Myanmar regime scrambles to deal with loss of border trade hubs

Since late last year, anti-regime forces have captured more than half a dozen major border crossings, accounting for more than half of all overland trade between Myanmar and its neighbours. Over the past six months, starting with the offensive launched by the Brotherhood Alliance in northern Shan State late last October, an array of groups opposed to the junta that seized power three years ago have taken control of one border hub after another. The latest to fall have been along Myanmar’s border with Thailand. Earlier this month, the Karen National Liberation Army (KNLA) and its allies captured the Karen State town of Myawaddy, delivering a devastating blow to a regime already reeling from months of both military and economic losses. On Monday of this week, the KNLA also seized a Myanmar army base near Htee Khee, an important but less well-known international transit point farther south in Tanintharyi Region’s Dawei Township. To the north—at around the same time as the fall of Myawaddy—the Kachin Independence Army (KIA) took full control of Lwegel, a town on the Chinese border in Kachin State’s Momauk Township. Meanwhile, Karenni forces have taken control of Mese Township, which borders Thailand’s Mae Hong Son Province. Although it has been largely inactive in recent years as a centre for trade between the two countries, it is one of seven official border crossings. Last November, as the Brotherhood Alliance was taking over much of northern Shan State’s border with China, including the major trade hub of Muse, Chin resistance forces captured Rihkhawdar, a town on the border between Chin State and India. According to the junta’s official records, the total value of all goods that passed through these trade hubs was more than US$4 billion in the 2023-24 fiscal year. That’s 52 percent of all cross-border trade in the same period. While the regime still has a hold on 11 other border trading centres, it is clearly facing a major crisis at it struggles to maintain some semblance of control over the country’s economy. A ship docks at Yangon Port (Ministry of Information) Meanwhile, Myanmar’s business community is doing what it can to cope with the present reality. This means redirecting at least some border trade to seaports. “We might have to move our operations to the Yangon ports from the border areas. Many traders from Mandalay and Muse are already in Yangon,” said a leading businessman who is also a member of the Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI). Myanmar exports everything from rice, maize, and seafood to teak, jade, and other gemstones, while it imports a range of foodstuffs, home appliances, and industrial raw materials. Much of this trade has long taken place overland. According to the businessman from the UMFCCI, the current conflict actually hurts Myanmar’s trading partners more than it does Myanmar itself, because of the balance of trade. “The disruption in border trade affects China more than it affects us, because they export more to us than we do to them,” he said. According to an official from the regime’s ministry of economy and commerce who spoke to Myanmar Now on condition of anonymity, the flow of goods into Myanmar was already constrained by the country’s lack of foreign currency reserves, which has led to efforts to focus on local production of goods for domestic consumption. “We had to restrict the amount of imports, while the exports were already declining due to logistical problems,” he said. Meanwhile, the armed groups that now control some of the country’s major trade hubs say they will soon have them back open for business. “Trade has currently halted and though we haven’t yet begun operations, we will resume trading activity in coming weeks,” KIA spokesperson Col. Naw Bu said last week regarding the group’s plans for Lwegel. But other sites, such as Myawaddy, are unlikely to reopen anytime soon, as the junta gears up for a major offensive to retake the town. While Myanmar’s neighbours will likely try to avoid taking sides, at some point, they may have to start dealing with the country’s ethnic armed organisations (EROs) as legitimate trading partners, according to a business analyst who did not want to be named. “Each neighbouring country will have to rely on these EROs to reopen the border trading centres, which will give them greater recognition,” he said. But the regime is not just going to allow this to happen: Recently, the Myanma Port Authority announced that it had 50 cargo ships ready to handle both imports and exports.

Myanmar regime scrambles to deal with loss of border trade hubs

While businesses and trading partners do their best to cope with the current situation, the junta is focussed on maintaining some semblance of control

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