Why Myanmar Remains Poor and Persecuted (Part II): Power, Profits, and Proxies

Nicholas Kong

Myanmar’s crisis, often framed as a civil war or humanitarian disaster, is fundamentally a struggle over power and profit. For decades, the military has engineered a system that converts political control into personal economic gain. Understanding this architecture is essential to explaining why repression persists despite mass resistance – and why external actors have struggled to shape outcomes.

Power Structure: Rule by Design

Myanmar’s military rule is rooted in a delusional belief in divine entitlement, akin to royalty, claiming ultimate ownership of the nation and its resources. Over time, this absolutist mindset evolved into a parallel state embedded within formal institutions.

The 2008 Constitution entrenched military dominance by reserving 25% of parliamentary seats for serving officers, granting the armed forces veto power over constitutional amendments. The National Defense and Security Council (NDSC) concentrates authority in the commander-in-chief, who controls defense, policing, internal and border security beyond civilian oversight. This structure enables the military to override elected institutions under any declared “emergency,” rendering civilian rule conditional and reversible.

The 2021 coup was therefore not a rupture, but a reassertion of this design. When electoral outcomes threatened military interests, the system activated its ultimate safeguard: direct seizure of power.

The Military Economy: War as a Business Model

Political dominance is inseparable from the military’s vast economic empire. Through conglomerates such as Myanma Economic Holdings Limited (MEHL) and Myanmar Economic Corporation (MEC), the armed forces control lucrative sectors including oil and gas, mining, timber, cement, tobacco, banking, ports, media and telecommunications.

These enterprises operate outside civilian budgets and parliamentary scrutiny. Profits fund military operations, reward loyalty among senior generals, family members, and cronies, and insulate the institution from fiscal accountability. Sanctions have had limited effect, as revenues are opaque, offshore, or routed through regional intermediaries.

This structure creates perverse incentives. Prolonged conflict justifies military budgets; territorial control secures resource extraction; instability deters civilian oversight. Peace, by contrast, threatens to expose corruption and dismantle monopolies. For Myanmar’s generals, war is not a failure of governance—it is governance.

China: Stability Over Democracy

China is the most consequential external actor in Myanmar. Beijing’s overriding priority is stability along its southwestern border and protection of strategic interests, including energy pipelines, trade corridors, and access to the Indian Ocean.

For years, China pursued “strategic ambiguity,” engaging both the military and ethnic revolutionary organizations (EROs). However, following the junta’s catastrophic battlefield losses in 2023, Beijing shifted toward overt intervention. It pressured northern resistance groups into ceasefires, facilitated the return of seized towns, and increased military and technological support to Naypyidaw.

China does not seek to legitimize Myanmar’s generals ideologically. Rather, it seeks a predictable partner capable of enforcing order and safeguarding ambitious projects under the China–Myanmar Economic Corridor. Elections – however flawed – serve this purpose by providing a veneer of continuity. From Beijing’s perspective, a weak but compliant junta is preferable to a fragmented revolutionary victory.

The United States: Principles Without Leverage

Washington has taken a principled stance against the coup, imposing sanctions and maintaining diplomatic isolation of the junta while offering limited humanitarian assistance. Yet U.S. influence remains constrained. Myanmar was not considered a core strategic priority compared to Taiwan or Ukraine, and sanctions lack impact without regional enforcement.

The United States faces a persistent dilemma: engagement risks legitimizing the junta, while disengagement cedes influence to China and Russia. Without coordinated action involving ASEAN, Japan, India, and the European Union, American policy has been morally clear but strategically thin.

This constraint has deepened under the “America First” orientation and the National Security Strategy of flexible realism, which prioritizes direct national interests and limits intervention in authoritarian governance abroad.

Resistance Forces: Resilient but Fragmented

Myanmar’s resistance landscape is unprecedented in scale and diversity. The Civil Disobedience Movement crippled state administration, while nationwide boycotts of military-owned enterprises eroded the generals’ financial base. People’s Defense Forces (PDFs) emerged across the country, often aligned with ethnic revolutionary organizations (ERO’s).

Since late 2023, coordinated operations by EROs and PDFs under the National Unity Government (NUG) inflicted historic losses on the military, stripping it of territory and manpower. These victories shattered the myth of the junta’s invincibility. However, following the success of Operation 1027, resistance forces failed to sustain relentless pressure. The military, allowed time to regroup, rearmed with Chinese logistical and financial support, returning better prepared.

Fragmentation remains the resistance’s greatest vulnerability. Differences in ideology, ethnicity, command structures, and external patronage complicate unity. Some groups face pressure from neighboring states to accept ceasefires, while most resistance groups lack sustainable funding or arms.

Efforts are now underway to form a Federal Revolutionary Council, aimed at unified political leadership, a cohesive diplomatic voice, and centralized military coordination. Success will depend on setting aside historical grievances in a do-or-die moment. Delay risks enabling military recovery – or locking the country into prolonged war.

The Strategic Impasse

Myanmar is trapped in a strategic stalemate. The military cannot decisively defeat the resistance but seeks survival through repression, aerial terror, and manufactured elections. Liberation must come from within. Only a unified resistance can function as a de facto actor capable of negotiating with China and the United States on regional stability, global security issues such as cybercrime, narcotic and human trafficking, and strategic resources like rare earth elements.

External powers prioritize stability and competition over democratic transformation. The cost is borne by Myanmar’s people.

The Way Forward

Myanmar’s crisis will not be resolved through cosmetic elections or elite bargains. A durable solution requires dismantling the military’s political and economic monopolies, integrating resistance forces as equal partners into a federal unity framework, and aligning international pressure with regional enforcement.

The people—the lifeline of the revolution—have already spoken, most clearly through nationwide silent strikes. The responsibility now lies with resistance leadership by the NUG and ERO’s to honor that sacrifice and deliver a future defined not by fear, but by freedom, dignity, and prosperity. Until then, poverty and persecution will remain not accidents of history—but instruments of rule.

Why Is Myanmar Destined to Be Poor and Persecuted (Part I): It’s the Military, Stupid!