Geopolitical Report ISSN 2785-2598 Volume 50 Issue 2
Author: Antonio Graceffo

For decades, the people of Burma, particularly those in ethnic states, have endured violence and hardship caused by armed conflict. Burma is home to 135 ethnic groups, many of which have their own armed forces. Across Burma, over 170 armed groups are active, by estimation.

This report, based on open sources and publicly available information (PAI), aims at analysing the geopolitical risk and criminal scenarios in Myanmar, particularly focusing on the Shan State.

Myanmar’s Armed Groups:
Background Information

The armed groups in Myanmar are broadly divided into two main factions: resistance armies opposing the military and pro-military groups, including Border Guard Forces (BGFs) and ceasefire groups. The resistance forces consist of ethnic armed organisations (EAOs), representing Burma’s diverse ethnic groups, and the People’s Defense Force (PDFs), anti-junta militias formed after the 2021 coup. Opposing them is the national military, the Tatmadaw, often referred to by the name of the junta’s government, the State Administrative Council (SAC). The Tatmadaw relies on the support of BGFs, which receive weapons and supplies in exchange for their loyalty.

A prime example of the complex interplay between multiple armed groups and competing interests is Shan State in eastern Myanmar, the country’s largest administrative region. Bordering China, Laos, and Thailand, Shan State is home to an estimated 6–7 million people and a richly diverse population. The Shan form the majority, with significant ethnic communities including the Pa-O, Ta’ang (Palaung), Kachin, Lahu, Lisu, and Wa.

Shan State hosts numerous powerful Ethnic Armed Organizations (EAOs), such as the Shan State Army-South (SSA-S) and its political wing, the Restoration Council of Shan State (RCSS); the Shan State Army-North (SSA-N) and its political wing, the Shan State Progress Party (SSPP); the United Wa State Army (UWSA) and its political wing, the United Wa State Party (UWSP); the Mongla Defense Army (MDAA); the Myanmar National Democratic Alliance Army (MNDAA); the Ta’ang National Liberation Army (TNLA); the Pa-O National Liberation Army (PNLA); and the Pa-O National Liberation Organization (PNLO).

Besides their battles against the Myanmar military, these groups frequently clash with one another, further complicating the region’s already volatile dynamics.

Since the 2021 coup, Myanmar has become the world’s largest producer of opium and a leading global producer of methamphetamines, with Shan State at the center of both industries. Border Guard Forces (BGFs), operating under the protection of the Tatmadaw, along with numerous Ethnic Armed Organizations (EAOs) such as the United Wa State Army (UWSA), the Shan State Armies, and the Myanmar National Democratic Alliance Army (MNDAA), are deeply entrenched in drug production and trafficking. In some cases, even factions within the Tatmadaw itself are implicated.

The Tatmadaw leverages transnational organised crime—including drug trafficking, illegal logging, arms smuggling, and human trafficking—as a financial lifeline to sustain its repressive regime amidst international sanctions and political unrest. Profits from these illicit activities fund its operations, stabilise relationships with rival ethnic groups, and exploit rural populations, who are often pressured into opium cultivation because of heavy taxation on alternative crops.

Myanmar’s black market thrives on the illegal trade of jade, gemstones, drugs, and endangered wildlife, driven by regional demand from China, Thailand, and India. These illicit networks generate an estimated $1–2 billion annually, reinforcing the Tatmadaw’s grip on power while perpetuating widespread poverty, environmental degradation, and human suffering. Military elites and armed groups profit significantly from these trades, depleting the country’s natural resources and exacerbating ecological challenges.

Illegal logging has led to one of the highest deforestation rates globally, while jade and gemstone extraction has caused deadly landslides and environmental disasters. Ethnic minorities and marginalised communities endure these crises, including human trafficking. Refugees fleeing violence are often subjected to forced labor or sexual exploitation, reflecting the Tatmadaw’s complicity in such operations.

This exploitation underscores a broader agenda of ethnic cleansing, as the junta’s actions systematically target and oppress vulnerable populations. The intertwining of illicit economies with the Tatmadaw’s governance fuels instability, undermines regional security, and creates significant barriers to sustainable development, deepening Myanmar’s ongoing crisis.

Alongside its participation in the drugs business, BGFs are tasked with combating revolutionary forces. A resident of Shan State described the grim aftermath of battles: “Both sides suffer losses, and to replenish their forces, the armed groups force villagers under their control to join. Those who refuse face severe punishment, such as the confiscation of property, farmland, homes, and livestock.”

The Myanmar military heavily relies on its alliances with Border Guard Forces (BGFs) to maintain control amid nationwide armed resistance. These forces, composed of former ethnic insurgents now under military command, provide critical tactical and political support, particularly along the borders with China and Thailand. In exchange, BGF leaders are granted unchecked freedom to engage in illicit activities such as narcotics trafficking, illegal gambling, and cross-border crime, which bolster their economic power and deepen their ties to the junta.

The Kokang BGF, operating in the Kokang Special Administrative Zone along the China-Myanmar border, plays a pivotal role by leveraging strong ties with Chinese officials to facilitate cross-border trade and support the junta’s economic initiatives. Similarly, the Karen BGF, based along the Thai border, has expanded its regional influence by partnering with Chinese criminal networks and serving as a key logistics hub.

These criminally linked BGFs not only strengthen the junta’s campaign to suppress resistance but also fuel broader instability. Their activities undermine regional security, sustain transnational crime networks, and further entrench the military’s power, illustrating the symbiotic relationship between the junta, organized crime, and neighboring states.

Conclusion

Myanmar’s illicit economies have wide-ranging consequences. Domestically, they erode democracy, entrench military power, and fuel ethnic violence, driving a refugee crisis as hundreds of thousands flee Shan State to seek refuge in neighboring Thailand.

The environmental toll is devastating, with deforestation and illegal resource extraction causing natural disasters and long-term ecological damage. Internationally, Myanmar’s shadow economy destabilizes the region, fueling cross-border drug trafficking, human smuggling, and environmental degradation that neighboring countries struggle to contain.

Disclaimer. The views and opinions expressed in this report are those of the author and do not necessarily reflect the official policy or position of SpecialEurasia.

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