One bit of good news is the economy, which is growing at a rate of over right percent this year and seems likely to continue at that rate into 2016. The economy is actually larger and growing faster than the official data shows. That’s because of all the illegal activity that is not reported. Some of this illegal business is big business and it is usually for export. The big ones are drugs, jade and timber. The government has tried to limit or at least control all three but because all these activities are mainly in the rebellious tribal north, and often involve powerful economic and political interests in China (the main customer) change is difficult. Officially China wants to stop the illegal export of Burmese drugs, jade and timber to China. Unofficially only the drugs are opposed. Illegal timber and jade from Burma is tolerated because these are legal commodities (once they enter China). Yet illegal logging is a major grievance for the northern tribes and the government will occasionally pressure China to cooperate in curbing the deforestation and damage to tribal lands. The last time China cracked down was in 2005 but as is common with these things the bribes (to local officials and soldiers as well as border guards to allow the timber to reach customers) eventually had their way and now the illegal timber trade is as big as ever and the tribes are increasing the pressure on the government to act. The situation is worse than in 2005 because now the illegal logging has gone deeper into Burma to find the rosewood and teak that is the most profitable. The illegal logging crews have their owned security and will often bribe local soldiers to help out. Sometimes the tribal militias were bribed as well but most of the time the armed tribesmen were not willing to sell out their neighborhood.
The Burmese Army has long been at the center of most illegal economic activity. Some researchers believe that at least $20 billion has been illegally moved out of Burma during the fifty years of military rule and much more stayed in the country. Almost all of that was military personnel or their gangster and commercial allies. Military families still control a lot of the economy and most of the wealthy families in Burma have a military connection. The illegal cash leaving amounted (on average) to about six percent of GDP. The military may have surrendered much of their political power, but they are hanging on to their considerable personal wealth.
One reason for the futility of the peace talks with the tribal rebels is the continued power of the generals. Thus while the commander of the army insists that the military will respect the outcome of the November elections everyone believes that this “respect” has limits. The generals say they would accept a new government that wanted to curb the power of the military. This was in response to growing domestic and foreign pressure on the military to give up the veto power it has under the new constitution. The generals have used this veto to “protect their interests.” This has included blocking “hostile” (anti-military) candidates from running for president or attempts by parliament to curb military power. This is all about how the 2008 constitution that guarantees the military 25 percent of the seats in parliament and requires 75 percent of the votes in parliament to get the constitution changed. Many of the generals are reluctant to allow any changes to this because so many Burmese are still angry at the decades of bad behavior by the military governments. Without some control over the government the generals who ran the military dictatorship (and many of their subordinates) could be prosecuted for their crimes. The generals are under a lot of pressure over the constitutional reform issue. Burmese businessmen and foreign investors also back a reduction of military control, mainly because the military is the main source of the widespread corruption that cripples the economy.
The latest round of peace talks with the tribal rebels in the north are failing for the usual reason; the various tribal factions cannot agree on what terms to accept from the government. Thus some factions are willing to settle for less than other factions. This happens a lot and the army sees it as a major advantage as the tribal rebels are a lot easier to deal with if they are not united. Another reason for delays in a new peace deal is that in some parts of the north (like Shan and Kachin states) the fighting is pretty continuous.
Up in Shan state the army blames the Kokang tribal rebels and their organization (MNDAA) for most of the violence. So far this month at least twenty soldiers and about half as many rebels have died in ambushes and skirmishes up there. The MNDAA wants official recognition, something the government is reluctant to grant. The MNDAA is largely composed of ethnic Chinese who have long lived in northern Burma (as have other Chinese tribes). MNDAA used to be more political (communist) but that disappeared in 1989 when the Burmese Communist Party fell apart as a side effect of the collapse of communism in East Europe. MNDAA made peace with the government in 2009 but like most peace deals up north that did not last because the army kept operating in tribal territory. The government refused to recognize the MNDAA as one of the tribal rebel groups negotiating a ceasefire and this refusal continues to be a problem. The Kohang and MNDAA have become a drug gang as have many of its tribal allies in the north. These included the Shan State Army–South (SSA-S). For years the army has fought the SSA-S for key terrain, usually to control roads that supply and troops and everyone else. The army has also been trying to interfere with the tribal drug operations up north. The SSA-S is allied with the neighboring Wa and these two groups and the MNDAA are making a lot of money producing and smuggling drugs. Opium and heroin production have been revived in the past few years. Production of methamphetamine is huge. Called "yaba" ("crazy drug") locally, most of it is smuggled out via Thailand. Over the last few years, production of yaba tablets has soared. The meth labs are easier to conceal than poppy fields (opium is the sap of poppy plants) and the meth labs are believed to produce several hundred million tablets a year. The tribal rebels, especially ethnic Chinese tribes (like the Wa and MNDAA) use the profits to buy more weapons for their fighters, and run their rebel organizations. The government has been in a weak bargaining position here but always had the option to declare the militias in violation of the 2012 peace deal and officially renew the fighting. That declaration has not happened yet. TNLA (Taang National Liberation Army) rebels as well as the KIA (Kachin) rebels also support the Kokang rebels. These three groups provide most of the armed opposition to the army in the Chinese border area. Rebels remain active here because China is a major market for heroin and other drugs produced in the north. China is also the source of all the military equipment the rebels need and China has had little success in halting the illegal export of weapons military equipment (including uniforms) to the tribal armies in northern Burma. The money is too good to pass up for local Chinese merchants who have long learned how to deal with directives from their national government. As the ancient saying goes; the mountains are high and the emperor is far away.
Despite the continued violence in Shan state there are parts of the state that have been peaceful enough long enough to lift some restriction. Thus Thailand is reopening a border crossing that has been closed since 2002 because of the fighting. This crossing leads to the Shan state capital and will increase trade and economic activity in Shan state as well as Thailand.
The violence on the Indian border continues. Lately many Indian rebels have been staying out of their usual hideouts just across the border in Burma. That’s only because in mid-2014 the Burmese army began actively seeking out and attacking the camps of Indian rebels. Often the rebels detect the approach of the Burmese soldiers and flee back into India. There the Indian Army is more active in going after the rebels. Because of a recent agreement, India and Burma are sharing intelligence on armed groups near their mutual border. This cooperation is not uniform all along the border. This month India went public with complaints that in one area at least two Indian rebel camps had been established three and five kilometers inside Burma and local Burmese troops were not cooperating. Apparently bribes, threats or whatever had been used to get some of the cooperation the Indian rebels long enjoyed. India is demanding that the Burmese high command act. So far there has been no action on this matter.
Burma isn’t the only country having problems with rebels using borders to hide behind. Next door in Bangladesh there are also problems, mainly with Burmese rebels setting up camps just inside Bangladesh. The Bangladeshis are not very tolerant of this sort of thing and this month Burmese soldiers were sent to reinforce border guards who were pushing members of the “Arakan Army” back into Burma. Arakan State, on the northwest coast, has not had as much tribal violence as states to the east, but the Arakan Army had help from Kachin state tribal rebels and have proved to be a persistent problem on both sides of the border.
September 9, 2015: : India is offering cash rewards of up to $15,000 for information on Naga rebel leaders responsible for a June 4th ambush in the northeast near the Burma border that killed 18 soldiers. This ambush is still big news for most Indians and the reason for the increased activity along the Burmese border.
August 22, 2015: In the north (Kachin state) a soldier shot dead a civilian he was arguing with. First the soldier punched the civilian and when the civilian defended himself the soldier opened fire. Other soldiers sought to seize all the cell phones being used to record the incident but the truth got out and now the military has responded by arresting the soldier and promising to prosecute him. Incidents like this are common in the north and the military is under pressure to punish the offenders.