On February 23, three Bangladeshi-origin members of the Arakan Military (AA), the dominant ethnic armed group (EAO) in Myanmar’s Rakhine State, had been apprehended by the Border Guard Bangladesh whereas infiltrating Bangladesh via the Chattogram Hill Tracts. Some 168,000 Myanmar kyat (round 9,800 Bangladeshi taka) had been recovered from them.
Six days earlier, the AA kidnapped 5 Bangladeshi residents from the neighborhood of the Shah Pori Island on the mouth of the Naf River. A day earlier than that, the AA had launched 73 out of greater than 200 Bangladeshi hostages.
These incidents point out two of the multitude of financial crimes dedicated in opposition to Bangladesh amid the struggle in Myanmar’s Rakhine State: particularly, forex smuggling and kidnapping for ransom. In reality, the Rakhine struggle has exerted a substantial damaging financial impression on Bangladesh, a problem that has up to now remained understudied.
Background of the Rakhine Conflict
Myanmar’s Rakhine State has witnessed a fancy armed battle because the independence of the nation in 1948. The present part of the Rakhine struggle began on October 27, 2023, when the Arakan Military joined two different EAOs to launch Operation 1027 in opposition to the military-controlled Myanmar authorities.
Since then, the AA has captured greater than 90 % of Rakhine State, together with the northern Maungdaw District – the normal Rohingya heartland – and Paletwa Township in southern Chin State. In doing so, the Rakhine nationalist group gained management of everything of the 271-kilometer-long Bangladesh–Myanmar border, successfully chopping off Myanmar’s government-controlled territories from Bangladesh.
At current, the statelet managed by the AA and its political wing, the United League of Arakan, is the de facto southeastern neighbor of Bangladesh, and it exerts substantial management over the commerce flows between Bangladesh and Myanmar.
The commerce quantity between Bangladesh and Myanmar is modest, peaking in 2018–2019 at an estimated $223.22 million. In 2024, commerce turnover slumped to only $90.1 million, partly because of the disruptions brought on by the intensification of combating in Rakhine. Greater than 90 % of Bangladesh’s commerce with Myanmar is performed via two checkpoints in Rakhine State: Sittwe and Maungdaw. At present, Maungdaw is below the management of the AA and Sittwe, the capital of Rakhine State, is besieged and minimize off from the remainder of Myanmar. That provides the AA a chokehold on commerce between Bangladesh and Myanmar.
Disruptions in Official Commerce
The outbreak of a full-scale struggle between the Myanmar authorities and the Arakan Military has led to substantial discount within the bilateral commerce between Bangladesh and Myanmar. The AA has imposed an indefinite ban on the motion of vessels within the part of the Naf River close to Rakhine State. The AA has additionally been finishing up indiscriminate seizures of Bangladesh-bound cargo ships arriving from Myanmar’s core territories, and exacting further taxes from Bangladeshi merchants transport items from Sittwe to Teknaf. These components are accountable for this downturn in bilateral commerce.
Earlier than November 2023, round 50 cargo ships arrived on the Teknaf Land Port daily. After the seize of Maungdaw District by the AA, the port acquired solely three to 5 ships monthly on common.
In FY2022–2023, Bangladesh imported 188,999 tonnes of products value 15.5 billion takas ($126.43 million) from Myanmar, and exported 2,941 tonnes of products value 67.2 million takas to its neighbor. Nonetheless, after the beginning of Operation 1027, it was reported in November 2023 that the federal government of Bangladesh was struggling losses value 30 million takas every day because of the contraction in bilateral commerce with Myanmar. Since then, the quantity of monetary losses has solely mounted.
In FY2023–2024, Bangladeshi imports from Myanmar shrank by 62 % to 71,741 tonnes of products value 8 billion takas and exports to Myanmar shrank by 76.1 % to 704 tonnes of products value 24.5 million takas. This demonstrates a considerable lower in bilateral commerce between Bangladesh and Myanmar owing to the Rakhine struggle.
Whereas Bangladesh’s export basket to Myanmar is small, Bangladesh imports quite a lot of grocery gadgets from its southeastern neighbor. These every day necessities embrace foodstuffs comparable to rice, frozen fish, dried fish, coconuts, and pickles, in addition to culinary aromatics comparable to ginger, garlic, and onions.
Specifically, Bangladesh, regardless of being the third largest producer of rice on the earth, has to import a big amount of rice as a consequence of rising demand and shortfalls in manufacturing, and Myanmar, because the seventh largest producer of rice, has exported rice to Bangladesh for years. In 2025, Bangladesh determined to obtain 100,000 tonnes of rice from Myanmar and the United Arab Emirates (UAE). Thus, Myanmar is necessary for Bangladesh’s meals safety, however the Rakhine struggle poses challenges to this symbiotic commerce partnership.
Rise in Unofficial Commerce and Financial Crimes
Along with disrupting the official commerce move, the Rakhine Conflict has led to a spike in unofficial financial actions, together with black-marketeering, drug smuggling, human trafficking, and a ransom economic system. These actions impose on Bangladesh not solely social, political, and cultural prices but additionally steep financial prices.
After the beginning of Operation 1027, the manpower-deficient Tatmadaw (Myanmar Armed Forces) utilized the “4 cuts” technique in opposition to the AA. It blockaded Rakhine State to strip the EAO of meals, funds, info, and recruitment. Accordingly, the AA now procures all kinds of products – together with foodstuffs, cement, fertilizers, oil, and medicines – from Bangladesh by way of the black market.
The amount of products smuggled from Bangladesh to Rakhine State is substantial, nevertheless it has not but been absolutely accounted for, as a big portion of the smuggling stays undetected. On account of this “unofficial” commerce, the federal government of Bangladesh is shedding a considerable sum of money in unpaid customs and excise duties.
In the meantime, a big amount of narcotics, together with methamphetamine (popularly generally known as yaba) and opiates (comparable to opium and heroin), is smuggled into Bangladesh from Rakhine State. The AA is reportedly concerned on this commerce in narcotics. Almost 80 % of those medication are smuggled into Bangladesh by way of coastal areas, utilizing impoverished Rohingyas as couriers. Just some days in the past, the Border Guard Bangladesh confiscated almost 1 million methamphetamine tablets from drug smugglers in Cox’s Bazar.
The largely uninterrupted and big move of medication into Bangladesh has turned greater than 8.3 million folks into drug addicts, resulting in a variety of socio-economic issues, together with poverty and a spike in violent crimes. The disaster has necessitated substantial allocation of assets by each the state and people to the rehabilitation of drug addicts. Bangladesh reportedly loses $481 million yearly as a consequence of drug trafficking, and the oblique financial prices of drug habit are even greater.
Furthermore, the actions of the AA in Rakhine State have pressured greater than 150,000 Rohingyas to flee to Bangladesh, including to the already present 1.4-million-strong Rohingya refugee neighborhood within the nation. This has additional strained the risky economic system of Bangladesh, and the socio-economic prices of the escalation of the refugee disaster are incalculable.
As well as, the AA has reportedly facilitated the trafficking of Rohingyas into Bangladesh in alternate for cash. Thus, the EAO is profiting off a humanitarian disaster, whereas Bangladesh is bearing its financial, social, political, and safety prices.
Lastly, by abducting a whole bunch of Bangladeshi fishermen from the Naf River and the Bay of Bengal and seizing their vessels, the AA is successfully in search of to show the river and the bay into “Rakhine lakes.” This deprives Bangladesh of the chance to train its financial rights in its personal territorial sea, contiguous zone, and unique financial zone, and has prompted the nation and its residents substantial financial losses. The AA then extracts ransom from the households of the hostages, creating extreme financial and psychological strains on already impoverished and marginalized folks.
Conclusion
The newest part of the Rakhine struggle has imposed substantial financial prices on Bangladesh, each straight and not directly. The outbreak and protraction of the battle have precipitated a marked contraction in bilateral commerce between Bangladesh and Myanmar. Concurrently, the struggle has generated – and in some circumstances intensified – casual and illicit financial actions, together with black-marketeering, the unlawful drug commerce, human trafficking, and the emergence of a ransom-based shadow economic system.
The complete extent of the struggle’s financial burden on Bangladesh stays insufficiently quantified and inadequately documented. With out stabilization alongside the Bangladesh–Myanmar frontier, these prices are more likely to deepen, entrenching structural distortions within the border economic system and complicating Dhaka’s broader financial and safety calculus.