Myanmar Is More Important Than You Think

Flag of Myanmar waving in the wind

For a country that doesn’t get much attention, Myanmar matters much more than most realize.

While caught in a civil war for decades, Myanmar has a whole lot going for it. It sits between India and Thailand, it’s a low-cost labor center, and it has a navigable river. Add all that up, and you’ve got the perfect replacement for low-end global supply chains when China goes belly up. And if the election goes well in December, things might get even better.

Myanmar is also punching above its weight class in geopolitical importance. In the eyes of Beijing, they are an attractive land outlet to the Indian Ocean and access to Middle Eastern energy. With the military juntas in Myanmar favoring China and elected governments favoring the West, the coming election could tip the scales and shake up logistics for Beijing.

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Transcript

Hey all. Peter Zeihan here coming to you from Wren chair, a creek in Yosemite where I have my own personal beach and pool resort. Quite refreshing and a little chilly. Anyway, today we’re going to talk about Myanmar, which, of course, makes some of you say, what the hell is a Myanmar? And why would I care? Well, let me tell you, Myanmar is a country in Southeast Asia, sandwiched between the part of India that India doesn’t like to talk about. 

And Thailand. It is well, it’s having a really nasty civil war again. Has been for decades, honestly. And we now have news that on the 28th of December, the ruling junta, a military group, has decided that they’re going to hold elections again. And this is important for the three reasons that you should care. Number one, if we are going to move into a world beyond China, the Chinese are dying. 

So we need to. But if we still want stuff, we need to build out as robust of manufacturing supply chains outside of mainland China as we possibly can. Myanmar can be a huge part of that. It’s already part of the Association of Southeast Asian Nations. But 

Unlike Malaysia or Thailand or Singapore, it’s not particularly advanced in Vietnam, long since left it in the dust. However, all types of manufacturing that are going to be economically viable require a multi-step manufacturing supply chain step, something that some policymakers sometimes forget. And that means you need someone on the low end to do things like assembly in Myanmar is perfectly set up for that. 

So if we’re going to have a reasonable chance of still having manufactured goods in a post China world, Myanmar, it would really help if they were part of the solution. That’s one. Number two. Like I said, there’s a civil war going on. And because of that, you’ve got lots of secondary groups, minorities that are basically massively funding their operations through the heroin trade. 

Well, in the past, when the military’s giving up power to central control, the war has died down and some of the heroin production and smuggling has died down with it. So yes, yes, yes, Americans love their meth. They love their fentanyl. The cocaine. But we like heroin too. And anything that constrains the supply, I would say, is a good thing. 

And then the third reason why it matters is China directly. If China is ever going to escape parts of its geography, it really needs another outlet to the world. Right now, its entire population is basically on the eastern coast. And just off the coast is something called the first island chain. Japan. Taiwan, the Philippines, Indonesia. 

Countries that are, for all practical purposes, Informal if not formal U.S. allies. And so China has never, ever been able to punch through the chain in any meaningful way. They would take a Navy as powerful as the US Navy, which they are nowhere close to even try. So what about an alternative on land? 

Now, going through Russia sucks because it’s you know, Russia and they can’t be trusted by anyone. But Myanmar provides an opportunity to not only bypass the Strait of Malacca, but get closer to, say, the oil fields of the Middle East. So in the past, when the military has been in control, relations with the Chinese have been pretty good, even though the civil war boils right up to China’s border. 

But when the military gives up power and the civilian authorities take over, then it’s a little bit different. And generally China gets shafted, loses all its investments, and Myanmar opens to the west. That’s what happened about 12, 13 years ago when I was writing The Accidental Superpower. So there’s a section on Myanmar in that book. If, if, if, if in December, real elections actually happen. 

I see no reason why that shouldn’t happen again. So having a military dictatorship in Myanmar is something that the Chinese actually like, because they know who to talk to you. They know that, you know, you don’t have to change policy every election. Now, I don’t want you to get overexcited here. Democracy in Myanmar looks different than it does anywhere else. 

This is a country where the Burman people are largely in the center of the country, along the Irrawaddy River. To be perfectly blunt, the military is all Burman and they’re wildly racist. And that’s one of the reasons why the Civil War is going. And the last time we had elections and this woman by the name of Onion Suu Kyi, one who had been a dissident for quite some time, policy towards the minorities didn’t change at all. 

The Burman are pretty nasty with all of the minorities in the country. So I don’t want to suggest this is a once and done and not part of a process, but it would definitely be a step in the right direction. One more thing to keep in mind. Almost unique in Asia. Certainly in Southeast Asia.  

There is a river, that goes right through the Burma territory, called the Irrawaddy. And it is one of only a handful of navigable waterways in the, in the Asian landmass. So not only would the skill set for manufacturing be kind of like a 1980s Mexico, you know, relatively low skilled, relatively low education, but really, really cheap. You also have the possibility, because of the navigable waterway, of moving cargo back and forth really, really cheaply. 

So from an infrastructure point of view, would be really easy to build out Myanmar if the politics align. We’ll find out in December.

Myanmar’s Bleak Future: Civil War and Ethnic Strife

Myanmar doesn’t often catch my attention, but with the ongoing civil war, I figured it was time to throw it into the mix. After years of civil unrest, is there a clear path to stability?

A quick look back at Myanmar’s history will show a fractured population divided by demography and ethnic lines. The majority is made up of the Burmese people, which comprises two-thirds of the population. The Burmese live in the most favorable location and have the best infrastructure.

The Burman majority currently also makes up the vast majority of the military, which is the backbone of the ruling junta. In addition to stymying domestic democracy movements and mismanaging the country (and its resources, and its economy), the pro-Burman regime has a long history of abuses against various minority groups. These groups have increased their violent confrontation with the junta in recent years, and the military has struggled to retain control.

So, after 15 years of civil unrest and conflict, can they see the light on the other side? Unfortunately, the future remains bleak until there is some form of political resolution to regain control of the country and the disconnected population.

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Transcript

Hey everybody, Peter Zeihan here, coming to you from Colorado. We are in the first full week of August, and today we’re going to talk about a place called Myanmar. We’ve had a lot of military activity there in the region—there’s basically a civil war going on. The rebels have captured a major military facility in one of the regional capitals.

First of all, what is Myanmar? Myanmar is a country that used to be called Burma. It is sandwiched between the Indian subcontinent and Southeast Asia. It’s primarily mountainous, primarily jungle, but cutting through the middle of it is the Irrawaddy River, which is actually a navigable riverway, much like the Mississippi or the Rhine. And so it’s a huge push for commerce right there.

The population, of course, as you would expect from jungles and mountains, is fractured. The core population, the Burman or the Burmese, is based on what your ethnicity is and runs right along the river, right in the lowlands. This is the most economically viable area, where most activity happens, where most agriculture happens. They make up about two-thirds of the population, and they are large and in charge.

They have also had a succession of governments under military and civilian rule that are kind of pricks and treat everyone else as disposable. Before you even consider that mountainous people and jungle-living people are a little ornery, there’s plenty of reason for all the other ethnicities in Myanmar, or Burma, to be at odds with the Burmans. And so we have basically been in an increasing state of civil breakdown, and now civil war, for the last 15 years.

There are over 100 other ethnicities—none of them make up more than 10% of the population—but all of them have their little areas that they’ve carved out, big into smuggling, big into heroin, because these are things that you can do when the center cannot hold. I phrased that wrong. The center can hold—the center can hold the center—but it has a real hard time pushing power into the provinces and the edges, where everybody else is.

The problem is that all the borders are porous, development is limited, and what infrastructure exists is largely limited to the Burman areas in the lowlands around the Irrawaddy. This, unfortunately, is becoming the new state of affairs. The Burmans have mismanaged their affairs under civilian and military rule—it’s currently military rule—to the point that relations with pretty much all of the ethnicities have broken down.

And while there’s a civil war on one hand, there is also, because of military rule, a pro-democracy push across the country that is weakening the government from within. So if the center holds but nothing else, you’re basically looking at this giant U of territory in the northwest and east becoming stateless in the traditional sense. This is how it’s going to remain until such time as someone is able to consolidate power.

That could be a change of government among the Burmans, who could maybe do some sort of national reconciliation. But I don’t see anyone alive in the political system right now who is capable of that. Or it could be a third party coming in and knocking some heads together. The only country in the region that has that capacity would be China. And while the Chinese are okay with Myanmar being weak, they are not okay with being the power that has to come in and take over the security situation, because it would be just as hard for them as it has been for the Burmans.

So unfortunately, despite a reasonably favorable geography in the core, this is a country whose time has not yet come and will not until we can have some sort of political resolution, which does not, unfortunately, appear to be on the horizon. All right, that’s it. Bye.