A new report by the Global Initiative Against Transnational Against Organized Crime titled Cashing In On Conflict: Illicit economies and the Myanmar civil war by Alastair MacBeath explains the impact of illicit economies on the civil war in Myanmar.

The report provides an overview of Myanmar’s illicit economies since the February 2021 coup. It shows how both the government and armed groups are engaged in a wide range of criminal markets to fund their activities. Indeed, Myanmar is one of the world’s most fertile criminal ecosystems, including opium production, drug trafficking, jade mining and trafficking, gold mining, arms and ammunition trafficking, timber trafficking as well as scam centers. Profits generated by these illicit markets are considerable. For example, it is estimated that Myanmar’s  jade industry generates an estimated US$31 billion a year in exports, which accounts for around 70% of the global trade.

The Global Organized Crime Index ranks Myanmar as the highest-scoring country in the world for criminality (8.15 out of 10). The situation is compounded by Myanmar’s low resilience to organized crime (1.63 out of 10). In fact, according to the Global Index, Myanmar has the largest criminality–resilience gap of any country (6.52).

The report highlights the nexus between instability and organized crime, and how illicit trade is integral to internal politics and power struggles. This stems in large part from ceasefire agreements between the government and several ethnic armed organizations since the 1980s. In what has been referred to as “ceasefire capitalism”, these deals enabled ethnic rebel groups to trade in any product, including drugs and environmental resources, in exchange for a cessation of hostilities. Some of these groups, colluding with state-embedded and foreign actors, also control border regions that are pivotal for cross-border trafficking. They also generate revenue by levying taxes and rents for goods transiting territory that they control.

Any initiatives to move Myanmar closer to sustainable peace will therefore have to address these lucrative illicit economies and their central importance to sustaining ethnic armed groups and the Myanmar military – the Tatmadaw. This will not be easy since, as the report points out, “any intervention in the country’s illicit economies will be at a considerable political cost to whatever government is in power, not only in regard to the power dynamics between the various political actors, but also due to the socio-economic reliance of local communities on the illicit economies for their livelihoods and survival”.  Therefore, tackling Myanmar’s illicit economies is a political as much as a law enforcement challenge.