One year after Myanmar’s coup, how do the generals hold power?

ADVERTISEMENT

Guns, gems and drugs: One year after Myanmar’s coup, how the generals hold power

Daniel Combs is the author of “Until the World Shatters: Truth, Lies, and the Looting of Myanmar.” In addition to Myanmar, he has lived and reported from Ethiopia, the Democratic Republic of the Congo, Bangladesh, Nigeria, Thailand and Israel. He works for the State Department. The views expressed in this report are the author’s own and may not reflect those of the U.S. government or the Department of State.

On Feb. 1, 2021, 54 million people in Myanmar woke to the news that the military had overthrown the country’s democratically elected government and seized power. In short order, cellular service and the internet were shut down, licenses for independent media outlets were revoked, and soldiers took to the streets. The coup plotters, led by Min Aung Hlaing, the commander-in-chief of the military, imposed a state of emergency. Hundreds of members of parliament were placed under house arrest. The winners of the November 2020 democratic elections — including the Nobel Peace Prize Laureate Aung San Suu Kyi and President Win Myint — were detained and charged with crimes.

From 2016 through 2020, Aung San Suu Kyi and her followers had led a broad effort at reform, one that culminated in a freer press, fewer political prisoners and a concerted attempt to restructure the country’s corrupt economy. To the military, these changes, on top of their dismal showing in the elections, constituted a clear threat. The coup was their answer. And just a few years into an at-times euphoric, at-times chaotic experiment with democracy, the generals were back in charge.

Nationwide protests followed, and the coup leaders were quick to respond. Within days of the takeover, the army was killing civilians in the street. In the year since, Myanmar’s citizens have lived in fear of arbitrary arrest, torture and extrajudicial killings. Nearly 1,500 people have been killed by the junta, according to the Assistance Association for Political Prisoners.

ADVERTISEMENT

The world responded to the coup with near-universal condemnation. The U.S., U.K. and EU imposed sanctions against the new regime; several other countries severed contact with the government. Inside Myanmar, the coup prompted a new generation of activists to take to the streets and inspired many to take up arms against the military.

And yet one year later, the generals have not only held onto power — they have profited from the chaos. How they have done so is a story about guns, drugs and precious gems. It is also about religion and mythmaking. And it’s about brute force, and an institution with a long history of using it.

Disaster for most, prosperity for the generals

One year after the coup, Myanmar’s economy is in crisis. According to the World Bank, the country’s output shrank by more than 18 percent in the past year. Its currency, the kyat, has depreciated by 60 percent, and prices for food and basic staples have skyrocketed. The number of people living in poverty has doubled, to 46 percent of the population. Basic public services are increasingly hard to come by.

While the public has suffered, Myanmar’s military has managed to insulate itself from the economic shock. According to the most conservative estimates, since the coup, military companies, affiliated business and armed groups loyal to the military have leveraged an opaque network of aboveground commerce and illicit trade to bring in more than $2 billion. They have likely earned far more than that.

The coup leaders are building on the work of their predecessors. Over the past few decades, the generals in Myanmar — formally Burma — have amassed an enormous commercial empire. Some elements this empire involve aboveboard industries such as construction, timber, petroleum, agriculture, textiles, beer and tourism — activities that bring at least $900 million into the military’s coffers annually. Other elements are built on underground industries including the trade in precious gems — jade in particular — and in narcotics. This illicit commerce brings in significantly more money — a figure harder to quantify, but at least several billion dollars annually.

ADVERTISEMENT

Using these off-book revenue streams, the military has long run its own banks, schools, farms, phone networks and hospitals, insulating the regime from the economic shocks affecting the rest of the population.

Military leaders in Myanmar calculated long ago that a lack of effective governance could be highly profitable, both for the military as an institution and for the generals personally. Myanmar’s civil war — really a collection of several ethnic conflicts — dates to independence in 1948, making it the longest-running armed conflict on the planet. The fighting has brought frequent trauma to the population, particularly in the northern part of the country, but it has allowed military-linked businesses to operate in conflict zones with little oversight. According to extensive research and reporting by the United Nations, Amnesty International, the International Crisis Group and others, that revenue both secretly pads the military’s budget and fills the pockets of its leaders.

Follow the money (1): A gemstone empire

In the year since the coup, some of these activities have been growth industries for the military — despite the aboveground economy contracting by nearly a fifth and the regime losing effective control over significant amounts of territory.

In the far north, the notoriously corrupt jade industry has operated at a breakneck pace since the coup, according to the watchdog nongovernmental organization Global Witness. That fact alone accounts for a huge influx of cash for last year’s coup leaders.

I have tracked the jade industry since 2016 — in particular its disastrous effects on life for the people of northern Myanmar. My own research, as well as surveys conducted by Global Witness, Harvard University, the Natural Resource Governance Institute and the Kachin Development Network Group, put the value of the jade trade at somewhere between $8 billion and $40 billion per year. This “green vein” flowing from Myanmar’s northern mountains is the source of enough money to right many of the country’s social and economic wrongs, were it shared fairly and properly managed.

Instead, it has made the generals rich.

The military has long run its own mines, smuggling networks, gemstone markets, money-laundering schemes and banks to service the jade business. By multiple accounts, that activity has continued in the year since the coup.

Despite a moratorium on jade mining that has been in effect since 2019 — part of an effort by Aung San Suu Kyi’s government to reform the industry — military-owned and affiliated mining sites have continued extensive operations in the Hpakant mining area since the coup. Through a corrupt licensing process, armed takeovers of mining sites and an extensive smuggling network, the military directly controls an estimated 16 percent of the jade trade, with another 65 percent controlled by affiliated businesses, according to 2018 estimates. Assuming those figures hold — and if anything, the coup has only strengthened the military’s hold on the industry — jade would have brought the new regime at least $1.2 billion in revenues. The true figure is likely much higher.

Follow the money (2): Mining and meth labs

The coup leaders have found other cushions against international sanctions — taking advantage of Southeast Asia’s immense appetite for drugs and Myanmar’s rich stocks of rare earth minerals.

In 2020, Myanmar supplied 74 percent of China’s imports of rare earth minerals, according to Chinese state-run media. This is another industry run in large part by the military and military-affiliated companies; Myanmar’s exports were worth an estimated $388 million in 2020, the last year for which accurate data is available. Since the coup, extraction of minerals such as ammonium sulfate in Myanmar’s far north has risen sharply, as military-affiliated mining sites have ramped up operations to meet increasing Chinese demand. According to local estimates in investigations by local media outlets such as Frontier and the Irrawaddy, since last February, hundreds of mines in far-northern Kachin State being operated by Chinese investors and the New Democratic Army-Kachin, a proxy militia linked to the regime leadership, have increased production tenfold.


ADVERTISEMENT

Meanwhile, Myanmar’s narcotics trade, especially the traffic in methamphetamines, has also surged since the military takeover. While its underground nature makes it impossible to measure precisely, Southeast Asia’s meth trade was worth between $30 billion and $60 billion per year, according to June estimates from the U.N. Office on Drugs and Crime (UNODC). The majority of the region’s methamphetamine is produced in Myanmar’s ungoverned periphery in eastern Shan State, with military proxy groups and affiliated criminal networks controlling the lion’s share of the industry.

Since the coup, regional methamphetamine busts have spiked to historic levels — a development that the U.N. says is directly related to the coup and its aftermath. Jeremy Douglas, the Southeast Asia Representative for UNODC, told Vice News in October that the record rate of meth seizures was “no doubt connected to the deterioration of security and governance” in post-coup Myanmar. In October, authorities in neighboring Laos seized more than 1.5 tons of crystal meth packed into beer crates on a truck; it was Southeast Asia’s largest-ever drug bust. In Malaysia, authorities were on track as of last fall — the last period for which statistics are available — to more than double their annual narcotics seizures, with methamphetamine making up the bulk of drug confiscations. According to Voice of America and the Bangkok Post, meth “super labs” in Myanmar have thrived since the coup.

Privately, drug enforcement officials, international advocacy groups and local researchers say that the meth trade — historically and in the past year — is one more significant source of off-book revenue for the regime, in the form of kickback payments and bribes paid to military figures.

The religion factor

From the time they enlist, Myanmar’s soldiers are taught that if the military does not thrive, Myanmar risks destruction. And through the regime’s own schools, exclusive social clubs and museums, young enlistees are taught the military’s skewed, jingoistic version of the country’s history, a strand of deeply conservative Buddhist philosophy that condones the basest forms of ethno-nationalism. Soldiers are trained to identify any risk to the military as an existential threat to Myanmar itself, even if that means making its own citizens the enemy.

For more than 60 years, the military has worked to publicly defend this philosophy by building alliances of convenience with the country’s Buddhist clergy, which wields enormous influence in the deeply religious land. While most of Myanmar’s monks oppose the generals’ political machinations, and have led anti-military protests in the past, the regime has nonetheless succeeded in winning a large cohort of religious leaders to its cause. Through projects like pagoda renovations, lavish donations to monasteries, and regular photo-ops linking top brass and the country’s monks, the military both guards against criticism from the clergy and tries to justify its actions as part of a centuries-long tradition of theocratic Buddhist empire-making.

ADVERTISEMENT

The generals have used this playbook often in the year since they took power. On Feb. 2, one day after the coup, state-run newspapers ran a photo of Min Aung Hlaing, the commander-in-chief, prostrating himself before a Buddhist abbot. In November, Min Aung Hlaing’s wife led members of high-ranking military families in an 11-day public recital of a Buddhist treatise, to pray for Myanmar’s prosperity. And in December, Min Aung Hlaing publicly consecrated a centuries-old pagoda outside Yangon by placing a diamond orb atop its gold pinnacle. He was accompanied by a controversial conservative monk named Vasipake Sayadaw who has served as the general’s chief astrologer since 2006.

According to many scholars of Buddhist nationalism and Myanmar history, in the deeply conservative flavor of Buddhism favored by the regime, completing these religious works is meant as a kind of karmic bulwark against any criticism and a connection to the original builders of the Burmese empire. This partnership may insulate the military from significant criticism by the clergy, but it must be said that the vast majority of Myanmar’s population reject that ultraconservatism, its violent aspects in particular.

The people take up arms

Since the coup, pro-democracy protests and grassroots resistance movements have cropped up across the country. Opposition to the junta has been kept alive through social media, expatriate fundraising networks and citizen journalism. At least 58 new armed resistance groups have been formed, according to the Armed Conflict Location and Event Data Project.

What began as peaceful street protests last February descended quickly into almost daily bloodshed as the generals ordered increasingly harsh crackdowns against anyone who voiced criticism of the coup. The junta has at last count killed at least 1,498 of its citizens, according to the Assistance Association for Political Prisoners. Another 11,787 have been arrested, many subjected to torture. Of those in prison, only 650 have been formally sentenced.

The military has also taken unprecedented judicial action to silence Aung San Suu Kyi, whose popularity inside Myanmar has remained strong despite widespread global criticism for failing to rebuke the violent persecution of the Rohingya minority in her country. Aung San Suu Kyi’s National League for Democracy dominated the November 2020 election — before the military rejected the results. In December 2021, Aung San Suu Kyi was sentenced to four years imprisonment for violating covid-19 regulations and “incitement.” On Jan. 10, she was given another four years for charges including owning unlicensed walkie-talkies. If, as many believe, the military secures convictions for the other still-standing charges levied against her, the 76-year-old politician will likely spend the rest of her life under house arrest.

ADVERTISEMENT

What may come next

Over the next year, expect the military to continue courting the country’s most conservative religious traditionalists, and cracking down on fundamental freedoms and any citizens brave enough to raise their voice in protest.

Meanwhile, the regime is almost certain to pursue its profiteering from the conflict. As the junta battles a diversifying array of armed opposition groups, its primary economic strategy will continue to be based on exploiting Myanmar’s extensive natural resource wealth. This will insulate the generals against international sanctions, even as the national economy suffers, causing significant hardship for the majority of the population.

Any attempts to dislodge the regime must therefore contend with the primary drivers of Myanmar’s conflict: the military’s treasure trove of underground and illicit commerce, and a foundational myth that is grounded in an almost existential need for violence. Those have been the ingredients for the military’s success for much of the last 60 years; there is no reason to think the generals will abandon them now.

  • Daniel Combs
    Daniel Combs

    Special Contributor

    Daniel Combs is the author of “Until the World Shatters: Truth, Lies, and the Looting of Myanmar.”