Podcast: Civil War Futures and Geoeconomics in Myanmar in 2025

Future scenarios in Southeast Asia's giant flashpoint amid election speculation, shifting major power links, sprawling scam networks and multitrack diplomacy.

INTRODUCTION

ASEAN Wonk: Welcome to the ASEAN Wonk Podcast where we bring you expert insights and regional perspectives on Southeast Asia and Indo Pacific geopolitics and geoeconomics. I'm your host Dr. Prashanth Parameswaran. If you haven't already, do subscribe to the ASEAN Wonk platform at www.aseanwonk.com so you don’t miss any of our posts. Our guest today is Ambassador Vicky Bowman, who has over three decades of experience in international relations and business, including serving as Britain's former ambassador to Myanmar. We'll start our conversation talking about sanctions and Myanmar’s current foreign and economic links including within ASEAN. Make sure you tune into the full episode as we go through a range of other subjects including major power involvement in Myanmar and the future geoeconomic and geopolitical landscape in the country.

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RIGHTSIZING THE ROLE OF SANCTIONS IN POLICY

ASEAN Wonk: Welcome to the ASEAN Wonk Podcast, Vicky. Thank you for joining us and let's get started. One of the periodic focus areas or topics in the headlines on Myanmar is the use of sanctions. We saw the US add the telecommunications firm Mytel to its sanctions list, which is part of an ongoing process of so-called targeted sanctions that have touched on various areas including finance and aviation fuel. The use of sanctions has been billed as a tool in the wider toolkit for some governments. And there's long been a debate in terms of academic and policy circles on how smart or targeted you can make sanctions, in terms of making sure that you're punishing the regime for actions it's not taking, but also ensuring that you're insulating the rest of the population from some of the impacts that are actually happening. As somebody who has been observing and helping shape policy in Myanmar for decades, how do you assess the current state of how Western countries, including the UK, the US, are calibrating their approach to sanctions relative to other levers that you can use in policy to address the ongoing situation in Myanmar in terms of its politics and its economic development?

Ambassador Vicky Bowman: Thank you, Prashanth. Thank you for inviting me on ASEAN Wonk. It's a delight to be here. What you have just said really takes me back to when I was ambassador, which was between 2000 and 2006, because a number of the more senior Asian diplomats were always inviting us around for what were rather tedious diplomatic dinner parties where they would put me on the spot and say: Vicky, why does the West do sanctions? And at sometimes, I even used to arrange for friends to call me so I could leave home – leave the dinner party – because of an urgent call because it got rather boring. To be honest, I see sanctions as a little bit of a sideshow for the West's efforts. Important, definitely headline-grabbing. To some extent, they have some impact. In a way, their deterrent impact, I think, is perhaps more important from the perspective of the private sector.

I note that at least certain Myanmar businesses who were on sanctions lists previously are very keen to effectively behave in order to avoid that in the future. But I don't see them as being the thing which is going to lead to change in Myanmar. And what we're really seeing at the moment is a sort of gradual ticking off of various military-linked companies, one that you mentioned, Mytel, being a joint venture with the Vietnamese telecoms company in which the Myanmar side has a significant shareholding by one of the military-owned companies. So when I saw that coming on, I was quite surprised they weren't already on the list. But I think what's more important to remember rather than focusing on this differentiator between Asian governments and Western governments being sanctions, it's actually the effort of the West on humanitarian assistance which is most important. And I think this is often forgotten.

And I was just digging out some figures on this. So the UN Office for the Coordination of Humanitarian Affairs assessment of what's needed and I think what's needed and could be delivered if the money was there is currently only just over a third funded. So of that funding, that third, $409 million last year, a third of that came from the US government. And then beyond that, you had 13 percent coming from Australia. You had 9 percent European Commission, 7 percent Japan, 5 percent each Sweden and UK. At the bottom, you've got ASEAN with $760,000, which is really, you know, a very significant differential. And I think sometimes it's important for Asian countries, rather than criticizing the West on sanctions, to understand how much contribution is coming in and humanitarian. And then for us all to be somewhat concerned that with the recent U.S. election and sort of reviews to USAID, what is that going to mean in the future? [Note: Ambassador Vicky Bowman wanted us to note in the transcript that this discussion of assistance volume is occurring amid uncertainty in the United States in a new administration over what Washington’s future role will be both in general and with respect to Myanmar more specifically].

Even I hadn't been aware of quite how significant the US was in this area. But if I look at all the other donors as well, all of them are facing budget constraints. All of them are facing other priorities. You know, Gaza, Syria, Ukraine, Sudan should be much higher up people's lists. So I fear that those numbers are going to go down. And the victims of that change are going to be people, particularly in rural areas. And that somewhat is the reason why the work I've been doing and continue to do, although on a much sort of less full-time basis now, is all around trying to keep the formal economy going and maintaining jobs. Because if you lose that, then how are people going to eat? And we see them obviously leaving the country to the extent they can. But jobs in the country are often funding three or four people in a family. We see that even in really poorly paid jobs in the garment sector. So it's really important to keep those in.

And what I'm pleased to see is that compared to those debates we were having 20 years ago, there are certainly very few governments – no governments, really – but also very few Myanmar stakeholders who are arguing for everyone to leave. It's very much a minority position. But there are a few who seem to think of a sort of scorched earth [scenario] for the economy – I mean, one of them the other day said we need to completely reset the Myanmar economy. Well, for me, resetting it means just basically leaving a blank slate where there will only be organized crime left there. And we're already seeing too much of that: the organized crime, the scam centers, the drugs. So trying to help companies to stay there and continue to function and to function responsibly, I think, is still a really important priority for the West as well as for ASEAN: in some cases, more for the West than for ASEAN.

STANDARDS CALIBRATION IN GEOECONOMICS

ASEAN Wonk: So Vicky, just to build on the point that you were mentioning earlier on sanctions being a sideshow relative to some of the huge humanitarian needs that are required in the country. How do we balance the considerations with respect to making sure that the trajectory of the country is diversified – so not focused on a more isolated landscape with respect to China, Russia – and making sure that the regime actually has the sort of the incentives to make sure that it's leaning in the right direction? Because what we're seeing now is a trajectory where there are some businesses that are in the country but some of them – including major businesses – have actually left the country. And there is this dynamic, which is not unique to Myanmar, where obviously businesses are going to follow profit – there's business considerations that are there – but there are also really geopolitical and geoeconomic considerations, which is the more businesses leave, Western businesses in particular, for all of their flaws and issues, they tend to help lift the overall standards in the in the country relative to, say, businesses from China and Russia. So them leaving the country actually creates this broader issue or challenge where the overall standards in the country might actually be depressed relative to where we are now. So as somebody who has seen this country Myanmar through various cycles – not just the recent cycle of the post-coup landscape – how do we think about this question of how do we balance those considerations?

Ambassador Vicky Bowman: Well I think that certainly Western governments are very conscious of it, and they're conscious of it for exactly the reasons you say. If you leave a vacuum, generally, the quality of what goes on there in terms of rule of law, of good governance will slip, environmental sustainability, and so on. And that that will be bad not just for today, but for any future economic transition. I mean, if we ever get to the point where we have a democratically elected government, they do not want to inherit a wasteland in terms of the economy. Not least because when you see these sort of signal companies like Coca-Cola leaving, other companies look at that. Maersk is another one. The Danish shipping company is a really core company to maintain in the country. Because if Maersk goes, a lot of others who depend on them for shipping goods, particularly in the garment sector, will go too. And often when companies leave, their boards say to them: you know, okay. We learned our lesson. Let's now just back off and see how things go. So they don't turn around on a sixpence or a dime and say: Okay, let's go back in now, they've just had an election or they've just had a change of government.

So, yeah, embassies are very conscious of that. You see them supporting certain initiatives. My own, obviously, was a part of that. But also within the garment sector, the EU is a major player with its funding of the Made in Myanmar program, which brings together the brands from Europe who are continuing to source. It's mainly Europe. It's mainly Japan. There are a few US companies as well. I was talking to some in the baseball cap sector the other day who I think see a post-election growth perhaps. But, you know, it's really important that those companies do stay and source, but source responsibly. And that takes good policy from the military. And that's where governments, and for that matter, the businesses themselves, have a problem in that they are not engaging with the military regime.

So, therefore, they need to find vectors through which to pass messages about how certain policies – for example, on exchange rates or on the lack of increase in the minimum wage – are making it harder for them to stay. This is, for example, a particular concern of mine right now that wages are so low that nobody in the garment sector can survive without a huge amount of overtime. And the reason wages are so low is because in that sector, they tend to cling to the bottom of the official minimum wage. They don't go up in response to a natural market pressure. So we're seeing a sort of increase of what can be considered forced labor in that sector – not of people chained to their desks, but simply through economic reasons working way, way too long hours, and not able to take the leave that they're entitled to. And this is something where both the companies themselves should work with their supply chain, but also embassies should be alerting those companies to the risk that they need to fix this problem because, otherwise, there's a risk that some of these exports from Myanmar could fall into the forced labor category.

PULLING ON THE RIGHT POLICY LEVERS

ASEAN Wonk: That a really interesting point that you made. And I think it also relates to the general consensus on sanctions and their effectiveness: that absent the fact that you have coordination of sanctions with an overall series of policy objectives and that they're part of a comprehensive approach, they usually are not very effective. So their effectiveness is enhanced if you have a series of policy levers, you have a comprehensive approach, and you're also thinking about how targeted your sanctions are, which is a debatable question, right?

Ambassador Vicky Bowman: I think it's a debatable question. But it's one where we're seeing a movement within the European market away, I think, from the days in which entire countries were cut off from, for example, the Everything But Arms preferences as we saw in Cambodia to a much more targeted approach through things like the forced labor regulation, the deforestation regulation. Although it's certainly got its critics, at least is meant to be focused on specific products coming from a specific place rather than just saying everything that's coming out of that country is bad and should not be allowed on our market, which was the approach that the US took back in in 2003 when I was there in in Myanmar. So, basically, I'm sitting at a table, ironically, here in my conservatory, which was a beneficiary for me of sanctions because it couldn't be exported to Pennsylvania because of that ban. So the factory that had made it in Western Yangon had to sell it to me at a cheaper price to raise some cash. But that, to me, is not a sensible approach because it punishes everybody with the same brush, and we need to recognize as a spectrum from very good practice to very bad practice. And the aim should be to get the worst practice improved or to sanction that if there's nothing else that can be done.

INTRAREGIONAL CONNECTION SHIFTS

ASEAN Wonk: Related to that, we’ve seen some shifts in that regard in Myanmar in terms of the situation in the country and its relation to what you referenced earlier regional links. The official estimates are really hard to quantify, but the United Nations, in its assessment a few months ago noted that, for example, Thailand had replaced Singapore in terms of the leading source of military supplies via the banking system, even though there was a reduction in procurement figures. In Myanmar you've seen these links ebb and flow over the decades. It tends to be that when you have a military regime in power, those links concentrate a little bit more; they're a little bit more diverse when you have a period of kind of reform and opening, relatively speaking. But what are the general contours of how this configuration of countries is changing geoeconomically for Myanmar as a country that you've seen?

Ambassador Vicky Bowman: So the report that you're describing was by the UN special rapporteur which showed the shift – which was really for me, it wasn't a geopolitical shift around arms sales. It was around banking due diligence. And it was a reflection of the fact that there'd been quite sustained pressure on Singapore, particularly from the US government, but also domestic pressure on their part to clean up their act around money laundering. And there was this very famous case in Singapore of a number of Chinese businesses – you know, billions of dollars involved in money laundering – which was investigated by the Singaporeans in 2023. Nothing to do with Myanmar. But so the Singaporean banking sector, I think, has become much more rigorous about its due diligence. And the days from twenty years ago when the military had its spare bank accounts there and carry it across suitcases of cash, that's not happening anymore. But that banking services then went and found a nearby opportunity in Thailand. Sorry. When I said banking services, rather, the companies who were acting as brokers in this went to use accounts in Thailand, which they felt were going to come under less scrutiny.

So then with Tom Andrews' report, that was picked up by the Bank of Thailand and the Thai Anti Money Laundering Office who launched an investigation, called in the banks, discussed with them the findings. I have to say the findings were not totally clear. I've read that report over and over again. Can't quite work out what transactions we're talking about. And when you talk to the authors and so on, they say, well, we're protecting our sources. So it was challenging. And I think the Bank of Thailand had the same problem as did the banks who were being highlighted. With the conclusion that the Bank of Thailand drew that although there was nothing in their investigations to suggest that there were transactions linked to arms procurement, it was certainly true that banks were conducting transactions with some of the entities named in the report.

And the bank made a very important recommendation or finding that Thai financial institutions need to better manage the risks of being used as channels for funding illegal activities and human rights violations, which may manifest in new forms. And the reason I'm highlighting that is because it's the first time I've seen any Asian bank – or rather any Asian banking supervisory authority – make a connection between banking and complicity and human rights violations. The Singaporeans didn't do that. They were very focused on counterterrorism financing, anti-money laundering. But the Thai bank has taken policy a bit further forward by recognizing that there is a potential complicity risk for banks, and therefore, that's something that they should cover in their their due diligence. So it's put Thai banks on notice around this. Which is obviously generally a good thing, but it could have the impact of making it even more difficult for legitimate businesses to get banking services.

So to come back to your question about how the world is shifting, I think we're seeing a very active attempt both by the Myanmar government, but also by the Russians and the Chinese, and more broadly, to de-dollarize in banking transactions. And so Myanmar is just a microcosm of that, and you're seeing direct Indian Myanmar rupee transaction systems, again, also with the Russians, and increased use potentially of cryptocurrency – which, although the Myanmar government still has as illegal, I suspect may be being used for some purchases in some way. And then there's always going to be the traditional way of financing purchases and transactions, which is direct swaps. And we saw that from twenty years ago.

There was this rather marvelous interview with Tay Za, who really was and perhaps still is one of the most significant cronies, where he was asked: why did you buy North Korean equipment for the military government? He said, well, I have to do everything they tell me to. And that's in Forbes magazine from about fifteen years ago. But it's a reflection of the fact that certainly in those days, perhaps to a lesser extent now, there were many valuable assets that the military regime was able to monetize effectively by saying: do you want to have this land? Do you want to have this beach? Do you want to have this stand of teak forest? And could you please pay our bills overseas? So I think that stuff is still going to be going on, but I think it's going to be less and less the case simply because there is that much less for the military regime actually to offer, not least because of the shrinking control that they have over the territory and the fact that Myanmar is not seen by most businesspeople as being a particularly bankable or a particularly investable destination at the moment even for things like real estate.

GEOPOLITICAL AND GEOECONOMIC SCENARIOS IN 2025 AND BEYOND

ASEAN Wonk: That's an important point that you make there about how transactions are actually done, what formal or informal channels that you're using and what challenges those entail. And the other point you made about the fact that we're dealing with a regime that by one estimate has less than half of the country under its control. So we also have to think about what those implications are in that regard. Looking ahead, we've seen some suggestions from the military junta of trying to move towards potential elections this year, following a census that was conducted. Setting aside the many, many complications therein, even assuming that this eventually plays out, it does seem difficult to see at this point that we are sort of resetting back to where we were in the 2010s, where there was a lot of hope about initial reform and opening period, As you flagged earlier in some of your responses, we are dealing with a world in which it's there are a lot of challenges – there's the Ukraine issue; we've got issues in the Middle East; we've got intensifying major power competition that wasn't as much the case fifteen, twenty years ago. So how do you see that sort of configuration of major powers and their involvement in Myanmar changing in the coming years under the scenario? And feel free to disagree. I do think that the landscape that we're in right now is very different from we where we were in twenty years ago. So it's tough to sort of see this as kind of a reset back to the 2010s, no matter how people might seem to sort of be enthusiastic about how we could return back to the past.

Ambassador Vicky Bowman: Yeah, I totally…

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