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Myanmar Moving Forward

Who 3D Prints
Current Political RisksWhat in 2033?
& Future Scenarios

INTRODUCTION
For 41 years, a military junta suppressed almost all dissent in Myanmar, wielding absolute power in the face of
international condemnation and sanctions. In 2011, however, a nominally civilian government led by former military
commander Thein Sein was installed. President Sein has introduced a series of political and economic reforms, including
arranging the release of democracy activist Aung San Suu Kyi after 15 years of house arrest. This has been clear progress
which has given the country a boost in international legitimacy. In fact, the international community, led by the U.S., has
actually reengaged with Myanmar through aid and the removal of non-military sanctions.

The question is whether this positive momentum can continue. Expectations for a stronger economy and fair democratic
elections in 2015 are high. However, there are several areas of concern, including but not limited to: sectarian violence
involving the Muslim minority population and Buddhist monks, media censorship, opium production, the military’s role
in politics and government corruption.

In November-December 2013, Wikistrat ran a two-week crowdsourced, online simulation where over 60 analysts
collaboratively explored Myanmar’s current political risk factors – i.e., social, political, economic and geopolitical threats
to national stability. Wikistrat’s community then built on this analysis, mapping out possible futures (positive, negative
or mixed) for the new democracy in 2015. The main objective of this simulation was to determine the factors that may
pose a threat to Myanmar’s much-praised and ongoing reforms, leading to important strategic insights.

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intelligence products.
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Snapshot of Current Political Risk Factors

The Political Domain

LEVEL OF THREAT

HIGH

Military, Constitution, Politics and the 2015 Elections

The Myanmar Armed Forces have long had a say in the political affairs of the nation. This traditionally strong, bureaucratic
guardian military has stunted the growth of democratic institutions. Today’s ruling party is made up of a number
of current or former military elites and the constitution guarantees 25% of parliamentary seats go to army men. In
addition, the constitution suggests democracy activist and presidential hopeful Aung San Suu Kyi cannot be a candidate
in the 2015 elections because only someone with a military background can run and anyone with a foreign spouse is
excluded (Aung San’s late husband was British). If there is no change before the 2015 elections, Aung San will likely
launch a movement for change that could lead to significant violence between protesters and the army. Constitutional
reform is also key in the ongoing ethnic peace process – failure to address ethnic rebels’ concerns will present a threat
to stability.

Land Seizures by the Military

Land seizures by the military are a significant problem facing Myanmar today. Recent reports suggest that more than
3,100 hectares of land in the Latpadaung region were confiscated in 2012 to allow for an expansion of a copper mine run
by the military and Chinese industries. Land seizures are also a very significant area of concern for ethnic minorities;
there is pressure on rebel leadership from their support base and civil society organizations to see that land is returned
and compensation given.

LEVEL OF THREAT

MEDIUM

Corruption
Concerns about corruption and the dubious role of certain military, political, business and judicial elites persist. The
military’s vast economic empire includes a web of crony business relationships. The lack of oversight also enables illicit
transnational crime such as human, arms and narcotics smuggling, as well as money laundering.
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The Economic Domain

LEVEL OF THREAT

HIGH

Rising Inequality
The divide between the rich and the poor as well as between majority ethnic and minority groups is growing, posing
a threat to economic (and social) stability. Myanmar is the least developed country in Southeast Asia and 25% of the
Burmese live off less than 1.25 USD a day. The government’s economic reforms mainly benefit small and well-connected
sectors but do not affect general levels of inequality and poverty. Foreign-funded projects are a further threat in rural
areas where they have priority over farmers, populations and local livelihoods.

LEVEL OF THREAT

MEDIUM

Illegal Drug Trade

Myanmar is the world’s second largest opium producer and a significant source of illicit methamphetamine products.
In 2012, poppy cultivation jumped 17% to involve 51,000 hectares representing 25% of the global crop and producing
10% of opium for the international market. Should the current or future government of Myanmar attempt to dismantle
or disrupt the production and manufacturing of illicit narcotics by pro-government militias or ceasefire groups, this
may result in a deterioration of the security situation in Shan and Kachin States. It may also provoke an internal power
struggle within the ruling Union Solidarity and Development Party (USDP) and the military as several elected USDP
members are also part of pro-government militias involved in this trade.

LEVEL OF THREAT

LOW

Power Shortages
Myanmar has a significant potential to produce electricity from hydroelectric dams and gas-fired generators.
Unfortunately, due to poor infrastructure, inefficient production methods and the export to China, demand is not being
met. The country has suffered from power shortages in recent years, leading to nationwide protests.

Skyrocketing Inflation and Exchange Rate Volatility

The World Bank estimates that Myanmar’s inflation has recently increased to 7.33%, owing to the significant increase in
food prices. Adding to this vulnerability, since 2012, when Myanmar abandoned its pegged exchange rate and adopted
a managed floating exchange rate, the Kyat has lost about 20% of its value against the U.S. dollar.
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The Social Domain

LEVEL OF THREAT

HIGH

Tentative Ethnic Peace Process

Following the signing of ceasefire agreements between the Myanmar government and the majority of the country’s
armed ethnic rebel organizations (e.g., Karen National Union, Kachin Independence Organization, United Wa State
Army), there is momentum to achieve a political settlement to a six-decade old civil war. However, continued military
operations by the army as well as concern over the position of the leadership of the USDP and military over issues
of autonomy, disarmament, development of ethnic regions and the return of refugees continue to undermine the
confidence of the rebel organizations. This may result in the current peace process either stagnating or completely
breaking down, resulting in either a new “cold” standoff between the army and rebel forces or else the full resumption
of military activities by all sides.

Human Trafficking
With approximately 600,000 Burmese migrants registered for work in Thailand as well as hundreds of thousands of
other undocumented workers and refugees, any attempt to shift this labor to Myanmar may cause economic and social
disruption. This could cause civil society organizations, labor organizations and political parties to campaign for legal
reform and even discredit the ruling Union Solidarity and Development Party (USDP) and military for their management
of these issues, creating instability.

LEVEL OF THREAT

MEDIUM

Sectarian Conflicts
Since 2012, anti-Muslim violence has spread from the Rakhine State to other parts of the country, in a context of rising
Burman-Buddhist nationalism and growing influence of the monk-led 969 movement (that urges a boycott against
Muslim businesses). Years of frustration and anger under an authoritarian regime might now be used by a populist
political force and directed toward Muslims. Without effective government responses and changes in societal attitudes,
violence could spread again, creating more social instability and potentially impacting the political transition.

Stateless Rohingyas
The Rohingya Muslim minority is not recognized by the government and has existed for decades without citizenship or
nationality. Due to their statelessness, they do not have access to basic social services and rights that come with being a
citizen. They are also subject to discrimination, violence and human trafficking. Since 2012, there has been a recurring
cycle of Buddhist-Muslim violence in the states of Arakan and Kaman.
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The Geopolitical Domain

LEVEL OF THREAT

HIGH

Thai Unrest and Burmese Suppression

Unrest in Thailand is likely to seriously disrupt or possibly even halt efforts to repatriate refugees living in camps on
the Thai-Myanmar border – an important step for Naypyidaw as a sign that the country‘s civil war has ended and that
genuine political and economic reform is being undertaken. This may in turn embolden hard-liners within major ethnic
rebel groups including the Karen National Union to slow down or even end the current peace process leading either to
a stand-off or even full resumption of military activity by both the Tatmadaw and rebel forces.

LEVEL OF THREAT

MEDIUM

China’s Dominating Influence

China has been and continues to be Myanmar’s biggest economic partner and geopolitical ally. China’s trade has been
vital given the state’s relative international isolation in growing its economy in recent decades. China has sought to
diversify its energy base and Myanmar will become a major source and transshipment point for the superpower’s energy
needs. But Myanmar is struggling to accommodate a large Chinese minority into its government, this being especially
the case in the Kokang region. It is likely that any political or security changes in Myanmar through internal or external
forces would involve a response from China.

LEVEL OF THREAT

LOW

Regional Islamist Militant Groups

Islamist militant groups in Bangladesh, Pakistan, Afghanistan, Uzbekistan and Lebanon have released statements
declaring jihad over the fighting between Buddhists and Muslims in Myanmar. This was sparked by the Buddhist-Muslim
violence in Rakhine state starting in May 2012. Elsewhere, Indonesian authorities foiled an attempted suicide attack on
the Myanmar embassy during May 2013.
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2015 Future Scenarios

Wikistrat’s crowd built on the political risk analysis in Phase I to map out 30 possible future scenarios for Myanmar in
the year 2015 within the spheres of the economy, politics, society and geopolitics.

The scenarios were then organized into four Master Narratives (MNs), going from the worst possible outcome (external/
internal risk factors derail reforms) to the best possible outcome (external/internal risk factors do not derail reforms ).

Two questions were answered in each MN. First, what more dominantly shaped the particular scenario – external or
internal risk factors? Second, how did these risk factors impact the country’s much-praised political and economic
reforms?

The graphic below shows an X-Y chart of the four Master Narratives:

Reforms Not Derailed

TEXT

MN III:
MN IV:
Good Fences
Democracy
Make Good
Delivers
Neighbors

External Risk Internal Risk

Factors Factors

MN I: MN II:
Enemy at Hitting Rock
the Gates Bottom

Reforms Derailed
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Master Narrative I
Enemy at the Gates
[External Risk Factors + Reforms Derailed]

In this MN, existing threats to stability unravel in the social and economic spheres. The pace of government-led
reforms thus suffers. This prompts outside powers like China to step in to secure its interests on Myanmar’s
soil. Government weakness also allows for the rise in methamphetamine production, regional diplomatic
tensions and Islamist militancy.

China Supports Ethnic Armed Groups

The fragile ethnic peace process falters and China supports the rebel groups that can protect its key interests and
investments, such as oil and gas pipelines, hydro-dams and mining pits. The intent is to maintain secure access to
resources within Myanmar – the quickest and cheapest source of resources for the growing and increasingly affluent
southern Chinese provinces.

Bangladesh and Myanmar Lock Horns Over Rohingya

A weak government will be unable to make any concrete progress on the Rohingya issue. This will result in high levels
of forced migration towards Bangladesh, resulting in a dispute between the two nations over Rohingya refugees.

Political Tensions with Thailand

Myanmar has a long history of being a hub of human trafficking and smuggling of migrants to Thailand. This is only
worsened with a weak domestic government. Bilateral tensions between the countries increase as the Thai government
exploits the issue of illegal migrants to divert attention from unpopular domestic decisions.

Methamphetamine Production Leads to Regional Tensions

Myanmar becomes a key methamphetamine production and trade hub. As criminal
organizations within the country become the new entrants in the lucrative regional
methamphetamine market, it causes tension with rivaling methamphetamine producers
and criminal organizations in neighboring Thailand and Malaysia. China and India demand
the Myanmar regime gain control and destroy the hub.

FDI Starts to Fall

Due to the uncertainty of the return on investment in an unstable Myanmar run by a weak
government, foreign investors start to pull out. The vast and complex web of businesses
and interests maintained by Tatmadaw through the Union of Myanmar Economic Holding Limited and the Myanmar
Economic Corporation remain dominant in the local economy, which some investors may feel hesitant to challenge.

Regional Islamist Groups Fight for the Rohingya

As the result of continued poor treatment of the Rohingya Muslim minority and violence by state authorities and
Buddhist extremist groups, a new jihadist front is opened in Myanmar with fighters drawn from other battles. Regional
Islamist extremist groups rally to Myanmar during 2015, making it the newest battleground in the global jihad.
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Master Narrative II
Hitting Rock Bottom
[Internal Risk Factors + Reforms Derailed]

In this MN, internal challenges are not sufficiently tackled due to the decline in government legitimacy. The
domestic trigger is the Sein government’s failure to allow for constitutional reform for a legitimate election in
2015 that would enable Aung San to run. Aung San and pro-democracy activists protest the military-influenced
regime. Existing threats to stability unravel in the social sphere – i.e., among ethnic and sectarian groups. This
is especially the case after the 2014 census but is only further exacerbated after the 2015 election with no
constitutional reform. The pace of all reforms thus suffers. Maintaining law and order is the primary focus of
the military-dominated regime.

Civil Society Blows Up

The failure to allow for constitutional reform before the 2015 election leads to Aung San and her supporters to hold
mass protests in the name of democracy. This leads to violence as some protesters are arrested and even shot at.

2014 Census Brings Disunity

The long-anticipated “official” 2014 census leads to mass disunity even before the election.
It divides the country between major races and ethnic groups, opening a new and heated
debate on national identity. There are demands for a new federal system of government
that would allow for some degree of autonomy for the country’s ethnic minorities.

Ethnic Peace Process Breaks Down

The potential for a resolution on the world’s longest running war ends in 2015 as talks break
down between the government and the various ethnic-based armed groups. The nationwide
ceasefire grinds to a halt and civil war-like conditions ensue, hindering Myanmar’s political
and economic reforms that began in 2011.

Use of Anti-Muslim Nationalism

The senior leadership of Myanmar’s quasi-civilian regime attempts to exploit anti-Muslim Bamar-Buddhist nationalism
as a tool to maintain its grip on power. The decision is taken to use local police, the notorious and rebadged Nasaka
border security force – as well as to tolerate a certain amount of of anti-Muslim activism to stoke ethno-religious
tensions between Myanmar’s Bamar Buddhist population and the country’s Muslim minorities, especially the Rohingya
in Rakhine State.

Opium Hub
By 2015, Myanmar plays a major role in the international opium and heroin economy. It maintains the second global
position behind Afghanistan but reaches first when it comes to supplying the growing consumption markets in East and
South Asia. Production booms in regions and areas with weak state control and acute underdevelopment, and traffic
amidst growing trade driven by regional economic integration. As a whole, the opium economy in Myanmar builds upon
historical, geographical, economic and political factors that allow the country to position itself as the major supplier to
East Asian markets.
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Master Narrative III

Good Fences Make Good Neighbors
[External Risk Factors + Reforms Not Derailed]

In this MN, external challenges involve foreign powers’ presence on Burmese soil. But ruling military and
political elites have one agenda – to push their country forward while leveraging such foreign interest as
much as possible to their advantage. The goal of Myanmar reaching its (economic) potential supersedes any
infringement on national sovereignty that may be taking place.

The Sein government allows for constitutional reform for a legitimate election in 2015 that sees Aung San
as winner. Aung San’s military-influenced government takes advantage of the superpower rivalries playing
out on its soil involving China, India and the United States. It also capitalizes on the interests of foreign aid
agencies and NGOs while Myanmar is such a global priority and has growing legitimacy worldwide.

Sino-Indian Competition
The new center-right government in New Delhi decides to take proactive policy measures to strengthen its influence
in its neighborhood – i.e., to lock-in resources for the growing Indian middle class, to gain ideological and political
points domestically and to make geopolitical strategic advances in the region. It ventures into Myanmar with a new
vigor. China intensifies its interaction with India’s neighbors for strategic and economic reasons. A tough competition
becomes inevitable and Myanmar exploits the regional rivalry for its own economic gains.

U.S.-China Soft Power Struggle

Sein’s recent efforts to reform Myanmar have led to reduced sanctions, opening up
opportunities for global trade and international investment. China’s desire to maintain
influence and the U.S.’s desire to balance human rights and economic opportunity may lead
to a soft power struggle to gain favor of (or influence over) the Myanmar military. This
struggle with China may provide the economic incentives to push the U.S. further towards
supporting the NLD and Aung San Suu Kyi, anticipating a change in power in the 2015
election. Other countries in the region are attentively following and picking sides in this
U.S.-China soft power struggle; for example the ASEAN+3 countries may find themselves
leaning towards China to get a share of profitable economic ties with Myanmar. Ultimately,
Myanmar enjoys the attention from these rival superpowers, given the economic gains for the country.

International Donors, Beyond the Superpowers

Aung San’s leadership boosts Myanmar’s global legitimacy even more in 2015 after the election. Her presidency attracts
more foreign investment and aid to build the country. While the U.S., China and India compete for influence in Myanmar,
Aung San secures funding from smaller players like certain European and Asian countries, U.N. agencies and non-
government organizations like the Soros Foundation. This gives Aung San’s presidency more than enough resources to
ensure reforms can continue for Myanmar to reach its potential.
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Master Narrative IV
Democracy Delivers
[Internal Risk Factors + Reforms Not Derailed]

Internal challenges are nipped in the bud as soon as possible due to the government’s commitment to reforms.
The Sein government allows for constitutional reform for a legitimate election in 2015 that sees Aung San
as winner. This does not mean a complete transition to democracy, as the military is still a power player in
the country. But corruption is addressed for the first time by ruling elites. Aung San’s military-influenced
government is also committed to economic reforms that include energy development and a reduction in the
opium trade. Longstanding social issues such as the Rohingya and refugees are tackled.

Aung San Plus Military Government

After a long tussle, there is a compromise power-sharing formula between Aung San and the
military-dominated government with the help of the international community. Aung San is
given limited powers to run the government with the military retaining crucial ministries
like defense, foreign policy and internal security.

Efforts to Tackle Corruption

In an attempt to further the economic and political development of Myanmar, the
government tackles corruption within the military and politics. Convinced that this is best
for the country, both civilian and military leadership buy in, establishing a future cut-off
date and an amnesty for past offenses. Examples are made of some high-ranking military officials in order to show that
corruption is no longer acceptable.

Energy Exploitation
There is increased demand and a rush for energy resources (oil, coal, gas, hydro) by foreign and domestic firms.
The country’s economic standing improves significantly. Increased energy production leads to increased industrial
production and hence increased exports earnings.

Progress Towards an Opium-Free Economy

In 2012, Myanmar’s government pushed its deadline from 2014 to 2019 for the country to become an opium-free
economy. Some advances are made by 2015 – e.g., on World Drug Day, the government burns almost $80 million in
drugs. Some farmers are convinced by government and foreign aid agencies to grow tea instead of poppy in the northern
areas where 90% of this country’s drug is made.

Refugees Repatriated
By 2015, negotiations between Myanmar, Thailand, Western governments, the U.N. and NGOs see a deal struck to begin
the repatriation of the 130,000 (Buddhist and Christian Karen) refugees living in camps along the Thai-Burmese border.
UNHCR and government coordination is essential to the success of repatriation.

Rohingya Muslim Minority Made Citizens

The decision to grant the Rohingya citizenship is made amid an environment of controversy, instability and even violence
that follows the 2014 national census. Many ethnic minorities claim they have been undercounted, leading to significant
protests against the government that ultimately pave the way for policy changes.
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Strategic Takeaways

• If the current government of President Sein does not allow for constitutional reform that gives Aung San a chance
to run in the 2015 election, domestic and foreign legitimacy will decline. There will be significant civil unrest led
by pro-democracy activists. This means the government will not be able to keep reforms going. All social, political,
economic and geopolitical risks will be exacerbated to the detriment of Myanmar’s overall development.

• The sectarian violence since 2012 between Buddhist and Muslim minority groups (including the stateless
Rohingya) shows no sign of abating. It can only be resolved if the government after 2015 acknowledges the issue
as sectarian, rather than dismissing it as a law and order issue. Some kind of dialogue between representatives of
both sides is needed at the local and national level.

• The ethnic peace process is fragile at best. It will only be exacerbated by the 2014 census, unless the Sein
government legitimately acknowledges all ethnic groups. It can only be resolved with legitimate commitment
from all parties for peace.

• A real move towards an opium-free Myanmar would require a permanent resolution with rebel groups, many
of which are involved in the drug trade; the current tactics of international organizations and the Burmese
government will then have to be increased to ensure poppy farmers are given alternative forms of employment.

• Military corruption and land seizures can only be tackled if all military and political elites are truly committed to
reforms and Myanmar’s long-term development toward democracy.

• The economy is in the hands of the ruling government. If its legitimacy is hit especially with rising ethnic/sectarian
violence, it can be expected that inequality, inflation and exchange rate volatility will become an issue. Foreign
aid will decline.

• Any progress with human trafficking will require a coordinated effort from Myanmar, its neighbors, U.N. agencies
and NGOs. The relevant domestic legalities and international laws must also be part of this effort.

• If the current government of President Sein does allow for constitutional reform that would give Aung San a
chance to run in the 2015 election, domestic and foreign legitimacy will increase. This means the government will
be able to keep reforms going. All social, political, economic and geopolitical risks will be tackled with the help of
both internal and external actors. This is the ideal future for Myanmar in 2015.
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ATTRIBUTION:
[cover] This work, “MMF Cover” is a derivative of “Myanmar’s Complex Transformation: Prospects and Challenges” by Chatham House licensed under Creative Commons
Attribution 2.0 Generic; “8888s Anniversary” by Kwatonge under the GNU Free Documentation License; “Remise du Prix Sakharov à Aung San Suu Kyi par Martin Schultz
au Parlement européen à Strasbourg le 22 octobre 2013” by Claude TRUONG-NGOC under the Creative Commons Attribution-Share Alike 3.0 Unported license; and c.4
“Flag of Burma” by Unknown, released into the public domain; used and under C.C. by Lala Elizan
[page 7] This work, “MN1 Image” is a derivative of “2 Gs of Tweak” by Psychonaught, under Creative Commons CC0 1.0 Universal Public Domain Dedication; and
“Location of XY (see filename) in the region” by TUBS, under Creative Commons Attribution-Share Alike 3.0 Unported; used and licensed under C.C. by Lala Elizan
[page 8] “Monks Protesting in Burma” by racoles, under Creative Commons Attribution 2.0 Generic license.
[page 9] This work, “MN3 Image” is a derivative of “Chinese Flag” by Mart1n under, under a Royalty Free License; “Bright USA Flag” by bosela, under a Royalty Free
License; and “Flag of Burma” by Unknown, released into the public domain; used under C.C. by Lala Elizan
[page 10] This work, “MN4 Image” is a derivative of “Remise du Prix Sakharov à Aung San Suu Kyi par Martin Schultz au Parlement européen à Strasbourg le 22
octobre 2013” by Claude TRUONG-NGOC under the Creative Commons Attribution-Share Alike 3.0 Unported license; 10.2 “Burmese Defence Services personnel (Air Force),
Naypyidaw at reception of Thai delegation” by Thai Government, under Creative Commons Attribution 2.0 Generic license; used under C.C. by Lala Elizan
Who
3D Prints
What in 2033?

Written by: Dr. Amanda Skuldt & James McGirk in consultation with
Dr. Thomas PM Barnett, Wikistratís Chief Analyst
Edited by: Steve Keller

There were more than 60 analysts participating.

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June 2013