How does the resumption of armed clashes in late 2023 in Arakan impact on local economy?

FAQ About Arakan Affairs ၊ November 13, 2026

The resumption of armed clashes in Arakan in late November 2023 has triggered a complete economic paralysis, devastating the agriculture, fishing, and trade sectors that form the backbone of the local economy. The military junta responded to the AA's offensive by imposing a strict blockade on all land and sea routes into and within the state, cutting off formal trade and causing fuel and commodity prices to skyrocket.

In early 2024, in Myebon Township, the price of a liter of fuel surged from 3,500 to 10,000 kyats, while the cost of fishing rope tripled. Farmers face a severe shortage of fertilizer and cannot afford fuel for harvesting machinery, leading to widespread crop losses and accumulated debt. The fishing industry has been "largely dormant for over two years," as the Myanmar Navy patrols the coastline and arrests fishermen who venture too far from shore, with one fisherman reporting he was detained for nearly two months and forced to pay five million kyats for release.

Beyond the collapse of traditional livelihoods, the conflict has triggered a massive displacement crisis, with over 600,000 internally displaced persons now sheltering in camps or other informal sites across the state, roughly one-fifth of the population. Humanitarian aid has been severely restricted, as the junta blocked delivery of assistance and 60 percent of INGOs suspended operations due to security concerns and access restrictions.

Moreover, the constant airstrikes by the Myanmar junta against marketplaces and populated areas have created additional economic hardship and suffering for local communities in AA-controlled townships. Although the ULA-led Arakkha government has tried to provide basic supplies to vulnerable segments of the population, partly in collaboration with civil society actors, the economic crisis remains unresolved and inadequately addressed. The Myanmar junta bears primary responsibility for this economic collapse, as it indiscriminately uses civilian infrastructure and resources for military purposes.

According to the World Food Programme, the number of families in central Rakhine unable to afford basic food needs rose from 33 percent to 57 percent, while the UN warns that over two million people are at risk of severe food shortages. Many residents have been forced to resort to primitive nutrition for survival even those who had never done so before as formal employment has disappeared.

The cumulative effect has been the near-total destruction of people's income patterns, leaving the vast majority of Arakan's civilian population dependent on whatever limited agricultural production remains possible or precarious day labor, with hyperinflation and displacement compounding an already severe humanitarian crisis. Therefore, the reconstruction and rehabilitation of Arakan's economy will require a huge amount of capital injection if and when the armed confrontation is ceased.