A Grand Bargain: What It Is and Why It Is Needed

Abstract

Achieving sustainable peace in Myanmar requires a comprehensive effort which involves real negotiations between the army, government and remaining non-signatory armed ethnic groups. This paper makes the case that the resulting Grand Bargain will have to involve some degree of limited autonomy of states and natural resource revenue sharing. It will provide a basis for compensating armed groups on both sides for lost revenue, bringing revenues to Kachin state for development, and facilitating the NLD government’s investment in development spending for the rest of Myanmar in line with its priorities. Given the sizeable estimated total value of jade sales and the fact that, in the author’s estimate, official government collections for jade now amount to only 3% of sales, the paper examines possible modalities for taxing jade at a reasonable level and sharing these revenues in ways that makes durable progress possible. Several other key challenges to national unity are briefly addressed as well.