For over 60 years, illicit economies have fueled Myanmar’s conflicts, shaping political power, financing insurgencies, and sustaining armed actors. Since the 2021 coup, the interplay between organized crime and conflict—the so-called ‘crime–conflict nexus’—has deepened, making criminal markets a critical factor in Myanmar’s future.

This report examines how illicit trade, from drug trafficking and arms smuggling to human trafficking and environmental crimes, drives instability in Myanmar. Illicit economies in Myanmar are deeply intertwined with the country’s political structures and conflict dynamics. For decades, criminal markets have not only funded armed groups but also shaped power balances at local, regional, and national levels. This interdependence means that actors engaged in these illicit networks could become key players in any future peace settlement, raising concerns about how crime and governance might continue to overlap.

One of the most lucrative and destabilizing industries in Myanmar is the heroin and synthetic drug trade. The country remains one of the world’s largest producers of methamphetamine and opium, with trafficking networks extending across Thailand, China, India, and Laos. These illicit revenues fuel both the military government and ethnic armed groups, ensuring that drug production remains a central driver of conflict. Without alternative economic opportunities for communities dependent on opium cultivation, efforts to dismantle the trade will be met with resistance.

At the same time, Myanmar has become a global hotspot for human trafficking and cyber scams. Criminal networks, often operating in border regions controlled by armed groups, traffic thousands of people into scam centers where they are forced to commit online fraud under threats of violence. This industry has grown rapidly since the 2021 coup, leveraging the breakdown of law enforcement and state control. While these scams target victims worldwide, their protection by powerful actors inside Myanmar makes intervention complex.

Myanmar’s vast natural resources, such as jade, timber, and gold, also play a pivotal role in the country’s conflict dynamics. Myanmar’s environmental wealth has long been exploited by both the military and ethnic resistance groups, with profits used to fund war efforts rather than public services or sustainable development. International sanctions have targeted state-controlled enterprises involved in illegal resource extraction, yet corruption and smuggling continue to sustain these illicit industries.

Past ceasefires and peace agreements have largely failed to address the role of illicit economies, treating them as bargaining chips rather than tackling their long-term consequences. As Myanmar moves towards an uncertain future, any viable political resolution must confront the influence of organized crime. Without targeted policies to disrupt illicit markets and provide alternative economic solutions, Myanmar risks repeating the cycles of instability that have defined its history.

The report calls for international cooperation, policy interventions, and targeted economic reforms to break Myanmar’s dependency on illicit markets. Any future resolution, whether federal or regional, must rebuild institutional and societal resilience to prevent criminal networks from dictating the country’s future.

This brief is part of the UN Security Council Illicit Economies Watch series, which provides insights into the impacts of illicit economies for Council-relevant countries through country and thematic reports. The illicit economy is a key underlying driver upsetting a peace continuum – and a more effective response is needed.