Myanmar’s Peace Process: Disarmament, Demobilization and Reintegration, Borderland Economies, Service Delivery, and other Post-Panglong Concerns (Part II)

Bobby Anderson analyzes the complexities of a post-Panglong peace process.

Editor’s Note: The following is the second part of a three part series to be featured on Tea Circle this week. You can find the first part of Myanmar’s Peace Process: Disarmament, Demobilization and Reintegration, Borderland Economies, Service Delivery, and other Post-Panglong Concerns here



The government of Myanmar possesses the capacity to undertake disarmament and demobilization processes. But what it is still theoretically building with EAOs is the trust necessary to engage in such a process. Despite this, the government is unlikely to go down the well-trod path many other states have travelled via the subcontracting of Disarmament and Demobilization processes to the United Nations Department of Peacekeeping Operations (DPKO) and other UN agencies that have expertise in such work. China’s acquiescence, however, matters here: elements of One Belt, One Road require the stability in Myanmar’s border with Yunnan, and this has been amply demonstrated by the involvement of special envoy Sun Guoxiang in the latest Panglong Meeting. It is unlikely that China would involve itself in disarmament and demobilization directly; a process under the auspices, not of the EU or DPKO, but of ASEAN, may be more palatable for them.

The disarmament aspect of DDR is a technically easy, time-bound process that only requires the will of each entity to engage with the other, under third party facilitation. This may involve insurgent entry into cantonments and dual-key weapons storage after a given peace process reaches a certain pre-defined milestone. The weapons initially handed over will likely be constituted in large part by “museum pieces”, while better functioning weaponry is held back in case Panglong 21 breaks down, or for sale. Implicit in such a process is the building up of state police forces in insurgent areas— often made up of ex-insurgents under state command— in a structure resembling BGFs, but more lightly armed.

Demobilization and Insurgent Economics:

Demobilization of insurgent forces is both a discharging of soldiers and dissolution of the insurgent command structure. In most DDR processes, within the time-bound framework that also encompasses disarmament, it is almost purely symbolic: soldiers in formation hand over their weapons on a parade ground in front of press and dignitaries, and are then “dismissed”, one last time, by a commanding officer. The pageantry implies they all go home after. This is disingenuous. Despite claims of demobilization or conversion, the structures nearly always remain, down to the grassroots level.

In less-organized EAOs, these structures are most apparent in financial flows generated by legal and illegal economic activities. Ex- All Burma Students Democratic Front rebel and former MPC director Aung Naing Oo estimated the size of the conflict economy in Myanmar’s borderlands at between US$20 billion and US$30 billion— and while conflict will stop, the raising of funds often does not. Many EAOs, namely those with longstanding ceasefires with the Tatmadaw, have built up lucrative portfolios constituting of real estate in Yangon and Mandalay, hotels, bus companies, and so on. These are generally in the hands of individual insurgents rather than a group as a whole. Extralegal taxation is the norm, with trade taxed at checkpoints, and businesses and even households taxed in many areas. Sometimes these taxes are used for legitimate ends within complex EAO structures providing services; other times, they are simply protection fees. Often, insurgents exploit natural resources to fund rebellion and charge others for the license to do so: in Myanmar, jadeite, rubies and timber are especially lucrative. Taxes on jadeite, for example, provided up to half of the KIA’s operating budget.

In border areas, the smuggling of untaxed goods also constitutes a norm, as does insurgent taxes on such goods. Vice is also a popular business, as is gambling, in Kokang and Mongla especially. This also doesn’t stop with a peace agreement, and military businesses also remain deeply involved in natural resource extraction in contested areas, which casts a shadow across Panglong 21. On the furthest end of the spectrum of illegality, select EAO and militia economies are constituted by drug cultivation and processing, namely heroin and methamphetamine. Indeed, some EAOs and militias operate as particularly well-armed criminal syndicates with a thin veneer of ideology masking economic rationales.

As mentioned elsewhere, some crime will be tolerated by the authorities, written off as the “price of peace”. A particularly negative example can be found in the experience of neighbouring Northeastern India, where Naga insurgents who rose up against the Indian state in the 1950s developed comprehensive extortion and protection rackets, and engaged in fratricidal wars—more so than they either fought the state or provided services. They and other insurgent groups in Assam, Manipur, and other areas of Northeast India, espouse ideologies to mask the economic rationales of their current activities, and they act as shadow security forces, “descending, despite high-sounding ideals and rhetoric, into a criminalized oligarchy.” The Indian state tolerates these behaviours in the insurgents it has treaties with and the groups it is still trying to negotiate with. Yet another example of tolerated criminality can be found in Indonesian Aceh, on the northern tip of Sumatra. There, the Free Aceh Movement (Gerakan Aceh Merdeka or GAM) fought the Government of Indonesia from 1976 until 2005, when a mediated peace process culminated in the Helsinki Memorandum of Understanding, followed by the 2006 Law on the Governing of Aceh. GAM disarmed and theoretically demobilized; the structure remained in place, with GAM veterans continuing to collect extra legal taxes from individuals and businesses across the province, as well as other organized criminal activities. This is implicitly allowed by the provincial government, with only GAM dissenters from the main GAM corpus declared “outlaws” and killed.

In Myanmar, peace will also offer lucrative protection opportunities for insurgent structures, especially regarding construction contracts in EAO areas. Improved roads and new businesses will mean more goods and services to tax. These structures will prove durable long after the peace process ends.

The government will initially lack both the capacity and the will to police ex-insurgents and militias, and the Tatmadaw will not do so either. On the contrary, rogue elements of the Tatmadaw within its regional command structure may engage in the same activities, forming new partnerships with EAOs and militias and continuing existing ones.

Ultimately this will be important for a future when the Tatmadaw itself contracts, firstly through its Border Guard Forces. Its affiliated militias, which the Tatmadaw does not finance, will present more immediate law and order problems.

Drug Eradication and Alternative Livelihoods:

As in Afghanistan, chaos and statelessness in Shan and other areas of Myanmar engenders drug production. A key element of DDR is the halting of principal insurgent funding streams, and in select (but not all, the KNU, for example, historically executes drug traffickers) EAO and militia areas, this means opium poppy cultivation and heroin/methamphetamine production. The primary way in which this should be undertaken is the ramped-up targeting of grassroots opium poppy cultivators through alternative livelihoods programs, which UNODC and partners have implemented for years through introduction of alternative crops and agricultural extension services. If the alternative livelihood process occurs in a cautious manner, then a period of crop introduction and extension services will occur prior to opium poppy field eradication and law enforcement. Drug treatment programs will follow this process: many poppy cultivators are also addicts.

This can result in much economic distress to poppy-cultivators: In “The United Wa State Party: Narco-Army or Ethnic Nationalist Party?”, Tom Kramer notes that, when the UWSP leadership were indicted by the US Department of Justice for drug production in 2005, they launched eradication efforts on their own accord, and this resulted in widespread declines in household incomes, as well as small-scale famine. As opium was the only cash crop in the area, and hardly any other edible crop was grown, farmers didn’t have the ability to purchase rice and other staples. However, a future alternative livelihood process may be less economically painful for these poor households. If it were a seller’s market, no alternate crop would equal the value a farmer can earn from opium, but this may not be the case in Myanmar: the last UNODC Southeast Asia Opium Report indicates a fall in the opium purchase price which may result from market consolidation. Initial successes in alternative livelihoods might result in buyers offering higher prices, which could eliminate licit gains made in a non-coercive manner. Other administrations have also taken crop substitution initiatives, in Kokang especially, with sugarcane supplanting poppy grown there.

A better-funded—and for communities, less beneficial—“alternative livelihoods” model has been pursued by private businesses which are opening rubber and other plantations, and paying local labourers pittances. This exploitative capitalism, disguised as beneficial to former opium cultivators, can lead to exactly the type of instability that more traditional alternative livelihoods programs seek to avoid.

Individual Combatant Reintegration:

The reintegration element of DDR is likely to be seen by Myanmar and China as less politically sensitive. It is also the aspect of the triage that disarmament and demobilization practitioners avoid, as it is often sub-contracted to the UN sister agency or at the NGO level. The United Nations Development Programme (UNDP), the International Labour Organisation (ILO), and the International Organization for Migration (IOM) are key reintegration implementers, but this does not mean they have been uniformly successful in past endeavors. Reintegration of ex-combatants from insurgent groups into civilian life is not time-bound, and is fraught with difficulty, if not failure. When insurgencies end, there often isn’t enough work for civilians, much less fighters, as insurgent areas are distinguished by a lack of infrastructure and undeveloped licit markets. The majority of the economy is illicit, with significant organized criminal activity, as EAOs are regularly excluded from licit markets unless, in the example of the UWSP and others, they control a large enough territory. Most civilians in such areas are engaged in subsistence agriculture or, to a lesser extent, petty trading. There is often also a lack of health and education services, although this was not the case historically in KIA, KNU, and then-Communist Party of Burma (CPB) territories.

When it comes to the type of work available to ex-combatants, there is also the issue of pride. Having a weapon taken away, as a soldier, can be a traumatic experience. The work one can do in civilian life when one fought previously cannot just be any work. It has to have meaning. We cannot expect people who have killed and suffered for a cause to become subsistence farmers on their own land, much less land that is not their own, or bicycle-riding vegetable sellers— especially when previously, in addition to fighting, they acted in a tax-collecting capacity (or what in peacetime is referred to as conducting a protection racket) and when the old insurgent structure still exists for them to return to. This is why the recidivism rate amongst select ex-combatants to violence and crime is high, and why after millions of dollars in reintegration programming in other contexts, only a minority of ex-combatants identified as problematic by their own structure are engaged in licit work (as a direct result of a program, be it a job training or grant) after five years.

Reintegration of individual combatants will consist of job training, apprenticeships, support to small businesses, and remedial/vocational and technical education. It will be proven that the rural economies of EAO areas do not have the capacity to absorb large numbers of fighters into roles other than subsistence ones. The leadership class of insurgents, on the other hand, will become local politicians and construction contractors for the myriad projects that the union and the Tatmadaw will launch, and non-competitive contracts will likely be awarded to them by the government in order for them to feel that peace is profitable. Such leaders will be able to provide for much less of their rank and file than they would have before the peace. One-time reinsertion payments for demobilized soldiers will be spent quickly, and demands for pensions may follow. A particularly expensive example can be found in Timor-Leste, where disgruntled insurgents from the 1975-1999 conflict acted as the foot soldiers for a 2006 insurrection; since then the government has prioritized veteran’s pensions in order to maintain stability, and has committed to paying off select veterans and their descendants through 2122.

The Union of Myanmar cannot afford this. And so a certain amount of illegal activity will continue to be committed by the non- integrated rank and file. Extortion and other crimes are often tolerated by the state and the EAO authorities as the price of peace. And so the future peace, for select EAO host populations, might be a cold one, with some insurgents shorn of their ideological justification continuing to feed on communities, whilst other ex-combatants face the disappointment of local economies that cannot accommodate their peacetime ambitions.

Reintegration, crop substitution, extension services, and other livelihood programs are not only for ex-combatants and opium poppy cultivators. The morass of internally displaced within Myanmar and refugees from Myanmar in Thailand will require not just resettlement but an economic role and livelihood source. The UNHCR and other agencies estimate nearly 100,000 internally displaced in Kachin and northern Shan, and roughly 400,000 in the Karen and Mon areas of the southeast. The government will likely prioritize formerly armed populations for reintegration and livelihoods programming, and will neglect returnees, because in the cynical but pragmatic calculus of authorities, they pose less of a threat.


Part Three of the series will discuss other aspects of state building in insurgent areas, service delivery and migration in particular, followed by a comparative discussion of state building in formerly insurgent areas of Northwest Thailand in previous decades.


Bobby Anderson ( is a Myanmar-based Research Associate at the School of Oriental and African Studies, University of London. The opinions expressed in this article are the author’s own.