A frontline Kachin Soldier.
Photo: David Brenner
A frontline Kachin Soldier. Photo: David Brenner

Battlefield to marketplace and back

Peace in Burma is hampered by an economic logic of limited utility.
A frontline Kachin Soldier.<br />Photo: David Brenner
A frontline Kachin Soldier.
Photo: David Brenner

(This article is part of our print quarterly 'The Southasian Military Complex' from September 2014.)

In the 2008 film Rambo, a well-aged Sylvester Stallone gasped his way up the Salween River and through the thick jungle between Burma and Thailand. With the help of Karen freedom fighters, Stallone's character, the redoubtable John Rambo, was attempting to rescue Christian missionaries detained by the 'evil' Burmese Army. However problematic, the moral clarity of the 'Rambo approach to Burma' was nonetheless appealing: back then, it seemed easy to divide 'good' from 'bad' in a country ruled by a ruthless military junta.

In the intervening years, these binaries have been muddied. In 2011, former dictator Than Shwe paved the way for a series of wide-ranging reforms. A nominally civilian government was sworn in, a number of political prisoners freed, the National League for Democracy (NLD) re-registered and the right to peacefully assemble enshrined in law. The international media and Western policymakers lauded the new quasi-civilian rulers for their efforts to transform a country tormented by decades of authoritarianism, poverty and civil war. US Secretary of State Hillary Clinton even visited Naypyidaw for direct talks with President Thein Sein.

This article is part of our print quarterly '<a href="http://himalmag.com/single-issuepurchase/vol-27-3-southasian-military-complex/" rel="noopener noreferrer" target="_blank">The Southasian Military Complex</a>' from September 2014.
This article is part of our print quarterly 'The Southasian Military Complex' from September 2014.

Though Burma was never as isolated as many in the West assumed, democratic reforms have resulted in a level of political and economic engagement not seen since the country formed the eastern limits of the British Raj. But beyond the achievement of broad-based economic development, the consolidation of democratic reforms holds greater promise: the resolution of the world's longest ongoing civil war and the mainstreaming of the country's myriad ethnic armed groups. For many, this goal is assumed to progress in a linear fashion.

Rapproachment between Naypyidaw and the Karen National Union (KNU) supports this optimistic outlook. The country's oldest ethnic insurgency movement has, historically, been the least willing to compromise on its demands, continuing to fight throughout the 1990s, when most other armed groups agreed to ceasefires. But after signing an armistice in early 2012, the KNU has championed the peace process. The outbreak of heavy fighting between Burma's armed forces – the Tatmadaw – and the Kachin Independence Organisation (KIO), however, taints this rosy picture. Since the collapse of a 17-year-long ceasefire just weeks after the formal semi-civilian power transition in 2011, military offensives that continue to this day have taken a significant toll on the civilian population. The resumption of hostilities was particularly disturbing given the KIO's receptive approach to dialogue and its generally amicable relations with the Burmese establishment since signing a truce in 1994.

Though these coexisting realities appear puzzling, even contradictory, Burma's shifting tides of war and peace reflect a wider policy trajectory tied to the management of foreign investment. As external engagement with Burma increases, and foreign direct investment (FDI) flows, the degree to which the current government, and those subsequent to it, take heed of past failures, will define the prospects of a lasting peace.   

Transforming border economies
The long-lasting pragmatism of the KIO and other rebel groups has been directly related to the economic opportunities afforded by renewed Chinese and Thai engagement in Burma from the late 1980s onwards. Instead of Cold War-era policies that provided covert support to various non-state actors as a means of containing the Burmese Army, both countries became increasingly interested in exploiting Burma's vast natural riches, relatively large export market, and strategic location for the development of trade and energy infrastructure. Thai Prime Minister Chatichai Choonhavan's 1988 pledge to direct Indochina from 'battlefield to marketplace' and explore greater trade with its immediate neighbour's, coupled with China's focus on delivering prosperity to its landlocked interior, meant that Burma's borderlands became zones of immense strategic significance. As money flowed, peace became a lucrative business, not only for the newly formed State Law and Order Restoration Council (SLORC), but also the numerous armed groups whose grievances were, essentially, of a political nature. 

From the SLORC's perspective, investment offered multiple rewards. Facing the prospect of a united front between militarised democracy activists and ethnic armed groups, Burma's new junta reversed its previous strategy of total war, and instead concluded truces with individual armed groups. These agreements were made palatable to rebels by allowing them to retain their weapons and de-facto pockets of territory, as well as legalising their business activities. Unique geopolitical black spots were created, and a kind of 'ceasefire capitalism' established. Between 1988 and 2012, 65 percent of the USD 36 billion officially documented FDI was concentrated in these borderlands. Kachin State alone attracted 25 percent of overall investment during this period. Formal figures, however, only capture a small part of the picture: most investment and border trade goes unrecorded. The Ash Center for Democratic Governance and Innovation, a research and policy-focused initiative of Harvard's Kennedy Law School, estimates that jade exports in 2011, for instance, amounted to more than USD 8 billion. Officially, however, only USD 34 million worth of exports were declared.

Many observers have praised Burma's peace-making model as a positive take on the 'resource curse' narrative, arguing that it demonstrates how economic interests can move combatants to cease hostilities. But while ceasefire politics have stabilised the Sino-Burmese borderlands for many years, the state's escalating tensions with the Kachin, Shan and Palaung in Kachin and northern Shan State, as well as increasing hostilities with the Wa, defy the economist logic of Naypyidaw's counterinsurgent experts. Indeed, as events in Kachin State demonstrate, the limited scope of previous peace initiatives has contributed directly to the renewal of war.

From rebels to businessmen and back again
To understand why rebels-turned-businessmen suddenly rediscovered their revolutionary ambitions, imagining civil war as a binary contestation between rebels and the state is insufficient. Armed groups don't always have unified interests, nor do they necessarily pursue rational strategies to obtain them. As Aung Naing Oo, the associate director of the Peace Dialogue Programme at Myanmar Peace Center, an advisory body to the Burmese government, argues, the dynamics affecting the behaviour of armed groups include a complex web of kinship alliances, tribal divides, territorial interests, and political grievances. These, in turn, are affected by broken social fabrics, the war economy and disparate cultures of political negotiation. Simplistic attempts to corrupt rebels into peace via profiteering, therefore, may have an unexpected impact on the politics internal to armed groups, and can create outcomes that may not have been foreseen.  

This is exactly what happened in Kachin State. Though during a 17-year-long ceasefire the KIO was able to develop infrastructure such as roads and hydropower plants in areas under its control, little of the wealth trickled down to the communities. Instead, local strongmen exploited their territories' natural resources in collaboration with the Tatmadaw and Chinese companies, and lined their pockets with the proceeds. This new, entrepreneurial direction ignited factional infighting within the KIO, particularly over lucrative jade mine concessions, and culminated in a series of coups and assassinations among the rebel group's leadership in the early 2000s. The strength of the organisation's armed wing, the Kachin Independence Army (KIA), was punctured: lacking a credible revolutionary agenda, its rank and file deserted in the hundreds. The authoritarian model of self-enrichment promoted by the organisation widened the divide between rebel leaders and Kachin communities. But instead of leading to the movement's demise, increased factionalism and leadership rows only inspired a young generation of leaders whose agenda was less pragmatic, and less amenable to state overtures.

In recent years, the once-revolutionary KIO has returned to its roots. A co-founder of the organisation's youth wing in a rebel-held town close to the Yunnan border explained how this was achieved: "Some young officers had this idea: they organised university students and started the EEDY [the KIO youth wing]. And after that they also started an officer's school. Now most of the young officers are educated men… With that they could change the old people." By working with local churches and other civil society organisations, the aspiring leaders re-established the organisation's legitimacy among Kachin people. A local journalist, cheroot poised on his lips, told me: "Before these developments the people of Myitkyina [the government-controlled capital of Kachin State] were afraid of the KIA. Even though they are Kachin, they were afraid of the KIA, because most of the KIA leaders behaved just like mafia businessmen. But after that everything changed in the KIA."

As a part of Naypyidaw's attempt in 2008 to exert tighter control over armed groups, the government ordered those with which it had ceasefires to transform into Tatmadaw-controlled militias – a so-called Border Guard Force (BGF) free of political ambition. Many of the older generation of KIO leaders were inclined to give in to the government's demand. The young officers, however, perceived this to be the defacto death blow to their organisation. By this time they had already integrated large parts of the KIA with their own forces. In addition, they could count on popular support from local communities who generally despise Tatmadaw militias widely known for their illicit business activities and human-rights abuses. After organising public consultation meetings and paving the way for the older leaders to step down without losing face, the young officers took over the leadership and prepared for what would be an inevitable confrontation with the Tatmadaw. This did not take long to happen.

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