INTRODUCTION

Since Operation 1027, Ethnic Resistance Organizations (EROs) and other armed groups have made significant territorial gains. They now control most of Myanmar's key border trade posts and overland trade routes. This includes Myawaddy, which has traditionally been Myanmar's second largest border trade post and the largest on the Thai-Myanmar border.

They also control Chin Shwe Haw, Myanmar's third-largest border trade crossing before the coup and the second-largest on the Myanmar-China border, after Muse. Resistance groups also control significant parts of the Mandalay-Muse, Mandalay-Chin Shwe Haw, and Myawaddy-Yangon corridors. They also control significant territory—especially along the country's international borders—where people depend on and regularly engage in local cross-border trade.

However, despite controlling territory and trade routes, Myanmar's resistance faces an uphill battle in turning conflict victories into trade-related gains that enhance their legitimacy and aid their people. Internationally, non-state groups struggle to access and benefit from the formal trading system, which is designed around states and governed by state-to-state and multilateral agreements. In Myanmar, the State Administration Council (SAC) continues to control the state institutions that facilitate formal trade, even as it loses physical control over trade routes and border crossings. As such, non-state groups generally do not have the option to facilitate formal, legal trade. This has numerous implications, including negatively affecting the livelihoods of people living in their territories, who face higher costs for logistics—including facilitation fees and limits on market access. This can hinder the development of long-run competitiveness, and also shape factors such as migration and even the direction of conflict. In short, the inability to access formal trade is a significant and durable drag on development.

International precedents show that non-state actors have limited success accessing the international trading system. Case studies show the potential and limitations of non-state actors developing their own trade-related institutions. These suggest that there are possible avenues that Myanmar's resistance actors could pursue in order to build up their traderelated influence. There are also clear incentives for neighbours—especially Thailand—to consider trade-related engagement with resistance actors. If Myanmar's resistance can find ways to diminish the benefits the SAC enjoys by controlling the institutions of trade, it could help them further erode the military's access to revenues while also benefitting people living in some resistance-controlled areas.