Aung San Suu Kyi has now spent a year as the de facto leader of Myanmar. She has avoided clashes with the country’s former military rulers and there are clear, if ponderous, signs of progress on legal reform, banking and financial regulation, and rules for foreign investors. Downtown Yangon is choked with construction cranes and traffic jams of newly purchased automobiles. However, this progress – and the positive sentiment that should go with it – is threatened by one thing: Myanmar’s long-troubled relationship with its ethnic and religious minorities. Much of the international press has been devoted to the humanitarian crisis in Rakhine state and the plight of the Rohingyas, but this is only one unique piece of the ethnic puzzle.

Fundamental conditions for development

If Myanmar’s good news development story is to prevail, two fundamental conditions are necessary. First, all of the country – not just the 60% ethnic Bamar majority – must genuinely be brought into the development process. Second, Myanmar must be sustainably connected to its more developed neighbors (especially China and Thailand, which represent 60% of Myanmar’s trade). At present, neither of these two conditions exists and the situation is mutually reinforcing since most of the country’s minorities live in Myanmar’s border areas. The land routes north and west remain subject to instability in Kachin, Shan, Karen and Mon states where major ethnic armed groups (EAGs) are in active conflict with the central government. In many cases, conflicts have been raging on and off since the formation of an independent Burma in 1948.

The 'ethnic question'

The solution of the ‘ethnic question’ has been a key focus (some would say a preoccupying one) for Aung San Suu Kyi. It’s a legacy thing. Her father, the independence hero Aung San, tried to create a united, multi-ethnic state before his untimely death. ‘The Lady,’ as she is often called in Myanmar, wants to realize that dream. The second Union Peace Conference (also called the 21st Century Panglong peace conference after the original conference held by Suu Kyi’s father in 1947) is expected to take place on 24 May, after being postponed several times. Although some smaller EAGs are expected to sign the Nationwide Ceasefire Agreement, this conference is unlikely to deliver breakthrough results.

Aung San Suu Kyi comes to this renewed peace process with few advantages: she discarded the previous team of government negotiators who had built a degree of trust with ethnic separatist groups and a great deal of experience; she does not control the military, which – like the EAGs – has vested interests in the perpetuation of a ‘conflict economy’; and the EAGs do not trust her any more than they did past military representatives (in their view, she, like the military, only represents ethnic Bamar interests).

So, how is the ‘ethnic question’ to be resolved? Three conditions must be met for the incentives to outweigh continued conflict.
  1. First, pressure must be applied by Myanmar’s neighbors to the EAGs they support and shelter. This is especially true in the case of the conflicts along the northern frontier involving the Kachin, Kokang Chinese and Wa (who run a large, well-armed narco-state).
  2. Second, a financial endowment must be raised to “purchase” the agreement of combatant leaders on both sides to cease conflicts that generate huge illicit cash flows from narcotics, gems, jade, timber, minerals, smuggling, protection money and transit ‘taxes’. 
  3. Finally, the Bamar majority must reconcile itself to the fact the Union of Myanmar will only succeed if it lives up to the name – a practical federal union with decentralized powers at state level. 

Fortunately, there is an ASEAN model to emulate here – Indonesia. Like Myanmar, Indonesia is a large, diverse resource-rich nation that also transitioned from an autocratic military dominated government (that served as something of a model for Myanmar’s junta) to what is now arguably South-east Asia’s freest democracy. This was only possible by decentralizing the state and sharing revenues with localities, a process that was phased in over a decade.

The factors needed for lasting peace are clear to all. After 70 years of conflict, all sides recognize that movement towards this objective isn’t going to be rapid, and Myanmar even has an ASEAN ‘blueprint’ to follow from Indonesia. The question is: who wants it? The real struggle in Myanmar is between those who profit from the conflict franchise and those who wish to realize broader gains from closing it down.

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