Myanmar: Multidimensional Challenges Continue Amidst Outreach to ASEAN

Myanmar Air Force: A Force to Achieve Peace [Sic] Claims Union Government

General

The Union Government’s military led administration is strengthening the nominally civilian posture even as a parallel consolidation is ongoing by the alternative Spring Revolution forces led by the Steering Council for the Emergence of a Federal Democratic Union (SCEF). While the Union government is focusing on the main cities as Yangon and Mandalay the SCEF is dominant in the rural zones. Active conflicts are persisting across multiple states. Armed opposition groups and ethnic resistance organizations continue localized pressure, where the central administration faces ongoing challenges regarding territorial control. Intense fighting is ongoing in the Rakhine and the Chin States presumably as the President is keen to fulfil assurances given to China and India to open up the trade routes. The Union Government also focused on managing regional relations within the broader framework of ASEAN and neighbouring bilateral partners, attempting to secure diplomatic recognition.  The SCEF’s attempts at international outreach remain weak. The economy is no longer experiencing collapse seen immediately after the coup period, growth remains low, inflation remains among the highest in Southeast Asia, and conflict continues to constrain productivity and investment.

International Relations

United States. United States and Myanmar's Union government held talks in Tokyo in the second meeting in a month as Washington steps up re-engagement as per Reuters. Talks in Myanmar's capital Naypyitaw in mid-September had focused on securing the release of an American businessman Adam Castillo, a former head of the American Chamber of Commerce in Myanmar and shutting down scam centres that target Americans. US Assistant Secretary of State for Intelligence and Research Michael Vance led the talks in Tokyo talks. Vance has previously met the democratic opposition and ethnic armed organizations fighting the military, both in person and online. The US explained lifting of sanctions on the daughter of a Myanmar businessman accused of supporting the country's military, saying the move was part of a new approach to the country as one of the range of tools employed to gain recognition. Against this background it is seen that the U.S. has however not offered recognition, sanctions relief, or formal agreements on minerals or scam centre crackdowns. Current outreach is narrow, unscheduled, and lacks a published negotiating mandate. Possibility of success is modest: the junta may cooperate tactically on scam centres to gain diplomatic space, but deeper collaboration on rare earths risks conferring de facto recognition—something Washington has avoided.  Moreover the rare-earth deposits Washington is interested in lie mainly in territory held by the Kachin Independence Army (KIA) in Kachin State which are difficult to retrieve.

China. As the US resumed direct engagement with Myanmar’s Union Government, Beijing moved to cement its overarching influence by meeting with nine political parties in Yangon to gauge public sentiment. The Chinese delegation was led by Peng Xiubin, director‑general of the Chinese Communist Party’s International Liaison Department. Beijing also maintains influence over the Kachin Independence Army, which controls key mines, ensuring continued preferential access and complicating U.S. entry.

Spring Revolution Forces. CRPH said on 12 October that the 153rd Assembly of the Inter-Parliamentary Union [IPU], held in Arusha, Tanzania on 9 October had adopted a resolution to continue recognizing the CRPH as a key partner for dialogue for a fifth consecutive year, granting its delegation non-voting observer status while refusing to recognize the military-backed parliament, and addressing the situation of Myanmar’s elected parliamentarians who remain unlawfully detained. A delegation from the Steering Council for the Emergence of a Federal Democratic Union (SCEF) met with Australian Foreign Minister Penny Wong at Parliament House in Canberra, Australia, on 28 September, according to a statement released by SCEF 1 October.

Regional Relations

ASEAN. The Union Government led by President and former Tatmadaw Chief Senior General Min Aung Hlaing is striving to gain recognition and reintegrate with the ASEAN. In October, Malaysia was Min Aung Hlaing’s fifth stop to an ASEAN member after Thailand, Laos, Cambodia, Vietnam collectively enhancing his political standing.  Repatriation of Myanmar nationals from Malaysia dominated talks between Myanmar Union Government President Min Aung Hlaing and Malaysian Prime Minister Anwar Ibrahim during visit of the Myanmar leader to Kuala Lumpur. This comes as on September 29, Malaysian authorities sent back 1,476 Myanmar nationals—1,370 men, 79 women, 20 boys, and 7 girls, ages 8 to 60, aboard two Myanmar navy ships and a hospital ship from Lumut naval base in Malaysia’s Perak state. The deportations come amid a wave of public hostility in Malaysia toward refugees, particularly Rohingya, that government officials have fomented.

Malaysia’s reception of Min Aung Hlaing, coupled with pledges to work toward Myanmar’s “full reintegration into ASEAN,” marks the strongest signal of regional re engagement. The Philippines, as ASEAN Chair. President Ferdinand Marcos Jr. hailed recent visits by Myanmar coup leader Min Aung Hlaing to ASEAN countries as part of a “new approach” to resolving the country’s crisis. To effect integration the Union Government has appointed ASEAN Affairs Committee to lobby remaining skeptical members. ASEAN’s Five-Point Consensus consists of ending violence, beginning dialogue among all parties, appointing an ASEAN special envoy, and ensuring that humanitarian assistance those in need is now under stress. The consensus will have little practical value if their conditions are repeatedly affirmed in statements but lose influence in diplomatic practice. Thus, performative nonrecognition by the ASEAN as well as international community at large and more particularly by Asian countries is evident in Myanmar.

Suu Kyi and Reintegration. Publishing of pictures of Daw Aung Suu Kyi receiving packages from Britain’s King Charles III and allowing Kim Aris son of the Nobel lauraeate the first telephonic conversation with the octogenarian leader for the first time in five years is a calibrated political signal: the regime is showcasing controlled access to Suu Kyi to project normalcy, counter “proof of life” pressure, and seek international legitimacy amid deepening civil war. The timing—days after releasing images of Suu Kyi receiving books and a letter from King Charles III—suggests an orchestrated campaign to soften the junta’s pariah status and extract diplomatic concessions. However, having described her as as ‘special female prisoner,’ the waters may be muddied. Nevertheless, states acting in national interest would be willing to engage with the Union Government with an opening by the US is also visible to Government

India. Attempts to reopen the promised trade routes to India are ongoing with progress made in the Chin State where a four-pronged offensive is ongoing. The Myanmar Policy Institute’s latest report for October examines the implementation of the India–Myanmar–Thailand (IMT) Trilateral Highway between June and September 2026. MPI report concludes that escalating armed conflict, contested territorial control, damaged infrastructure and the humanitarian consequences of military operations make the full restoration of the highway unlikely in the future.

SCEF Low Diplomatic Heft. The main opposition political grouping Steering Council for the Emergence of a Federal Democratic Union (SCEF) and other resistance actors will need to demonstrate effective governance in territories they administer, strengthen civilian protection against air attacks, and develop credible cooperation with foreign governments on shared concerns such as online scams, transnational crime, trade and regional security to gain a degree of recognition.

Political Developments

Myanmar Union Parliament on 18 October extended a state of emergency in 55 townships for another 90 days, as lawmakers supporting the move conceded that administration and the rule of law had yet to return to normal across the affected areas. The townships lie in Sagaing and Magway regions and in Chin, Rakhine, Karenni, Karen and Shan states. Ngazun Township in Mandalay Region and Kyaukme and Hsipaw townships in northern Shan State were dropped from the list. The list has shrunk slowly from 63 townships on 31 July 2025 to 55 townships now

The Steering Council for the Emergence of a Federal Democratic Union (SCEF) is continuing with online meetings with political organisations such as the New Mon State Party–Anti-Dictatorship (NMSP-AD), Mon State Federal Council (MSFC), Mon State Consultative Council (MSCC) and Committee Representing Mon State Hluttaw (CRMH).  SCEF’s legitimacy inside Myanmar is growing but uneven, rooted in its coalition of major Ethnic Armed Organizations (KIO, KNU, KNPP, CNF), the NUG, and CRPH — a grouping now seen as the most structured resistance authority since 2021. Its three pillar design (ERO/federal units, people’s representatives, women’s representatives) and rapid outreach to PDFs and local administrations give it procedural legitimacy among resistance constituencies, especially in Sagaing, Kachin, Karen, Chin, and Karenni areas. This reflects an emerging federal power sharing framework rather than ad hoc coordination. To integrate all allied forces within Karenni State into a unified defense structure, the Karenni State Interim Council (IEC) announced that the Karenni State Interim Parliament enacted a unified Karenni Military Law on October 21.

Internal Security

Intense fighting is ongoing in multiple provinces and states to include Tanintharyi Region, multiple townships in Sagaing Region, Kachin State, Magwe Region Myaing Township which is an oil hub, Mon State and Karenni State amongst others.

In Rakhine State, fighting has been the most intense around Nga pyi Island, located between Sittwe and Pauktaw townships, as Myanmar military reportedly attempted an amphibious landing and the Arakan Army [AA] moved to block them The AA is one of several major holdouts nationwide, including the Kachin Independence Army and the Karen National Union. AA was engaged in fierce clashes around military-controlled Sittwe, Kyaukpyu, and Manaung townships. In Chin State clashes have been reported in Mindat, Kanpetlet & Shwe Aung Tha. There is constant reconfiguration of forces as it was reported that a regiment from the Kawthoolay Army (KTLA) rejoined the Karen National Union (KNU).

Ethnic resistance organizations (EROs) and People’s Defence Forces (PDFs) have been able to maintain significant influence over rural areas despite failing to establish sustained control over major towns. Their position, however, remains under pressure as the junta continues to use air power, artillery and conscript manpower to regain strategic locations and secure key economic projects.

Along the India–Myanmar border, a drone bombing was reported in Lahae, in Sagaing Region’s Naga Self-Administered Zone, following an attack on the Assam Rifles near Nampong in Arunachal Pradesh.

Defence

Myanmar regime warplanes and artillery units bombed and shelled through the month to support the ground offensives. This despite, widespread domestic and international condemnation of the military junta’s airstrikes on civilian targets. Ironically, newly appointed regime Defense Minister Lieutenant General Yar Pyae said the bombing operations were intended to achieve peace indicating the approach that the military will take towards air strikes including on innocent civilians. Lt-Gen Yar Pyae also serves as chairman of the National Solidarity and Peacemaking Negotiation Committee (NSPNC). Myanmar’s UN envoy, Ambassador Kyaw Moe Tun, told the UN General Assembly’s First Committee in New York on 20 October that the military junta is dropping chemical bombs containing tear gas, white phosphorus and aluminum phosphide, as the Southeast Asia National Human Rights Institutions Forum (SEANF) expelled the junta-controlled Myanmar National Human Rights Commission (MNHRC)

Economy

While the economy is no longer experiencing the collapse seen immediately after the coup period, growth remains low, inflation remains among the highest in Southeast Asia, and conflict continues to constrain productivity and investment. The Asian Development Bank projected Myanmar's GDP growth at 2.2% in 2026 and 2.7% in 2027, indicating a slow recovery relative to regional peers. Inflation remained one of the economy's biggest challenges, with the ADB projecting 24% inflation in 2026. The kyat remained vulnerable to currency volatility and foreign-exchange pressures, contributing to elevated import costs and weak household purchasing power.

More than 37 million people—over two-thirds of Myanmar’s population of more than 54 million—are experiencing or at risk of “multidimensional poverty,” according to the latest report from the United Nations Development Programme (UNDP). Myanmar’s US dollar exchange rate climbed to 4,600 kyat on 14 October amid fallout from problems in the country’s high-end condominium market. In fiscal year 2025 ending this March, Myanmar approved US$472.6 million in foreign direct investment, down another one-third or 31.5 percent from a year earlier. But inflow from China rose 2.1‑fold to $201.1 million, meaning it now accounts for 42.6 percent of the total.