Arakan Economy - Building Prosperity Amid Conflict

By GAN

Longread: Opinions                                       July 5, 2025

Arakanse Farmers (photocrd)

The economic landscape of Arakan (Rakhine State) under the United League of Arakan (ULA) and Arakan Army (AA) stands as a powerful symbol of our people’s resilience against the predatory policies of the State Administration Council (SAC). For centuries, Arakan has been relegated to the status of one of Myanmar’s poorest regions, its abundant resources—oil, natural gas, fisheries, and its strategic coastal location—systematically plundered by the central Burman government and foreign entities, with China playing a prominent role through its Belt and Road Initiative (BRI).

The SAC’s economic stranglehold, intensified since the conflict resumed on November 13, 2023, has devastated agriculture, disrupted trade, and restricted access to essential goods, plunging our communities into deeper poverty. Yet, the ULA/AA, guided by the "Arakan Dream" and the "Way of Rakhita" as articulated by Major General Twan Mrat Naing, perceives this crisis as a transformative opportunity to forge a self-sustaining economy that restores our national dignity and ensures prosperity for future generations.

As of June 23, 2025, the AA’s military successes have secured control over 15 of 18 townships in Rakhine State, including strategic areas like Paletwa near the Bangladesh border and key coastal regions. This territorial dominance has enabled the Arakan People’s Revolutionary Government (APRG) to lay the groundwork for an economic framework, albeit rudimentary. Our primary revenue streams stem from a modest tax system imposed on local businesses and households, alongside customs duties collected at border checkpoints.

These efforts, though limited, provide a vital lifeline amidst the SAC’s relentless blockades, which have severed formal trade routes and inflated prices for essentials like rice, cooking oil, and salt—costs that have tripled since October 2023. The SAC’s accusations of drug trafficking are malicious fabrications, a propaganda tool to discredit our legitimacy; our economy is built on legitimate trade in agricultural products, fish, and timber, though these are severely constrained by their restrictions.

The halt of formal trade with Bangladesh since December 2024, exemplified by the impounding of rice sacks at Chittagong ports, underscores the SAC’s intent to isolate us economically. To counter this, the ULA/AA is exploring alternative trade corridors, notably the Kaladan River route with India and our recent advances into Magwe and the Irrawaddy Delta, where our forces are now within 100 km of Pathein. These initiatives aim to reconnect Arakan to regional markets, reducing our historical dependence on SAC-dominated hubs like Yangon and Mandalay.

Locals working in the market (photocrd)

The SAC’s economic exploitation is most evident in projects like the Yunnan oil and gas pipelines and the Kyaukphyu Special Economic Zone, where profits flow northward to China rather than benefiting local communities. The ULA/AA is committed to renegotiating these arrangements, demanding equitable revenue sharing and prioritizing local employment and development. India’s Kaladan Multi-Modal Transit Transport Project offers another avenue for economic integration, and we are working to incorporate Paletwa into this network despite SAC resistance.

The ULA leadership is also investing in infrastructure—repairing roads, constructing makeshift ports, and establishing local markets—to revive the agriculture and fisheries sectors, which have been hit hardest by the blockade. The devastation wrought by Cyclone Mocha in May 2023, which destroyed homes, farms, and storage facilities, has further complicated our efforts, yet we persist with local production initiatives and informal trade networks to mitigate the impact.

The displacement of over 500,000 people, as documented by the ULA Humanitarian and Development Coordination Office, poses a significant challenge to the region's economic capacity. Many have lost their livelihoods, and the influx of displaced persons strains our limited resources. Nevertheless, the ULA/AA is distributing aid where possible, negotiating trans-border humanitarian support from Bangladesh and India to address immediate needs.

Our conscription policy, enacted in March 2025, imposes a travel ban on men under 45 and women under 25 to prevent exploitation by trafficking gangs, a measure that also aims to stabilize the labor force and prevent the loss of working-age individuals to external labor markets. Internally, the ULA/AA faces the delicate task of balancing taxation with the needs of these displaced populations, ensuring that economic policies do not exacerbate their suffering. Intercommunal economic cooperation, particularly with the Rohingya community, is a strategic priority.

Despite SAC-fueled tensions and propaganda about alleged abuses, there is an offer of equal economic opportunities to all under APRG governance, fostering a unified market that strengthens our economic base and promotes social cohesion.

The path forward demands the decisive defeat of the SAC to lift their blockades and secure international partnerships that respect our sovereignty. Engaging with China and India, whose economic interests in Kyaukphyu and the Kaladan Project are significant, requires careful negotiation to ensure mutual benefit rather than exploitation.

As of June 23, 2025, our economic foundation remains fragile, hampered by resource scarcity and ongoing conflict, but it is steadily growing. This nascent economy is a beacon of hope, a foundation upon which we will build a prosperous, self-determined Arakan that harnesses its strategic location for the welfare of its people.