Narrative Diversions

Vietnam’s Geopolitical Anxiety Over Cambodia’s Funan Techo Canal, Myanmar’s fragmented state and why the West should support parallel state-building in rebel controlled areas.

Vietnam’s Geopolitical Anxiety Over Cambodia’s Funan Techo Canal

By Chansambath Bong

Vietnam’s concerns about a China-backed canal project in Cambodia are making some waves. Cambodia’s new leader has a chance to calm the waters.

Cambodia’s plan to build the Funan Techo Canal, a 180-kilometre waterway linking a port in its capital Phnom Penh with Kep Province and onto the Gulf of Thailand, has made recent headlines, particularly in Vietnam. Pitched as a plan to revive Cambodia’s historic but under-utilised water systems, the canal will be 100 metres wide, 5.4 metres deep, and will accommodate ships of up to 3,000 deadweight tons (DWT). The China Road and Bridge Cooperation (CRBC) will finance the entire US$1.7 billion construction project under a Build-Operate-Transfer arrangement.

Despite Cambodia’s assurances, the plan has prompted Vietnam’s concerns about the potential environmental impact on the Mekong River. These concerns, in the author’s view, mask Vietnam’s geopolitical anxiety about its declining influence in Cambodia and China’s role in Mekong River geopolitics.

For Vietnam, the Funan Techo Canal will lead to lost earnings from Cambodia-bound ships. Moreover, it is another indication of Cambodia’s shifting position between China and Vietnam. Since the July 1997 political crisis, Cambodia’s overtures to China have been driven partly by tension with Vietnam resulting from the issues of illegal Vietnamese immigrants in Cambodia and Vietnam’s alleged border encroachments. Tension over the canal would reaffirm China’s importance for Cambodia’s security.

The canal raises two related predicaments for Vietnam. On the one hand, it needs to tread carefully since Beijing will back the canal financially under the Belt and Road Initiative (BRI). On the other hand, overreactions or inflammatory comments from Hanoi will stir up nationalistic sentiment among Cambodians pushing the project forward. The project symbolises Cambodia’s quest for greater sovereign ability to transport and trade goods domestically and internationally.

Though the canal is an essential step in Cambodia’s long-term quest for greater connectivity and economic prosperity, how well the country manages its ties with Vietnam during the canal’s construction will be the first foreign policy litmus test facing Hun Manet.

Despite the overblown argument by Vietnamese scholars that the canal could bring a Chinese military presence into Cambodia, Phnom Penh has no reason to antagonise Vietnam and no use for such a speculated presence. Furthermore, Phnom Penh would have to think more than twice before embarking on something that could invite external interference and a repeat of its tragic past. Cambodia’s history teaches us that a Chinese military presence will violate Article 53 of Cambodia’s constitution which prohibits foreign troops on its soil, in any case. This is a principle that rings similar to Vietnam’s “four no’s” policy.

For Cambodia, the canal will potentially reduce shipping costs and allow it to reroute a significant proportion of exports gradually away from Vietnam’s Cai Mep port along the Mekong Delta. Cai Mep is where Cambodia’s exports currently navigate before reaching international waterways. Their current dependence on Vietnam means that the Vietnamese can use administrative red tape, cross-border shipping fees, and political goodwill as strategic levers to keep Cambodia in a disadvantaged, if not subordinate, position. Vietnam is certainly not planning to lose that leverage anytime soon.

Critics of the canal may argue that it is not a silver bullet for Cambodia’s shipping woes. Containers would still have to be transhipped in ports like Singapore or Hong Kong before reaching their final destination, but the proposed canal is one key to strengthening Cambodia’s trade competitiveness, logistical connectivity, and to reducing its dependence on foreign ports.

Separately, the ongoing phase one expansion of the Sihanoukville Autonomous Port funded by Japan is a bigger step towards establishing Cambodia’s ability to bypass foreign ports to ship products directly to Europe and US markets. This expansion and the proposed canal are vital parts of Cambodia’s 2023-2033 logistics master plan.

Other critics may point to the irony of Cambodia lessening its reliance on Vietnam, only to depend more on China. However, they miss one crucial point: unlike Vietnam, Cambodia does not see China as an immediate challenge to its security.

That is why Cambodian Prime Minister Hun Manet’s argument that the canal would enable his country to be “breathing through our own nose” has resonated widely with the Cambodian public. The national psyche has been fundamentally shaped by bitter encounters with Vietnam throughout history, with examples like the Nguyen dynasty’s absorption of Cambodia’s lower Mekong Delta territory in the 18th century. If anything, Vietnam’s overreactions to the canal today will play right into those nationalistic sentiments.

Cambodia’s wariness about its reliance on Vietnamese ports has historical roots. In 1956, the then-South Vietnamese government weaponised Cambodia’s dependence on the Port of Saigon to impose an economic blockade to pressure it over its neutrality. It was this blockade that prompted then Cambodian leader Norodom Sihanouk to seek France’s support for the Port of Sihanoukville’s construction, which was completed in 1959. Vietnam’s 1994 blockade of Cambodian shipping was another instance of Cambodia not being able to ‘breathe through its own nose’.

Though Vietnam’s concerns about the project’s possible environmental impact are understandable and need to be assuaged, its anxiety is more driven by the prospect of further losing its influence in Cambodia and China’s role in Mekong River geopolitics.

Though the canal is an essential step in Cambodia’s long-term quest for greater connectivity and economic prosperity, how well the country manages its ties with Vietnam during the canal’s construction will be the first foreign policy litmus test facing Hun Manet.

President of the Cambodian Senate Hun Sen’s recent comments may reassure Hanoi that Phnom Penh takes its concerns seriously and that the canal is solely for socio-economic purposes rather than more nefarious ones. A cautious optimist like this author would cast the canal as just one issue of many in the larger Cambodia-Vietnam relationship.

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Western Fragmentation of Myanmar

By Morten B. Pedersen

To remain relevant to Myanmar’s future development, the West should support parallel state-building in liberated areas.

Outrage is not a policy: Coming to terms with Myanmar’s fragmented state

Key Findings

• Myanmar’s civil war has entered a crucial phase. While the junta remains firmly ensconced in the centre, a series of stunning victories by its opponents has severely diminished the reach of the military regime into the borderlands.

• With the military state retreating, anti-junta forces have started building state-like structures and delivering public services in “liberated areas” where they are in effect governing millions of people.

• After struggling for the past three years to respond effectively to the conflict, Western governments now have a chance to restore their relevance to Myanmar’s future development by supporting this parallel state-building. This will require increased non-military engagement with a broad tapestry of resistance groups and local community organisations, not just the National Unity Government.

Executive summary

This paper analyses the evolution of Myanmar’s civil war with a view to identifying optimal international policy responses.

The sharp escalation of armed resistance since late 2023 holds out the tantalising prospect that the once seemingly invincible military regime could be defeated. Yet it remains an open question whether anti-junta forces will be able to carry the momentum from their recent victories in the forest-covered, mountainous borderlands across the open plains of central Myanmar to take the capital or other major cities. Even if resistance forces ultimately emerge victorious, the goal of building a genuine federal democracy will likely take years of highly complex and politically fraught negotiations.

While the outcome of the civil war remains uncertain, new resistance groups have started building state-like structures and delivering public services in “liberated areas”, much like the older ethnic armed organisations have been doing since the 1960s. The longer Myanmar remains mired in warfare, the more crucial these plural governance systems will become to the welfare of millions of people, with lasting implications for the nature of state-building in the country.

To more effectively support the Myanmar people, Western governments and likeminded actors will need to come to terms with the reality of an increasingly — and quite possibly, permanently — fragmented state. The paper thus calls for greater investments in “parallel state-building”, focused on strengthening the collective capabilities of a wide range of emerging political authorities and community-based organisations to carry out traditional state functions and serve vulnerable populations.

Introduction

The 2021 military coup in Myanmar ended a decade of liberal political and economic reforms but sparked a revolution that many hope will ultimately produce much needed, more radical change.

The Myanmar people are no strangers to military rule. However, the latest coup hit the country like an earthquake, shattering the hopes of millions of people who, after a decade of growing civil, political, and economic freedoms, had finally come to believe that tomorrow would be better than today. What the coup leaders had seemingly envisioned as a relatively simple “course correction” instead sparked a popular uprising, which soon evolved into an armed mass insurrection and civil war.

A note on terminology

This paper refers to the anti-coup movement as “the resistance” and to the new militias that have been established since the coup to fight the junta as “people’s militias”. The resistance also includes some long-standing ethnic insurgent groups that have openly aligned with the revolutionary goals of the anti-coup movement and engage in joint combat operations with the people’s militias. However, the term “ethnic armed organisations” (EAOs) is maintained as the collective term for all armed groups that pre-date the coup and primarily fight for local autonomy and ethnic rights. When individual EAOs have different names for their political and armed wings, the name most commonly used in the English-language literature is used for simplicity and familiarity. The junta’s armed forces are referred to simply as “the military”.

Three years after the coup, the new junta — the State Administration Council — is fighting a battle for survival against scores of new people’s militias and more established ethnic armed organisations (EAOs) demanding an end to the military’s role in politics and the establishment of a “genuine federal democracy”. Fresh elections originally scheduled for August 2023 have been repeatedly postponed, seemingly squashing any hope the coup-makers had of sneaking a new iteration of more tightly controlled “disciplined democracy” in through the backdoor.

The coup has been a failure. However, the revolution has not yet succeeded either. The civil war rages on; mass atrocities have become tragically commonplace as the military seeks to terrorise the population into submission; and Myanmar’s already weak state and economy are collapsing. According to the United Nations, more than 2.5 million people have been displaced, and nearly a third of the country’s total population of 56.6 million needs humanitarian assistance. [1]  Mediation of the escalating conflict appears next to impossible as both sides believe they can annihilate the other and see the rising humanitarian toll as a bearable burden.

The National Unity Government (NUG), founded by elected members of parliament who escaped arrest after the coup, aspires to lead the resistance forces and govern newly “liberated areas”. However, its influence is tenuous on the ground, where day-to-day leadership is in the hands of a bewildering array of local armed groups and administrative bodies. In the border areas, several long-standing EAOs have taken advantage of the splintering of the centre to expand and consolidate control of their traditional homelands. While fears of “balkanisation” may be overblown (if only because neighbouring countries will not recognise any new independent states), it is increasingly uncertain whether Myanmar can come together as anything resembling a functional union, even a federated one.

Western governments have expressed outrage over the military’s power grab and brutal suppression of the resistance, and have imposed targeted sanctions against the junta leaders as well as their main supporters and economic interests. Yet they have left it to the Association of Southeast Asian Nations (ASEAN) to do the thankless job of trying to mediate the crisis. Similarly, while many donors have stepped up humanitarian aid, political timidity and bureaucratic rigidity have hampered effective delivery in a highly politicised and often dangerous aid environment that is confounding many traditional humanitarian agencies. Few international actors (other than perhaps China) appear to have a coherent strategy for dealing with Myanmar’s increasingly fragmented state.

This paper analyses the evolving situation in Myanmar with a view to identifying optimal international policy responses. The first part examines two intersecting elements of the current upheaval: the trajectory of the civil war (including the current state of the battlefield and the underlying balance of power) and the emergence of new local governance structures in “liberated areas”. The primary focus is on developments to date. However, separate sections consider likely scenarios in the medium term (3–5 years), which are key to developing a more strategic international approach to Myanmar, notwithstanding the uncertainties inherent to all scenario planning.

The second, shorter part of the paper critically reflects on current Western policy on Myanmar and offers some broad recommendations. It argues that Western governments and likeminded actors who aim, first and foremost, to support the Myanmar people need to come to terms with the reality of an increasingly — and quite possibly, permanently — fragmented state. This will require less normative posturing and more pragmatic engagement with the multiple political authorities who are now governing populations across Myanmar’s complex physical and political geography. The paper thus calls for greater investments in “parallel state-building”, focused on strengthening the collective capabilities of the NUG, EAOs, and other non-state governance actors to carry out traditional state functions and serve vulnerable populations.

The state of the battlefield

Three years after the first major armed clashes in April 2021, the momentum is with the resistance forces. The new military regime has not only failed to subdue the population and consolidate power but has also lost control of large swathes of the countryside. The mushrooming of new people’s militias, coupled with a resurgence of several long-running ethnic insurgencies, has forced the military on the retreat across much of the country and inflicted large-scale casualties and material losses, leaving this once all-dominant institution in its weakest position since the immediate post-independence period in the early 1950s.

Phase 1: Establishing a foothold

In the initial phase (roughly the first 3–6 months, depending on the specific area), the new people’s militias were mostly “conquering” territory that had never really been governed by the central government. The large majority of this latest generation of freedom fighters were young people with no prior military training or combat experience. They also had very few weapons, other than traditional hunting rifles and homemade explosive devices. Yet the military was thin on the ground in many of the initial hotspots of armed resistance — especially in the Dry Zone, which had seen little armed conflict since the 1950s — and therefore never managed to effectively clamp down on the burgeoning insurrection. In many rural villages, local administrators either joined the uprising or were killed or chased out, thus leaving day-to-day control in the hands of the resistance forces.

Phase 2: Attacking the military

Over time, the resistance was increasingly able to take the fight to the military by launching offensives against military targets. Gradually improving cooperation among better armed resistance forces — often involving joint operations with established EAOs — saw ever-growing numbers of successful attacks on security outposts, as well as military supply convoys, especially in remote areas with mountainous terrain. The result was to gradually reduce the footprint of the military regime across much of the hinterland, where it soon found itself fighting a rearguard action to maintain control of the main towns and highways.

By mid-2023, there were near-daily skirmishes across an ever-changing battlefront in Sagaing Region, as well as neighbouring townships in Magway and Mandalay regions; resistance forces were in control of most of rural Chin and Kayah states; and joint Karen National Union/people’s militia forces had crossed the Sittaung River in eastern Bago Region and were threatening the old highway and railway line between Yangon and Mandalay. The only areas outside of the centre that were not experiencing widespread armed clashes between resistance and regime forces were Rakhine State in the west and Shan State in the east, where key EAOs were largely respecting pre-coup ceasefires with the military and had made it clear that new militias were not welcome. In Shan State, the Shan State Progress Party and the Restoration Council of Shan State were instead preoccupied with an intra-ethnic struggle for control of central parts of the state.

Phase 3: Taking control of strategic nodes

To this point, resistance advances were largely confined to areas of limited strategic significance. Yet that changed dramatically in late 2023 when the Brotherhood Alliance, supported by allied people’s militias, launched a surprise blitzkrieg across northern Shan State, aptly named “Operation 1027” after the date the first attacks were launched. The three “brothers” — the Myanmar National Democratic Alliance Army, Ta'ang National Liberation Army, and Arakan Army — have been working closely together for more than a decade and are among the strongest EAOs in the country, both in terms of manpower and firepower. Their entry into the war thus not only opened a whole new front against the military, which was ill-equipped to deal with further, large-scale attacks, but also fundamentally changed the tenor of the civil war. For the first time since the heyday of the Burma Communist Party in the 1960s, non-state armed forces overran major military bases and took control of significant regional towns and administrative centres, as well as several key border crossings and vital trade routes.

At the time of writing in early April 2024, the Myanmar National Democratic Alliance Army and Ta’ang National Liberation Army have consolidated control of the traditional, respectively, Kokang and Palaung homelands in northern Shan State, helped (or held back, depending on one’s perspective) by a China-brokered ceasefire with the junta. Moreover, the Arakan Army is edging closer and closer to achieving the same thing on the other side of the country where it has largely expelled the military from eight townships in northern and central Rakhine State, as well as southern Chin State.

Having punctured the long-standing myth of the military’s invincibility, the unprecedented success of these three EAOs has also inspired a wave of unusually bold offensives elsewhere in the country, where other anti-junta forces seek to exploit the regime’s troubles. The launch of a series of attacks by the Kachin Independence Organisation on key military positions in southern Kachin State in mid-March 2024 may be particularly consequential as it threatens to deny the regime access to some of the richest mineral deposits in the country.

Some key take-aways

As long as the junta controls the centre, it will likely not only have the resources to survive, but also remain critical to how external actors engage with the state of Myanmar. As one of the premier international authorities on the Myanmar defence force, Andrew Selth, has observed, for the military to remain in power, “it does not need to win the war; it only has to avoid losing it”. [13]

The NUG, by contrast, is greatly disadvantaged by lacking a safe base area inside the country. This is not just an obstacle to building a more cohesive resistance force with a common national strategy and effective command and control, it also restricts its ability to build governance legitimacy and maintain the support of the population, EAOs, and foreign governments alike.

With no immediate prospect of either regime or resistance forces being able to overcome critical resource constraints, any decisive push to end the war will likely have to come from the major EAOs. The stronger northern groups, in particular, will play a vital role, thus giving China an outsized role in shaping developments. Crucially, Beijing has made it clear that it does not want these EAOs to join the resistance and has pushed them instead to agree to ceasefires with the military regime in order to reduce fighting near the China–Myanmar border and protect China’s broader strategic and economic interests.

Conclusion

The overall trajectory of Myanmar’s civil war clearly favours the resistance, yet fighting is likely to continue for the foreseeable future. And even if the anti-junta forces ultimately emerge victorious, the ultimate goal of building a genuine federal democracy will take years of highly complex and politically fraught negotiations among a multitude of armed and civilian actors who share little but a loathing for the military and a vague commitment to staying together within the sovereign state of Myanmar.

The most influential external actor is without doubt China. However, Western governments and likeminded actors could maximise their influence by committing to a new core strategy of parallel state-building in areas under the control of resistance forces and allied EAOs. This will require creativity, as well as a willingness to take some political and fiduciary risks. It will also necessitate deft diplomacy and dialogue with Myanmar’s neighbours, including China, to manage regional sensitivities around external intervention. However, it would add a much more constructive and forward-looking element to Western policy — one guaranteed to pay dividends whatever the trajectory of the civil war and subsequent efforts to build a new and better Myanmar. In short, it would help the West remain relevant to Myanmar’s future development in a way that currently it is not.

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