5 Ways To Crack Down on Myanmar’s Military Junta

The war with Iran is reshaping more than the Middle East; it is disrupting the commodity flows, diplomatic relationships, and financial networks that authoritarian regimes use to sustain one another. Myanmar is part of this ecosystem. Its military junta, which seized power in a 2021 coup, has relied on Iranian jet fuel, missiles, and drones to power an air campaign against its own people — ethnic minorities and pro-democracy civilians alike — while Russia provides weapons and China offers financial lifelines.

Myanmar, also known as Burma, is more than a distant humanitarian tragedy. It is one node in a broader authoritarian network now under strain. Weakening this network benefits both the Burmese people and American security interests. Below are five ways Washington can raise the costs for Myanmar’s junta and weaken the authoritarian ecosystem that sustains it.

1. Sanction the Myanmar Economic Bank.

When the United States sanctioned the Myanmar Foreign Trade Bank in 2023, the effect was immediate — international transfers through the bank collapsed. The junta quickly adapted by shifting foreign exchange operations to the state-owned Myanmar Economic Bank (MEB).

Designating the MEB for sanctions would close that escape valve. The junta relies on a declining stock of foreign currency to purchase weapons and fuel from Russia, China, and Iran. Without access to dollars, those transactions become slower, more expensive, and riskier.

2. Appoint a U.S. Special Representative to Myanmar.

The United States cannot appoint a traditional ambassador in Yangon without recognizing the junta. Instead, Washington should appoint a special representative for Myanmar to coordinate economic statecraft, diplomacy, and intelligence efforts across agencies — a position Congress has already proposed as part of the Brave Burma Act.

A special representative could also work with regional partners such as Thailand and Singapore to disrupt financial channels used for arms purchases while coordinating humanitarian assistance and diplomatic engagement with pro-democracy forces within Myanmar.

3. Support the Karen National Union to shut down scam centers, helping Americans.

Myanmar’s post-coup collapse has fueled an explosion of industrial-scale online fraud targeting Americans. Chinese criminal networks, working alongside junta-backed militias, have built city-sized scam compounds along the Thai border that specialize in pig butchering schemes, cryptocurrency fraud, and human trafficking. Americans have lost billions of dollars to these operations.   

Under pressure from the U.S. Justice Department’s new Scam Center Strike Force, the junta has staged high-profile and performative crackdowns — even dynamiting compounds like KK Park on television. But the junta destroyed just 13 percent of KK Park, and workers were quietly transferred elsewhere, because the militias running the compounds answer to the military itself.

The Karen National Union, a long-established political organization controlling much of eastern Myanmar, has seized scam compounds during clashes with regime forces, leaving the union responsible for hundreds of trafficked workers from dozens of countries. U.S. support for victim processing, evidence collection, and repatriation would help dismantle these criminal networks while generating valuable intelligence.

4. Strengthen the Spring Development Bank to counter Chinese sanction evasion.

Washington can also strengthen Myanmar’s emerging democratic financial infrastructure, particularly the Spring Development Bank. This digital platform allows migrant workers in diaspora communities and pro-democracy supporters to move money outside of junta-controlled banks.

This effort matters because China is trying to do the opposite. Beijing is helping Myanmar’s Central Bank develop a digital currency linked to China’s Cross Border Interbank Payment System, which could give sanctioned entities in Myanmar a backdoor into the global financial system. Supporting the Spring Development Bank offers a strategic counter. Technical assistance, regulatory guidance, and targeted financial support could help the platform scale while maintaining compliance with U.S. financial standards. It would also help keep worker remittances out of the hands of the junta while undercutting China’s attempt to build a sanction-evading financial architecture.  

5. Reject the myth of Myanmar’s critical minerals windfall.

Some analysts argue that an America First approach to foreign policy means that Washington should reengage Myanmar’s generals to gain access to rare earth elements critical to defense and high-tech applications. This argument — which reportedly has had some traction with senior administration officials, including the vice president — misunderstands both Myanmar’s political reality and rare earth element markets.

Myanmar’s rare earth deposits are concentrated in areas largely outside of meaningful military control. More fundamentally, rare earth elements are not rare. The bottleneck is processing capacity — and that capacity overwhelmingly sits in China. China’s mineral chokehold on the United States is not on mining. It is on processing and refining.

The only durable path to reducing Chinese dominance in Myanmar runs through a democratic victory. That outcome will not emerge from mineral diplomacy with a regime that only controls half its country’s territory and depends on U.S. adversaries for survival.

Dan Swift is a senior research analyst for economics, finance, and trade for the Center on Economic and Financial Power (CEFP) at the Foundation for Defense of Democracies (FDD). Dan is a retired U.S. diplomat who served in Burma from January 2015 to August 2019. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focusing on national security and foreign policy.