Recent unrest in Myanmar’s Rakhine State which has seen more than 44 deaths since a police outpost was attacked on the October 9, has been linked to an apparent rise in Islamic inspired militancy according to the Myanmar government. Government officials went on to express fears that a new insurgency led by members of the Rohingya Muslim minority was gaining strength.

The response to the attack which killed 5 border guards in the border township of Maungdaw, a mainly Muslim area near the frontier with Bangladesh, was a swift build-up of over 10,000 heavily armed Tatmadaw troops. At least 26 people have been killed by security forces in the build-up. The deaths have been described by state media as skirmishes with armed attackers and in which four soldiers were also killed. Human rights groups say they have evidence that extrajudicial killings may have taken place while aid agencies express their concerns about having to suspend their programmes in the affected areas stating that much needed medical care was being denied to local residents.

A statement from the office of Myanmar’s President Htin Kyaw blamed the little-known “Aqa Mul Mujahidin” for recent attacks around Maungdaw Township, going on to say that “They persuade the young people using religious extremism, and they have financial support from outside…they are broadcasting their videos on the Internet like ISIS, Taliban and al Qaeda. They now have 400 insurgents fighting in Maungdaw region.”. It was also stated that Police Brigadier General Maung Khin, the border chief in Maungdaw township had been removed and a replacement put in place.

Seeming to escalate the external threat further was the recent revelation that Myanmar’s famed stateswomen Aung San Suu Kyi’s had been named on an assassination list sent to a Malaysian police station by purported ISIS allegiants inside Malaysia.

The Rohingya, a stateless group of more than 1.1 million Muslim people from the north west of Myanmar, have been described as “the most persecuted minority in the world” by the United Nations. Many live in squalled conditions that resemble concentration camps.

Myanmar refuses to accept their status as citizens or as a recognised minority group in the country. Many Buddhist citizens refer to the Rohingya as simply ‘Bengalis’ and loudly maintain that they will not accept the idea of citizenship being offered to the Rohingyas. Because of this, the Rohingya face discrimination, severe restrictions on their movements and basic access to services such as healthcare.

For many observers this situation looks like a powder keg for Islamic extremist recruitment.

Claims of both internal and external Islamic extremism by the central government are not new however. In 2012, after a much larger uprising of inter-communal violence, the Myanmar government blamed the all but defunct Rohingya Solidarity Organisation (RSO) as well as outside Islamic extremists. Recent claims follow the same line and have also continued to reference the RSO and other terrorist groups.

In spite of purported and tenuous connections with Islamic extremist groups such as Jamaat-e-Islami, active in Pakistan, India, and Bangladesh, the RSO’s activities were largely confined to Cox’s Bazar in Bangladesh, from where it carried out localized military campaigns across the border against the MDS. It moreover lacked the military capacity of larger ethnic armies elsewhere in Myanmar and so represented, in the pre-9/ 11 counter-insurgency world, what was seen as a minimal threat. It was further dealt a body blow in 2001 when the Bangladeshi military and security apparatus targeted the group’s training camps, which led to a severe decline in the RSO’s operational capabilities.

Capacity today

With such a strong military presence in the North West, especially along the border with Bangladesh, the operational capacity of any new or existing extremist group is severely constricted. Shwe Maung, a ruling Union Solidarity and Development Party member, rejected the claims that photos showed RSO fighters in his region. “There is not a square meter without Nasaka [border guard] forces in northern Arakan” said the MP, who represents the Muslim-majority Maungdaw Township in northern Arakan.

The lack of resources of most Rohingya’s in the area, who remain desperately poor, adds further restrictions to locally organized terror cells. The capacity for any serious internal insurgency is extremely low.

Domestic Ends

Anti-Islam and Islamic terrorism rhetoric is strong in Myanmar where many in the predominantly Buddhist country see Islam as an existential threat. There is also a colonial perception of the North West of the country as the gateway to Myanmar’s heartland that has been used by countless occupiers and for which is particularly vulnerable to external threats. Stoking the flames of these concerns satisfies a number of domestic political goals for the central government in Myanmar while continuing to justify its harsh stance on the Rohingya’s.

The recent military actions have also been met with large rallies of support for the Tatmadaw in the Rakhine region itself with locals claiming that the actions are protecting them from insurgents and terrorists who were allegedly forcing thousand out of their homes. Buddhist leaders have long expressed fears over being outnumbered by the illegal ‘Bengali’ community which has produced an atmosphere of animosity, division and fear between the communities and strengthened the political hand of Buddhist extremists.

How should investors take these developments?

In short, the recent spikes in violence and subsequent rhetoric should be seen in the context of domestic political concerns. The increased presence of the Tatmadaw will ensure that infrastructure projects in the area such as the Kaladan Multi-Modal Transit Transport Project will continue as planned.

The most important consideration for international investors should be to assess any potential projects in the region in line with their Corporate Social Responsibility (CSR) policies and commitments. It should also be a reminder to update Business Continuity Plans (BCP).

The removal of Police Brigadier General Maung Khin, the border chief in Maungdaw township should also remind investors that they should also be continually undertaking stakeholder scanning and stakeholder engagement as local political dynamics shift or consolidate.