Five years after seizing power in the 1 February 2021 coup, Myanmar’s military is set to hand authority to a nominally civilian administration in early April. The transfer follows stage-managed elections that delivered a landslide for the military-backed Union Solidarity and Development Party, with none of the main democratic or ethnic parties participating. The former military chief and coup leader, Min Aung Hlaing, looks likely to shed his military garb to become president, but he will have to share a modicum of power with other members of the ruling establishment, creating the potential for tensions or rivalries. China, which pressed the regime to proceed with the polls, has moved quickly to endorse the new arrangement. Meanwhile, the country’s post-coup civil war has continued to rage on several fronts. 

Myanmar’s conflict has ramifications for European Union priorities beyond humanitarian and human rights concerns, including organised crime, critical minerals and geopolitical competition. Brussels will therefore need to calibrate its response carefully. The shift in order does not constitute meaningful political change, and any contacts with authorities in the capital Naypyitaw should remain limited and clearly defined around narrow policy objectives – for example, advocating for humanitarian access or raising concerns related to international humanitarian law and transnational organised crime. Such discussions should be approached with care to avoid conferring unwarranted legitimacy upon the regime or diluting existing policies. At the same time, the EU should continue to address the fallout of Myanmar’s civil war by sustaining – and, where possible, expanding – its assistance, delivered outside official channels, and refrain from suspending Myanmar’s access to Everything But Arms (EBA) trade preferences, which support hundreds of thousands of garment-sector jobs, particularly for women, without providing any significant benefit to military or government authorities.

The change in administration will not alleviate the political crisis or the intensified armed conflict triggered by the 2021 coup. Min Aung Hlaing looks set to dominate the new order as president, and though the 2008 constitution constrains the presidency on paper, he will install loyalists in key posts. The new authorities will therefore confront the same fundamental challenges as before: deep public hostility, widespread armed resistance and no obvious way to stabilise the country.

But Min Aung Hlaing will face internal challenges in continuing to wield absolute authority. The military designed the 2008 charter to perpetuate institutional – not autocratic – power, granting the armed forces autonomy from civilian oversight and limiting presidential authority. Though Min Aung Hlaing will put loyalists in top jobs, they will have power bases of their own and may not remain fully aligned. Such rivalries, however, are unlikely to open space for reform. The cabinet, likely to be dominated by establishment figures, could include ministers with experience and technocratic skills, but they may not have much scope for independent policymaking on issues of vital importance to the population, such as health, education and the economy. Whether they will attain more freedom of action over time will merit close attention.

There is also little prospect of the civil war abating. Naypyitaw will continue to preside over a fragmented state, facing persistent armed opposition in several theatres. The conscription drive it launched two years ago has helped it shift battlefield dynamics in its favour by replenishing depleted ranks. Yet the draft has been deeply unpopular and economically damaging, accelerating outward migration by pushing young people of conscription age – including skilled workers – into overseas labour markets or the illicit economy in areas beyond central state control. Though recruitment has so far been limited to men, the law allows for conscripting women as well, prompting many young women to seek exit options of their own.

Combined with increased Chinese support (see below), continued mobilisation may allow the military to consolidate control in some areas, though major advances against powerful opponents such as the Arakan Army and Kachin Independence Army remain unlikely. Tactical, China-facilitated ceasefires may provide temporary respite, but no durable settlement is in sight. The Nationwide Ceasefire Agreement – concluded in 2015 as a step toward a comprehensive peace agreement – will endure as largely symbolic cover for transactional truces, with limited participation or substantive progress toward peace.

Diplomatically, the new administration may find somewhat more breathing space. Since mid-2024, China has expanded its political, military and financial backing for the regime, pressed for the elections to proceed and welcomed the outcome. Beijing looks set to embrace the new administration even more firmly, and it will expect significant concessions in return, including a leadership that is suitably deferential to Chinese interests, for instance by giving accelerated approval to long-planned Chinese infrastructure and investment projects. Naypyitaw is wary of being bound too tightly to Beijing, but it has no viable counterweight.

Other countries will likely follow in China’s diplomatic slipstream. India has intensified engagement with the regime following a period of hedging when it placed greater emphasis on outreach to the armed groups operating on its border. Thailand is pushing to ease Myanmar’s diplomatic isolation within a divided Association of Southeast Asian Nations (ASEAN), as are Vietnam, Laos and Cambodia, while the Philippines, which holds the chair at present, is focused on other issues. Untethered from normative constraints on its foreign policy, the U.S. could also pivot toward greater engagement, driven by competition with China and interest in critical minerals, though Myanmar remains a low priority in Washington.

Reduced diplomatic isolation will not translate into improved regional stability, however. Myanmar’s fragmentation and the authorities’ weak territorial control will continue to generate cross-border threats. The illicit economy remains a major concern. Myanmar is the world’s largest producer of heroin, and the dominant source of synthetic drugs – methamphetamine as well as ketamine and ecstasy – in the Asia Pacific. It also hosts large-scale online scam centres, which are associated with human trafficking, involving at least 100,000 workers and generating tens of billions of dollars annually. European nationals are attractive targets for the organised crime groups operating these scam centres, and European financial infrastructure is at risk of being used for illicit financial flows linked to this industry.

While minority rights and opposition to military rule underpin the armed conflict, economic interests within the country also shape the battlefield stakes. These derive in part from the illicit economy, but also from highly lucrative natural resource extraction. Myanmar is the largest global source of heavy rare earth elements, vital for the permanent magnets used in everything from electric vehicles to wind turbines and hi-tech weapon systems. The Kachin Independence Army took over the main mining area on the Chinese border in late 2024, after expelling the military-aligned militia that had long controlled it. There has also been fighting for control of gold deposits in several areas of the country, with the surge in global prices for the metal boosting profitability. In recent years Myanmar has also become the world’s third-largest tin producer, almost entirely from a single mine in an enclave controlled by a non-state armed group, the United Wa State Army. Karen National Union-controlled areas are also a strategically useful source of antimony concentrates for China, at a time when global supplies are highly constrained.

The transition to pseudo-civilian rule will also leave the plight of Myanmar’s Rohingya Muslim minority unresolved. Over one million remain as refugees in Bangladesh, where poor camp security and shrinking humanitarian funding heighten risks of dangerous onward migration, criminal exploitation and recruitment by Rohingya armed groups. Within Myanmar, conditions in Rakhine State offer no pathway to safe, voluntary and dignified repatriation for Rohingya in the medium term – even in the event of a tactical ceasefire between the Arakan Army and the military. Attacks by Rohingya armed groups on Arakan Army forces in northern Rakhine State will continue to erode security conditions and aggravate relations between Rakhine and Rohingya people.

The parallel National Unity Government, created by lawmakers ousted in the 2021 coup, is in a difficult position. For some time, it has faced internal and external criticism for excessive bureaucracy, limited transparency in the use of funds, and weak responses to allegations of corruption or abuse in its ranks. More fundamentally, it has struggled to articulate a convincing strategy for effecting political change or to build and sustain the broad coalitions required to do so – particularly with ethnic political leaders and armed groups. The regime’s election exacerbated these challenges. By grounding its legitimacy in the 2020 election results and presenting itself as a parallel government rather than a revolutionary movement, the NUG now faces questions about its mandate given that its original five-year electoral term has expired. But regardless of the NUG’s institutional weakness, the broad popular desire for an alternative to military power remains undiminished and is sure to find political outlets. 

Myanmar is often overshadowed in European policymaking by crises such as Iran, Ukraine and Gaza that are closer to home and present more immediate security and geopolitical challenges. Yet developments in Myanmar carry consequences for the EU that extend well beyond humanitarian and human rights considerations.

Geopolitically, Myanmar has not played a central role in the broader competition for influence in South East Asia, but it cannot be divorced from that contest. China’s position as the decisive external actor in the country underlines the limits of European leverage in a subregion that is central to the EU’s Indo-Pacific strategy. How Brussels handles the Myanmar issue in the coming period will therefore test both the credibility of its normative policy instruments and its willingness to sustain principled engagement when leverage is limited. Any move by ASEAN to renormalise relations with Naypyitaw will further test the EU’s commitment to ASEAN centrality – the principle that South East Asian regional diplomacy should be led and coordinated by ASEAN itself – particularly given the bloc’s limited traction with Myanmar at a time when Beijing has markedly expanded its influence.

The country’s booming illicit economy – especially online scam operations and associated human trafficking and money laundering – increasingly affects European citizens and financial systems. Scam networks target EU nationals, use global payment infrastructure – including European networks – and are likely purchasing assets in Europe with criminal revenues. These issues are directly relevant to EU priorities on organised crime, cyber-enabled fraud and financial integrity.

The EU also has an important role to play in continuing to address the immense humanitarian needs in Myanmar. According to the UN’s latest assessment, some 3.6 million people are internally displaced and 16.2 million – almost one third of the population – in need of humanitarian assistance. While humanitarian access remains a major challenge, lack of funding is the binding constraint. With the dismantling of USAID and the U.S. shift away from liberal values and support for the most vulnerable populations in foreign policy and overseas aid, the EU carries a special responsibility as the world’s largest donor committed to these principles. In Myanmar, it should sustain life-saving assistance delivered through non-state channels, while also supporting civil society organisations, including independent media and women-led groups. Though Brussels has made funds available – both humanitarian allocations and the reprogramming of development assistance frozen after the coup – the overall aid envelope for the 2027-2028 period is set to shrink significantly.

In these straitened circumstances, the role of the private sector in Myanmar is vital for providing jobs and sustaining livelihoods, which it can do at a scale far beyond anything that foreign assistance could match. The EU’s EBA trade preferences are essential to sustaining hundreds of thousands of jobs in the garment industry, which employs mostly young women from poor households and whose biggest export market is the EU. In addition to longstanding discussions in Brussels about the optimal balance between the integrity of its trade preferences scheme and its development objectives in Myanmar, the question of continuing EBA access has also been prompted by the International Labour Organisation’s June 2025 call for its members to review their relations with the country in light of its persistent failure to meet obligations on freedom of association and forced labour. But suspending trade preferences would have little impact on the military, while causing deep economic harm to vulnerable households. Other tools, such as principled EU engagement backed by the ILO resolution, offer better ways to push for concessions such as improved compliance with core labour standards. EU pressure demonstrated its efficacy in 2025, when it helped push the regime to release several high-profile trade unionists.

Myanmar’s growing importance in critical mineral supply chains is also of strategic relevance for the EU. As mentioned, the country is the world’s largest source of heavy rare earth elements, as well as a major source of tin and antimony. Production is concentrated in conflict-affected areas and largely exported to China for processing, reinforcing Beijing’s dominance across the value chain. While European companies are not getting these materials from Myanmar, they enter global supply chains that serve European green and defence industries, creating reputational, governance and supply risks. As the EU implements its Critical Raw Materials Act and seeks to diversify supply chains, China’s privileged access to Myanmar resources demonstrates how geopolitical competition affects Europe’s long-term resource security.

The EU and its member states should:

• Elevate Myanmar on the EU’s strategic agenda. Despite being overshadowed by other crises, Myanmar’s conflict has important ramifications for EU priorities on organised crime, critical mineral supply-chain security and geopolitical competition. Brussels should ensure sustained high-level political attention to the country and link its Myanmar policy with the EU’s Indo-Pacific strategy, organised crime and critical raw materials frameworks.

• Maintain and refine restrictive measures. The EU should renew its sanctions targeting military leaders, military-owned enterprises and arms transfers at the forthcoming review in April. Where credible evidence supports it, listings should be updated to reflect evolving military-linked business structures and players in the illicit economy. Sanctions should be coordinated with like-minded partners to maximise impact.

• Engage cautiously and in a principled way. Limited engagement with Naypyitaw may at times be warranted, for example to advocate on humanitarian access, human rights and labour standards, and to convey concerns about the illicit economy. Such contacts should be clearly defined, coordinated among member states and pursued in a way that avoids conferring political legitimacy. As regards ASEAN, at a time when it is divided on Myanmar but will almost certainly ease its diplomatic quarantine, EU engagement with and support for like-minded ASEAN members will likely be more consequential than bloc-level interactions on this file.

• Sustain and, where possible, expand humanitarian and civil society support. The EU should protect funding for humanitarian operations and support for civil society and independent media. Such assistance is vital for saving lives, preserving social capital and enhancing accountability. The EU and member states should continue pressing for humanitarian access to address the dire needs of the Rohingya and other displaced persons.

• Maintain Myanmar’s access to EBA preferences. Suspending trade preferences would harm hundreds of thousands of mostly young women workers and their families, while having negligible impact on military authorities. A better way to respond to the ILO’s call to action would be to leverage the ILO process and enhanced monitoring mechanisms to press for incremental improvements in labour rights compliance.

• Consider carefully targeted private-sector support. Beyond the garment industry, Brussels should explore targeted support – including responsible sourcing engagement and compliance assistance – to sustain employment and livelihoods in sectors not structurally dominated by state or military-owned firms, such as agriculture. 

• Strengthen action against transnational organised crime in Myanmar. The EU should deepen cooperation between Europol, DG HOME and member states’ financial intelligence units, on one side, and South East Asian partners, on the other, to address scam networks and associated human trafficking and money laundering. Domains for cooperation include intelligence sharing and asset tracing, as well as political and technical coordination with ASEAN and relevant member states, particularly Thailand.

• Integrate Myanmar-related risks into the EU’s critical materials strategy. As the EU diversifies supplies under the Critical Raw Materials Act, it should ensure enhanced due diligence for rare earths and other resources originating from Myanmar. Brussels should work with industry and international partners to promote transparency and conflict sensitivity in its supply chains.