As the Arakan Army Tightens Its Grip on Rakhine's Coast, the Region Pays the Price in Drugs, Displacement and Uncertainty

A new analysis by Singapore's RSIS think tank warns that intensifying fighting between the Arakan Army and Myanmar's military along Rakhine State's coastline is creating dangerous ripple effects across Southeast Asia, from drug trafficking to Rohingya sea crossings, while raising hard questions about ASEAN's push to re-engage with Myanmar's military-backed government.

Photo Source: AFP

SINGAPORE: Something important is happening along the coastline of Myanmar's Rakhine State, and most of the world is not paying attention.

Since August 2026, fighting between the Arakan Army and Myanmar's military has intensified sharply along Rakhine's western coast. The Arakan Army already controls most of Rakhine State's territory. What remains in the junta's hands is a shrinking collection of coastal positions, held onto with increasing desperation by sea. The military reportedly moved around 1,000 additional troops into Sittwe by landing craft in August. It has strengthened its naval presence near the Shwe Mingan naval base. In Kyaukphyu, fighting has escalated since August, including near the Taung Maw Gyi naval station. By the final week of that month, Myanmar military vessels were conducting intensified patrols along a wide stretch of the Rakhine coast.

That is what a losing fight looks like when you still have ships.

The Arakan Army has already sunk Myanmar Navy vessels, captured coastal military infrastructure and seized the Central Naval Diving and Salvage Depot at Maung Shwe Lay. As the military loses overland access across most of Rakhine, its ability to hold Sittwe and Kyaukphyu depends almost entirely on the sea.

Why Kyaukphyu Matters Beyond Myanmar

Kyaukphyu is not just another port city caught in a civil war. It is the coastal terminus of oil and gas pipelines connecting Myanmar to China's Yunnan Province. Prolonged fighting in and around Kyaukphyu has direct consequences for energy security in southwest China, and for the wider geopolitical calculations of Beijing, which has long-standing economic interests in both the Myanmar military and the Arakan Army.

If the Arakan Army eventually consolidates control over more of Rakhine's western coastline, it would effectively control the infrastructure through which a significant portion of China's overland energy access flows. That is a reality no one in the region has fully reckoned with yet.

The Drug Problem No One Talks About Enough

Here is something that rarely makes headlines but should: Myanmar is already the principal source of methamphetamine in Southeast Asia, and Rakhine State sits at the centre of a widening illicit coastal economy.

The United Nations Office on Drugs and Crime has documented maritime drug trafficking routes carrying Myanmar-origin methamphetamine to markets across Malaysia, Indonesia and the Philippines. Recent reporting from Bangladesh suggests that yaba and crystal meth are moving through maritime networks across the Bay of Bengal, flowing out of Rakhine's increasingly ungoverned coastline.

As territorial control along the Rakhine coast fractures between the military and the Arakan Army, the ability to monitor and interdict these trafficking networks weakens accordingly. Myanmar's military has also accused the Arakan Army of involvement in narcotics trafficking, allegedly using drug proceeds to purchase arms and ammunition. Those allegations remain difficult to verify independently, but the links between conflict economies, arms networks and drug flows in Myanmar are well documented and long-standing.

The harder the coast becomes to govern, the easier it becomes to use.

2025: The Deadliest Year on Record for Rohingya at Sea

While strategic analysts debate maritime balance and drug flows, thousands of Rohingya are making a different and far more desperate calculation.

More than 6,500 Rohingya, primarily from Myanmar and Bangladesh, attempted sea crossings in 2025, heading for Malaysia and Indonesia. Nearly 900 were reported dead or missing on those journeys, making 2025 the deadliest year on record for Rohingya maritime movements. In 2026, thousands more have attempted the same crossings.

Human Rights Watch has reported that Rohingya civilians in Rakhine are being caught in combat from multiple directions, with ARSA and the Rohingya Solidarity Organisation fighting alongside the Myanmar military against the Arakan Army, forcing civilians into conflict they have no part in choosing. The UN's human rights office has documented abuses by the Arakan Army against Rohingya, including arbitrary detention, forced labour and severe restrictions on movement.

In short, the Rohingya have nowhere safe to be in Rakhine. And the sea, for all its dangers, keeps looking like the only way out.

Departures are also happening from Bangladesh, where more than one million Rohingya refugees live in the camps of Cox's Bazar with restricted movement, no legal right to work and limited pathways to safety anywhere. As the RSIS analysis notes, even the best maritime enforcement effort cannot address the underlying conditions driving people onto boats. Until those conditions change, the crossings will continue.

For receiving countries like Malaysia and Indonesia, repeated irregular arrivals have generated not only humanitarian challenges but growing domestic political pressure and public hostility. Malaysia has this year deported nearly 1,500 refugees to Myanmar despite warnings from UNHCR and rights groups about ongoing violence in Rakhine. There has also been growing concern in Malaysia about Rohingya-linked criminal networks, adding a security dimension to what is fundamentally a humanitarian crisis.

ASEAN Talks Re-Engagement, But the Math Is Hard

All of this is unfolding at the same moment that some ASEAN members are pushing for renewed engagement with Myanmar's military-backed government, which came to power following the country's widely condemned 2025-2026 election process.

At the ASEAN Foreign Ministers' Retreat in January 2026, Thailand called for the grouping to adjust its approach toward Myanmar while maintaining the Five-Point Consensus as a framework. In July, Myanmar's Foreign Minister Tin Maung Swe met ASEAN foreign ministers informally in Bangkok for what Thailand described as a process of "calibrated re-engagement." Singapore held separate meetings with Myanmar stakeholders as part of its preparations for its incoming ASEAN Chair role.

Myanmar's President Min Aung Hlaing has been on his own diplomatic offensive, visiting Laos, Thailand, Vietnam and Malaysia, where he met Prime Minister Anwar Ibrahim to discuss bilateral ties and the repatriation of Myanmar nationals.

The argument for engagement is not without logic. More regular contact with Naypyidaw could improve information access and create channels to raise regional concerns about drug trafficking, irregular migration and maritime security. The Five-Point Consensus framework also technically allows engagement with parties beyond just the military government.

But there is a fundamental problem with the re-engagement calculation, and the RSIS analysis puts it plainly: Myanmar's military has limited and shrinking control over Rakhine's coastline. Any agreements on maritime security cooperation signed with Naypyidaw may simply not be enforceable in the territory where the problems are actually happening. Cooperation with a government that cannot govern its own coast is cooperation in name only.

A Region at a Crossroads

The fighting in Rakhine State is not a distant internal conflict. It is generating consequences that travel by sea and reach the shores of Malaysia, Indonesia, Thailand and Bangladesh on a daily basis.

Those consequences include drugs, displacement and the deaths of people who had no good options left. They include security pressures on governments already stretched thin, and political pressures on leaders navigating domestic hostility toward refugees they increasingly cannot accommodate.

For ASEAN, the question of how to engage Myanmar is ultimately inseparable from the question of what is actually happening on the ground in Rakhine. Any regional strategy that does not account for the Arakan Army's growing coastal control, the fragmentation of authority along Myanmar's western coast and the humanitarian catastrophe that continues to unfold there is a strategy built on assumptions that the map no longer supports.

The coast of Rakhine is contested, ungoverned and consequential. It deserves more attention than it is getting.

Analysis based on RSIS Commentary CO26220, "Rakhine's Contested Coast: Implications for ASEAN's Myanmar Re-Engagement," by Chong De Xian, Associate Research Fellow, Maritime Security Programme, S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore, published October 20, 2026.