Myanmar’s Political Conflict With Authoritarian-Controlled Resources

By Min Htee 14 Dec 2021

Written by Min Htee 

Arakan State produces up to 1,200 million cubic feet of natural gas annually, and the Arakanese people are still deprived of all right to benefit from and manage it. The Arakanese people should be able to enjoy the full benefits of extracting and selling resources and have a political system that gives the Arakanese people full decision-making power for the development of Arakan State. The people of the ethnic states are victims of Myanmar’s dictatorship and continue to be stripped of resources amid conflict and poverty. 

There are 25 oil and gas blocks in Arakan State; two onshore blocks and 23 offshore blocks. Natural gas is being extracted and sold from the A-4 block off the Arakan Sea, and another block is being prepared under the military council. 

Companies from 13 countries — including the United States, France, Malaysia, Thailand, China, Japan, Singapore, Canada, the Netherlands, Austria and South Korea — operate in the Arakan Sea. According to a report released by AOW (Arakan Oil Watch) on November 19, 2021, most of Myanmar’s revenue comes from taxes from the natural gas industry. 

There are four gas pipeline projects in Myanmar, with the Shwe natural gas project extractions from Arakan State being the largest exporter, the report said. Neighbouring Thailand and China are also major buyers of natural gas from blocks such as the Zawtika, Yetagun and Yadanar and Shwe gas projects. 

Myanmar has a combined annual revenue from natural gas of up to US$1.5 billion. POSCO, a South Korean-based company operating in Arakan State since 2009, has invested US$315 million in the third phase of the Shwe gas project, which is currently producing and selling natural gas. POSCO will complete a 27,000-ton Hyundai corridor by 2024 to boost natural gas storage and transportation. 

With the exception of military coups in Myanmar, the main problem in the Southeast Asian country is decentralisation. Power is the lifeblood of a nation. Myanmar emerged in 1948 after independence, and the country is still facing 70 years of chronic civil war because of Burmese political leaders who do not want to recognise the politics of the rest of the non-Burman ethnic groups. 

Myanmar’s civil war has been raging for more than 70 years, with the military failing to find a political solution to the problems of equal rights and the sharing of resources that all ethnic groups deserve. The military dictator Senior General Than Shwe drafted the 2008 Constitution, ostensibly abolished the dictatorship and introducing a multi-party democracy and civilian government to the political scene in 2011. 

However, the 2008 Constitution does not provide for a federal system based on the equal rights demanded by the ethnic groups in the states, and the military holds 25% of the legislature and administration, and all powers are vested in the Union government. Although state governments were constitutionally allowed to form governments, they were unable to formulate governments that were meaningful to the people of their respective states and regions due to constitutional restrictions. 

However, decentralisation has been limited compared to the military dictatorship, as people’s representatives have been allowed to attend parliamentary sessions. The National League for Democracy (NLD), the largest opposition party for the military, won a third general election in a November 2020 landslide victory, but the military seized power on February 1, 2021, on the grounds that the general election was rigged. 

At present, the revolution has turned to the armed opposition, and there are now more than 150 People’s Defense Forces (PDFs) across the country. More than 1,300 people have been killed by security forces and 10,596 have been arrested in the 10 months since the military seized power, according to the Assistance Association for Political Prisoners (AAPP). On the other side, 253 Union Solidarity and Development Party (USDP) members have been killed and 406 alleged informants have been killed in the 10 months since the military coup, according to Radio Free Asia (RFA). 

There have been 2,530 clashes between the anti-regime forces and junta troops, with 2,941 military casualties and 908 civilian casualties, according to the National Unity Government (NUG). There is no confirmation of this information from independent organisations. 

However, it is undeniable that the military has not been able to govern the whole country well since the military took over, and the country’s economy has declined significantly. The military council bought US$17.4 million worth of radar equipment from Russia, the best ally since the coup, and agreed to acquire long-range ballistic missiles and drones. The military council then imported long-range ballistic missiles from neighbouring India in 2021. 

Arakan Oil Watch (AOW) said in a statement that most of the businesses had been shut down since the coup, and that the military council’s main source of revenue was oil and gas. Myanmar had a total of US$3.3 billion in natural gas sales in 2020, accounting for 20% of total exports. The military council, which seized power in early 2021, will receive more than US$1 billion in export revenue. 

The Shwe Gas Project off the Arakan State coast is valued at US$473 million and the second phase of the project began in 2018 and will be led by US companies in 2022. Of the four natural gas pipelines in Myanmar, Shwe gas from Arakan State is the largest source of revenue. 

Myanmar is exporting up to 22 million tonnes of oil through a pipeline from Kyaukphyu in Arakan State to China, and the country receives a dollar-per-dollar tax on every tonne of oil it passes through. Another pipeline is the export of 1,200 million cubic feet of natural gas a year from Arakan State to China. This amount has been transported since 2013 and it will be nine years in 2021, but there is no benefit for Arakan State at all and even the local people are losing job opportunities. 

Another block, A-6, which was declared part of Ayeyarwady Region in 2018, is expected to become another treasure, according to AOW. Oil and gas revenues are monopolised by the Myanmar Oil and Gas Enterprise (MOGE), which transferred US$504 million to another account, according to Myanmar Extractive Industries Transparency Initiative’s report released in 2017-18. Myanmar Oil and Gas Enterprise raised US$4.6 billion in oil and gas revenues in 2018 alone. 

After years of military monopoly power in Myanmar, political tensions erupted between the military and the National League for Democracy (NLD), led by the influential opposition leader Daw Aung San Suu Kyi. The military seized power on the grounds that the 2020 general election was rigged. 

More than 4,000 clashes took place in Arakan State between the Arakan Army (AA) and the Myanmar military in Arakan State from the end of 2018 until November 2020. The Union government cut off the internet access in some townships in Arakan State for more than a year, declaring the Arakan Army a terrorist organisation and allowing the military to operate at will. 

Despite the Myanmar military’s offensive under the guise of eradication, the Arakan Army has grown in strength exponentially in two years and is now active throughout Arakan State. Meanwhile, the ethnic armed group is attempting to control the administration, judiciary, policing, customs, taxation and economy in Arakan State. There have been virtually no clashes between the Myanmar military and the Arakan Army in Arakan State since November 2020, but to date no formal political talks have taken place between the two sides. 

The Arakan Army chief has said in the media that neither the civilian government nor the military council will be able to deliver on the political aspirations expected by the ethnic armed group fighting for self-autonomy. The Arakan Army’s political goal is to have a separate or “confederate” system of governance, and it appears to have decided to pursue a separate peace path, one step higher than the Nationwide Ceasefire Agreement (NCA). 

There were talks of building Myanmar into a federal democratic Union under the NLD, but it was not the establishment of a genuine federal union based on the equal rights and aspirations of the ethnic nationalities and the right to self-determination. However, after the military seized power, the National Unity Government (NUG), led by NLD supporters, called for building a federal democratic union. 

I think this means more details between the ethnic groups in the states and the Burmese in the regions. The military, which claims to be holding power, not a coup d’état, has called for a re-do election in accordance with the 2008 Constitution and is preparing for a proportional system (PR). This means that the USDP, which already has 25% of the seats in parliament and is led by retired military personnel, will form a nationwide coalition of MPs and allies of the USDP to defend the 2008 Constitution and continue to exploit ethnic resources. 

It’s difficult to say whether the political crisis in Myanmar will be based on a federal union or ethnic self-determination; it depends on how far the states can be built. 

In the interests of neighbouring countries, the overthrow of the so-called dictatorship has a lot to do with the country’s natural resources, and ethnic groups are likely to be embroiled in conflicts behind the exploitation of natural resources. I pray that the “fake peace” behind the bloodshed of the precious ethnic resources will not become another game in Myanmar.