Yangon (AFP) – A surprise attack by Myanmar’s ethnic armed groups has blocked two routes leading to the country’s biggest trading partner, China, stifled cross-border trade and rejected the junta’s cash-strapped taxes and foreign exchange.
Two weeks of fighting in northern Shan State have displaced nearly 50,000 people, posing a serious military challenge for the generals since they took power in 2021.
The closure of key transport arteries is driving up prices in markets and preventing the junta from sending reinforcements to counter the attack.
“We haven’t seen any (goods) trucks since the conflict started,” said a resident of Moses, a town on the border with China.
“There is no commercial crossing,” they said, asking not to be named for their safety.
Every day, hundreds of trucks carry fruits and vegetables to China or carry electronics, medicine and consumer goods.
In the town of Lashio, 160 kilometers away by road, residents said they were feeling the effects of the conflict.
“A bag of rice was 160,000 kyats ($76) before the fighting,” said one resident of the city, who asked not to be named for security reasons.
The current price is 190,000 kyat… If there is going to be a long fight, we will have a hard time surviving.
Goods traffic from Moses has been halted since fighters from the Arakan Army (AA), the Myanmar National Democratic Army (MNDAA) and the Taeng National Liberation Army (TNLA) launched their offensive on October 27.
Another center, Chinshuahua, on the border with China’s Yunnan Province, is closed for business.
Last week, the MNDAA released a picture showing the fighters unfurling their flag at the border gate. He admitted that the junta had failed to control the city.
The Chinshua and Moses crossings accounted for a third of the $5.32 billion in border trade with neighboring Myanmar from April to early November, according to trade ministry data.
Analysts say about $1 billion of that trade comes from natural gas entering China through Moses.
Much of the trade goes across borders through the black market and is not included in the official numbers.
Beijing understands that infrastructure has not been damaged by the conflict, a Chinese Foreign Ministry spokesman said Friday.
The main overland trade route to China — a major ally and arms supplier — is “embarrassing” to the military, said Richard Horsey of the International Crisis Group.
Since the coup, the junta has been trying to distance itself from Western countries, which have imposed sanctions on the generals and their businesses and cut ties with its giant northern neighbor.
Earlier this month, the central bank chief announced the launch of a cross-border bank payment service with China that would “enhance bilateral trade and investment,” state media reported.
But at the time, fighting was raging along the border, forcing residents to flee to China and suffocating local transportation.
A prolonged border closure will have a negative impact on Myanmar’s trade balance, current account and foreign exchange supply, Horsey said.
The cash-strapped junta has a strong desire to pay for foreign currency imports; According to rights groups, it is a weapon he wants to fight the regime’s entrenched armed struggle across the country.
Soldiers were suspended
Losing control of border crossings “would be a bit of a hit to revenue, but not crippling,” Horsey said.
Of more immediate strategic importance, analysts say, is the military’s ability to control the routes through which it deploys troops.
Jason Tower of the United States Institute of Peace said: “Deploying troops into the northern Shan is becoming increasingly difficult, and the military is now relying on helicopters to send reinforcements to the border area.
He said it would be “difficult” for the military to recapture the border infrastructure lost in the past two weeks.
“Even if the airstrikes can be brought back into place, it will anger China by destroying critical infrastructure,” he said.
© 2023 AFP