Myanmar: Sectarian Unrest Should Not Be Overlooked

Myanmar has attracted a fair amount of investor hype over the past two years, but the country faces significant risks, as well as opportunities. Regarding the former, Myanmar suffered another flare-up in ethnic unrest recently, with Rakhine state once again serving as the epicentre. On September 29, Buddhist mobs reportedly set fire to more than 100 homes in Thandwe township, leaving more than 500 residents homeless and at least five people dead. Those attacked were primarily of the Kaman ethnicity, a minority Muslim group that has increasingly been the target of majority Buddhist aggression in Rakhine state, which is among the least developed of Myanmar's 21 administrative subdivisions.

Although incidents involving ethnic and religious tensions have erupted all across Myanmar over the past two years, the situation in Rakhine state is considerably less stable and more historically sensitive than in other regions. While the government does officially recognise the Kaman Muslim group targeted in the above-mentioned attack, it does not recognise a much larger Muslim group in Rakhine, namely the Rohingya. The Rohingya's origins are disputed. Some argue that the group originates from Bengal, or modern Bangladesh, while others believe that they have been settled in Rakhine for centuries. Either way, they are stateless, and suffer from extremely limited rights in Myanmar as a result. Of Rakhine's approximately 3.8mn population, it is estimated that 800,000 are of Rohingya ethnicity.

Military Faces Dilemma Over Forcefulness Of Response

As we wrote previously (see Business Monitor Online, July 16, 2013, 'Three Risks That Could Derail Political Reforms'), concerns about the broader implications of growing sectarian violence in Myanmar have shifted from the potential for an excessively heavy-handed military response to the implications of government inaction.

On the one hand, if the government cracked down heavily on agitators of violence, it would risk displeasing both the Buddhist majority (an estimated 89% of the population), if the response was deemed to be benefiting  Muslim minority ethnicities, as well as displeasing the minorities themselves, if the response was seen as being biased against them. A forceful military response might also attract criticism from the so-called 'international community'.

On the other hand, if the government refrained from curbing inter-ethnic violence, it could a) create the impression that it was losing control of the country, and b) inadvertently allow an escalation of violence, which would cause the problem to become bigger, thus requiring a more forceful intervention at a later date.

Overall, we emphasise that the political risks associated with conflicts affecting seemingly obscure ethnic groups should not be overlooked. In 1990, tensions between Croats, Serbs, Bosnians, and Kosovar Albanians in Yugoslavia were all arguably 'obscure' and esoteric phenomena. A year later, there was civil war. We are not saying that Myanmar will succumb to civil war, but recent history has shown that when a multi-ethnic country liberalises or experiences a weakening of the state after decades of authoritarian rule, ethnic, sectarian, or tribal tensions can become overwhelming. We have seen this is in the former Soviet Union (early 1990s), Indonesia (1998-early 2000s), Iraq (since 2003), Libya (since 2011), and Syria (since 2011), to name just a handful of examples.