This blogpost examines the financing of Myanmar’s anti-military resistance, focusing on the National Unity Government (NUG) and its fundraising efforts since the 2021 coup.
It highlights challenges posed by the junta’s control over financial institutions and limited international recognition. The analysis explores key funding patterns, revealing the interplay between financial strategies, ethnic dynamics, and the broader struggle for legitimacy in Myanmar’s political conflict.
Financing the Anti-military Resistance: Unpacking the National Unity Government’s role...
Authors: Zaw Tuseng, Zam Deih Khual, Monalisa Adhikari and Jennifer Hodge
Abstract
Contesting the legitimacy of the military-led State Administration Council (SAC) after the coup in February 2021, the National Unity Government (NUG) was formed by the Committee Representing Pyidaungsu Hluttaw (CRPH), a group of elected parliamentarians ousted in the 2021 coup, along with representatives of different ethnic minority groups, and minor parties. While enjoying unprecedented support, in a bid to be seen as the government or the ‘legitimate representative of the people of Myanmar’, the NUG has sought to cohere the wide anti-military opposition, engender inter-ethnic cooperation, and committed to building a federal, democratic country. In this endeavour, the NUG has sought to creatively raise funds – through sale of bonds, mining rights, taxation, fundraising from the diaspora, lotteries and tariffs on natural resources, among others – to support the war effort and provide basic governance functions in the country. This blog analyses key patterns of funding and draws inferences on the challenges and opportunities the NUG faces in mobilizing funds from the domestic and diaspora community, which is central to the ability of the NUG to form a credible united opposition to the military government.
Introduction
The 2021 military coup in Myanmar reversed a decade-long experiment with democratization and peacebuilding and ignited a nationwide anti-military resistance movement unparalleled in terms of its scale, geography and competing visions for the country. The altered geography of post-coup resistance and the junta’s hardened response to it has ensured that decades-long insurgencies in much of the borderlands that are home to multiple ethnic minority groups, as well as central parts of Myanmar, which has not seen violent protests for decades and are dominated by the Bamar Buddhist majority, are now pivotal to the battle for control over the country (Loong 2022). The anti-coup resistance movement has involved military coordination between the country’s multiple ethnic armed organizations (EAOs), the newly created People’s Defense Forces (PDFs) and the National Unity Government (NUG), who together have fought for inclusion and federalism against the dominance of the Bamar Buddhist majority (Byrd 2024). The NUG has also advocated for an alternative constitutional vision, including the formation of the National Unity Consultative Council (NUCC), which drafted a Federal Democracy Charter (FDC) that provides a political roadmap and vision for the movement, committing to the complete removal of the military from national politics, the formation of a federal constitution that provides ethnic states with significant autonomy, and a range of protections of human rights, women’s rights and indigenous rights in line with the demands of the NUCC’s diverse membership (Hein 2024).
Despite the increased military coordination between different elements of the anti-military resistance, and more recently military loss of control over vast swathes of territory and strategically significant bases (Ibid.), the initial optimism about a swift victory of the revolutionaries and dissolution of the military apparatus, while not impossible, has over the last four years been challenged. In turn, it is being increasingly articulated that peaceful resolution of the conflict in Myanmar is unlikely in the near future (Martin 2023) and the country has been mired in a political impasse – marked by continued targeted attacks on protestors and civilians by the military, countrywide protests, and resumption of violence in different parts of the country – triggering humanitarian and economic crises.
Access to funds is central to the war efforts of both the State Administration Council (SAC) and the NUG. Struggling to maintain economic stability, owing to severe economic mismanagement and widespread domestic opposition has meant that funding is critical to the SAC (International Crisis Group 2022). For the NUG, access to finance is critical to funding the ongoing war, delivering on governance, and initiating a constitutional process that coheres disparate groups of the anti-military opposition and establishes itself as the ‘legitimate representative of the people of Myanmar’. Indeed, although a recent survey by the United States Institute for Peace suggests broad popular support for the NUG, including ethnic communities whose armed organizations are not formally aligned with the NUG, it also cautions that many Burmese see the NUG as dominated by the majority Bamars, rather than representative of all (Jap and Liu 2024). With little international support or recognition, the NUG has relied on self-funding the revolution using creative methods, including cryptocurrencies, real estate auctions, sales of bonds, lotteries and tariffs on natural resources, with the majority of funds raised through crowdsourcing (Abuza 2023). Both the NUG and the SAC have sought not only to raise money but also to deny access to finance to their adversary (International Crisis Group 2022).
In 2023, the Myanmar Policy Institute (MPI) conducted a survey among Burmese citizens in the country and the diaspora to analyse patterns of how they fund, who they fund, and concerns around funding. The survey was conducted from 15 September through 15 November 2023 with 1,818 Burmese community members residing in Myanmar, Australia, Canada, Malaysia, the United Kingdom, the United States and some European countries responding to the questionnaires. This blog analyses key patterns of funding and draws inferences on the challenges and opportunities the NUG faces in mobilizing funds from citizens within the country and the diaspora, which is central to the NUG’s ability to form a credible united opposition to the military government. In particular, it highlights three broad patterns: i) the majority of donations were directed towards the People’s Defense Forces (PDFs), followed by the NUG as the second-highest recipient, indicating that PDFs may be seen as the primary agents for the war effort; ii) while people identifying as Bamars tend to fund the PDFs and NUG, we find that ethnic minorities in the diaspora also tended to fund the PDF and NUG relative to funding the EAOs; and iii) the SAC’s control over central institutions like the central bank, and digital repression continues to restrict the ability of contributors, especially in the diaspora, to financially contribute to the revolution.
Key Findings
1. PDFs receive the highest share of funding, followed by the NUG
The 2023 survey by MPI revealed that 39% of respondents donated directly to the PDFs, followed by 23% contributing to the NUG. Humanitarian aid secured the third position in terms of donations, while contributions to ethnic resistance armies ranked fourth, and other organizations received the fifth-lowest share. The NUG has over 300 affiliated PDFs throughout the country in some part of its chain of command. There are also roughly 200 Local Defense Forces that are also fighting the military, but which are outside of NUG control- the NUG lacks the secure communication capacity it would need bring these forces into a more coherent fighting force (Abuza 2023). Interestingly, the survey analysis also reveals that non-Bamar respondents were more likely to fund PDFs (24%) and the NUG (14%) than EROs (9%) potentially indicating broader trust-building between the non-Bamar and the Bamar population.
Analysis of these funding patterns allow us to infer firstly, that financing the armed is prioritised over the unarmed, as people see the PDFs rather than the NUG as key to the anti-military resistance. Second, the decision over who to finance also highlights how the war is prioritised over other aspects of the political transition, with the resistance movement seen as the last chance to remove the military dictatorship (Thida 2023). The NUG’s popular legitimacy in leading the revolution, thus, relies on the armed resistance of the PDFs, and the NUG’s ability to be seen as the government of Myanmar, relies on its control of the PDFs. If the NUG is focused on strengthening its ability to contest the military’s claims on state authority, legitimacy, economic resources, and monopoly of armed force (Stokke and Kyaw 2024), control of the PDFs is central to achieving these objectives. Lastly, the decision to fund the PDFs directly may also stem from the perception that the NUG is largely ‘a very scattered government’ and without capacity to ‘reach out enough to some local PDFs’ (Thida 2023).
The findings underscore contemporary discussions in Myanmar about the NUG’s inability to control and lay down political objectives for all the PDFs (CNI News 2022). Control is pertinent to a unified command structure, uniformity of rules and regulations across the PDFs, as well as to ensure accountability of the PDFs.
2. People identifying as Bamar in large part tend to fund NUG and PDF platforms, and non-Bamars also tend to fund both PDFs and NUGs more than the EAOs
It is generally assumed that most Burmese would primarily donate to PDFs or the NUG. The survey by MPI broadly affirms this assumption- of the 528 survey respondents that identified themselves as Bamar 74% funded PDFs, 45% funded NUG, with 81% funding at least one of the two, and 26% funding EROs. At the same time, the survey reveals that whilst 24% of non-Bamar respondents funded PDFs, 14% funded the NUG, and only 9% funded EROs. This highlights how divides around ethnicity continues to persist, yet PDFs have been able to win trust and financing of non-Bamars within the country and the diaspora.
The figures both point to the need for the NUG to continually work for interethnic cooperation, whilst also highlighting the trust that the NUG has gained. While the NUG triumphs in popular legitimacy compared to the military junta, persistent challenges and differences have remained between the NUG, the EAOs and the PDFs. There are long term tensions between the ‘democrats’ and ‘federalists’, including in bodies like the NUCC, with a strategic split between the civilian opposition and the EAOs based on ethnopolitical grounds.[1] The divides are historic, with the outcome that the military has survived ‘not because it faces no criticism, but because its multiple oppositions found it impossible to unite’ (Callahan 2009).
Notwithstanding how the anti-coup resistance has enabled new alliances between the Bamar majority and some ethnic forces (Loong 2021), as well as the NUG being ‘radical’ in terms of its diversity (Thuzar and Min Tun 2022), a core critique of the NUG has been that it has been dominated by Bamars and members of the National League of Democracy (NLD). This is despite the fact that 53% of the NUG’s cabinet members are non-Bamar ethnic minorities, and only 38% are NLD members (Oo 2024). Further, divides between the EAOs and NUG have persisted (Hunt 2023), largely pertaining to the sequencing of the political transition- while some sections within the NUG have argued that the focus needs to be on toppling the dictatorship and that dialogue on broader issues can come later, amongst other ethnic and civic communities, there is a sense that granular conversations on federalism, governance and institution-building need to be discussed alongside military strategies against the SAC (Adhikari and Hodge 2024).
Another critique in the post-coup context centres around how discussions related to minorities and diversity have centred on the pre-coup model of ethno-nationalist federalism as a post-revolution power-sharing arrangement, rendering concerns of minorities without territory and other non-dominant minorities largely invisible (Ko et al. 2024). Likewise, the complex relationship between public perceptions of the NUG and the EAOs is demonstrated by another recent survey assessment which shows that more exposure to positive EAO governance is associated with slightly lower trust in the NUG, if the EAO in question is not considered explicitly supportive of the NUG (Kim 2023). The ethnic communities’ funding of PDFs and the NUG, however, also points to the gains that have been made around interethnic relations since the coup.
3. SAC control over central institutions restricts citizens within the country and the diaspora contributions to the revolution
There is an overwhelming willingness to support and sustain the revolution, with 67.2% of respondents to the 2023 MPI survey reporting that they have contributed funds to the resistance movement. At the same time, safety concerns were identified as the single biggest issue inhibiting funding, including legal and financial restrictions implemented by the military regime. Respondents raised monitoring of financial transactions by SAC controlled institutions like the central bank as a key concern. Identifying trustworthy means of financing was cited as a major issue, leading many to rely on informal mechanisms like Hundi or black-market channels with higher service fees. The SAC regime enjoys significant economic advantages over the resistance because it controls the Central Bank and state assets, and because it enjoys coercive power over the private sector (International Crisis Group 2022).
The SAC government’s control over central institutions like the Central Bank is key to its ability to repress, bestowing it with the financial resources to wage its wars (Turnell 2024). In Myanmar, three deputy governors and lieutenant colonels have been brought to senior leadership positions within the Central Bank (Naing 2023), loyalists from the armed forces leading administrative institutions, as is often the case in militarised bureaucracies (Peters 2023). Moreover, the recent MPI survey reveals that SAC control over central institutions is also disrupting NUG attempts to strengthen its funding base, and confirms allegations of the SAC government ‘weaponising digital banking transition’ to starve resistance funding (Frontier Myanmar 2022).
To circumvent the SAC’s control, the NUG has used digital financial technologies, raising revenue through diverse methods including taxation, the sales of treasury bonds, the sale of real estate in the possession of the military, and inviting pre-investment for revolutionary projects and NUG Pay operations (BNI 2022). As part of this push, the NUG established the Spring Development Bank (SDB) in 2023, an online bank which relies on Myanmar’s foreign reserves of $1.3 billion, frozen by the US government since the military seized power in a coup as the collateral, and impacted by the broader question of international recognition of the NUG as the legitimate government of Myanmar (Naing 2023).
Conclusion
Wars/insurgencies and resistance against the military-rule is not new to Myanmar, but the widespread protests against the military after the coup in 2021 are extraordinary in both their prospect to refine the idea of Myanmar as well as the challenges it faces. Several factors, including widespread grassroots movement transcending national boundaries, use of digital technologies and informational flows, and unprecedented forms of alliance building between the military’s multiple opposition groups have all redefined the post-coup context. Access to funding is central to the NUG sustaining its war effort, as well as for consolidating its ability to ‘govern’. Patterns of funding, thus, are key to understanding priorities of contributors, as well challenges they face in financially supporting the movement. Such patterns of funding have become all the more important as despite considerable diplomatic support, the revolutionary movement has yet to be provided with notable material by any armed actor. Findings in MPI’s recent survey indicate the people are prioritizing financing of PDFs over the NUG and other actors, and emphasize the challenges of circumventing the junta’s hold on central institutions. These findings reinforce domestic discussions on these issues, revealing a complex financial context in which the anti-coup revolutionary movement must orient itself towards a sustainable financial future.
Endnotes
[1] Interview by the authors, August 2023
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