hand, the Myanmar Military Government formed a High-Level Coordination Committee and showed willingness to collaborate with the ILO.

For the second invocation of the ILO Article 33 on Myanmar again in 2025, the junta's labor minister similarly rejected the invocation of Article 33 against Myanmar as "politically motivated" in June 2025. Conversely, the National Unity Government (NUG) issued a statement welcoming the resolution on the same day it was invoked. NUG stated that this action would lead Myanmar to restore democracy.

When ILO Article 33 was first invoked against Myanmar, the ILO was allowed to visit Myanmar to meet with the Myanmar junta's ministers, various institutions, including the National League of Democracy (NLD), and many other agencies and organisations. This indicates that the Myanmar authorities at the time were more receptive to the ILO’s presence and actions than the current State Administrative Council (SAC) government.

Economic Implications of the Resolution

The ILO's 2000 Article 33 resolution placed significant global pressure on the Myanmar Military Regime and resulted in diplomatic isolation and reputation damage. Several countries and corporations reconsidered or suspended their engagement with Myanmar, and development assistance was also reduced. The Military Regime allowed the opening of an ILO Liaison Office in Yangon in 2002, and had limited cooperation.

Article 33 aims to protect and help workers by putting a powerful resolution in place that will put pressure on military authorities responsible for systemic labour abuses. At the same time, this invocation caused economic harm to ordinary workers, especially in export sectors like garments, when brands withdraw or suspend operations without differentiating between civilian and military‑affiliated businesses.

Myanmar's economy has already been fragile following the COVID-19 pandemic, the 2021 coup, and the 2025 Sagaing earthquakes, resulting in a contraction of 2.5 percent in real GDP. The reinstatement of Article 33 in 2025 is likely to bring renewed political and economic pressure and can hinder Myanmar's already vulnerable communities. Many western countries, Japan, the EU, etc., can coordinate the ILO article 33 invocation, while some countries may hesitate due to their strategic or economic interest. Global brands may withdraw from Myanmar's garment, agriculture, and mining sectors due to their reputation risks. Moreover, suspending technical cooperation and development aid would also lead to a humanitarian crisis for the grassroots people amid the ongoing polycrisis.

While the invocation aims to protect workers, it can backfire with severe unintended consequences to the workers it aimed to help. This harm is amplified because the Myanmar Military corporate empires and conglomerates (e.g., MEC, MEHL) systematically use complex webs of subsidiaries, shell companies, and obscured ownership structures to evade sanctions and continue accessing international markets and foreign exchange. These shadow networks make distinguishing between civilian and military linkage complicated for outsiders. Therefore, the disengagement by international brands should be driven by careful consideration so as not to cause collateral damage to ordinary workers.

Recommendations: Strategic Targeting of Military Ties to Maximise Impact

Article 33 does not mention or require sanctions and remains an option for the ILO members. However, there will surely be political isolation and economic sanctions followed by Western nations. Notably, they collaborate and coordinate to focus sanctions on military-related and their own conglomerates and high-level officials. Moreover, the countries should impose asset freezes, travel bans, and restrictions on the higher ranks, which will be more effective for Myanmar's democratic movements. As the financial sanctions will cause unintended harm to Myanmar civilians, careful measures should be preceded by prior actions. Moreover, the ILO should support livelihoods and economic activity in the SAC uncontrolled areas. Lastly, the ILO should establish monitoring mechanisms to protect workers' rights and adopt a labour dispute resolution system that applies to enterprises in international supply chains. This path requires precision, solidarity, and unwavering commitment to Myanmar's workers.

Conclusion

The 2025 invocation of ILO Article 33 marks a critical turning point in global accountability for Myanmar’s ongoing repression. Although the tool lacks legal enforceability, the solution includes a powerful combination of diplomatic, reputational, and economic leverage designed to isolate the military regime by freezing its access to resources, investment, and legitimacy.
To avoid unintended harm to civilians, global actors must target sanctions smartly, distinguish between military and private-sector actors, and support worker-led structures for further implementations by following the different Guidance and Recommendations (UNGPs, OECD, MNE Declaration by ILO, BHRRC, and JFM). When combined with solidarity and multilateral coordination, these steps can raise pressure on the junta while preserving livelihoods and safeguarding the people of Myanmar. ILO Article 33 is a double-edged condition for the Myanmar economy, which directly affects the livelihood condition of normal workers, with precise obligations and solidarity.

Aung Thet Paing Hmue is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc) with over two years of experience in the humanitarian sector. Currently residing in Thailand, he navigates cross-border challenges while building his professional future.

“Advocating Sustainability, Shaping Our Future”

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As Trump 2.0 intensifies his tariff war, Myanmar’s garment industry, already reeling from military rule and economic collapse, is emerging as one of the least expected but most vulnerable casualties.

Key Takeaways:

1. Myanmar’s garment industry, once a low-cost export hope, collapses under U.S. tariffs, compounded by political instability and global supply chain fragility.

2. The Trump administration’s 2025 tariff hikes, including a 44% import tax on Myanmar goods, devastate export competitiveness and accelerate job losses.

3. Over 80% of the industry’s workforce is women, and the trade shock is worsening gender inequality, forcing thousands into precarity or migration.

As President Donald Trump returns to power, his administration has intensified its tariff policy, particularly targeting China with steep increases on a wide range of imports.

However, the ripple effects of this protectionist approach extend far beyond Beijing. Once seen as a potential beneficiary of the U.S.-China trade, Myanmar now finds itself caught in the crossfire. Once a growing center for low-cost manufacturing, Myanmar’s garment industry, dependent on Chinese raw materials, western markets, and foreign investment, is struggling to survive.

This article explores the unfolding “tariff trap” that is dismantling Myanmar’s garment industry, examining its wide-reaching impact on trade, jobs, human rights, economic stability, and the long-term future of one of the country’s most vital sectors.

Historical Context: U.S.-China Tariffs and Ripple Effects on Myanmar

To understand Myanmar’s current crisis, it is essential to look at the escalating trade tensions between the United States and China. Since 2018, the U.S. has imposed increasingly aggressive tariffs on Chinese goods to reduce trade deficits and protect domestic industries. These deficits stem from factors such as China’s currency manipulation, integrated global supply chains, and strong U.S. consumer demand. Under President Trump’s renewed administration in 2025, these measures intensified. On April 2, 2025, he announced a sweeping new tariff plan: a blanket 10% tariff on all imports and a 34% hike on Chinese goods, bringing the total tariff burden on some Chinese imports to 54%. Specific tariffs surged even higher in the following weeks, reaching 145% on select items.

A major blow came with revoking the de minimis rule, which had previously allowed low-value imports to enter the U.S. duty-free. This affected fast fashion platforms reliant on low-cost Asian manufacturing, further straining global supply chains.

Although a temporary tariff truce was reached in May 2025, offering brief relief, the disruption to global trade had already taken its toll. Myanmar—deeply embedded in supply chains reliant on Chinese raw materials and Western consumer demand—has been among the most brutal hit.

Myanmar’s Garment Industry Under Pressure

By 2023, Myanmar's garment industry comprised over 800 factories, with about two-thirds owned by foreign investors, mainly Chinese, Japanese, Korean, and Thai firms. Chinese investors account for over 60% of total sectoral investment, operating over 300 Cut-Make-Pack (CMP) facilities. This foreign-led expansion has sustained industry amid prolonged political and economic turmoil.

In 2024, Myanmar exported $473.12 million worth of goods to the U.S., with garment and apparel products making up more than $343 million, over 72% of total exports. But on April 2, 2025, the United States imposed a sweeping 44% tariff on all imports from Myanmar.

Although the U.S. is not Myanmar’s largest trading partner, the tariff makes its exports less competitive and threatens already limited export earnings in key sectors like garments. Along with the EU's suspension of trade preferences and falling garment orders, this tariff has severely hurt the industry. Moreover, the sector's continued reliance on the CMP model, which limits local value addition and tax contributions, raises further concerns about its long-term sustainability.

The timing of this shock could not be worse. Myanmar’s economy struggled in 2024 with slow growth, high inflation, and ongoing military rule. Since the 2021 coup, it has recorded the weakest economic performance in Southeast Asia. GDP grew by just 1% in the year ending March 2024, 10% below pre-pandemic levels.

Instability, conflict, and a sharp drop in foreign investment, from $2.5 billion in 2019 to $1.52 billion in 2023, have disrupted Myanmar’s economy, with FY2025 growth expected well below the pre-pandemic 6–7 % average. Recent shocks like a significant earthquake, combined with U.S. tariffs cutting off key markets, and the departure of international clothing brands such as Mango, Myanmar’s trade and economic outlook will likely worsen further.

Uneven Responses: How Governments Are Reacting to the Tariff Shock

In response to the U.S. tariff shock, governments across Asia have shown varying degrees of urgency, transparency, and effectiveness, reflecting their political environments and economic capacities.

Myanmar, facing a 44% tariff on its exports, is reportedly considering measures to address it. However, unlike other countries actively engaging in diplomacy, it has not publicly initiated formal talks with the U.S. for reduction or suspension. The de jure opposition, the National Unity Government (NUG) operating in exile, lacks international recognition and authority over trade policy, rendering it largely powerless. Meanwhile, the de facto State Administration Council, led by the military, has shown no interest in engaging diplomatically with the Trump administration. Myanmar Garment Manufacturers Association (MGMA) has warned that the tariff could be devastating, risking massive job losses, especially for women, and reversing years of progress on labor rights. While MGMA has appealed to U.S. officials to reconsider or reduce the tariff, citing economic harm and human suffering, these efforts lack strong government backing.

By contrast, Vietnam responded swiftly and strategically. Facing a 46% tariff over transshipment concerns, it secured a temporary cut to 10%, tightened customs enforcement, and began broader trade talks with the U.S.—a proactive move grounded in long-term planning.

China launched the most vigorous pushback. In response to the U.S. tariff of 34% under IEEPA (International Emergency Economic Powers Act), it imposed matching retaliatory tariffs, ultimately to 125%, alongside export restrictions on rare earths, expanded scrutiny of U.S. companies, and a formal complaint lodged with the WTO. After tough talks, China and the U.S. agreed to a 90-day pause starting mid-May 2025. During this time, they temporarily lowered tariffs from 34% to 10% and put some other trade restrictions on hold, but many tariffs and controls are still in effect as they continue negotiations.

Malaysia, as ASEAN chair, took a cautious but coordinated approach. It matched the U.S. with a 24% tariff but prioritized diplomacy, impact assessments, and a proposed U.S.-ASEAN summit to promote regional unity and trade stability.

How Tariffs Devastate Women in Myanmar’s Garment Industry

The recent 44% U.S. tariff hike on Myanmar’s garment exports is not just an economic blow; it’s a gendered crisis. As of early 2022, the garment industry employed around 500,000 workers, over 80% of whom are women, primarily aged 16 to 27. For many, garment work is one of the few available sources of stable income and economic mobility in an economy marked by limited opportunities.

As U.S. orders decline due to the tariff, factories are likely cutting production and delaying shipments. With little or no access to severance pay or social safety nets, dismissed workers are often pushed into informal or precarious jobs, or fall deeper into poverty. This economic shock comes from worsening conditions since the 2021 coup, which eroded labor protections and fueled workplace harassment and inflation. Between 2014 and 2024, women’s labor force participation fell significantly, from 51.1% to 41.8%—a stark indicator of declining opportunities for women. In a country where most jobs are informal and insecure, the female unemployment rate reached 3.686% in 2024, reflecting the deepening vulnerability of women in Myanmar’s workforce.

A 2025 UNDP study found that average garment workers earn under $100 per month, with only 7% earning more. Despite such low wages, most women contribute over 75% of their household income, and nearly 90% send remittances if living away from family. Still, over half reported reducing food intake to cope with rising costs, and more than a fifth said their earnings were insufficient to meet basic family needs.

Despite the hardships, around 70% of workers say they would stay in Myanmar if wages and conditions improved. However, as hope fades, 21% of surveyed workers are now preparing to leave the country for better opportunities. This growing out-migration reflects the deepening desperation among young women who no longer see a future in an industry that once offered them stability.

Conclusion

In sum, the stated goal of the U.S. tariff hikes, narrowing the trade deficit and diversifying supply chains, remains far from achieved. Instead, they could have driven up prices for American consumers, hurt U.S. importers, and disrupted global trade without closing the trade gap. The result is a lose-lose scenario.

Nowhere is this more painfully evident than in Myanmar’s garment industry, where the latest 44% tariff on U.S. imports is dismantling the livelihoods of hundreds of thousands of women in Myanmar and their families who depend on the garment industry to survive.

While the policy may appear economic, its repercussions are intensely social, compounding gender inequality, driving families into poverty, and accelerating the breakdown of already fragile communities. Without urgent international attention and a reconsideration of such punitive trade measures, the cost will not just be in lost exports, but in lost futures.

Windia Soe is a Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). With over seven years of experience, she focuses on health and social behaviour change, working with international and local NGOs.

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Coal, a controversial resource, has become a catalyst for conflict, environmental degradation, and the tightening grip of civil war in Northern Shan State.

Key Takeaways:

1. In Northern Shan State, coal is not just an economic resource; it is a strategic asset exploited by the Myanmar military, ethnic militias, and crony companies, reinforcing their territorial and political control.

2. Coal mining has led to severe environmental degradation, water pollution, forced displacement, and health hazards for local communities, with minimal accountability or compensation.

3. Instead of driving local development, coal extraction has exacerbated local tensions, entrenched inequality, and contributed to the ongoing civil war dynamics in Northern Shan State.

Tangyan, a town in Northern Shan State, gained strategic importance following Operation 1027, as the State Administration Council (SAC) identified it as one of three key locations for the potential recapture of Lashio. The SAC temporarily established the Northeastern Command there, alongside increasing investments and economic optimism from mainland Burma. Tangyan is also known for hosting several controversial online casinos.

Long before recent developments, Tangyan was a military-dominated town where numerous battalions and tactical commands of the Myanmar military were based, systematically oppressing local residents. This control was not limited to the military alone but also extended to its allies, including the so-called People’s Militia and the Shan State Progress Party/ Shan State Army – SSPP/SSA.

Coal, one of the most critical fuels for industrialization, is especially abundant in this region and has long been controlled by powerful stakeholders. Its production is largely monopolized by the military-owned Myanmar Economic Corporation (MEC) and Ngwe Yi Pale, though smaller companies also operate. During the NLD government era, infrastructure expansion drove a surge in coal demand. However, as most deposits are located in conflict-affected areas, this boom disproportionately benefited armed groups authorized to operate there, while local communities and the environment bore the costs. By 2020, Ngwe Yi Pale and MEC accounted for two-thirds of Northern Shan State’s total coal output. MEC itself does not mine directly but sells permits to smaller operators. Much of the coal is used for cement production, as cement plants can process various coal grades and manage logistics independently. The demand for Northern Shan coal further escalated after the People’s Defence Forces (PDFs) gained control in Sagaing Region and disrupted logistics routes to Mandalay, prompting mainland companies to ramp up extraction in the north.

However, many of the targeted areas are villages or farmland where communities rely solely on agriculture and the cultivation of cash crops. MEC-backed companies, after securing permits from Mining Enterprise (1) through profit-sharing agreements, began exploring new coal deposits in these areas. These companies often align with local militia groups and attempt to reassure residents by promising regional development and economic growth. In reality, however, their operations have had significant negative impacts on both the environment and the livelihoods of local populations.

Previously, coal mining in the region had already caused severe impacts on local residents. In 2020, in Tat Lyet village of the Ner Hok village tract, located about nine miles southwest of Tangyan town, underground mining operations led to ground subsidence, forcing 11 households to relocate. The unidentified mining company responsible compensated affected residents with 10 million kyat, but this was only one of the more visible cases of harm.

In addition, Ngwe Yi Pale conducts surface mining in the Tat Lyet village area of Tangyan, severely damaging local farmland and discharging untreated wastewater into the Pang River, a tributary of the Salween River. Villagers living downstream report that mining waste has turned the river “black.” Although the region produces large volumes of coal, no official estimates of the deposits have been made public, and the company has failed to fulfill its corporate social responsibility (CSR) commitments. Compensation for displaced residents has been minimal and often forced.

As a result, there was strong opposition from local residents when Ngwe Yi Pale proposed a new 850-acre coal mining project near Wang Kyaung and Wan Han villages, located across the Pang River. Faced with forced relocation, villagers reported the issue to the SSA/SSPP, the SNLD office, and the Mong Ha militia. However, following the 2021 coup, the village tract leader who opposed the mining operation was threatened by the Mong Ha milita.

In neighboring Mong Yai township, which also has an active coal mining site and a sugar factory, Ngwe Ye Pale faced resistance but successfully began operations in 2018. The company continues to produce coal, exporting it to its subsidiary sugar factory and cement plants.

Due to the presence of people's militias, the SSA/SSPP, and the Myanmar Army, resistance to their control in the region was nearly impossible, even during the previous NLD government era. Since the 2021 coup, the situation has worsened. The attractive profits and ease of coal extraction, thanks to shallow deposits, have attracted many investors seeking permits from MEC. Meanwhile, the environment, local health, and livelihoods remain under serious threat.

Coal is Tangyan’s most significant industrial resource, and if managed responsibly, it could somehow drive the region’s development. However, its current exploitation fuels ongoing conflict and leaves the land uninhabitable. With the Myanmar National Democratic Alliance Army (MNDAA) having recently withdrawn from Lashio and no clear intervention in place, the future remains uncertain, but the Myanmar Army and its affiliated militias may strengthen control, allowing coal extraction to continue fueling conflict in Northern Shan State.

Thuta Aung holds a B.Sc. in Geology and is currently pursuing Environmental Science at Chiang Mai University. He has experience working in environmental conservation, focusing on monitoring and mitigating the impacts of mining operations in Myanmar.

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The opinions expressed in this article do not represent the official stance of SRIc - Shwetaungthagathu Reform Initiative Centre. The Sabai Times is committed to publishing a range of perspectives that may not align with editorial policy.

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China and Myanmar share a long-standing economic partnership, as Myanmar is considered a strategic location for China to expand its economic power, particularly in terms of trade and investment within the Indo-Pacific region.

Key Takeaways:

1. Development projects for economic growth may destroy livelihoods for the local community instead of creating employment opportunities and improving living standards.

2. The Kyaukphyu Special Economic Zone serves as an example of a common problem in developing countries: the pursuit of economic growth at the expense of social and environmental sustainability.

3. Infrastructural development, ecosystem safety, and local community protection must be balanced in order to achieve inclusive and sustainable progress.

In 2010, Myanmar experienced a dramatic economic transition, resulting in the establishment of Special Economic Zones (SEZs), an important component of the country's modernization efforts. The Kyaukphyu Special Economic Zone is one of these, intending to promote foreign investment and regional economic growth between China and Myanmar.

The Impact of Kyaukphyu SEZ on Local Livelihoods and Environment

Special economic zones are designed to be the driving force of the socio-economic progress of a specific country and play a pivotal role in the development of many emerging economies. However, special economic zones are risky & expensive and produce social and environmental unsustainability in the local livelihoods of the community. In addition, some SEZs are located in remote areas where it is difficult to access environmental assessment. The global experience of SEZs has been uneven, with some countries attaining successful economic outcomes while others struggle to overcome market failures, institutional constraints, and social and environmental consequences. Several SEZs still need to deliver the projected economic benefits while severely impacting the environment and residents.

Kyaukphyu Special Economic Zone is located in Kyaukphyu Township, Kyaukphyu district, in Rakhine State, on the west coast of Myanmar. It is a key area for overall national economic development and Rakhine State development. According to the media outlets, residents in Kyaukphyu Township report losing their rights to fishing grounds for giving spaces to Chinese ships. However, the government neglects to consider the side of the local community whose living is dependent on the sea. 70% of the population in Kyaukphyu Township are farmers and fishers. They mainly depend on their land for agriculture and sea fishing to make a living income. Therefore, the activists claim that the deep sea port is expected to seriously disrupt the livelihoods of local fishermen as fish stocks have been depleted. As a result, they lost 50 percent of their fisheries and now have to rely only on the remaining 50 percent to make income. The cases within SEZs (Special Economic Zones) show that the local livelihoods have declined due to the industrial development of these zones.

The larger and more complex the project, the greater the potential for positive and negative effects on the local community. For example, the deep sea port project, a part of the KyaukPhyu Special Economic Zone, releases waste from ships and other port activities, leading to the loss or degradation of habitat areas and harm to marine life. Fishermen in Kyaukphyu are now experiencing depleted fish stocks and difficulties, as they have relied on sea fishery for their entire lives. Unfortunately, the changes and consequences brought on by the Special Economic Zone have harmed their local livelihoods rather than positive effects.

As mentioned, ship waste disposal significantly threatens marine life and the ecosystem's delicate balance. The region of Kyaukphyu boasts a wealth of biodiversity, and the construction of special economic zones often involves exploiting natural resources and deforestation. This destructive practice can ultimately lead to biodiversity loss and contribute to a broader climate crisis. In addition, the air quality in Kyaukphyu is worsening, and the emission sources are estimated to be industrial facilities, marine vessels, inland transportation, and waste burning. Kyaukphyu SEZ is also a crucial hub for China’s oil and gas industry. Therefore, the increased shipping traffic threatens the natural habitats and marine ecosystems surrounding the ports.

Conclusion

According to the goals adopted by the UN in 2000, ensuring environmental sustainability is one of them. Countries nowadays, whether developed or developing, are trying to advance their economy in terms of utilizing the increased use of technological power, modernization, industrialization, and urbanization, neglecting the potential impact on the natural environment. In the case of the Kyaukphyu Special Economic Zone, the local community has suffered the most in terms of livelihoods and ecosystems. We cannot conclude that every development project would benefit the country and its people without causing harm to the natural environment. As a host country of these large-scale infrastructural projects, Myanmar has been exploiting the natural resources and causing harm to the environment by the powerful countries. Therefore, we must be aware that we must find ways to balance the progress of economic development and the sustainability of the natural environment to protect citizens’ health, livelihoods, and food security, which means inclusive development or sustainable development.

Pyae Phyoe Mon is an M.A. Candidate in Social Sciences at the Faculty of Social Sciences, Chiang Mai University, Thailand.

“Advocating Sustainability, Shaping Our Future”

The opinions expressed in these articles do not represent the official stance of SRIc - Shwetaungthagathu Reform Initiative Centre. The Sabai Times is committed to publishing a range of perspectives that may not align with editorial policy.

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Imagine being lured by a dream job only to be trapped in a nightmare. This is the grim reality for thousands in Myanmar's vast cyber scam industry.

Key Takeaways:

1. Political instability has made Myanmar a center for cybercrime and human trafficking, with criminal syndicates exploiting the lawlessness for online fraud.

2. Myanmar-based scams, like “pig butchering,” are responsible for billions in global losses, targeting victims worldwide through romance, investment, and cryptocurrency fraud.

3. Urgent international cooperation is required to dismantle criminal networks, with enhanced intelligence-sharing among neighboring countries to curb the crisis.

The Explosive Rise of Cyber Scam Syndicates in Myanmar

In recent years, in 2021, China has intensified efforts to combat cybercrime by enacting the Personal Information Protection Law (PIPL) and Data Security Law (DSL) to reinforce China’s commitment to data security. Additionally, the Chinese government banned cryptocurrency trading, mining, and advertisements while implementing stricter anti-money laundering measures and crackdowns on telecom and online fraud. These regulatory shifts have made it increasingly difficult for cybercriminals to operate within China.

As a result, many cybercriminal syndicates adapted new methods and relocated their operations abroad to exploit stolen personal data for fraudulent schemes. Among their top destinations, Myanmar—already grappling with post-coup instability—emerged as a prime hub for cyber fraud and organized crime. Using lawlessness, economic turmoil, and the country’s strategic location, transnational crime syndicates have established large-scale scam operations. These operations not only cause significant financial damage but also involve human trafficking.

The Kokang Region and Myawaddy, located on Myanmar's borders with China and Thailand, have historically been hotspots for illicit activities due to their strategic locations, ethnic armed conflicts, and weak central government control. From 1950-1990, Kokang was central to the Golden Triangle's opium trade, while Myawaddy facilitated drug trafficking. By 2000-2020, both areas shifted toward gambling and underground financial schemes, fueled by cross-border investments and Special Economic Zones. Since 2020, they have become centers for large-scale online scams, supported by SEZ infrastructure and armed group protection.

Myanmar’s endemic corruption and lawlessness have further enabled these criminal networks, making these border regions major players in transnational crime. Additionally, widespread unemployment has pushed many into these illicit enterprises as direct participants or middlemen. The digital shift accelerated by the COVID-19 pandemic has further fueled this crisis as more people engage with online platforms, making them easy targets for cyber fraud.

The Rise of Cybercrime-Driven Human Trafficking in Myanmar

Myanmar faces a severe crisis of cybercrime-driven human trafficking, as evidenced by its top ranking in the Global Organized Crime Index. The surge in human trafficking within the country, reaching 8.50 in 2023 from 6.50 in 2021, underscores the escalating prevalence of forced labor and sexual exploitation.

Beginning around 2020, criminal networks across Myanmar, Cambodia, Laos, and Thailand have rapidly adapted to technological advancements, significantly expanding their reach and effectiveness. These syndicates utilize social media and sophisticated cryptocurrency scams to deceive victims and evade law enforcement.

Cybercrime syndicates have refined their recruitment strategies to fuel these operations, deploying deceptive job offers that promise lucrative salaries and professional advancement. They strategically target young, educated, multilingual individuals with IT skills, recognizing their value in executing complex scams. Job advertisements for positions in customer service, online marketing, and tech support are widely disseminated across ASEAN nations, China, Africa, Latin America, and the Middle East, demonstrating the global scope of their recruitment efforts.

The scale of this forced criminality is vast. According to the 2022 Global Report on Trafficking in Persons, 10.2% of reported trafficking cases are linked to forced criminality. In Cambodia alone, crime networks have lured between 50,000 and 100,000 people into slave-like conditions, and it is assumed that the numbers are significantly higher in Myanmar. Credible sources estimate that over 120,000 individuals in Myanmar may be trapped in forced online scam operations. The global scale of this crisis is further underscored by a 2023 UNODC report stating:

“Overall, international NGOs have identified over 40 nationalities of trafficking victims in scam compounds in Southeast Asia.”.

The Twin Horrors of Cyber Scams: Life Inside the Fraud Factories and Financial Fraud

The reality for those recruited is a stark contrast to the promises made. Once victims arrive at the supposed workplaces, they are subjected to horrific conditions. Their passports and personal belongings are confiscated and confined to heavily guarded compounds. Under constant threats of violence, they are compelled to participate in fraudulent schemes, such as romance scams, investment fraud, and cryptocurrency deception.

Notably, romance scams surged by one-fifth in 2023, disproportionately targeting men aged 55 to 64, who accounted for 52% of reported cases. Many victims were financially stable professionals or retirees seeking companionship online. A 2023 survey found that 66% of respondents in India encountered online dating scams. In Europe, 1%–3% of the population reported being victims (2020), while nearly 70,000 cases in the U.S. in 2022.

The notorious "pig butchering" scam involves deceiving victims before exploiting them financially, resulting in staggering losses. Between 2020 and 2024, Southeast Asian-based cyber scams led to global losses of approximately $75 billion and an estimated annual loss of $43.8 billion in Southeast Asia. In the U.S. alone, Americans suffered estimated losses of $2.6 billion in 2022 due to pig butchering and cryptocurrency fraud.

Those who fail to meet financial quotas result in brutal punishments, including beatings, starvation, and further trafficking into other forms of forced labor and sexual exploitation. While the financial impact is devastating, the human cost—marked by psychological trauma, exploitation, and shattered lives—is immeasurable.

Myanmar's Cyber Scam Crackdown: Operation 1027's Ripple Effect

Fueled by China's growing frustration with cyber-scam operations targeting its citizens along the China-Myanmar border and following a reported massacre at a Shan State scam center, the Three Brotherhood Alliance launched Operation 1027, a coordinated offensive against the Myanmar military junta in northern Shan State. With multiple objectives, including dismantling online fraud, this operation gained momentum due to tacit Chinese support.

This offensive led to the rescue of thousands of trafficked victims, primarily Chinese nationals. By late November 2023, a major milestone was achieved, with over 31,000 suspects handed over to Chinese authorities. Despite the significant disruptions in Shan State, cybercrime syndicates have proven highly adaptable, relocating operations southward to Karen State along the Thai border. Furthermore, cybercriminals are increasingly leveraging AI and advanced translation tools to streamline their scams, reducing reliance on trafficked workers fluent in specific languages.

As these networks relocate, fueled by recent reports of the trafficking of Chinese model and actor Wang Xing at the Myanmar-Thai border, Thailand has responded by cutting electricity, internet, and fuel to Myanmar’s border areas to dismantle cross-border scam compounds. Meanwhile, the impact on local communities is evident, with many facing power cuts while Chinese businesses, including scam centers, continue running on generators.

Thailand's Department of Special Investigation (DSI) is also seeking warrants for three Karen BGF leaders—Saw Chit Thu, Tin Win, and Mote Thone—accused of profiting from transnational crimes through land control and real estate linked to scams. However, prosecutors rejected the request due to insufficient evidence. In an exclusive interview, Saw Chit Thu denied involvement, claiming he only leases land, has no ties to scam operations, and emphasized cooperation with Thai authorities.

Despite these legal hurdles, this crackdown is intensifying. Still, the long-term question remains: can these deeply entrenched criminal networks be fully dismantled, or will they evolve and resurface elsewhere?

Myanmar's Cybercrime Inferno: A Global Call for Stakeholder Action

Myanmar's surge in cybercrime, human trafficking, exploitation, and abuse has created an urgent crisis demanding immediate action. However, with the military focused on consolidating power and suppressing internal conflicts, it remains unable and unwilling to tackle these issues. Moreover, its Border Guard Forces, militias, and allied groups are not just turning a blind eye but are directly implicated in facilitating and securing these scam operations.

Recognizing the dire need for action, the NUG outlined plans for self-governing territories to combat cybercrime in its January 2025 Joint Statement, calling for enhanced intelligence-sharing between neighboring countries to address these transnational crimes.

In this context, international collaboration has never been more critical, but Myanmar’s political isolation and ongoing sanctions severely hinder effective cooperation. Without decisive regional and global intervention, these criminal enterprises will continue to thrive, further undermining Myanmar’s security and governance while exposing citizens worldwide to devastating threats.

Windia Soe is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). With over seven years of experience, she focuses on health and social behaviour change, working with international and local NGOs.

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Myanmar, once known for its rich landscapes and cultural traditions, is now grappling with a relentless narcotics crisis.

Key Takeaways:

1. Political instability, involvement of various armed groups like UWSA and AA in drug smuggling, and weak law enforcement have fueled mass drug production and human trafficking.

2. Youth and internally displaced populations suffer from soaring addiction rates, worsening health crises, and economic instability.

3. Harsh drug laws punish minor offenders while major traffickers operate freely, undermining harm reduction and rehabilitation efforts.

The country has become a major hub for methamphetamine production, exacerbated by political instability and economic collapse. This crisis is destabilizing entire regions, with widespread drug addiction affecting families and overburdening fragile healthcare systems. This article explores the origins of Myanmar's drug scourge, reflects on past failed interventions, and considers potential pathways toward a more hopeful future.

How did Myanmar go from opium fields to a heroin hub?

The history of narcotics in Myanmar is tragically intertwined with the nation's past. Opium poppies were introduced to northeastern Myanmar by Chinese traders centuries ago, but it was during British colonial rule (1824-1948) that opium cultivation significantly expanded. Driven by Chinese demand, the British established a lucrative monopoly, making opium a key part of Myanmar’s economy. By the late 19th century, regions like Kokang and Wa became synonymous with opium production, solidifying Myanmar’s role in the global opium trade.

Independence in 1948 brought little relief, as ethnic insurgencies erupted, with many rebel groups turning to opium cultivation for funding—creating a cycle where the drug trade fueled insurgency, which in turn protected and expanded the drug trade. By the 1970s, Myanmar had become a major heroin producer, with heroin refined in border areas—particularly under the control of Kuomintang-linked groups. Its legacy highlights the ongoing challenges Myanmar faces in combating narcotics today.

The Rise of a New Scourge: The Methamphetamine Era

While opium dominated the 20th century, the 21st century has seen Myanmar become a major methamphetamine producer. The scale of this production dwarfs traditional opium output and unleashes a flood of highly addictive synthetic drugs across Southeast Asia.

Record-breaking seizures of 190 tonnes of methamphetamine in East and Southeast Asia in 2023 paint a clear picture of Myanmar's central role in this illicit trade, creating a massive headache for neighboring countries like Thailand and China.

Already burdened by decades of conflict, Shan State has become the epicenter of this illicit industry in the Golden Triangle, transforming into a global hub for ice and Yaba production. By 2010, drug production in Shan State shifted from heroin to meth, driven by the UWSA militias and other ethnic armed groups. Before the 2021 coup, the Aung San Suu Kyi-led civilian government also highlighted the involvement of militia groups like the Arakan Army (AA) in drug smuggling as a key source of their funding. Infrastructure improvements, such as upgraded roads and expanded trade routes to neighboring countries, have also unintentionally facilitated the trafficking of precursor chemicals into Myanmar and drug exports to international markets.

Recent reports indicate that Myanmar has now surpassed Afghanistan as the world's top opium producer, with estimated opium yield has risen to 22.9 kilograms per hectare, surpassing the previous record of 19.8 kilograms per hectare set in 2022, highlighting the adaptability and scale of Myanmar's drug production networks.

How the 2021 Coup Fueled the Methamphetamine Crisis?

Following the February 2021 coup, Myanmar plunged into widespread unrest, violent crackdowns, and economic collapse. As poverty and unemployment soared, many farmers in Shan and Kachin States turned to opium cultivation for survival because of the lack of alternatives. Meanwhile, lawlessness intensified in conflict-ridden areas like Shan State, where armed groups capitalized on the chaos by expanding drug production as a key source of financing. These groups seized trafficking routes, protected meth labs, and taxed the drug trade, using the profits to fund their military operations and political influence.

The UNODC reported a surge in methamphetamine production, with traffickers exploiting weakened state authority. In 2023, authorities in Thailand seized 648.9 million Yaba tablets (a combination of methamphetamine and caffeine) and 26.4 tonnes of crystal methamphetamine, compared to 395 million Yaba tablets and 17.6 tonnes of crystal methamphetamine in 2019. Opium cultivation rose by 18% from 2022 to 2023, reaching a total area of 47,100 hectares.

A Threat to a Generation

Given the above complex interplay of historical, political, and social factors, Myanmar’s escalating narcotics crisis is harming youth and endangering future stability. Cheap and highly potent synthetic drugs like Yaba and "ice" have infiltrated communities across the country, from urban centers to remote villages. Young people, particularly in Shan State, are especially vulnerable due to their proximity to significant drug production areas.

Addiction rates are soaring, especially among youth and internally displaced persons, as a coping mechanism for trauma. A meta-analysis shows that 26.4% of displaced populations suffer from depression, linking forced displacement to substance abuse. In ethnic areas, addiction ranges from 40% to 85%, with a 40% prevalence among refugees. In Kachin, where mining is prevalent, 5% of men aged 15–49 inject drugs—far above the national 0.3% rate.

Weak regulatory oversight in urban centers has also fueled rampant drug use. "Happy Water" has surged in popularity among young people. Distributed through a supply chain originating in conflict zones near Myanmar’s borders, it is readily available in nightlife venues like bars, clubs, and KTVs, where private Hi Rooms serve as hubs for drug sales and consumption. Once a luxury, these drugs have become alarmingly affordable since the 2021 coup, making them more accessible than ever.

The consequences are catastrophic. Addiction and imprisonment rob the futures of youth, destabilizing families and weakening economic security. Methamphetamine use and injecting drug use are driving Myanmar’s worsening HIV epidemic, tuberculosis, overdose epidemics, and hepatitis C, especially in Kachin State, Northern Shan State, and Sagaing Region, with HIV prevalence among drug users exceeding 50% in some townships.

In response, families are left to address youth drug use on their own with little central government support, sending children to ethnic armed group treatment centers or big cities to escape addiction—often exposing them to exploitation and trafficking, further worsening an already dire situation.

Regional and Global Threat

Myanmar's escalating drug crisis extends far beyond its borders. Myanmar's strategic location between China and India, along with its position within the East and Southeast Asian drug market, makes it highly vulnerable to the narcotics trade. Myanmar’s post-coup turmoil has turned it into a global methamphetamine hub, with armed groups and militias—often linked to military officials—profiting from the trade. A steady influx of precursor chemicals from China and India has fueled mass production, flooding neighboring countries with cheap, highly addictive drugs.

Record meth seizures in Thailand and China highlight the crisis, straining law enforcement and healthcare systems. The drug trade funds armed conflict destabilizes governance, and fuels violence. Beyond Asia, Myanmar’s meth reaches as far as Australia, where 70% of crystal meth on the streets originates from the Golden Triangle.

Efforts and Challenges to Combat Narcotics

Myanmar has tried to combat narcotics through national policies and international collaboration by participating in regional initiatives like the Mekong MOU on Drug Control. The 1974 Narcotic Drugs Law aimed to curb drug production and trafficking through a ban on illicit crop cultivation, mandatory addict registration and treatment, and severe penalties. Despite amendments in 1983 and 1988, the law remained ineffective and was replaced by the 1993 Narcotic Drugs and Psychotropic Substances Law.

In 2018, Myanmar introduced the National Drug Control Policy with UNODC support, emphasizing a balanced, evidence-based, and health-focused approach. This policy incorporates public health, harm reduction, alternative development, and human rights considerations.

In Myanmar, harm reduction programs, such as needle exchange initiatives and opioid substitution therapy, have been instrumental in reducing HIV and hepatitis C transmission among PWID. Between 2003 and 2019, the distribution of sterile needles and syringes and the number of individuals on methadone maintenance therapy increased significantly. Moreover, community-driven harm reduction efforts in Kachin and Shan States, including education, clean syringes, and rehabilitation, have shown promise.

However, Myanmar's efforts to combat narcotics are hampered by inconsistencies between its laws and policies. The outdated 1993 Narcotic Drugs Law primarily targets small-scale farmers and drug users while failing to dismantle major trafficking networks. This punitive approach contradicts the objectives of the 2018 National Drug Control Policy, which emphasizes harm reduction and rehabilitation. Effective reform requires updating drug laws to align with modern harm-reduction strategies and strengthening regional cooperation to combat trafficking.

Conclusion

Myanmar's drug crisis is deeply rooted in historical, political, and socio-economic factors. To address Myanmar's drug crisis, it is essential to dismantle trafficking networks, shift to rehabilitation for low-level offenders, and expand harm reduction programs. Enhancing regional cooperation, limiting precursor chemicals, and providing sustainable economic alternatives will reduce militias' reliance on drug profits. Only through a coordinated, multifaceted approach can Myanmar hope to break its dependence on the drug trade and foster a more stable, prosperous future.

Windia Soe is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). With over seven years of experience, she focuses on health and social behavior change, working with international and local NGOs.

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In Myanmar, darkness no longer just falls after sunset—it has become an everyday reality, an uninvited guest that lingers well beyond nightfall.

Key Takeaways:

1. Severe Power Shortages Cripple Myanmar – Blackouts for up to 20 hours disrupt businesses, healthcare, and daily life, worsening economic hardships.

2. Gas Dependency and Infrastructure Damage – Failing gas plants, stalled solar projects, and grid attacks force reliance on costly alternatives.

3. Urgent Reforms Needed – Expanding renewables, repairing infrastructure, and improving governance are crucial for energy stability.

As the country grapples with one of its most severe power shortages in decades, the lights of progress have flickered and dimmed under the shadow of the military junta's regime. With rolling blackouts, widespread infrastructure damage, and a fractured power grid, Myanmar's citizens find themselves in the dark—literally and figuratively. Widespread socio-economic challenges, including higher household expenses, job losses, business closures, disruptions in education and healthcare, rising poverty, and long-term economic and environmental damage, are growing due to persistent power shortages. This article examines the causes and far-reaching consequences of Myanmar’s energy crisis, offering insights into the political, social, and economic toll it continues to exact on the nation.

1. Background of Myanmar Power Industry

Over the past decade, Myanmar's power industry has experienced notable growth, followed by an abrupt decline following the 2021 military coup. Between 2015 and 2021, Myanmar saw significant strides in electricity generation and electrification. The country's energy infrastructure expanded with foreign direct investment (FDI) support and progressive government policies like the Myanmar Sustainable Development Plan 2018-2030. The total installed power capacity grew from 5,125 MW to 6,830 MW, while power output increased from 15,965 GWh to 23,643 GWh annually. Gas-fired power plants like Thaketa Power Plant (400 MW), Thanlyin Power Plant (350 MW), and Thilawa Power Project (1,250 MW, expected online in 2024) were developed, and the electrification rate surged, benefiting both urban and rural areas.

However, the 2021 military coup marked the beginning of a rapid decline in Myanmar’s electricity production. Major foreign investors exited the market, conflicts disrupted infrastructure, and economic instability set in, bringing the country's energy growth to a halt. These disruptions have since spiraled into one of the worst power crises in Myanmar’s history, one that continues to have far-reaching social and economic implications.

2. Brief Situation of Power Resources

In a crisis, Myanmar’s energy sector faces widespread disruptions affecting all primary power sources. As demand outpaces supply, the country’s energy infrastructure faces mounting challenges. Let’s take a closer look at the current state of power resources.

2.1 Natural Gas: Declining Dominance

Once the backbone of Myanmar’s power generation, supplying 55% of Myanmar’s electricity in 2022, natural gas generation has plummeted due to supply shortages and investor exits post-2021. Foreign companies like Voltalia, Posco, Total Energies, Chevron, and VPower ceased their operations due to political instability, ethical concerns, economic mismanagement, security risks, and financial losses, further weakening the energy sector. The shutdown of VPower’s Thilawa (350 MW) and Thaketa (400 MW) LNG plants in July 2021 resulted in a 1,200 MW capacity loss. Gas-fired plants operate below capacity, dropping efficiency from 17% in 2023 to 19% in 2022. State-owned plants struggle with rationing, while private facilities receive priority.

2.2. Hydropower: Overuse and Declining Efficiency

Hydropower, accounting for 43.4% of the country's electricity in 2022 and almost 62% in 2023, has become the fallback as gas declines. Despite an estimated 100,000 MW potential, installed capacity remains at only 3,262 MW. Major plants like Yeywa (790 MW) and Shweli-1 (400 MW) are disrupted by conflicts and transmission damage. The Baluchaung cascade plants (243 MW) are in decline, with Baluchaung 1 and 3 no longer operational. Overuse has stressed water resources, causing seasonal fluctuations. The Nation’s heavy reliance on hydropower leads to severe electricity shortages during the dry season when water levels drop, reducing generation capacity. In 2022, maintenance shutdowns of key hydropower units, declining gas production, and halted LNG imports worsened power cuts, highlighting the urgent need for energy diversification.

2.3. Solar: Limited Impact and Stalled Expansion

Myanmar’s solar capacity is minimal, with only six operational plants generating 182 MW. Government efforts to scale up solar through IPP tenders have largely failed, with only 142 MW commissioned out of a planned 2,150 MW. Most projects post-2021 remain stalled or canceled. Even functional solar plants provide inconsistent generation and are limited to daylight hours.

2.4. Coal: Minimal Contribution, Environmental Concerns

Coal power remains marginal at 0.5% of total generation, with just two operational plants (138 MW). Myanmar has 488.7 million tons of coal reserves, yet only 1% has been confirmed, limiting its immediate contribution to the energy mix despite the potential. Environmental concerns have stalled coal expansion, with coal-related emissions accounting for 5.1% of total power sector emissions in 2022.

2.5. Power Grid: Conflict and Infrastructure Decay

The national grid has suffered 229 attacks since 2021, severely disrupting transmission. In early 2025, power generation fell below 2,000 MW per day, far from the 4,400 MW demand. Yangon, Mandalay, and Naypyidaw endure blackouts lasting 5-20 hours daily. Power distribution remains unequal, with Yangon receiving 48%, Mandalay 17%, and the rest of the country 35%.

2.6. Mini-Grids: Rural Electrification at Risk

Developed under the National Electrification Plan (NEP), 73 mini-grids serve 22,500 households and 15,800 public facilities. However, sustainability is threatened by conflicts, theft, and soaring fuel costs, which have tripled since 2021. Fixed tariffs fail to cover operational expenses, causing financial distress for operators and frequent outages for rural communities.

2.7 Worsening Current Nationwide Power Shortage

As of early 2025, Myanmar’s power generation has plunged to around 2,800 MW daily, meeting just 50-55% of demand. Peak output sometimes drops below 2,000 MW, causing severe blackouts—up to 20 hours daily in major cities like Yangon, Mandalay, and Naypyidaw. Rural and conflict-affected areas face near-constant outages. In Yangon, power cuts begin as early as 1 AM, with electricity available for only eight hours daily. Businesses and households increasingly rely on solar panels, charcoal stoves, and generators, further straining the economy and infrastructure.

Recently, on 5th February 2025, Thailand cut power to Myanmar scam compounds linked to forced labor and fraud. Still, some remain operational using generators and satellite internet, while diplomatic efforts with China and Myanmar aim to curb these crimes.

3. Socioeconomic Impacts

As a result, this persistent power shortage has caused severe socio-economic repercussions across Myanmar at every level.

1. Household Hardships: Families face cooking, water access, and refrigeration issues, raising daily expenses.

2. Job Losses: Power outages force businesses to cut operations, leading to unemployment, especially in industrial zones.

3. Business Struggles: High generator costs raise production expenses, forcing some factories to shut down.

4. Education & Healthcare Disruptions: Schools and hospitals struggle without stable electricity, affecting learning and medical services.

5. Transportation Disruptions: Power shortages limit CNG supply, reducing public transport availability.

6. Rising Poverty: Limited electricity reduces income opportunities, increases living costs, and hinders progress in education and healthcare.

Long-Term Damage: Development slows, investment declines, and reliance on unreliable energy sources worsens environmental and health risks.

4. Junta's Mitigation Action Fell Short

In response to the crisis, the military junta has attempted short-term fixes like infrastructure repairs and LNG projects, but sanctions and technical issues have slowed progress. Hydropower overuse has worsened water shortages, reducing capacity. Long-term plans for new hydro and solar plants remain stalled, with pre-coup projects largely unfulfilled. Despite doubling electricity tariffs, revenue has not improved power generation or grid stability.

On the other hand, the National Unity Government (NUG)'s ability to address Myanmar’s energy crisis in liberated areas is hindered by the ongoing fragmentation among resistance forces, the lack of participation from key ethnic armed organizations (EAOs), and the challenge of establishing inclusive, accountable governance systems necessary for sustainable energy infrastructure.

5. Future Prospects and Consequences

The power crisis persists without addressing these governance inefficiencies and investing in renewables, threatening severe economic, social, and political consequences. Economically, industrial output will decline as businesses face high costs of diesel generators, deterring foreign investment. Socially, the crisis will disrupt healthcare, education, and water supply, worsening poverty and inequality. The country's infrastructure and economic systems may suffer lasting damage, reversing years of progress. Politically, the junta's failure to address the crisis could fuel public dissatisfaction and civil unrest, deepening instability and challenging its legitimacy, further exacerbating Myanmar's decline.

6. Mitigation Plan

To address this alarming crisis, Myanmar must adopt a multi-pronged approach. The immediate priority is the restoration of infrastructure, focusing on repairing damaged transmission lines and rehabilitating key gas plants. Expanding renewable energy sources, particularly solar, wind, and hydropower, is crucial for reducing the nation’s dependency on gas and mitigating future power shortages.

Moreover, Myanmar’s energy policy must be reformed to attract foreign investment and improve governance. An independent Energy Regulatory Commission could ensure transparency, boost investor confidence, and combat corruption. Strengthening the financial management of the energy sector will also be vital for sustainable growth.

In the longer term, Myanmar should explore regional energy cooperation, particularly with neighboring countries like Laos and Thailand, to ease supply constraints and expand the grid. For instance, Laos and Myanmar are advancing a 2024 MOU on power cooperation to supply 300-400 MW via northern grids. Still, past struggles with domestic energy projects and ongoing feasibility studies will determine pricing and implementation within two years. Mini-grids and decentralized solutions must be prioritized to ensure that rural areas continue to have access to reliable energy.

Ultimately, political stability is key to the success of any energy reform. Without a return to peace and stability, foreign investments, technical expertise, and infrastructure improvements will remain out of reach, prolonging Myanmar’s energy crisis.

Dr. Htet Khaing Min, a medical doctor, is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). He recently led Remote Health Projects, focusing on Community Health Worker programs in the border regions of Naga and Karen States.

“Advocating Sustainability, Shaping Our Future”

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From the impacts of post-coup policies and border trade disruptions to the rising influence of ethnic armed organizations and shifting power structures, Myanmar’s economic and political fabric is undergoing profound changes.

Key Takeaways:

1. Border trade remains a critical pillar of Myanmar’s economy, accounting for $7.7 billion of its $30 billion international trade in 2023-2024. However, post-coup policies, such as foreign exchange controls, increased import restrictions, and ongoing armed conflicts, have disrupted traditional trade routes and exacerbated economic challenges.

2. EAOs have gained significant influence over Myanmar’s border trade, controlling major trade hubs like Muse and Chinshwehaw. This shift challenges the military junta’s authority. It has forced foreign stakeholders, including China and India, to engage directly with EAOs to safeguard their investments.

3. Myanmar’s reliance on low-complexity exports, such as natural gas and jade, contrasts with its trading partners’ focus on value-added goods. Addressing this imbalance through industrial development, technological advancement, and export diversification is crucial for achieving equitable and sustainable trade growth in Myanmar.

Geopolitical Strategic Position

Myanmar spans 676,578 square kilometers with diverse landscapes, including the Arakan Mountains in the west and the Shan Plateau in the east. It borders Thailand and Laos to the southeast, China to the north and northeast, and India and Bangladesh to the west. Its location near the Andaman Sea, Bay of Bengal, and Indian Ocean shipping lanes makes it a vital regional link and trade hub into China from the Bay of Bengal.

The Historical Evolution of Border Trade Under Military Rule

Myanmar’s economy, rich in natural resources like oil, gas, and minerals, suffered under decades of military rule and economic mismanagement. During the socialist period, key trading partners included Japan, the UK, and the US, supported by official development assistance (ODA). After the 1988 military coup, Western sanctions redirected Myanmar’s trade towards neighbors such as China and Thailand.

The 1962 coup saw industries nationalized, eliminating competition and stifling economic growth. These policies pushed many businesses into the informal economy, spurring illegal border trade. A market-oriented economy reintroduced in 1988 attracted private investment, boosting imports and exports. Border trade agreements with China, Thailand, India, and Bangladesh in the 1990s further solidified cross-border commerce, establishing 17 official border trade stations.

Trade Policy Reforms Under Semi-Democratic Transition Period

Since 2011, Myanmar has pursued trade liberalization to integrate into global markets. Key reforms include reducing export taxes on Cut-Make-Pack (CMP) goods, exempting agricultural products from commercial taxes, and eliminating state monopolies. Customs duties have been progressively reduced, and most exports were duty-free, barring a few exceptions like rice and bamboo. Export taxes include an 8% commercial tax and a 2% income tax on private-sector exports, while state-owned enterprises pay only an 8% commercial tax.

Foreign trade was overseen by institutions like the Myanmar Foreign Trade Bank (MFTB) and Myanmar Economic Bank (MEB), while trade policies are aligned with World Trade Organization (WTO) standards. Despite capacity-building challenges, these measures have enhanced trade flows and encouraged foreign investments.

Border Trade’s Economic Significance

Border trade accounts for a substantial portion of Myanmar’s economic activity, crucially supplementing maritime trade restricted by Western sanctions. The agricultural sector, contributing 22% of GDP and 29% of exports, relies heavily on border trade to access regional markets. In 2023-2024, border trade generated $7.7 billion of Myanmar’s $30 billion international trade. In the 2023-2024 fiscal year, Myanmar’s international trade exceeded $30 billion, with $7.7 billion from border trade.

Despite challenges like a $734.2 million trade deficit in 2022-2023, key exports include garments, gas, and pulses, while imports comprise refined oil, machinery, and raw materials. Land routes dominate trade with China and Thailand, while sea routes prevail with India.

Myanmar-China Border Trade

China is Myanmar’s largest border trading partner, with bilateral trade surpassing $3.279 billion in FY 2023-2024. Major border hubs include Muse, Lweje, and Chinshwehaw, with Muse accounting for the highest trade value. Myanmar exports low-complexity goods like natural gas and precious stones to China while importing industrial materials like fabrics and iron pipes.

In 2022, Myanmar exported $9.62 billion worth of goods to China, with key exports including precious stones ($4.05 billion), petroleum gas ($1.31 billion), and rare-earth compounds ($604 million). These exports have grown at an average annual rate of 14.4% since 2017. Imports from China, valued at $13.5 billion, were dominated by industrial materials like fabrics ($1.25B) and iron pipes ($625M), with a 3.36% annual growth rate since 2017.

Myanmar's reliance on low-complexity goods like natural gas, jade, and agricultural products, with minimal value addition, contrasts starkly with China's focus on value-added goods, highlighting a disparity in economic complexity. In 2022, Myanmar ranked 118th on the Economic Complexity Index, compared to China’s 18th. The disparity in economic complexity between the two nations highlights Myanmar’s need for industrial development, technological advancement, and export diversification. Strengthening these areas could reduce reliance on low-value goods and foster more equitable trade relations.

Myanmar-Thailand Border Trade

Thailand ranks as Myanmar’s second-largest export partner and third-largest import partner. Trade occurs through six checkpoints: Hteekhee, Tachilek, Myawady, Kawthoung, Myeik, and Mawtaung. In the first quarter of FY 2024-2025, Hteekhee led with $472.66 million in trade, followed by Tachilek ($80.48M) and Myawady ($63.23M). By June 2024, total border trade reached $737 million, down significantly from $1.7 billion the previous year.

Border crossings, particularly Myawaddy-Mae Sot, account for about 80% of Myanmar-Thailand trade, including legal and illegal activities in 2022-2023. However, ongoing armed conflicts have disrupted traditional routes like Myawaddy-Mae Sot, forcing traders to adopt alternative shipping methods.

The Yangon-Kawthoung-Ranong maritime route, launched in 2024, demonstrates the growing importance of container shipping, which offers more excellent reliability compared to uncertain land transport. By October 2024, this maritime route facilitated $60 million in trade, complementing traditional land routes such as Myawaddy-Mae Sot. For instance, in March 2024, Myanmar exported 1,767 tonnes of freshwater fish using 17 container ships from Aungmingala Port. These shifts underscore the adaptability of Myanmar’s trade networks amidst logistical challenges.

Myanmar-India Border Trade

Myanmar is the only ASEAN country sharing land and maritime borders with India, a crucial link between India’s northeastern states and Southeast Asia. The 1,643 km shared border with Arunachal Pradesh, Nagaland, Manipur, and Mizoram integrates isolated India’s northeastern region with ASEAN markets. Myanmar’s Sagaing Region and Chin State are key trade hubs.

Bilateral trade facilitated through Moreh-Tamu and Zowkhathar-Rhi volume remains modest, reaching $2.175 billion in 2016-17. Myanmar exports beans and pulses ($809 million) and timber ($156 million) while importing sugar ($424 million) and pharmaceuticals ($184 million), highlighting untapped potential in the trade relationship.

The introduction of the Special Rupee Vostro Account (SRVA) mechanism in 2024 has streamlined transactions by allowing settlements in Indian Rupees alongside Chinese Yuan and Thai Baht. This transaction reduces costs and promotes efficiency in cross-border commerce. However, challenges persist, particularly in the timber trade. Sanctions and smuggling have complicated this sector, with illegal activities often financing conflict with the military junta and Ethnic Armed Organizations (EAOs), which rely on these proceeds to support their operations. Political stability, law enforcement, and transparency are essential to address these issues.

Impact of Post-Coup Policies on Myanmar's Trade

Political instability following the military coup in 2021 has disrupted border trade and reshaped the economic landscape. The military junta has reversed economic liberalization, opting for restrictive policies emphasizing state control and self-sufficiency. Central Bank of Myanmar (CBM) mandated the repatriation and conversion of foreign currency income into Myanmar Kyat (MMK) within one day. While aimed at curbing USD outflows and rebuilding reserves, these measures have limited importers' access to foreign currency, stifling trade. Policies like the car import ban and increased licensing requirements (35% to 74% of import lines) reflect the SAC’s efforts to regulate economic activity.

The combination of these restrictive policies has led to several impactful changes in Myanmar's trade dynamics: Export values fell by $4 billion by 2023, while garment exports hit a five-year low due to the withdrawal of foreign brands. Economic restrictions have also fueled informal trade, particularly in timber, with an estimated 80% trafficked illegally to China and India. Rising prices for essential goods and transport disruptions have worsened inflation and food shortages, especially in conflict-affected areas.

Rising Influence of Ethnic Armed Organizations (EAOs)

EAOs have gained significant control over Myanmar’s border trade, undermining the junta’s authority. Key trade stations like Muse and Chinshwehaw with China are under EAO control, facilitating millions in daily trade. These groups’ strategic acumen and resilience have reshaped power dynamics, challenging the junta’s dominance.

Notably, the Muse trade station, controlled by the Three Brotherhood Alliance (3BHA), handles $6 million daily trade, while the Chinshwehaw station, under MNDAA control, handles over $1 million daily. As a result, Myanmar-China trade volumes have dropped from $640 million to $416 million in just one year, exposing the junta’s failure to maintain stability.

Strategic Importance of EAOs in Border Trade

Rakhine State is pivotal in China’s Belt and Road Initiative (BRI), hosting critical infrastructure like the Kyaukphyu deep-sea port and oil and gas pipelines. China's Kyaukphyu deep-sea port and Special Economic Zone (SEZ), a crucial endpoint for the China-Myanmar Economic Corridor, connect Yunnan Province to the Indian Ocean, offering an alternative route to bypass the Malacca Strait. As of August 2024, EAOs and PDFs fully control 10 of 19 Chinese projects in northern Shan State and central lowlands, worth over $2.4 billion, and partially control key infrastructure, including the China-Myanmar oil and gas pipelines, cross-border power lines, Muse-Mandalay railway, and significant trade routes.

As Myanmar's internal conflicts escalate, China and India have adopted strategies to safeguard their interests. India’s engagement with ethnic groups aims to ensure the success of strategic projects like the Kaladan Multi-Modal Transit Transport Project. China employs a dual-track approach, balancing relations with the SAC and EAOs to protect investments and secure supply chains. However, disruptions caused by the KIA's seizure of key border towns and rising rare earth prices underscore challenges to China's influence.

Growing EAO control over these projects highlights the Myanmar Military's inefficient role in stabilizing Chinese investment. As EAOs consolidate power, foreign stakeholders must engage directly with local actors (EAOs) to protect their interests and contribute to regional stability. Rakhine’s potential as a trade hub hinges on political stability and international cooperation.

Conclusion

Myanmar’s evolving trade landscape reflects broader political and economic upheavals. While border trade remains a vital lifeline, internal conflicts and restrictive policies have created significant obstacles. The rising influence of EAOs and strategic shifts by foreign powers underscores the need for innovative diplomacy and inclusive economic strategies.

Windia Soe is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). With over seven years of experience, she focuses on health and social behavior change, working with international and local NGOs.

“Advocating Sustainability, Shaping Our Future”

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Myanmar’s electric vehicle (EV) adoption initiative seeks to reduce fuel imports and foreign currency outflows. Still, critics argue it serves as a tool for the military regime’s economic control, with limited focus on equitable or sustainable development.

Key Takeaways:

1. EV adoption reduces fuel import dependency, but the policy prioritizes economic stabilization for the military regime rather than sustainability goals.

2. Import regulations and incentives disproportionately benefit military-linked entities, limiting competition and equitable market access.

3. Insufficient charging stations and unreliable electricity supply, especially in rural areas, hinder EV adoption and reflect gaps in long-term planning.

Evolution of Electric Vehicles in Myanmar

The program to promote Electric Vehicles was launched in late 2022 under a directive from the State Administration Council (SAC), Myanmar’s ruling military government, under Ministry of Commerce (MOC) order No.62/2022. Myanmar’s adoption of electric vehicles (EVs) is being positioned as a solution to reduce the country’s reliance on imported fuel, a significant source of foreign currency outflows. While this initiative aligns with global trends toward sustainable energy and transportation, it is also deeply intertwined with the political and economic priorities of the military-led government. Critics argue that the policy is less about environmental reform and more about bolstering the regime’s economic control amidst growing international sanctions and a power struggle.

By mid-2023, over 2,700 EVs had been registered under the initiative, with most imported from China. The government has framed the policy to reduce fuel dependency and save foreign currency. Still, observers note that the SAC’s primary focus appears to be economic stabilization for political leverage rather than environmental or developmental goals. The environmental benefits of EVs, such as reducing carbon emissions, remain largely absent from the government’s narrative.

Regulation on the Import of Electric Vehicles

EV import regulations are tightly controlled, with licenses granted predominantly to businesses linked to powerful military-affiliated (SAC) entities. Many of the country’s EV dealerships are owned by individuals close to the junta, raising concerns about market monopolization and lack of transparency. While centralized control ostensibly aims to monitor foreign currency outflows, it has created an uneven playing field, limiting competition and discouraging participation from smaller businesses and international stakeholders. The concentration of wealth and power within a narrow circle exacerbates existing inequities and has drawn criticism for prioritizing regime interests over broader economic benefits.

Income Tax Incentives and Exemption on Electric Vehicles

Efforts to incentivize EV adoption include customs duty waivers, commercial tax exemptions, and reduced registration fees. Citizens working abroad are also permitted to import one EV annually if they remit 25% of their monthly salary, amounting to over $200,000, through exchange channels under SAC direct control - a move aimed at increasing foreign currency inflows. However, the SAC exchange rate (1 USD ≅ 3000 MMK) set by the junta undervalues these remittances, effectively depleting their actual worth (1 USD ≅ 4500 MMK). These policies reflect the SAC’s broader strategy of leveraging EV adoption to consolidate economic control while the benefits for individual consumers and small businesses remain limited.

Challenges in Infrastructure and Electricity Grid

Infrastructure challenges further highlight the gaps in the government’s approach. While over 140 EV charging stations have been approved, only 38 stations (equipped with 51 chargers) are operational, primarily in urban areas like Yangon and Nay Pyi Taw or along the Yangon-Mandalay Expressway. Rural regions, where much of the population resides, remain underserved, mirroring the country’s broader inequitable development patterns. Compounding this issue is Myanmar’s unreliable electricity supply, which relies heavily on hydropower and natural gas. Seasonal droughts and fluctuating gas production often lead to power shortages, undermining the feasibility of widespread EV adoption. Additionally, the high cost of setting up charging infrastructure - ranging from $800 for basic home units to $80,000 for advanced public chargers - has deterred private sector investment.

Path to Sustainability or Regime Strengthening

Myanmar’s transition to electric vehicles (EVs) presents significant opportunities and complex challenges. On the one hand, it could reduce fuel dependency, promote a green economy, and contribute to global sustainability efforts. On the other hand, the initiative is deeply entwined with the political and economic agenda of the military regime, which has used the EV program to consolidate its control over the country’s economy.

To unlock the full potential of EV adoption, Myanmar must address critical infrastructure gaps, including expanding reliable charging stations and improving the electricity grid, especially in rural areas. The government must also prioritize renewable energy sources such as solar and wind to power the EV network sustainably. However, the regime’s focus on economic stabilization for political leverage rather than true environmental reform raises concerns about the equitable distribution of the benefits of EV adoption.

The current regulatory framework favors military-linked entities, limits competition, exacerbates economic inequality and undermines the program’s potential for broad-based development. Moreover, efforts to incentivize EV adoption - such as tax exemptions and remittance policies - are heavily tilted in favor of the regime, leaving smaller businesses and ordinary citizens at a disadvantage. The government’s focus on economic control, rather than fostering a competitive and transparent market, further hinders the EV initiative’s success.

To make meaningful progress, Myanmar must shift its priorities. This includes fostering local production of EV components to reduce import dependency and create jobs while ensuring that incentives benefit all citizens, not just regime-affiliated businesses. Expanding public awareness and providing affordable financing options for consumers can also help boost EV adoption.

Conclusion

Ultimately, Myanmar’s EV adoption initiative is a critical test of the military regime’s ability to balance its economic goals with broader developmental and environmental objectives. Without an inclusive strategy that addresses infrastructure, regulatory fairness, and renewable energy integration, Myanmar risks reinforcing existing power structures rather than achieving meaningful, sustainable progress. Only by addressing these issues can Myanmar harness the true potential of electric vehicles, securing a more equitable and prosperous future for its people.

Phyo Thura Aung is a Research Assistant at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). He passionately advocates for social change in Myanmar while advancing his academic journey in Vietnam.

Tin Shine Aung, Consulting Director at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc), reviewed and edited the article.

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Myanmar’s efforts to reduce poverty (Sustainable Development Goal 1) face significant setbacks due to escalating inflation and unemployment driven by political instability, economic crises, and conflict-induced disruptions.

Key Takeaways:

1. Inflation surged from 3.64% in 2021 to 30.2% by late 2023, fueled by currency depreciation, foreign currency shortages, and rising oil prices, pushing nearly half the population below the poverty line.

2. The military coup and COVID-19 caused mass job losses, with unemployment peaking at 4.34% in 2021, forcing millions into informal, unstable jobs and prompting a mass emigration of skilled laborers.

3. Political instability, military conscription, and declining investment have weakened Myanmar’s labor market, reducing job quality, wage levels, and overall productivity, compounding poverty.

Progress and Setbacks in Poverty Reduction

Myanmar, one of the least developed countries, has significantly reduced poverty over the last decade. Myanmar began a political and economic transition in 2011 under a controversial elected government led by a retired military leader, which led to its first semi-democratic transition in 2015. The 2017 Myanmar Living Conditions Survey (MLCS) reports that the percentage of the population living below the national poverty line decreased significantly, dropping from 48.2% in 2005 to 24.8% in 2017. Between 2011 and 2019, the country achieved significant economic growth, averaging 6 percent annually, and notable reductions in poverty. This progress was driven by economic reforms, increased foreign direct investment, the lifting of sanctions, and growing optimism for stability.

However, Myanmar’s development journey is complex, with the positive trends observed in 2017 were soon disrupted by the COVID-19 pandemic and subsequent political instability in 2021. By the end of 2020, the poverty rate was projected to rise from 6 to 11 percent, driven by declining incomes and limited coping mechanisms among vulnerable households. The 2020 Household Vulnerability Survey revealed that 83.3% of households reported income losses, particularly those reliant on small-scale family businesses.

In 2021, the economy contracted to 10%, with widespread job and income losses, inadequate government relief, and halted public investments. This contraction from the dual crisis shows no sign of recovery, pushing millions into poverty. Poverty has more than doubled, rising from 24.8% in 2017 to 49.7% in 2023; nearly half of the population was living below the poverty line, struggling to meet even their basic daily needs on just 1,590 Kyats a day (around $0.75). In 2023, the estimated average income per person in Myanmar was just 75,000 Kyats per month (about $35). In rural areas, incomes were even lower, 24% less than the national average, averaging around 75,000 Kyats.

Inflation: A Major Driver of Poverty

Amid ongoing crises, inflation has emerged as a pivotal factor driving the surge in poverty levels across Myanmar. After reaching a five-year low of 3.64% in 2021, inflation escalated dramatically, with consumer price inflation rising to 30.2% by the September quarter of 2023, according to Statista. This stark increase reflects deepening economic vulnerabilities exacerbated by external shocks and internal instability. The Asian Development Bank forecasted an average inflation rate of 8.5% in 2023, building on a 16% rate in 2022, underscoring the persistent inflationary pressure within the economy.

Food price fluctuation, a critical component of household expenditures, has further strained vulnerable populations. The World Food Program reported a 27% increase in food prices between October 2023 and April 2024, with conflict-affected regions such as Kayah and Rakhine experiencing even sharper spikes of 40–50% and up to 200%, respectively. These disproportionate increases highlight the compounded effects of regional instability and supply chain disruptions. The rapid erosion of purchasing power has pushed an alarming number of families below the poverty line, emphasizing the urgency for targeted interventions to stabilize prices and protect the most affected communities.

Several key factors contribute to this alarming rise in inflation, including;

1. Local currency (Kyat) depreciation: As of August 2024, the kyat has fallen to an all-time low of about 7,500 kyats per US dollar in the black market, a sharp drop from approximately 5,000 kyats earlier in the same month.

2. Increase in oil prices: Oil prices rose by 13% from December 2023 to April 2024, increasing 31% compared to last year. In response to escalating prices, the Central Bank of Myanmar implemented measures in early 2024 to provide fuel importers with access to subsidized exchange rates. However, persistent foreign currency shortages have hindered importers' ability to fully utilize these preferential rates fully, increasing local fuel prices.

3. Foreign currency shortage: The country has experienced significant foreign currency shortages due to a sharp decline in trade activity, which fell sharply by 55–64% within two months of the military takeover, as port operations were hampered by clearance delays, logistical challenges due to political unrest, and the temporary suspension of shipping services. This decline limits the availability of foreign currency as exports decrease.

4. Increase in the money supply by printing: Following the coup, Myanmar faced widespread civil disobedience movements that severely disrupted economic activities and caused cash shortages. In response to the cash shortage, the CBM increased the money supply by printing to address the cash shortages. As of March 2024, Myanmar's Money Supply M1 was reported at 23.245 billion USD, marking an increase from 21.523 billion USD in December 2023.

Although these are significant factors contributing to inflation in Myanmar, they are not exhaustive. Other elements, such as supply chain disruptions, rising production costs, and broader economic instability, play critical roles in shaping inflationary trends.

Unemployment’s Contribution to Poverty

The labor market in Myanmar has been severely affected by the military coup in February 2021. These disruptions have led to significant unemployment and underemployment, which in turn contribute to rising poverty levels across the country. In 2021, an estimated 18.9 million people were employed, reflecting a loss of 1.6 million jobs (8%) compared to 2020 due to the military takeover and COVID-19. Industries such as construction, garments, and tourism were hit hardest, with employment dropping by 31%, 27%, and 30%, respectively, compared to the previous year. Since 2019, the combined impacts of the pandemic and political crisis have resulted in 3.2 million people (14% of the workforce) losing employment.

Despite a reported decline in official unemployment rates—from 3% in 2022 to 2.8% in 2023—these figures fail to reflect the true challenges in the labor market. Many workers have been pushed into informal, low-paying, and unstable jobs, while reports of labor rights violations further underscore the precarious conditions faced by workers across the country.

Current Labor Market Situation

As of December 2024, Myanmar's population is approximately 54.6 million, with a working-age population between 15 and 64 years at 68.4%. Of 22 million employed in the country, approximately 48.8 percent work in agriculture, 16.9 percent in industry, and 34.2 percent in service industry.

The working-age population is projected to rise, reaching 39.2 million by 2030. However, employment gains have not kept pace with population growth, leading to a decline in the employment-to-population ratio, which dropped to 54.5% in 2022- a decline of 8.2 % from 2017. The decline is particularly severe in conflict-prone regions, where instability eroded economic activity and labor opportunities.

A significant recent development affecting the labor market is the enforcement of a military conscription law in February 2024, which mandates military service for men aged 18 to 35 and women aged 18 to 27, with evasion punishable by up to five years’ imprisonment. This has triggered widespread fear and migration, especially from urban areas to rural regions and neighboring countries such as Thailand. Labor shortages have become critical, as many employees have resigned to evade conscription. The mass exodus of young people has intensified the labor crisis, further straining an already fragile economy and contributing to the rise of child labor. In response, the garment and construction industries have been forced to increase wages to retain employees, but these efforts have not been enough to attract skilled laborers.

Trends in Unemployment

From 2004 to 2020, unemployment in Myanmar remained low, typically below 1.5%. However, unemployment spiked sharply to 4.34% in 2021, the highest in nearly two decades. This jump is attributable to mass layoffs in the public and formal private sectors after the coup. Additionally, international sanctions—including targeted measures by the EU and other countries—and Myanmar’s FATF blacklisting in 2022 deterred foreign investment, prompting the withdrawal of numerous Western companies and exacerbating the economic downturn. The garment sector shed an estimated 300,000 jobs after the closure of over 200 factories. Unemployment rates slightly decreased to 2.83–2.84% in 2022 and 2023, but the recovery remains fragile due to ongoing political instability and sanctions. The trends suggest that Myanmar may face challenges in stabilizing its labor market without substantial governance and economic policy changes.

Economic Consequences of Unemployment

The sharp rise in unemployment since the 2021 coup has worsened poverty and weakened the labor market. Key consequences include:

1. Declining Job Quality: The share of wage employment decreased from 36.8% in 2017 to just 28.9% in 2022, indicating that many workers have shifted toward self-employment or informal jobs with lower returns.

2. Impact on Women: Women have been disproportionately affected; their unemployment rate increased fivefold from just 2% in 2017 to approximately 10.2% in 2022, reflecting severe job losses across both public and private sectors.

3. Real Wage Decline: Real wages have declined by approximately 15% between 2017 and 2022, forcing over 70% of households into asset liquidation or borrowing as coping mechanisms due to wage losses.

4. Reduced Labor Productivity: Labor productivity has also suffered significantly; estimates show an 8% drop in productivity during 2021, followed by a further 2% loss early in 2022. This indicates that skilled workers are increasingly channeled into low-value sectors like agriculture.

5. Brain Drain: Since the coup, 1.6 million people have lost their jobs, including many from high-skill sectors. The emigration of skilled workers—especially those aged 18–25 years—has further weakened Myanmar's labor market.

These trends underline Myanmar’s economy’s deep structural challenges, with long-term implications for growth, poverty alleviation, and social stability. The interconnectedness of unemployment and poverty creates a vicious cycle, further undermining the well-being of vulnerable populations in Myanmar.

Conclusion

The relationship between inflation and unemployment is complex. High unemployment keeps wages low, while low unemployment can drive wages up, leading to inflation. In Myanmar, inflation and unemployment are rising, creating unique challenges that deepen poverty. Studies by the University of Ibadan show that rising inflation, unemployment shocks, and population growth strongly affect poverty in the short term. But, long-term strategies focusing on sustainable economic growth, stable governance, and investment in human capital are essential to breaking the cycle of poverty and achieving the SDG of eradicating poverty by 2030. However, the success of long-term strategies is deeply tied to political stability, which unfortunately appears increasingly uncertain and fragile in Myanmar.

Windia Soe is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). With over seven years of experience, she focuses on health and social behavior change, working with international and local NGOs.

“Advocating Sustainability, Shaping Our Future”

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The combined impact of economic hardship and forced military conscription on garment workers in Myanmar and their struggles reflect systemic exploitation in the global fashion industry.

Key Takeaways:

1. Myanmar’s garment workers endure severe exploitation, compounded by the military junta’s suppression of unions, inflation, and forced conscription.

2. The withdrawal of major fashion brands, citing ethical concerns, further destabilized the industry, leading to increased child labor and unsafe working conditions.

3. Addressing the crisis requires global advocacy, corporate responsibility, humanitarian aid, and targeted sanctions to restore worker rights and economic stability.

A recent commentary in Fulcrum by ISEAS illustrates the arduous conditions female workers face in Myanmar’s garment industry. Imagine a woman in her thirties rushing to a garment factory in Myanmar before the clock strikes 8 a.m. She knows even a minute’s delay will mean a deduction from her already meager daily wage of 6,800 kyats (≆ 1.5 $)—a sum that includes unpaid overtime. She works tirelessly from morning until 8 p.m., and her short lunch break is spent in crowded factory lanes or on the floor if she’s late to claim a spot. Holidays offer no reprieve; her boss pressures her to meet impossible targets, warning of grudges or job loss.

Her family’s financial strain forces her 13-year-old sister to abandon school and work alongside her, who was hidden by the company during inspections. Meanwhile, the looming threat of military conscription drives her brother overseas, leaving her as the sole provider. She endures harassment from a male supervisor, unable to speak out for fear of losing her job in a system devoid of unions.

This story might sound hypothetical, but it mirrors the grim realities faced by Myanmar’s garment workers, caught in a web of exploitation, inflation, and systemic abuse. This article delves into the factors crushing these workers under oppression.

1. Background of Myanmar Garment industry

Before scrutinizing the harsh realities of worker oppression, it’s essential to understand the broader landscape of Myanmar’s garment industry first.

Ahead of the COVID-19 pandemic, Myanmar’s garment sector was a key pillar of economic growth, supporting approximately 500,000 workers and accounting for 23% of all manufacturing jobs. Many workers, predominantly women, relied on these jobs to sustain their families, with 86% sending significant portions of their earnings back to rural areas. This financial redistribution was a lifeline for vulnerable communities.

However, the sector's promise has faltered under political turmoil. The February 2021 military coup, followed by steep inflation, import restrictions, and power outages, has disrupted operations. An estimated 150,000 jobs were lost during the first wave of COVID-19 alone, and by the end of 2020, over 100 garment factories had closed. Post-coup, the industry has seen additional factory closures and job losses, further imperiling workers’ livelihoods.

Amid this crisis, the demand for greater productivity has intensified. Many factories now demand double the productivity, forcing employees to work 10-hour days, often without weekends off, while wages remain stagnant or decline in real terms with inflation.

2. Jeopardizing Factors

To fully comprehend the plight of Myanmar's garment workers, let’s examine the role of major fashion brands, the impact of conscription, inflation, and the lack of union protection.

2.1. Exodus of Foreign Companies

Myanmar’s garment industry, once a global manufacturing hub due to its low labor costs and trade preferences, particularly with the European Union and the United States, has faced significant setbacks since the military coup in 2021. In 2022, exports from this sector reached $7.6 billion, with over half of the revenue stemming from EU markets. However, the junta's political turmoil and oppressive policies have driven several major brands, including Marks & Spencer, Uniqlo, and Inditex (Zara’s parent company), to exit the market.

These companies, guided by ethical disengagement frameworks developed with organizations like IndustriALL Global Union, cited escalating labor rights violations and operational risks as reasons for their withdrawal. Meanwhile, some brands, such as Adidas, have continued operations under stricter due diligence policies, though allegations of worker exploitation persist.

The Myanmar Garment Manufacturers Association reported that by December 2023, 298 member factories had ceased operations. This marks an increase of 52 closures compared to the previous year, with the share of non-operational factories rising to 36% from 31% in December 2022.

Foreign companies face mounting challenges in Myanmar, including new currency regulations that force exporters to exchange 75% of their earnings at unfavorable rates, rampant inflation, and frequent blackouts. Meanwhile, inspectors like IndustriALL and the Fair Wear Foundation flagged over 556 cases of human rights violations in factories linked to international brands by mid-2024. This growing exodus underscores the ethical and operational minefield that Myanmar’s garment sector has become.

2.2. The Impact of Conscription Law

Furthermore, introducing a new conscription law in 2024 has intensified the challenges faced by Myanmar’s workforce, particularly in the garment sector. Under the law, all men aged 18 to 35 and women aged 18 to 27 are eligible for military service, with the junta asserting that women will not be drafted for the time being. However, the broader impact of forced enlistment is already being felt across the workforce.

Factory workers, especially those from factories supplying international brands, have been drafted, disrupting production and creating widespread instability. A growing labor shortage has emerged in urban areas like Yangon, forcing some factories to increase daily wages to retain skilled workers. However, these efforts fall short of addressing years of wage stagnation.

The conscription law has also sparked fears of forced recruitment in industrial zones, with mass resignations and employers being pressured to provide personal details of their workforce. This has led to an increase in child labor as factories turn to underage workers to fill gaps, subjecting them to long hours and exploitation.

2.3. The Inflationary Pressures

In response to post-conscription labor shortages, some factories in Myanmar increased wages by 20–30% between 2020 and 2024. However, these modest raises have failed to compensate for years of declining real wages, especially when contrasted with the staggering 160% increase in the cost of a common diet during the same period. This disparity leaves garment workers struggling to meet basic needs, forcing many former workers into dangerous informal jobs, including sex work, to survive.

Fueled by excessive money printing and widespread distrust of the kyat, inflation has pushed living costs to unsustainable levels. Economist Jared Bissinger estimates that if wages had kept pace with skyrocketing inflation, the minimum daily wage would be 12,000 kyats instead of the current 6,800 kyats—insufficient to feed a family.

Concurrently, international brands exiting Myanmar due to ethical concerns exacerbate the economic strain, reducing foreign investment and destabilizing the currency. Skilled workers, facing bleak prospects, are fleeing the country, leaving factories reliant on underqualified and child labor to fill the gaps. Even modest wage increases in 2024, driven by labor shortages, fail to address the years of declining real incomes, further entrenching cycles of poverty and economic instability.

2.4 Suppression of Labor Unions

Since the 2021 coup, labor rights in Myanmar have plummeted to their lowest point, with the military junta systematically dismantling unions, banning collective organizing, and harassing labor leaders. This suppression leaves workers without any platform to advocate for fair wages or improved working conditions. The lack of union representation has exacerbated the exploitation of garment workers, who now face forced overtime, illegal dismissals, and wage theft without recourse.

Women comprise most garment workers and are particularly vulnerable in this union-free environment, lacking alternative income sources or support systems. The junta's crackdown on unions is part of a broader strategy to eliminate labor mobilization, as it sees organizing as a political threat to its authoritarian regime.

The absence of unions also blinds international brands to the ground realities in factories, preventing them from addressing labor abuses. Organizations like IndustriALL have brought attention to this crisis through the complaints of the OECD (Organization for Economic Cooperation and Development), urging global companies to uphold ethical supply chain practices. In the interim, the European Union, Myanmar’s largest garment export market, is reevaluating its "Everything But Arms" trade preferences, which, if revoked, could economically pressure the junta but risk further destabilizing the garment sector and its workers.

3. A Path Forward

Addressing these challenges in Myanmar’s garment industry requires coordinated efforts from multiple stakeholders. Given the situation's urgency, immediate action (described below) is needed to protect the garment worker’s rights.

• Corporate Responsibility: Brands operating in Myanmar must prioritize workers’ welfare, ensuring fair wages, safe conditions, and freedom of association. Companies that choose to disengage must do so responsibly, minimizing worker harm.

• International Advocacy: Labor rights organizations and governments must support rebuilding unions and advocate for reinstating workers' rights. Diplomatic efforts should focus on pressuring the junta to lift restrictions on labor organizing.

• Humanitarian Aid: Displaced workers and their families need financial and material support to navigate the economic crisis. This assistance can help mitigate the impact of job losses and conscription.

• Sanctions and Diplomacy: Targeted sanctions against the junta’s economic lifelines, coupled with diplomatic initiatives to restore democracy, can weaken the regime’s grip on power.

The plight of Myanmar's garment workers demands urgent attention from the National Unity Government (NUG). As the people's government, the NUG’s Ministry of Labour must intensify efforts to combat human rights abuses and hold accountable those exploiting worker rights by presenting the ongoing situation in UN meetings and ILO hearings. Strengthened collaboration with international labor organizations is essential to pressure global brands to adhere to ethical disengagement strategies. Such measures are crucial to curtail the military government’s financial gains from foreign investments and to protect the dignity and welfare of Myanmar's workers.

Conclusion

After analyzing the predicament of Myanmar’s garment workers it paints a grim picture of intersecting crises that have left them trapped and voiceless. Yet, their resilience in the face of such adversity is both inspiring and heartbreaking. These women and underage workers continue to endure, striving to keep their hopes alive despite relentless challenges.

The responsibility to act falls on those who claim to be governments, corporations, and global citizens who champion human rights and workers' welfare. Every moment of inaction dims the future of these workers. The international community must hold the military regime accountable, prioritise ethical labor practices, and ensure that Myanmar’s economic recovery is built on justice and dignity. Only then can the garment sector become a source of empowerment, paving the way for a more equitable and sustainable future.

Dr. Htet Khaing Min, a medical doctor, is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). He recently led Remote Health Projects, focusing on Community Health Worker programs in the border regions of Naga and Karen States.

“Advocating Sustainability, Shaping Our Future”

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Myanmar faces significant agricultural economic challenges as climate risks and socio-political factors intensify, increasing the urgent need for resilience, sustainable practices, and effective disaster management to ensure food security and protect livelihoods.   

Key Takeaways:

1.  Myanmar’s agriculture, the backbone of the economy, faces severe climate risks, including floods that impact food production, GDP, and community stability.

2.  Socio-political challenges, such as the 2021 military coup and COVID-19, have doubled poverty rates and disrupted essential climate-resilience initiatives, deepening vulnerabilities in agriculture.

3.  To build resilience, Myanmar needs climate-smart agriculture, sustainable land practices, and collaborative disaster risk reduction, though progress remains hindered by political instability and limited resources.

Myanmar is the second largest country in Southeast Asia, and agriculture remains a crucial component of its economy. According to Myanmar Agricultural Statistics, 17.74% is the net sown area, and 9.75% is a cultivable wasteland. Fertile land and abundant freshwater make Myanmar an ideal place for agricultural practices, which contributes approximately 22 percent of the country’s gross domestic product (GDP), accounts for over 29 percent of total export earnings, and nearly half of the employees rely on crop production, livestock, breeding, fishing, and agroforestry.  

Agricultural Vulnerability to Natural Hazards

Despite its significance, this sector is highly vulnerable to natural hazards, including floods, cyclones, earthquakes, droughts, landslides, and tsunamis. Storms and floods alone account for 11 percent and 10 percent of the disaster, respectively. In Myanmar, floods are most common during the monsoon season, from May to October, with river flood risks peaking at 49% in August. Flood exposure is exceptionally high in the densely populated Yangon and the Ayeyarwady Region, where flooding threatens agricultural production, residential areas, infrastructure, and community welfare.

Economic Impacts of Natural Disasters on Agriculture

Historically, Myanmar frequently suffers extensive losses of life, livelihoods, and property due to natural disaster events. From 2008 to 2023, approximately 49% of internal displacements - totaling around 7 million—were caused by flooding. The 2015 floods damaged 20% of the country’s cultivated land, and sectors such as agriculture, livestock, and fisheries were severely affected, with total losses equivalent to 4.2% of its GDP. The 2024 floods, intensified by Typhoon Yagi, submerged an estimated 2.3 million hectares of farmland during a critical rice-planting season, likely reducing paddy output to a slightly below-average level of 23.6 million tonnes.

Furthermore, the agricultural losses from floods, such as the $600 million GDP loss noted in 2018, highlight how extreme weather events increasingly threaten national economic stability. Between 2016 and 2019, floods contributed to an economic burden of approximately 3% of Myanmar’s GDP per year due to disaster-related costs. Beyond the direct costs, floods contribute to secondary economic consequences, such as inflation and reduced exports, which directly weaken purchasing power in affected communities.

Socio-Political Challenges Compounding Vulnerability

Myanmar’s economy has faced severe setbacks due to the dual impacts of COVID-19 and the 2021 military coup. These crises have nearly doubled the poverty rate from 24.8% in 2017 to a projected 48.2% by 2022, reversing years of progress in reducing poverty and improving livelihoods. Key sectors like agriculture and small businesses, which employ much of the population, have suffered significant income losses, with 83.3% of households reporting reduced incomes. Vulnerable groups, particularly women and children, bear the brunt of these impacts, as rising costs and disruptions limit access to essential goods and services.

Environmental Degradation and Agricultural Challenges

Besides, flooding also impacts ecosystems and biodiversity, leading to soil erosion, nutrient depletion, and water contamination, which harm agricultural productivity. Given these environmental and agricultural challenges, adopting sustainable practices is essential. Techniques like agroforestry, crop rotation, and organic farming can build soil resilience and foster biodiversity, reducing agriculture’s vulnerability to floods and other natural disasters. Furthermore, reforestation and wetland restoration can help absorb excess rainfall, reducing runoff and lowering flood risks.

Unfortunately, Myanmar is one of the top ten countries globally for deforestation, with a rate between 1% and 2.5% from 2000 to 2020. Additionally, since the coup, logging and mining activities have increased. These unregulated, widespread resource extraction activities exacerbate the effects of flooding, disrupt local ecosystems, and increase people’s vulnerability to climate hazards.  

Climate Change Projections and Future Risks

Projections show that average global temperatures may rise by as much as 4.5-5°C by the century’s end without global action. The Intergovernmental Panel on Climate Change (IPCC) predicts that the Southeast Asian region will face flood risks by 25% by 2050 if global temperatures continue to rise. For Myanmar, this would mean even more intense monsoons, potentially doubling the current levels of flooding and causing more significant agricultural losses.

Myanmar is already ranked as the world’s second most affected country between 2000 and 2019 and is the most vulnerable to new disasters in the coming years. By 2030, an additional 299,900 people may be at risk of river floods annually due to climate change. Without significant investments in adaptation, an annual average of 18 million people are projected to be affected by flooding due to sea level rise between 2070 and 2100.

Learning from International Experiences: Resilience Strategies

Many countries, like Japan and New Zealand, recognize the need for agricultural resilience and have implemented measures to help farmers adapt to climate risks. These nations are providing science-based information and decision-support tools. Often co-created with farmers, these tools offer strategies for handling extreme weather. Countries also use nature-based solutions, like Japan’s paddy field dams, to mitigate flood risks.

Therefore, Practical steps are urgently needed to strengthen Myanmar’s agricultural resilience in the face of climate risks. Myanmar has committed to applying Climate-Smart Agriculture to contribute to regional food security and environmental protection. This CSA strategy emphasizes developing flood-resilient rice varieties, improving water management, and promoting sustainable agricultural practices that withstand flood-induced stresses. Initiatives like the System of Rice Intensification (SRI) and Alternate Wetting and Drying (AWD) techniques are integral to this approach, helping farmers manage water more effectively to mitigate the risks of excessive rainfall.

Additionally, Myanmar’s CSA approach underscores the value of traditional flood-resistant crop varieties and indigenous farming practices, incorporating local knowledge as a crucial adaptation strategy. Indigenous farmers have valuable knowledge about local conditions and adaptive methods passed down over generations. Combining their traditional practices with modern farming techniques can strengthen resilience to flooding and other climate challenges. However, security concerns, limited mobility, and a lack of trust between communities and government bodies hinder this vital collaboration.

Policy and Institutional Challenges in Disaster Risk Reduction (DRR)

Despite the progress seen in various countries, Myanmar still faces significant challenges in incorporating effective flood mitigation strategies into its disaster risk reduction (DRR) policy. The Department of Disaster Management, under the Ministry of Social Welfare, Relief, and Resettlement, is central to coordinating DRR efforts. While frameworks like the Myanmar Action Plan on Disaster Risk Reduction (MAPDRR) 2017 have been developed, Myanmar’s disaster management faces critical challenges, including limited data, insufficient technical support, funding gaps, and a top-down policymaking approach that hinders effective local engagement and resilience efforts. 

Not just these challenges, but since the 2021 coup, political conflicts in Myanmar have significantly intensified the challenges faced in implementing flood resilience and disaster risk reduction strategies in Myanmar’s agriculture sector. Before 2021, the Myanmar elected government showed a strong commitment to addressing climate change, as evidenced by its first National Climate Change Strategy published in 2019, which prioritized climate resilience and disaster risk reduction. However, ongoing conflicts lead to the suspension or delay of government-led climate initiatives. Inadequate climate-resilience policies and a lack of investment in agricultural research have weakened Myanmar’s agricultural sector. 

Role of International Aid and Local Civil Society

Since the 2021 coup, international aid organizations, having ceased direct cooperation with the military-led State Administrative Council (SAC), now primarily fund local civil society organizations (CSOs) to implement DRR and humanitarian efforts. Local CSOs often work under intense scrutiny, face threats, and operate in volatile environments, particularly in SAC-controlled areas. Without stable political support, Myanmar’s capacity to adopt resilience strategies will remain limited, and local communities and the agricultural sector continue to face heightened risk. 

Building agricultural resilience in Myanmar is an economic priority and a foundation for food security and community stability. Addressing this complex challenge requires international collaboration, promoting education for sustainable development, and innovation across sectors. The path to resilience is a continuous process, demanding commitment from all parts of society - from government institutions to individual farmers. With the additional pressures of poverty and ongoing conflict, proactive measures are essential to protect livelihoods and foster sustainable agricultural development. Such actions today mitigate immediate risks and help build a sustainable, climate-resilient future for Myanmar.

Conclusion

Building resilience in Myanmar’s agriculture is not just a national concern but a regional one. The challenges Myanmar faces will likely have ripple effects throughout Southeast Asia. International collaboration and local empowerment are critical to addressing Myanmar’s agricultural vulnerabilities. Global stakeholders must continue to support local CSOs, encourage sustainable agricultural practices, and push for the restoration of democratic governance to enable climate resilience efforts to take root. 

Climate change, socio-political instability, and economic setbacks challenge food security and economic stability. However, with the right policies, practices, and international collaboration, Myanmar can build a resilient agricultural system capable of withstanding future challenges. The time to act is now for the sake of its people, economy, and its role in regional food security.

Windia Soe is a Junior Research Fellow at the Sustainability Lab of the Shwetaungthagathu Reform Initiative Centre (SRIc). With over seven years of experience, she focuses on health and social behavior change, working with international and local NGOs.

“Advocating Sustainability, Shaping Our Future”

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