Rohingya clampdown imperils investments, risks fanning radicalism

Rohingya clampdown imperils investments, risks fanning radicalism

Myanmar’s brutal crackdown against the minority Rohingya Muslim community has triggered international sanctions casting a shadow over the government’s bid to attract foreign investment from the West. The violence also risks radicalizing a new generation of extremists who could join forces with foreign jihadists, fuelling terror across the region.

On 2 July, UN Secretary-General Antonio Guterres visited refugee camps in Bangladesh, home to a million Rohingya Muslims who fled persecution in neighboring Myanmar. He decried the ‘tragic stories’ of ‘systematic violations’ faced by the Rohingya refugees, seeking more international pressure on Myanmar to create safe conditions for their repatriation. The exodus of Rohingya refugees from Rakhine State has cast a spotlight on the long-simmering tensions between the majority Buddhists and the Rohingya Muslims in the coastal state. The Rohingya are descendants of laborers who moved to Myanmar from British-ruled India more than a century ago. Following independence in 1948, Myanmar refused to recognize the community among the country’s 135 official ethnic groups and rendered them stateless after the passage of a new citizenship law in 1982. The Rohingya have since endured bouts of state-sponsored violence and discrimination.

Following the fresh outbreak of hostilities, hundreds of thousands of Rohingya Muslims streamed across the border following a vicious crackdown by the Myanmar Army in August 2017. The violence was sparked by the Arakan Rohingya Salvation Army (ARSA), an armed group, which launched coordinated attacks against security forces in northern Rakhine State. Rights groups accused the security forces of unleashing a systematic campaign of rape and murder against the hapless community, branded by the UN as a ‘textbook example’ of ethnic cleansing. Villages were razed and hundreds killed as the victims scrambled in search of safe havens across the region, often traveling in treacherous conditions. Médecins Sans Frontières, a humanitarian organization, grimly claimed that the number of Rohingya Muslims killed during and after the crackdown is likely above 10,000.

Sanctions threaten western investments

In response to the Myanmar Army’s murderous campaign, the European Union and Canada have imposed sanctions on seven senior military officials, hitting them with travel bans and asset freezes. The sanctions come as a blow to the fledgling National League for Democracy-led government amid fervent attempts to attract foreign investment to fuel a booming economy. The Asian Development Bank said GDP growth expanded by 6.8 percent in 2017, backed by robust export growth and private consumption. The government has also cleared the implementation of the long-awaited Myanmar Companies Law, designed to streamline business regulations and boost investment, which will take effect on 1 August.

The sanctions have indisputably thrown a spanner in the works for western investors, who are likely to put their plans on hold in the short term for fear of courting reputational risks. It is useful to point out, though, that capital inflows from the West were never that much to begin with. For instance, EU member states have only invested $5.6 billion in Myanmar in the last five years. Regional investors, however, will remain undeterred by sanctions and the refugee crisis. Investments from China, Thailand, and Singapore – already among Myanmar’s top investors – will continue to flow, particularly in the infrastructure and oil and gas sectors. Asian businesses are keen to tap opportunities in the frontier market of 50 million, given its vast size, strategic location, and abundant natural resources.

Refugee crisis risks stoking radicalism

The bleak plight of the Rohingya refugees also risks fanning the flames of radicalism across the region. The sprawling refugee camps in Bangladesh act as incubators for a new generation of Rohingya militants, angered by the loss of kin and property, providing a fertile recruitment base for ARSA, which is seeking to boost its ranks with fresh foot soldiers. More ominously, a growing Rohingya insurgency in Myanmar could act as a beacon for regional and international Jihadist groups willing to exploit the grievances of the refugees to develop operational links with ARSA. In September 2017, Al Qaeda issued a statement urging Muslims around the world to send aid, weapons, and military support to Rohingya Muslims. An influx of foreign fighters and arms into Rakhine State has the potential to transform a small rebel group – engaged in hit-and-run tactics – into a sophisticated fighting force capable of taking on the crack Myanmar Army in a direct confrontation. Regional intelligence agencies have maintained more than a passing interest in ARSA activities, claiming that the Rohingya militants have established links with transnational Jihadist groups and Pakistan’s Inter-Services Intelligence.The possible involvement of an extra regional intelligence agency in aiding the extremists is the clearest indicator that the Rohingya crisis is reverberating far beyond Southeast Asia.

Despite bellicose threats, ARSA has been relatively inactive in the last six months. The last known action attributed to the Rohingya armed group took place in January 2018, when ARSA militants ambushed a Myanmar Army convoy, injuring three soldiers. However the inactivity belies brimming tensions. It is unwise to rule out the possibility that ARSA could be regrouping to mount a series of bigger assaults on security forces in the near future. Any major attack will very likely escalate tensions and provoke a ferocious response from security forces, precipitating a familiar cycle of violence and displacement. The fallout of a fresh crisis is likely to spill over into the regional arena, sparking another round of anti-Myanmar protests in Southeast Asia and the wider region. This backlash will inevitably serve to deepen the siege mentality pervasive among militant Buddhists in Myanmar, who fear that their religion is under threat from Islam.

About Author

Brijesh Khemlani

Brijesh is a Bangkok-based analyst focusing on Southeast Asian and South Asian geopolitics. He has experience with IHS Jane’s, the Royal United Services Institute and the UN Food and Agriculture Organization. He holds an MSc in Comparative Politics from the London School of Economics and a BA in International Studies from Mahidol University, Thailand.