Of refugees, trade and investments

THERE is not much Malaysia can hope to achieve from a trade or investment perspective with Myanmar, which has been ravaged by a civil war since 2021.

Since the military coup that ousted a legitimately elected civilian-led parliament, there is no democratically-elected government. The generals in Naypyidaw may have conveniently doffed their uniforms for civilian clothing, but they are not considered reliable.

They have ignored ceasefires, and the Myanmar parliament in July rejected Asean’s Five-Point Consensus to end the war.

Despite still being barred from high-level Asean meetings, it is quite an achievement for Myanmar diplomacy that Min Aung Hlaing, the retired general who became president in April, has visited the capitals of five Asean members – Thailand, Cambodia, Vietnam, Laos and Malaysia.

He also visited India and China, who are competing for influence in the country. US officials also visited Myanmar in September.

These are bilateral meetings and may help Myanmar to normalise relations in the region and beyond. Myanmar recently formed an Asean Affairs Committee to further its regional diplomacy.

While Min’s visit to Malaysia has been painted as one of strengthening bilateral ties – with emphasis on collaboration over trade and investment – the issue of Myanmar refugees in the country still overshadows it.

According to the UNHCR, there are 225,750 refugees and asylum seekers registered in Malaysia as of August.

Around 90% are from Myanmar, and of this, some two-thirds are Rohingyas. Undocumented refugees and asylum seekers are suspected to far exceed the official figures. A backlash, especially against ethnic Rohingyas, has been growing, conflated with locals’ angst over economic security and jobs.

The truth is, Myanmar’s civil war means that most of the population – except the military-related elite and supporters – are either impoverished or have seen income stagnate.

Many businesses key to the economy are controlled by two military-related organisations, the Myanma Economic Holdings Public Co Ltd and Myanmar Economic Corp.

To say there are opportunities for trade and investment when people are fleeing violence is stretching it a bit. The military government has a hold over the country’s central regions where the ethnic Bamar majority live.

Ethnic minority militias control the rest of the country and run businesses ranging from scam centres to drug and human trafficking to fund their insurgencies.

The World Bank, in its June 2026 Myanmar Economic Monitor, says poverty remains elevated in 2025/2026 at 29.9% despite being slightly lower than 2024/2025.

However, it is far above the pre-coup trajectory.

The report says the recent softening of the poverty headcount is best interpreted as a partial rebound from a low base rather than a sustained recovery.

It says that if pre-coup growth had continued, poverty would be down to about a third of the present level.

More importantly, there is a shift towards less stable casual work despite stable employment rates. Productivity has fallen amid war-related migration and skills mismatch.

The IMF estimates Myanmar’s economic growth at 2% for 2026, which is anaemic given its population of 55 million.

Foreign direct investment (FDI) has been equally bad at just under US$1.07bil in 2025, which was a drop from US$1.09bil in 2024, according to UNCTAD data.

Myanmar’s best performing FDI year was 2017 in recent years, when the country attracted US$4.8bil but since 2018, has attracted well below US$2bil in FDI annually.

According to Myanmar government data, the manufacturing sector secured US$245mil in the fiscal year from April 2025 to March 2026 compared to the US$182.6mil secured in the previous fiscal year.

In pre-coup years, other industries that attracted significant FDI included power generation, oil and gas and telecommunications. Many have divested, due to the volatile economic and political conditions.

Petroliam Nasional Bhd as well as Mitsubishi Corp divested their interests in an offshore gas field in 2022. Axiata Group Bhd, through its subsidiary eDotco Group Sdn Bhd, divested its telecommunications tower business in April 2024.

Telenor ASA divested its telecommunications business in early 2022. Berjaya Land Bhd terminated an RM3.05bil proposed housing and mixed development project with Yangon’s regional government in early 2022.

During Min’s visit to Malaysia, both countries agreed to commit to enhancing collaborations in areas such as education, agri-food, energy and healthcare.

In bilateral trade, Malaysia is in positive trade balance compared to Myanmar.

According to the Observatory of Economic Complexity, Malaysia exported RM230mil and imported RM97.6mil in August 2026.

However, exports have only increased 1.3% year-on-year whereas imports have surged 73.7%. The latest full-year trade data available in 2024 showed that Malaysia’s top export to Myanmar was refined petroleum while the top import was rubber.

Exports stood at US$1.37bil while imports at US$322mil. Given this, it seems Myanmar holds most of the cards.

Which Malaysian business would want to invest in the country given the political uncertainty and an economy that has cratered from over five years of war? Bilateral trade is growing but the latest data show a surge of imports benefitting a country at risk of further sanctions.

Even in a volatile geopolitical landscape where governments are forced to hedge and businesses diversify their markets and supply chains, Myanmar seems a poor bet.

Just before Min’s visit, Malaysia repatriated 1,500 Myanmar refugees, none of them Rohingyas, out of an initial 5,000.

This is a questionable exchange for strengthening bilateral ties and there is no guarantee that the military government will take more back, especially Rohingyas that it does not recognise as citizens.

Past Malaysian administrations supported the Rohingyas, but the welcome wore out during the Covid-19 pandemic.

Now, the government is in a bind, as economic challenges mount and elections are around the corner in a country where race and religion, similar to Myanmar, remains a difficult narrative.