A Fatal Distraction from Federalism - Religious Conflict in Rakhine

The purpose of this paper is to provide an assessment of the current socioeconomic conditions in Myanmar's Rahkine State and to evaluate the prospects of accelerating economic development as a way of reducing tensions between Muslim and Buddhist groups. There has been significant conflict in recent years which has continued sporadically into 2014, resulting in severe hardship for approximately 140,000 Muslim refugees and significant damage to the local economy. The tensions also weaken the country by presenting a challenge to a potential framework for federalism by undermining stability and thus the confidence of potential investors. They also risk drawing in Muslim extremists outside the country. Drawing on historical information and on conversations conducted with a variety of Rakhine (Buddhist) business, civil society, political and government people, this study reviews the demographic trends affecting the state to separate fact from fiction and sheds light on the impact of current policies on the state's potential for economic development. Areas for working toward reconciliation are explored, and options such as promoting shared stakes in local resources and governance are discussed.