Addressing these challenges won’t be easy. On the domestic
front, Myanmar will have to navigate through an array of
policy choices that could well work against one another.
For example, unless properly managed, efforts to crack
down on the drug trade could easily upset tentative peace
deals reached with Shan, Kachin and Wa warlords, which
could discourage overseas companies from seeking
closer economic engagement. Equally, moving too fast
on government reform could undermine the support
of the military, which continues to exercise significant
behind-the-scenes influence.
Internationally, Myanmar will have to balance its relations
with China and the US carefully. Although the former offers
a highly lucrative source of foreign direct investment (FDI),
which typically comes with few if any political demands,
the latter provides arguably the best diplomatic vehicle for
furthering Naypyidaw’s reintegration into the mainstream