Myanmar Country Forecast - Five Years after the Coup: A Critical Phase

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As the Myanmar Military led administration prepares for elections in December this year amidst ongoing fighting in multiple zones, possible attempts to gain legitimacy through demonstrative polls appears to be the way ahead.

Executive Summary

With the Myanmar military coup set to complete five years on January 31 next year [2026], the Tatmadaw [Myanmar Armed Forces] leaders hope a return to democracy through polls that are slated for the end of the Year or beginning of 2026. While these are expected to include only a section of the population, the military will declare success and a return to governance by the people, gaining a degree of legitimacy in countries supporting the junta, such as China, Russia, and possibly even India. The United States under President Donald Trump is unlikely to reject the outcome of the polls.

The National Unity Government [NUG] has a significant task ahead to establish its legitimacy of influence across the country by demonstrating a lack of support of the people at the polls through non-participation. The NUG remains trusted by the public in large swathes of Myanmar, but the ability to influence political, economic and governance outcomes has led to a loss of faith in a section of the public in the leadership of the resistance movement. China has emerged as an important factor boosting the military’s counter-revolutionary campaign, having already set up ceasefires and rolled back in the Northern Shan State and is working on the Kachin and the Rakhine States. 

The Chinese could force Ethnic Armed Organisations [EAO] to acquiesce to the military thus setting back gains made on the ground, yet this remains an uncertain factor for now. On the economic front, there is enough pain due to military policies, with the World Bank flagging concerns. The people of Myanmar are caught in a negative spiral of doom between a rock and a hard place – the military and incessant fighting. Given factionalisation of resistance, success is not likely in the near term; a compromised formula of governance may be the only reasonable option, but it leaves the aspirations of the people on the skewers.

International and Regional Trends. In an unexpected legitimisation of the State Administrative Council [SAC] the military led nominal administration United  States President Donald Trump as is his style directly wrote to Senior General Min Aung Hlaing indicating reduction of tariffs on the country from 44 percent to 40 percent. In his response, General Hlaing, apart from requesting a reduction of tariffs to 10 to 20 per cent, also offered 0 to 10 per cent tariffs on the United States. Additionally, he outlined the reasons for the military coup and the efforts being made by the SAC to hold fresh polls. The outcome of the exchange of letters will only be clear on August 01, but if the US accepts a delegation visit from Myanmar, it would be a legitimisation on the SAC regime. This comes as, despite the sanctions imposed by Western governments on the Myanmar military regime, with Russia and China extending diplomatic, political and military support, the SAC, as the Tatmadaw likes to call itself, has been able to weather the storm in the global community. With ASEAN divided and India’s non-committal approach, the SAC is well able to manage global distrust.

If the United States reduces tariffs, this will be a significant boon to the Myanmar economy. Although Russia and China are deepening economic ties, Moscow’s economic constraints—especially under sanctions—limit how much it can truly support Myanmar. China, meanwhile, walks a strategic tightrope. It has long-standing interests in Myanmar through the China-Myanmar Economic Corridor, a key component of the Belt and Road Initiative. However, since the 2021 coup, Beijing has faced numerous concerns about the military regime’s ability to control territory and its people. While China continues to invest, it will covertly use ethnic rebel groups to pressure the junta and protect its border interests. Much will also depend on how the EAOs respond to China’s attempts to seek a compromise with the Tatmadaw.  For the Kachin Independence Organisation [KIO], Chairman Gen. N’ Ban La is on a visit to China, ostensibly for a medical checkup, but local media claim he may be under coercive arrest.   Myanmar SAC will attempt to gain international influence through the Eurasian Economic Forum; how far this will have practical results remains to be seen.

 Politics. Myanmar’s military is orchestrating the upcoming elections to entrench power under a civilian façade. Senior General Min Aung Hlaing has announced that elections will be held in December 2025 or January 2026, promising a “free and fair” vote. However, the military has already dissolved over 40 political parties, including the popular National League for Democracy (NLD), which won landslide victories in 2015 and 2020. This move effectively sidelines the most credible opposition voices. To prepare for the elections, the junta conducted a highly controversial census in late 2024, which was marred by violence and resistance from opposition groups.  54 political parties, with only the military’s proxy Union Solidarity and Development Party [USDP] is widely expected to take the lead along with the National Unity Party, Shan and Nationalities Democratic Party, People’s Pioneer Party and five other parties competing nationwide. Groundwork for the vote has been most visible in southern and eastern Shan State, as well as in junta-controlled urban centres within resistance strongholds, including Sagaing, Magwe and Loikaw towns.  

Meanwhile, the National Unity Government (NUG), a parallel administration formed by ousted lawmakers has dismissed the elections as a sham, given that voting will be held only in 267 townships. NUG claims that the country’s 330 municipalities are under the control of anti-regime groups, and 79 townships are experiencing ongoing conflict. At the same time, support for the NUG administration is dwindling due to a lack of firm direction and leadership, as well as an inability to coordinate the operations of the People’s Defence Forces, mainly in the Sagaing, Magwe, and Mandalay Regions. The NUG is also accused of poor financial management. Therefore, how the NUG delivers administration will be closely observed.

 Meanwhile, the military has appealed to the EAOs and PDFs to participate in the electoral process, while the NUG has rejected the demand, calling it a sham exercise.

 Internal Security. Continued fighting is anticipated between the People’s Defence Forces [PDF] and Ethnic Armed Organisations [EAO] on one hand and the Myanmar Military and proxies supporting the same.  The gains made by each side are difficult to assess due to varying inputs. Still, the military is surviving and gaining ground, particularly where China has been influencing the EAOs to cede territory and through the use of air power. The Ta’ang National Liberation Army (TNLA) is providing strong resistance to the military as it attempts to secure five key towns on the China-Myanmar trade route – Nawnghkio, Kyaukme, Hsipaw, Mogoke, and Momeik. The outcome of the fighting will determine the security of trade routes to China. The military has expanded control in Southern Shan State, having secured Moebye. Ethnic armed groups such as the Arakan Army (AA) and Kachin Independence Army (KIA) are continuing their offensives. International responses to Myanmar’s ceasefire violations have been critical but largely ineffective in stopping the ongoing military operations. The UN Special Rapporteur on Myanmar has called for an emergency Security Council resolution demanding an end to military offensives and obstruction of humanitarian aid. However, no binding resolution has been passed yet. ASEAN leaders issued a statement supporting an expanded ceasefire, but it lacks enforcement mechanisms or independent monitoring, allowing Myanmar’s military to continue attacks with impunity.

Defence. The Myanmar military is set to deploy 70,000 conscripts after a short period of training to regain lost territory. The performance of these is unknown, and much will depend on coordination with regulars and the armed organisations supporting the junta. The morale of the conscripts is reportedly low. Meanwhile, the resistance faces a challenge due to a lack of coordination between the People’s Defence Forces (PDFs) and People’s Defence Organisations (PDOs) or militias, which hinders their ability to present joint resistance.

Economy. While the regime has rejected the World Bank's prediction that the economy is set to shrink 2.5 per cent in the 2025/26 financial year, primarily because of March’s devastating magnitude-7.7 earthquake, what measures are being taken to uplift the same, except for an increase in the production of military factories, is unclear. During the National Economic Development Coordination Meeting, Senior General Min Aung Hlaing claimed the World Bank’s prediction is based on “inaccurate and incomplete data”, state-run media reported. Meanwhile, foreign companies under pressure from human rights groups are exiting the country. Much now depends on the US providing relief from tariffs as per the letter of President Trump to General Min Aung Hlaing.