On March 30, the government of Myanmar and an umbrella group of 16 ethnic minority groups agreed to a draft agreement for a “nationwide ceasefire” to end decades of conflict in the country’s northern reaches. But even as the latest ceasefire was being made, two armed groups, the Myanmar National Democratic Alliance Army (MNDAA) and the Kachin Independence Army (KIA), were in open conflict with the Burmese military. Fighting in Kokang and Kachin has led to casualties in the triple digits and displaced an estimated 100,000 civilians.

Given the potential for the military to use renewed conflict as a pretext to roll back or end Myanmar’s nascent political reform process, it might seem puzzling for minority groups seeking greater autonomy and relief from human rights abuses to escalate violence at a time like this. But their logic is clearer when you understand what’s been so commonly overlooked in Myanmar’s ethnic conflicts: competition by both minority rebel groups and the Burmese military over the control of extractive resources and illicit industries.

Rubies, Jade, Timber, and Poppy

Academics have pointed to competition and control over extractive natural resources such as minerals, metals, and timber as factors which lead to both higher rates and increased duration of internal conflict. Valuable extractive resources provide incentives for the formation of non-state armed groups and extend the duration of existing conflicts by providing a relatively easy source of income that groups can use to purchase military equipment and recruit fighters.

Areas currently under the control of or within the traditional home areas of ethnic minority groups in Myanmar are rich in timber, rubies, and jade. These resources are both extremely lucrative and easy for an armed group to control and export.

The KIA and other armed groups bordering China have long benefited from the exploitation of northeastern Myanmar’s teak forests and other valuable hardwoods, which are harvested and smuggled into China. A recent report by the NGO Forest Trends found the overwhelming majority of Chinese timber imports from Myanmar are illegal. Likewise, rubies and other gems from ethnic minority areas have been smuggled across the border and into global markets.

What’s more, the military strategies of many armed groups appear to be heavily influenced by a desire to maintain and expand control over natural resources. After the resumption of major hostilities between the KIA and Burmese military in 2011, a KIA force spread thin by the offensives of better equipped government forces surprisingly launched a significant offensive of their own. Their target? Hpakant, one of Myanmar’s most lucrative jade mining centers.

Myanmar’s booming drug production also serves as an easily exploitable source of revenue for non-state armed groups. Several of the most powerful armed groups run large-scale methamphetamine production operations and/or control the cultivation of poppy for the production of heroin. These are then smuggled into China and Thailand to supply growing demand in the region. The recent outbreak of conflict in Kokang may well be an attempt by the MNDAA to restore their control over the revenues of the drug trade.

An Alternate Path?

Given the seeming unending nature of these decades-long conflicts, options for resolution appear limited. A military resolution through the escalation of violence is both deplorable from a normative perspective and practically improbable. Is it possible, then, for nonviolent measures to alter the incentives of armed groups in ways which make control of extractive resources and illicit industries less important as a means of survival? There are several possibilities.

First, the government of Myanmar and international actors could crack down on illicit exports. This approach may prove very difficult to implement, as smuggling across rugged borders is difficult to monitor and cooperation from local communities and governments on both sides of the border who gain financially from smuggling is unlikely to be forthcoming (high-ranking military and government officials are among those that profit most from smuggling outside ethnic minority controlled areas).

Alternatively, a long-term peace deal and political settlement which places the control of revenues from extractive resources in the hands of local governments run by ethnic minority officials may eliminate some of the most powerful motivations for the continuation of conflict. The prospects for such a long-term deal also appear dim. The military has demonstrated its willingness to undermine or ignore agreements when they conflict with their interests. Likewise, minority groups are unlikely to have enough trust in the state to agree to such a plan should it require them to lay down their arms.

Perhaps the most viable option in the medium to long term is development programs specifically targeted at diversification of local economies, reducing reliance on extractive resources and illicit industries for the survival of minority communities. As control of extractive resources diminishes in comparative economic importance, so would the incentives of communities to sustain armed conflict intended to maintain control of these industries.

This approach is not without its own challenges. It is difficult to know if the Burmese state and military would have the foresight to allow such development programs in rebel-held regions. In the government’s current form, it seems unlikely, but if liberalization continues, perhaps it will become more possible. Additionally, those at the very top of the leadership structures of armed groups benefit the most from the status quo. This approach would therefore depend on eroding support for the continuation of resource-driven conflict from below, gradually undermining the comparative economic advantage to both civilians and rank and file members of armed groups to continue fighting.

The re-ignition of conflict should be a reminder that as long as the incentives to control exploitable natural resources and illicit industries are greater than the incentives to create stability, there is little hope for long-term peace in Myanmar. Sustainable progress is possible, but only if the underlying economic structures of minority groups are altered by the diversification of local economies and the government continues opening up. While this is by no means a panacea for the conflict, it may begin to alter the economic circumstances which have facilitated such persistent violence and bring about the conditions which lead to a more enduring peace.