The idea of pacifying ‘unruly areas’ with spoils of economic development has increasingly shaped military counterinsurgency campaigns world-wide. In Iraq and Afghanistan, the US military has attempted to win the ‘hearts and minds’ of the local populace with humanitarian and development programs in order to undermine support for insurgency. Other campaigns aim at corrupting individual rebels directly into becoming businessmen. Since the 1990s, Myanmar has practiced economic counterinsurgency—in the form of ceasefire agreements accompanied by lucrative business concessions—to end various ethnic rebellions in its borderlands. How successful has this been?

For 25 years, foreign direct investment (FDI) has surged into the country’s borderlands, particularly along the northern border to China. Investors mostly sought to exploit the area’s vast natural riches, including gem stones, teak, and precious metals. Large infrastructure projects, including hydropower dams, have also been constructed. During these years, war-torn Kachin State alone has seen 25 percent of overall official incoming FDI to Myanmar, which supposedly makes up for only a fraction of actual investment. Observers point out that it have indeed been the economic cooptation of many rebel leaders with which Myanmar’s army, the Tatmadaw, was to be far more successful to weaken insurgency than it had been in decades of warfare.

It seems as if business has provided counterinsurgents with an ‘Anti-Rebellion-Machine’ which overrides political problems with development in a resemblance of James Ferguson’s critical depiction of economic development as the ‘Anti-Politics-Machine’. Yet, an end to conflict has not been achieved so far. This is because Naypyidaw’s business-only engagement with the country’s armed groups has hitherto prevented genuine political dialogue on issues including minority rights and federalism. Moreover, economic collusion between warlords of both sides—individual rebel generals as well as the Tatmadaw’s frontline commanders—has not led to development but to the full-out plunder of ethnic territories. Hence, root causes of conflict—socio-economic marginalization and political grievances—remain unaddressed.

After Myanmar’s 2011 transition to semi-civilian rule, hopes were flying high for a renewed nationwide peace process that would finally be successful. A new round of negotiations with all ethnic armed groups is scheduled for next month. But how has reality lived up to expectations this far?

A new wave of ceasefires has been signed since 2011, including one with the Karen National Union (KNU), which has long been the country’s least compromising ethnic armed group. Moreover, in multiple rounds of negotiations most warring parties have continuously expressed their serious ambition to conclude a nationwide ceasefire as a first step towards peace talks. In the few international lines that Myanmar’s ethnic conflict occasionally receives in international media, these developments have overwhelmingly been praised.

At a time when everyone seems keen on grabbing a share of Southeast Asia’s last frontier market, ceasefire negotiations, however, easily get confused with peace processes. A closer look, indeed, reveals that things have not changed much since Thein Sein became president. His chief peace negotiator U Aung Min reportedly expressed this after meeting with leaders from the KNU: “If they become rich, no one will hold arms. If their areas are developed, no one will hold arms. If we do all [this] for them they will automatically abandon their arms.”

There is no doubt that bettering the livelihood of local communities plays a key role in resolving a conflict that is as much about economic marginalization as it is about ethnicity. Yet, recent “development” as it takes place in Karen areas at the Thai border is remarkably similar to the experience of Kachin State bordering China. With improved security since the 2012 ceasefire, investors have poured into Kayin State to exploit its mineral resources, including wolfram, antimony, and gold. Its border location has also made it an attractive site for the construction of large infrastructure projects, such as hydropower dams and highways. While in theory, this could stimulate local employment and create revenue for much needed health and education provision, local communities rather experience land confiscations and rampant environmental degradation.

This is not only detrimental to actual socio-economic development but also endangers the very ceasefire and peace process itself, as evidenced by renewed conflict escalation in Kachin state in 2011. While many factors affected the break-down of the 17-year long ceasefire between the Tatmadaw and the Kachin Independence Organization, grievances about years of economic exploitation were a prime contributor. Shortly before fighting broke out, the rebel organization even warned the Chinese president in an open letter that the construction of a mega-dam at the Myistone river confluence could spark civil war. Fighting since then has largely concentrated around controversial sites of economic interests in the area, including several dam construction sites, the infamous jade mines in Hpa’kant, and the Shwe oil and gas pipelines.

The economic counterinsurgency strategy with which the Tatmadaw sought to corrupt KIO leaders into cooperation has, thus, not worked out as planned. While ceasefire economics have provided incentives for individual rebel leaders to cease armed resistance for many years, it also added to internal contestation within the KIO. Struggle for leadership has haunted the organization and a younger generation who is much less willing to compromise finally started to remobilize the organization’s armed wing in anticipation of war since 2008. Similarly, factional tensions have surfaced within the KNU since they entered into a ceasefire. An internal opposition has continuously expressed dissatisfaction over the cooperative stance of the movement’s new top leadership. Observers have already warned of a possible split within the KNU and a balkanisation of Kayin State.

While economic counterinsurgency has served Naypyidaw in its attempt to divide and rule insurgency movements by buying off individual leaders for many years, it should ask itself whether this is actually in its own interest. If it is sincere about peace— and not just temporary stabilization—it should rather seek for negotiation partners who enjoy the full support of their movements. Only then will commitments be implemented. To achieve this, it will need to change its strategy away from only talking business towards a genuine discussion of politics. The government should, hence, warmly welcome the recent offer of ethnic armed groups to sign a nationwide ceasefire agreement in the upcoming negotiations next month if this will be accompanied by political dialogue.