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Crowdfunding a War: The Money behind Myanmar’s Resistance

December 20th, 2022  •  Author:   International Crisis Group  •  6 minute read
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Executive Summary

Funding has been a central concern for Myanmar’s junta and its opponents since the first days after the February 2021 coup d’état. Both sides have sought not only to raise money but also to deny it to their foes. The regime, with its control of the levers of state, has the advantage. But anti-military groups have held their own, adopting a variety of crowdfunding techniques, including innovative online methods, that have secured them enough resources to sustain a multi-faceted resistance movement. The amounts are far short of that required to threaten the junta’s hold on power, but the regime has been unable to cut off the flow of funds. The conflict’s trajectory now depends in part on whether resistance forces can keep donations streaming in – and find more. They should seek expert advice on data security so as to ensure that people giving money are protected. Meanwhile, regime restrictions aimed at the resistance are hurting humanitarian operations across the country. International donors should work more closely with local organisations to ensure that aid reaches people in need.

Post-coup Myanmar is a vivid example of how conflict parties can weaponise the internet, a trend that is increasingly evident around the world. Against the odds, opposition forces have raised significant sums – possibly in the hundreds of millions of dollars – to help them fight the military regime. The mobilisation of funds, much of it in small individual donations from the diaspora, has been made possible by Myanmar’s digital revolution and the democratisation of financial services over the past decade. This revolution created not only new means of raising and moving money, but also the knowledge people in Myanmar needed to take advantage of these tools.

Widespread internet access has also been essential to efforts to weaken the military regime financially. Here, the results have been mixed. Some initiatives have been highly successful, such as the mass boycott by people in Myanmar of military-owned beer brands and their refusal to pay electricity bills. But others have had little impact or even been counterproductive, such as civil society groups pressuring the French energy conglomerate TotalEnergies to withdraw from the country. That campaign ended up providing the regime with more oil and gas revenue, since it was able to assume part of TotalEnergies’ stake in a gas project for free.

While Myanmar’s anti-military forces have raised significant funds, like many decentralised insurgencies they have found it difficult to move money to where it is needed. Even with its unsophisticated monitoring instruments, the regime has been able to push most opposition groups out of the formal banking system, sowing enough fear to make many in the country hesitate to donate to its adversaries. Anti-junta forces, particularly the National Unity Government (NUG), a parallel administration formed by opposition lawmakers, have also faced challenges using the international banking system, sometimes falling foul of regulations meant to police money laundering and terrorism financing. In response, the NUG has begun using new technologies like cryptocurrency and blockchain, but these efforts remain embryonic; for the most part, anti-military groups have relied on informal remittances to skirt the regime’s banking restrictions.

The military 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. But it has struggled to maintain economic stability, due to a combination of widespread domestic opposition to its rule, global factors and its own economic mismanagement. The junta has exacerbated the crisis by imposing strict capital controls, rationing imports and fixing the exchange rate artificially high, further undermining confidence in its aptitude and triggering a revival of informal money transfers that go straight to resistance forces.

Funding will be an important factor shaping the conflict’s trajectory. The junta, despite strenuous efforts, has been unable to stop money and other resources from reaching resistance groups, mostly due to the ubiquity of unregulated informal remittance systems that are largely outside of its control. On the other hand, fatigue may set in among the diaspora that has contributed much of the financial support to the NUG and other anti-military groups, particularly as for now it appears unlikely that the resistance will succeed in ousting the regime. So far, the NUG has managed to sustain its fundraising campaign with creative tactics, but these would benefit from additional outside expertise, particularly when it comes to ensuring data security so that contributors are safe from the junta’s retribution.

Thus far, little suggests that foreign governments will stop outside funds from reaching resistance forces, and they are right not to try. Foreign capitals are understandably reluctant to give the resistance weapons or cash, but any measure to starve it of diaspora funding would be a step too far. Such measures would not necessarily bring fighting to a close; it might subside in some areas, though that is not guaranteed, and in any case the regime might then carry out reprisals, including against civilians. Cutting off the flow of funds would exacerbate the Myanmar population’s grievances, as the majority remain angry not only about the coup but also about the world’s response. Indirectly, it would support an illegitimate regime that has committed atrocities on a daily basis to crush opposition. It would do nothing to resolve Myanmar’s many ethnic conflicts; instead, it might enable the junta to train its sights on ethnic armed groups. For foreign powers, in sum, avoiding action to close down diaspora funding is an expression of solidarity with the regime’s opponents, yet one that stops short of providing weapons.

The battle between the regime and the resistance has also hindered delivery of life-saving humanitarian aid. Desperate to keep resources out of resistance hands, the regime is closely watching all incoming transactions, and in so doing it is starving NGOs of the funds they need to carry out programming. Given the increased scrutiny, donors and international aid organisations should make better use of local civil society actors to reach conflict-affected populations. Many have already introduced flexibility into their procedures, but shrinking humanitarian space means they will likely need to relax their operating and reporting requirements even more to keep aid flowing to the hardest-hit civilians. They should also regularly review these policies in light of the fast-changing circumstances. To reach as many people as possible, international actors should send aid through multiple channels, including cross-border assistance – in goods where feasible, but also in the form of cash – and non-state service delivery systems, such as those run by ethnic armed groups.

Yangon/Melbourne/Brussels, 20 December 2022

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