Current and Future Border Trade Situation in Myanmar

Myanmar Spring Chronicle – May 08 Scenes
MoeMaKa, May 09, 2024

Current and Future Border Trade Situation in Myanmar

Myanmar has 13 border trade stations, with the main ones being Muse, Tachileik, Myawaddy, Kawthaung, Maungdaw, Kanyinchaung, and Tamu. Among these, the busiest stations are Myawaddy, Kawthaung, and Tachileik (with Thailand), Muse and Chin Shwe Haw (with China), Tamu (with India), and Maungdaw (with Bangladesh).

China is Myanmar’s largest border trade partner, with Myanmar importing the most from China and exporting agricultural products, natural resources, aquatic products, and wild animals. Thailand follows as the second largest trade partner, with India and Bangladesh also significant.

Since the 1988 military coup, which shifted Myanmar to a market economy, border trade has become official and has steadily grown. Prior to 1988, foreign goods were controlled by government departments, with most trade conducted via waterways. Post-coup recognition of the private sector has driven the growth of border trade.

This growth has led to crowded trade stations and cities. Muse, Myawaddy, Tachileik, Tamu, and Maungdaw have transformed into bustling urban centers, serving as hubs for both legal and illegal tax revenue collection. Over the past three decades, border trade stations have also become significant tax collection points.

Following the 2021 military coup, control of border trading stations has become a target for various armed groups, as these posts are lucrative sources of customs revenue. Key trading posts such as Chin Shwe Haw in Kokang, the Muse 105-mile trade zone in northern Shan, Lwegel in Kachin State, Myawaddy in Karen State, and Maungdaw and Kayinchaung trade zones in Rakhine State have been involved in battles over the past six months.

While it is often assumed that armed groups controlling these posts will generate significant tax revenue, trade volumes are unlikely to return to previous levels. The civil war has fragmented regions and disrupted trade. Manufacturing has stalled, and many people have fled the conflict, making business operations challenging. Increased armed checkpoints and fluctuating customs collections have further diminished border trade activity.

Under these conditions, it is unrealistic to expect border trading stations to return to their pre-war state soon. Even if armed conflicts subside, restoring previous border trade levels will be difficult. Military-led organizations are likely to proliferate, and new administrative structures and regulations will be implemented. Border trading stations will likely face strict limitations and careful control of their operations.

In a scenario where political and military authority is divided along ethnic and geographical lines, it will be challenging to restore the seamless transport of goods across Myanmar. Consequently, it is increasingly unlikely that armed groups can generate significant revenue from border trade activities.

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