Photo – AFP
“The Analysis of Conflict Economy in Karen State” was published by the Institute for Strategy and Policy – Myanmar (ISP-Myanmar) on June 5, 2026. This report covers the period from June 2025, to January 2026. This research is part of the ongoing research conducted by the ISP-Myanmar’s Political and Conflcit Economy Studies.
▪️Executive Summary
Tax revenue generated from trade routes serves as the primary economic incentive driving the Karen State’s conflict economy. Currently, the Myanmar Armed Forces (MAF) and Karen armed groups, whose interest intertwined with the MAF, continue to control the major trade routes and critical infrastructures that hold the greatest geographical, economic, and security importance in the region. In the mining sector, the MAF and the Karen National Liberation Army (KNU/KNLA) currently share equal control of the region’s strategic antimony mines. Despite Thailand and Karen State sharing deep economic, geographical, and multifaceted interdependencies, Thailand’s government maintains limited leverage over Karen armed groups, dissimilar to the leverage the Chinese government wields over armed organizations along the Sino-Myanmar border. Consequently, Thailand’s capacity to facilitate or guarantee conflict mitigation among these armed actors remains weak. Additionally, informal resource trading and transnational organized crimes— such as online scam (Kyar Phyant) operations—continue to financially sustain and facilitate the growth of the various fragmented armed factions operating in Karen State. The ongoing conflict in Karen State are fundamentally driven by the goal to control these economically vital territories. Currently, the conflict situation has reached a stalemate level where neither side can win or lose. However, each armed group will strive to strengthen their standing, signaling that the region is heading toward a protracted conflict.
The Analysis of Conflict Economy in Karen State