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Thursday, August 31, 2017

Funny money in Myanmar's fintech sector!

Thursdays 24,2017

A prominent mobile money company appears to be flaunting regulations aimed at providing consumer protections in the burgeoning sector.

IN LESS than a year, OK Dollar’s bright yellow billboards have become a feature of the Yangon streetscape, visible from flyovers and high rises, at street level and in traffic jams.
The company, a subsidiary of Internet Wallet, is winning many customers to its service, which enables them to deposit, withdraw, send and receive money using an online account. They can also use the wallet to pay for a range of goods and services.
OK Dollar is one of the new breed of “fintech” companies taking advantage of rapidly growing mobile phone and internet use to offer financial services. And OK Dollar appears to be leading the pack. According to business manager Ma Zin Mar Nu, the service has attracted about 100,000 users since it launched in June 2016.
There are two reasons for OK Dollar’s success. The first is convenience. OK Dollar is easy to use, but also has a wide network of partners with which users can pay for everything from phone top-up cards and bus tickets to wedding and holiday packages. The company has developed a platform that encourages its customers to not only bank with OK Dollar, but also use it regularly for purchases.
The other factor is that it’s cheap; money transfers, known as remittances, are free.
There’s only one problem. OK Dollar doesn’t have what’s known as a Mobile Financial Services licence – a licence for non-bank financial institutions to perform tasks such as accept deposits and transfer money using a mobile platform.
Instead, it appears to be operating in a grey area with little regulation. In an industry that is yet to find its feet, that has many concerned – and confused as to why the regulator, the Central Bank of Myanmar, is not taking a tougher line.

Which licence?

Central Bank rules divide mobile-based financial services into two categories: mobile banking and mobile financial services.
This reflects earlier differences over whether mobile financial services should be bank-led ­– that is, offered by or in conjunction with a traditional bank – or operator-led. Under the previous government, Myanmar initially opted for the first model, promulgating the Mobile Banking Directive in December 2013. It requires companies to partner with a licensed bank to offer financial services, and users need to open a bank account.
However, after the Financial Institutions Law was enacted in January 2016, the Central Bank issued a Regulation on Mobile Financial Services. The March 30, 2016, regulation was issued “to create an enabling regulatory environment for efficient and safe mobile financial services in Myanmar”, said the Central Bank. It allows mobile network operators and non-bank financial institutions to apply for a mobile financial service licence, but also sets stringent rules on their operations to protect customers and the integrity of the financial services sector.
Central Bank Deputy Governor U Set Aung said some foreign and domestic fintech service companies are working with banks and operate under the licence of the respective bank. This group includes TrueMoney, Myanmar Mobile Money, myKyat, Ongo and 663.
Only two operators have so far received an MFS licence. Wave Money – a joint venture among Telenor, First Myanmar Investment and Yoma Bank – was the first, in October 2016, and M-Pitesan – a partnership between Ooredoo and Co-operative Bank – was approved on July 26.
Although the regulation says a decision on applications should be made within 90 days, in practice the Central Bank is taking much longer to process them; Wave Money waited at least seven months, while the M-Pitesan application was processed in about four months.

The rise of OK Dollar

Despite its relative success – in the mobile financial services industry, only Wave Money has the same prominence in the market – OK Dollar’s origins remain something of a mystery.
It was born out of a payment system known as iPay that was launched about five years ago. Despite its name, it was relatively low-tech – prepaid cards that could be used to make payments, such as for bus travel – and never really took off.
OK Dollar’s owners keep a low profile and rarely speak to the media. The Directorate of Investment and Company Administration lists the company’s directors as Mr Deepak Kumar, also known as U Maung Maung Oo, and Mr Vinod Kumar, known as U Tun Tun Win. Their portfolio includes such companies as Consumer Goods Myanmar, Crown Beverage Cans, Kispa Nadi Express, Delicious Food, and Malikha Automobile. Consumer Goods Myanmar employs more than 5,500 people, says its website, and distributes brands including Super Coffeemix, Designer Water and One Tea.


OK Dollar, a subsidiary of Internet Wallet, emerged from a short-lived prepaid card system named iPay. (Theint Mon Soe aka J | Frontier)
Earlier this year, OK Dollar’s managers agreed to be interviewed by Frontier about the business.
General manager Ma Aye Aye Sint said OK Dollar’s parent company was licensed by the Central Bank to offer microfinance services. Internet Wallet received the MFI licence “a couple of years ago”, she said. It waited and prepared its IT infrastructure to offer mobile payment services, before launching last year.
She said that any money kept in an OK Dollar account was deposited at a licensed bank, such as CB, KBZ or AYA. OK Dollar users earn no interest on these deposits.
Aye Aye Sint insisted that the company was following “all rules and regulations”, including what are known as “know your customer” rules. The rules are designed to combat money laundering and other illegal activities, and require users to disclose personal information when they open an account.
She also claimed that OK Dollar does not offer remittance services because it does not have the appropriate licence from the Central Bank. It applied for a mobile financial services licence in 2016, she said, but has not yet received approval.
Immediately after the interview, Frontier opened an OK Dollar account, deposited K80,000 and transferred it to another person with an OK Dollar account. They then withdrew the K80,000.
When making this transfer with OK Dollar, Frontier was not asked to register a SIM card, or provide a national ID card or driver’s licence, as required under the Mobile Financial Services regulation for transfers above K50,000 in a single day.
If OK Dollar is enabling users to remit money without the necessary licence, it could constitute a serious breach of the Financial Institutions Law. The penalties for operating a non-bank financial institution without a licence include a prison term of two to five years, and a fine of up to K500 million.

Seeking answers

On the question of licensing, the terms and conditions on the OK Dollar website are confusing. They state that the services operates “under the certificate of authorization issued by” the Central Bank of Myanmar and Myanmar Micro Finance Institute.
They then state: “OK Dollar services are governed by: (a) the payment and settlement systems act, and regulations made thereunder, (b) issuance and operation of pre-paid payment in Myanmar (CBM) directions, ("CBM guidelines"), MMFI and other regulatory institute directions, and (c) instructions issued by the CBM & MMFI from time to time in respect of the foregoing.”
Aside from the lack of clarity in the language, Myanmar does not have a Payment and Settlement Systems Act (a law of that name was enacted in India in 2007).
On May 18, Frontier approached the regulatory authorities for clarification on OK Dollar’s licence. An official at the Central Bank said responses had been drafted to Frontier’s questions, but the deputy governor’s office had not given approval for them to be released.
Before he was replaced as deputy governor of the Central Bank last month, U Set Aung told Frontier on the sidelines of an event at the Thilawa Special Economic Zone that OK Dollar had applied for a licence before the Financial Institutions Law was enacted in January 2016. “I would say they [OK Dollar] are working to re-apply for a mobile financial services licence – that’s what I know,” he said.
He did not respond to multiple requests for further comment or clarification.


Myanmar's mobile money regulations enable fintech companies to partner with banks to offer services to customers. (Ann Wang | Frontier)
The Financial Regulatory Department within the Ministry of Finance and Planning was more forthcoming. Three weeks after we sent our questions, acting director general U Myint Oo responded that Internet Wallet had an MFI licence and in October 2014 was granted approval to use a mobile payment system with its clients. As of May this year, it had 524 MFI clients, ministry figures showed.
The licence cannot be used to transact with OK Dollar customers who are not clients of its MFI, however.
“The Microfinance Supervisory Committee allows Internet Wallet to lend money, collect loan repayments and accept deposits using its mobile application [OK Dollar] – nothing else,” Myint Oo said.
“Internet Wallet has been informed that if OK Dollar wants to carry out mobile financial services, it must apply to the Central Bank of Myanmar in accordance with the rules and regulations. It is known that it has applied for a Mobile Financial Services licence,” he said.
But Myint Oo also seemed uncomfortable with Frontier’s interest in OK Dollar. On one of the many times when we asked about when we could expect responses to our questions, he suggested that Frontier may be pushing an agenda. “Why are you only investigating OK Dollar?” he asked. “Who are you connected to?”
Myint Oo’s suspicions are not necessarily misplaced. There are individuals, organisations and companies deeply unhappy that the Central Bank seems to be letting OK Dollar play by a different set of rules.

‘This industry is my baby’

Daw Pwint Phyu Htun’s love affair with telecommunications began in fifth grade, when her Ayeyarwady Region village got its first phone. She vividly recalls the many times when she and her sisters put on their best clothes to go to the switchboard and call their grandparents.
After the national uprising in 1988, Pwint Phyu Htun followed her mother to a refugee camp in Thailand and eventually resettled in Seattle, on the west coast of the United States. She had a job selling long-distance phone plans in a mall. On her breaks she was allowed to use the phone for free, and the homesick 18-year-old would call her relatives on the other side of the world. Inspired by the power of telecommunications, she studied to become an engineer and worked in the US telecoms industry developing new products.
When Pwint Phyu Htun made an unexpected visit to Myanmar in 2011, she was shocked by the cost of phones and the internet – SIM cards were selling for nearly US$1,000 each. The next year she began lobbying the Ministry of Communications to upgrade services in rural areas, which she believed were likely to be ignored by private companies when they rolled out infrastructure and services. Recognising that rural areas needed more than cheap calls, she also began lobbying the President’s Office to introduce mobile financial services. She became a consultant to the World Bank and eventually helped draft the MFS regulation enacted in March 2016.
“This industry is very much like my baby. I want all of the companies in the sector to succeed. I want the entire industry to grow and serve the urban and rural population,” she told Frontier.


Daw Pwint Phyu Htun, a World Bank consultant who helped draft the Mobile Financial Services regulation. (Supplied)
Pwint Phyu Htun sees OK Dollar as a threat to everything she hopes mobile money can achieve in Myanmar. She describes it as a mobile-based hundi service – a reference to the informal, unregulated money transfer networks that have operated throughout Asia for centuries.
“When I saw the OK Dollar terms and conditions I was so shocked. They directly contradict almost every line in the CBM regulations – I know, because I drafted the MFS regulation,” she said.
“Consumer protection is a very important part of mobile financial services and I don’t see any consumer protection in the way that OK Dollar is providing services, starting with the fact that there is no Myanmar language equivalent of the terms and conditions when the customer is signing up, so he or she might not realise what they are even signing up for.
“I understand that the Central Bank is aware of the terms and conditions of OK Dollar which directly contradict the Central Bank’s regulations. I am not sure why OK Dollar is allowed to keep offering unauthorised mobile financial services.”
She says consumer awareness and trust are essential for the success of mobile financial services. One bad operator could set the industry back years, or cripple it completely.    
“We’re entrusting these MFS providers with the money of the poorest populations and they are responsible for it. For me, this is not a game of get rich quick.”
Pwint Phyu Htun has a natural ally in Wave Money, which has an interest in both minimising competition and ensuring rival operators don’t damage the market. Wave Money’s chief executive, Mr Brad Jones, declined to discuss OK Dollar specifically, but told Frontier it was “of great concern” if companies were apparently operating without licences.
“When mobile money is at such an early stage in Myanmar, it is critical that all service providers comply with regulations and international best practice so that the industry can grow in a safe and compliant way,” he said.
“Our customer base is largely unbanked, with low trust in financial institutions. Our services need to apply the highest standard compliance.”
Mr Rene Meza, the chief executive of Ooredoo Myanmar, said the MFS regulation set high standards for operators, particularly on consumer protection.
“We welcome that level of scrutiny,” he said. “At the same time, it’s crucial that all providers offering mobile financial services are held to the same standards. A level playing field is essential and this new industry in Myanmar cannot afford a possible loss of trust in the market if any operator is not upholding the same high standards.”
“A properly regulated mobile money sector in Myanmar will empower the people of Myanmar and will be a key contributor to sustainable economic growth in the country.”

An issue of trust

Mobile financial services have the potential to transform economic activity in Myanmar. Although only 10 percent of the population is thought to have a bank account, there are about 50 million active SIMs, of which almost 80 percent have a smartphone and more than half are using data.
It’s no surprise that the sector has attracted its share of attention from potential investors, particularly since the MFS regulation was promulgated.
But relatively few people are using the available services. At the Mobile Money and Agent Banking Summit in Yangon in February, Mr Jacques Voogt from Ooredoo Myanmar presented research findings on methods used to transfer money.
Out of 1,000 people, just 20 – or two percent – used mobile banking. A similar proportion was using mobile money. Another 180 people, or 18 percent, transferred money through friends, and 60, or six percent, transferred money through the highway bus network. Banks remained the most widely used method, at 940 of the 1,000 people surveyed.




A panel at a mobile money summit held earlier this year in Yangon. (Theint Mon Soe aka J | Frontier)
A major hurdle for mobile money operators is users’ lack of familiarity. Although most people use smartphones, they have acquired them relatively recently. Daw Win, 61, from Yangon, who bought her first smartphone a year ago, said, “I don’t believe this little phone can be used to transfer money. … I don’t dare to use it [for that] until now.”
Jones of Wave Money said such attitudes were natural given that mobile money was a new concept in Myanmar. “Like any new concept it takes time for the market to understand and use the product,” he said.
“We have invested heavily in educating customers about the benefits of mobile money, particularly on how fast and convenient it is.”
Another big obstacle for mobile money uptake is trust. Voogt’s presentation showed that just two percent of those surveyed trust mobile money and mobile banking, while 91 percent trust banks to remit money.
For some, this indicates a need to adopt a cautious approach, particularly in regulating players in the market. A bad experience for customers could deter them from mobile banking completely, and discourage others from even trying it – thus hindering the development of the banking and finance sector.

Avoiding a monopoly

Others, though, see OK Dollar as less a problem than a symptom of the real issue: the Central Bank’s regulation of the mobile financial services sector and, in particular, the bank’s reluctance to grant licences at all.
Frontier understands that many companies have sought an MFS licence since the March 2016 directive was enacted, but have been told not to bother because only applications from mobile phone operators were being considered.
“Powerful players could use their leverage” to get a licence, said one source, who asked not to be named due to the sensitivity of the issue. “Small players were just kept busy and were finally denied a licence.”
Mr Edwin Vanderbruggen, a partner at legal advisory firm, said that the MFS regulation was “created specifically with the telcos in mind”, but in the absence of a clear policy from the Central Bank it was difficult to know which other companies would be considered for licences. For example, the Central Bank might distinguish between Myanmar and foreign companies applying for licences.
“Maybe there simply is no policy yet,” Vanderbruggen said. “I think it is fair to say that the financial regulators, with their limited resources, struggle to cover the full width and breadth of their regulatory purview … [There are] so many legacy issues, so many new issues, with very few people to do it. It’s like pilots having to rebuild a rather old plane in mid-flight.”
The inability to get an MFS licence, though, has meant that those keen to enter the sector have instead been forced to partner with one of the domestic banks instead – generally a less attractive proposition than going it alone.
Sources said the management of the Central Bank was essentially strong-armed into enacting the MFS directive by international donors and that it never supported the concept of mobile banking that did not involve a licensed bank.
Mr Tim Scheffmann, the former chief executive of MyPay, said competition and innovation would be important for ensuring uptake of mobile financial services.
“The mobile money market in Myanmar is still at an early stage and more competition at this point of time would definitely help to provide a better service to Myanmar’s people,” he said.
However, Pwint Phyu Htun argues that as the industry develops it’s better to start with experienced, low-risk companies – and mobile operators fit the bill perfectly.
“[They] are experienced at setting up agent network. Mobile operators have a huge distribution network of 100,000 airtime sellers, small neighbourhood shops and big stores from around the country. These can be transformed to become human ATMs on every street corner offering cash-in/cash-out service to people of Myanmar,” she said.
One issue on which there seems to be agreement is the need for interoperability: the ability for users to send money between mobile financial services operators. If different platforms are unable to talk to each other, the usefulness of what they’re offering is limited. Imagine, for example, if your Ooredoo phone was unable to call a Telenor user, or you couldn’t transfer money from an account at KBZ Bank to one at CB Bank.
Scheffmann said it was essential for the development of the sector that the regulator enables interoperability between the different providers.
“Once you open up the market to interoperability, transactions increase,” Pwint Phyu Htun said. “In Myanmar, many people don’t understand that interoperability brings huge value. Openness is what’s going to get a lot more adoption.
“MFS can be a nation-building effort,” she said. “All of a sudden you’re going to be connecting the people in Tanintharyi, northern Shan, Rakhine – anywhere in the country … Telecoms and financial services are really a glue that brings all the people together.”

The fine print

Should OK Dollar be granted a licence, it will have to make some significant changes to the terms and conditions of service currently available only in English on its website.
The terms and conditions relieve OK Dollar of many of the responsibilities that the mobile financial services regulation imposes on licensed operations.
For example, OK Dollar reserves the right to discontinue its service, terminate accounts and retain the balance “if there are discrepancies or inaccuracies in any information or documentation provided to them”. Deposits must also be used within 185 days or “may be forfeited at our discretion”. Similarly, it “reserve[s] the right to suspend or discontinue the OK Dollar services at any time, for any reason or no reason”. However, under the MFS regulation, providers “shall, upon request by a MFS account holder, redeem, at any time and at par value, the money held in the MFS account”.
OK Dollar distances itself from the actions of its merchants and agents. The terms and conditions stipulate that users “assume any loss or liability” resulting from a reload or attempted reload, or withdrawal or attempted withdrawal. It also states that it is “not responsible for any acts or omissions of any third party including merchants, advance merchants, agents or any financial institutions” that use OK Dollar services.
But under section 9(a)(3) of the MFS regulation, a provider “is legally responsible for the actions of its agent to the extent that they relate to the conducting of MFS transactions and matters connected therewith”. Section 20, meanwhile, states that a provider “shall be responsible for monitoring and supervising the activities of their agents”.
The terms and conditions also exempt OK Dollar from liability for “any breach of privacy or unauthorized access to their customers personal information, transactions or any other customer information”. The MFS regulation states that each provider “and its agents and intermediaries if any, shall ensure privacy and confidentiality of customer information and data”.
The service also appears to breach transaction limits. Under the MFS, individual account holders can deposit up to K1 million and transfer up to K200,000 a day and K5 million a month.
However, OK Dollar allows individual customers to transfer up to K500,000 in a single transaction, and K1 million over three transactions.
The mobile financial services regulation also requires all customer deposits to be held at an approved commercial bank. Any interest derived from these deposits “shall be declared to the Central Bank on an annual basis and be utilised for the benefit of customers as approved by the Central Bank”.
TOP PHOTO: Theint Mon Soe aka J | Frontier
Ref: https://frontiermyanmar.net/en/funny-money-in-myanmars-fintech-sector

Final Report of the Advisory Commission on Rakhine State

Rohingya militant group warns of 'war' against Myanmar Government; thousands flee clashes

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A militant group has warned of a "war" against the Myanmar Government, taking responsibility for attacks on police stations that have left more than 100 people dead.

On Friday, militants from the Arakan Rohingya Salvation Army (ARSA), which claims to be fighting for the rights of Rohingya people — a Muslim minority long-persecuted by Myanmar's Buddhist majority — attacked about 25 police posts in the country's west.

A new video posted on social media showed the group's leader Abu Ammar Jununi flanked by two masked men with assault rifles and saying the recent violence was in response to harassment from Myanmar's security forces and blockades of Rohingya villages.

He called on international aid groups to stay and help, but the United Nations is evacuating all non-essential staff for the region.
On Monday, Myanmar security forces reportedly intensified operations against the Rohingya insurgents, according to local authorities, in what is being treated as the worst violence involving Myanmar's Muslim minority in five years.

The fighting has killed 104 people and led to the flight of large numbers of Muslim Rohingya and Buddhist civilians from the northern part of Rakhine state.

The violence marks a dramatic escalation of a conflict that has simmered in the region since October, when a similar but much smaller series of Rohingya attacks on security posts prompted a brutal military response dogged by allegations of rights abuses.

The treatment of about 1.1 million Muslim Rohingya in mainly Buddhist Myanmar has emerged as the biggest challenge for national leader Aung San Suu Kyi, who has condemned the attacks and commended the security forces.

The Nobel peace laureate has been accused by some Western critics of not speaking out on behalf of the long-persecuted minority, and of defending the army's sweep after the October attacks.

'If ARSA is active, the situation will be tense': police

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The Rohingya are denied citizenship in Myanmar and classified as illegal immigrants, despite claiming roots there that go back centuries, with communities marginalised and occasionally subjected to communal violence.
"Now the situation is not good," police officer Tun Hlaing said, referring to the Rohingya insurgents.
"Everything depends on them — if they're active, the situation will be tense."
Rohingya villagers make up the majority in the area.

The latest unrest has again exposed the dark side of Myanmar's historic opening: an unleashing of ethnic hatred that was suppressed during 49 years of strict military rule that ended when the generals stepped back from direct rule in 2011.
The following year, hundreds of people, most of them Rohingya, were killed in communal clashes in Rakhine state and about 140,000 people were displaced.



A commentary by Zachary Abuza

In this screenshot from a video posted on YouTube, a man identifying himself as Ataullah Abu Jununi (center), commander of the Arakan Rohingya Salvation Army (ARSA), delivers a statement to the Myanmar government and ethnic groups in Rakhine state, Aug. 28, 2017.
In this screenshot from a video posted on YouTube, a man identifying himself as Ataullah Abu Jununi (center), commander of the Arakan Rohingya Salvation Army (ARSA), delivers a statement to the Myanmar government and ethnic groups in Rakhine state, Aug. 28, 2017.

The Rohingya insurgency is starting to gain traction.
Pogroms and low-level anti-Muslim violence erupted in 2012 during Myanmar’s democratic transition. In large part this was allowed to fester because the international community was trying to support the new democratic government of Aung San Suu Kyi.
It was no surprise that after years of systematic human rights abuses, including the denial of citizenship rights or any other legal protections, and with the government limiting the ability of Rohingya people to work or to have food and medicine coming in, that a full-on insurgency broke out.
The insurgency was nascent for much of 2016 and the first half of 2017. It began as Harakah al-Yaqin (HaY), led by Attullah Abu Ammar Jununi, who was born in Pakistan and raised in Saudi Arabia before he returned home to lead the struggle.
The group publicly refers to itself as the Arakan Rohingya Salvation Army (ARSA). Low-level attacks began to occur on a more sustained basis in 2016. Much of the violence in Rakhine state was perpetrated by government-backed vigilantes, as state security forces did little to curtail them.
But ARSA was clearly responsible for some of the violence. And, very clearly, it seemed to provoke heavy-handed responses. In October 2016, ARSA, armed with machetes and other primitive weapons, staged attacks on police posts.
The government responded with pogroms, including attacks on civilians and arson attacks in Rohingya villages. The United Nations estimates violence in October and November 2016 led to about 87,000 Rohingya refugees to cross into southeastern Bangladesh, where about 400,000 had settled previously.
Earlier this month, two days after U.N. Special Representative Kofi Annan issued his report on the Myanmar government’s alleged mishandling of the 11 million Rohingya, about 150 ARSA militants attacked 24 to 30 police outposts in Rakhine state. ARSA claims the attacks were pre-emptive and done in self-defense.
Those attacks were a tactical failure: about 77 militants were killed, compared to only a dozen police, in the fighting. But the attacks were not meant to be tactical successes. They were meant to be a strategic victory.
ARSA knew all too well that the Myanmar military (Tatmadaw) could respond only one way: with an extremely heavy-handed “clearance operation” and total disregard for human rights.  By Aug. 28, the death toll reached at least 104.
In the days after, thousands of refugees crossed into Bangladesh, with an additional 20,000 stuck in no man’s land along the border. Earlier, about 6,000 refugees, mainly women and children came under fire from the Tatmadaw as they tried to cross the frontier.
Human rights monitors witnessed Rohingya villages being set on fire. Human Rights Watch reported that in the four days following the Aug. 25 attacks, the number of villages burned down was significantly larger than the number burned last October and November.
‘Do they have any other choice?’
The fear is that the government’s abusive policies will further recruitment into ARSA. This is the self-fulfilling prophecy of extremists.
ARSA claims that it was founded three years ago. Because it was so small and extreme, few supported it. One would have to be mad to be willing to support a small poorly funded group against the Myanmar military, currently the world’s 11th largest with a long track record of repression.
But with no legal recourse available, many are compelled to join the insurgents. As one Rohingya village leader said about 30 young men had just volunteered for ARSA.
“Do they have any other choice? They chose to fight and die rather than be slaughtered like sheep.”
And in the squalid refugee camps in Bangladesh, joining ARSA is now becoming “farj” – a religious obligation.
Videos that emerged recently on pro-ARSA websites and social media show what appear to be evidence of extremely brutal attacks by government forces and paramilitaries.
The government of Nobel Prize winner Aung San Suu Kyi has officially labeled ARSA as “extremist Bengali terrorists.” Some government officials have accused ARSA of using violence to establish an “Islamic State.” Clearly, the group’s origins in Saudi Arabia, and the Arabic name, prompted it to rebrand itself ARSA in 2017.
Fighting ‘dehumanized oppression’
In an Aug. 18 video statement, Ataullah Abu Ammar Jununi, made it clear that ARSA was established only in response to government and paramilitary abuses against the Rohingya community.
“Our primary objective under ARSA is to liberate our people from dehumanized oppression perpetrated by all successive Burmese regimes,” he said.
He went out of his way to state the group was independent, with no ties to any international terrorist organization. He also stated ARSA received no funding from external organizations.
He called on the Rohingya diaspora to support ARSA, but to “obey and abide by the laws of the land” of their host countries. HaY was founded by a group of 20 Rohingya emigres in the Middle East. It seems highly unlikely they are not tapping into the larger diaspora network and financial resources from overseas.
In the 19-minute video that has since been removed, the ARSA leader flanked by six masked and armed men concluded his statement with an implicit threat to Rakhine Buddhists. He warned that there would be repercussions if they engaged in vigilantism or supported the Tatmadaw.
While he denied any links to Islamic State (IS) extremist group (though not named), and he called on fellow Rohingya to not be seduced into joining terrorist organizations, the fact is we do not know if there are any material connections. Clearly, he wants HaY/ARSA to be the vanguard organization.
And it is very clear that he has a nationalist, not a transnational agenda.
Links to IS?
But up against a wall, could that change? Or do covert ties already exist?
A more pressing concern is that whether ARSA asks for support from external organizations or not, it gets it. The plight of the Rohingya is big news in the Muslim world, and their cause is being championed by politicians, the middle class and hardline Islamists.
Indonesian authorities have broken up two terrorist plots by pro-IS militants to blow up the Myanmar embassy in Jakarta, while IS has begun to refer to the Rohingya in its (albeit diminished) media. Across the region, there also has been a surge in arrests of Bangladeshi nationals in connection with pro-IS groups.
In the Aug. 18 video, Abu Ammar Jununi went out of his way to praise the support of host countries, in particular Bangladesh. He stated that in pursuit of “our legitimate self defense,” ARSA would “respect Bangladesh’s interests.”
But, of course, this is fanciful. Bangladesh’s patience with the influx of refugees, as it is beset by its own poverty and natural disaster, is running out.
What probably took ARSA by surprise, though, was the speed in which the Bangladesh government publicly offered to engage in joint military operations with the Myanmar military. Without de facto support from Bangladesh, ARSA may be compelled to look to assistance from sub-state actors.
Provoking reprisals
My sense is that, like the Patani Malay militants in southern Thailand, ARSA seeks to remain focused on targeting security forces or Buddhist vigilante organizations, in order to provoke reprisal attacks.
That would allow them to maintain the mantle of “freedom fighter” and not alienate key backers in the international community. But if an attack was done in the name of the Rohingya, with or without ARSA’s knowledge, approval or support, the group would invariably be tied to terrorism.
Even if that does not happen, government operations against ARSA and the Rohingya population are only expected to escalate. Buddhist nationalists have been enraged by the attacks, and demanded that the security forces take further action. In firebrand sermons, hardline Buddhist clergy, such as Ashin Wirathu, have called on Buddhists to defend themselves.
The Myanmar military has every reason to comply. Meanwhile, the government of Suu Kyi, whether for retail political reasons or simply an unwillingness to stand up to the military, has signed off on such attacks. That will only drive more men into ARSA’s ranks, propel the organization, and create a downward spiral of violence and revenge attacks.
In an Aug. 26 interview, an ARSA representative told the Asia Times that until Rohingya demands for the restoration of full citizenship rights within Myanmar were met, there would be “open war” and “continued [armed] resistance.”
Neither the Myanmar government nor military is likely to accede to that demand. And with no political solution in the offing, there can only be violence.
“They grew up witnessing humiliation and persecution, so the current consensus among the Rohingya community is unless you fight, they’re not going to give us any of our rights,” a Rohingya activist who lives in Bangladesh told Agence France-Presse.
Zachary Abuza is a professor at the National War College in Washington and the author of “Forging Peace in Southeast Asia: Insurgencies, Peace Processes, and Reconciliation.” The views expressed here are his own and do not reflect the position of the U.S. Department of Defense or the National War College. He wrote this commentary for BenarNews, an RFA-affilated on-line news service.


Mon, 08/28/2017 - 09:46 -- moiAdmin
August 28, 2017
The Republic of the Union of Myanmar
Anti-terrorism Central Committee
Order No. 1/2017
1379 MY 4 Waxing Day of Tawthalin
(25 August 2017)

Following is the full text of the official translation of the announcement which declares the Arakan Rohingya Salvation Army (ARSA) a terrorist organization. An unofficial translation of the announcement was covered on the front page of the 26-8-2017 issue of the Global New Light of Myanmar.
The Anti-Terrorism Central Committee has issued this Order with the approval of the Union Government in exercise of the Anti-Terrorism law Section-72 Sub-section (B).
1. The Government of the Republic of the Union of Myanmar has formed various committees to undertake the tasks to ensure security, stability and peace, rule of law and regional development in Rakhine State. It has also carried out regional security and development tasks and provided health care services fulfilling the requirements of the State.
2. On 9 October 2016, the terrorists launched a surprise attack on the No.1 Border Guard Police Command Headquarters (Kyikanpyin), police outpost at Kotankauk and the Ngakhuya local administrative office. In that incident, 9 policemen were killed and 48 assorted arms, 6624 bullets, 47 bayonets, and 164 bullet cartridges seized by the terrorists. Investigation reveals that terrorists had infiltrated the area where the majority of the residents were Muslims and organized violent attacks to escalate terrorist acts in that area.
3. In response to the situation, Border Guard Police Command No.1 reinforced troops and has been collaborating with the Tatmadaw to provide security in the region. The multiple killings, threats and propaganda have adversely affected the process for regional peace and rule of law. Clearance operations in May Yu mountain range have also uncovered multiple terrorist training camps.
4. On 25 August, extremist terrorist groups again launched sneak attacks on 30 police outposts in Maungtaw, Buthidaung and Yathedaung townships as well as against the Regiment Headquarters in Taungthazar village. 10 police officers, 1 soldier and 1 immigration officer were killed. 9 security officers and a number of civilians were wounded. 6 firearms were lost.
5. The Government of the Republic of the Union of Myanmar strongly condemns these terrorist acts and will do all in its power to prevent them from occurring again. It will strive to bring the perpetrators to justice.
6. The Union Government hereby declares that the Arakan Rohingya Salvation Army (ARSA) and its supporters, responsible for the acts of terrorism, as a terrorist group in accordance with the Counter-Terrorism Law Section 6, Sub-Section 5.

Arakan Rohingya Salvation Army

From Wikipedia, the free encyclopedia
Arakan Rohingya Salvation Army
Participant in the Rohingya insurgency in Western Myanmar
Logo of the Arakan Rohingya Salvation Army.png
Logo of the Arakan Rohingya Salvation Army
Active October 2016 – present
Ideology Rohingya nationalism
Leaders Ata Ullah[1][2]
Area of operations Northern Rakhine State,
Bangladesh-Myanmar border
Size ~500[3]
Opponents  Myanmar
Battles and wars Rohingya insurgency in Western Myanmar
Designated as a terrorist organisation by

The Arakan Rohingya Salvation Army (Burmese: ထာα€›်α€€α€”်α€›ိုα€Ÿα€„်ဂျာ α€€α€š်တင်α€›ေးတပ်မတော်; abbreviated ARSA),[5][6][7] also known by its former name Harakah al-Yaqin[8][9] and by its former English name the Faith Movement,[8] is a Rohingya insurgent group active in the jungles of northern Rakhine State, Myanmar. It is led by Ata Ullah, a Rohingya man who was born in Karachi, Pakistan, and grew up in Mecca, Saudi Arabia.[1][2]
According to the lead interrogator of ARSA suspects jailed in Sittwe, Police Captain Yan Naing Latt, the group's goal is to create a "democratic Muslim state for the Rohingya". Although there is no firm evidence linking the ARSA to foreign Islamist groups, the Burmese government suspects that the group is involved with and subsidized by foreign Islamists.[10] The Burmese government has also accused the ARSA of murdering 34 to 44 civilians and kidnapping 22 others in reprisal attacks against those the ARSA have perceived as government collaborators.[11][12] These claims have been denied by the ARSA, who have stated that they "have no links to terrorist groups or foreign Islamists" and that their "only target is the oppressive Burmese regime".[5]
On 25 August 2017, the Central Committee for Counter Terrorism of Myanmar declared the ARSA a terrorist group in accordance with the country's counter terrorism law.[13] However on 28 August the group released a statement, calling government allegations against it as "baseless" and stating that its main purpose is to defend Rohingyas' rights.[14]


According to Rohingya locals and Burmese security officials, the group began approaching Rohingya men from various villages for recruitment six months prior to their first attack in October, and trained them across the border in Bangladesh.[10]
In October 2016, the group, calling itself Harakah al-Yaqin (or the Faith Movement in English), claimed responsibility for attacks on Burmese border posts along the Bangladesh-Myanmar border, which left 9 border officers and 4 soldiers dead.[15][16]
On 15 November 2016, the Tatmadaw (Myanmar Armed Forces) announced that a total of 69 insurgents had been killed by security forces in the recent fighting.[17]
On 14 December 2016, the International Crisis Group (ICG) reported that in interviews, the leaders of the group claimed to have links to private individuals in Saudi Arabia and Pakistan. The ICG also reported that Rohingya villagers had been "secretly trained" by Afghan and Pakistani fighters.[1][18]
On 22 June 2017, Burmese state media reported that three insurgents had been killed by security forces in a raid on an insurgent camp supposedly belonging to the ARSA, as part of a two-day "area clearance operation" by the government. Authorities confiscated gunpowder, ski masks and wooden rifles suspected to have been used for training.[11][19]
On 25 August 2017, the group claimed responsibility for coordinated attacks on police posts and an attempted raid on an army base. The government announced a death toll of 77 Rohingya insurgents and 12 security forces in northern Maungdaw following the attacks. The government stated that they had attacked a police station in the Maungdaw District with a handmade bomb alongside the coordinated attacks on several police posts. The ARSA claimed they were taking "defensive actions" in 25 different locations and accused government soldiers of raping and killing civilians. The group also claimed that Rathedaung had been under a blockade for more than two weeks, starving the Rohingya, and that the government forces were preparing to do the same in Maungdaw.[20]
On 29 August 2017, the Tatmadaw held a press conference at the Bayintnaung Guest House in Naypyidaw, the capital of Myanmar. In attendance were multiple military officials and representatives, as well as military attachΓ©s from foreign embassies and journalists. Major General Aung Ye Win, the director of the Department of Public Relations and Psychological Warfare, clarified the government's stance on the Rohingya and their historical background (namely referring to them as Bengalis), and mentioned the history of violence between the Buddhist Rakhine and Muslim Rohingya communities. Major General Soe Naing Oo later discussed the recent attacks by the ARSA and was followed by clarification from Major General Than Htut Thein regarding the Tatmadaw's conclusion on the situation. The military attachΓ© from Bangladesh also expressed their desire to cooperate with their Burmese counterparts to secure the border.[21]

Press statements

On 17 October 2016, the group (under the name Harakah al-Yaqin) released a press statement online. In a roughly five minute video, the group's leader, Ata Ullah, flanked by armed fighters reads from a sheet of paper:
Six other videos were released online by the group between 10 and 27 October 2016.[22]
On 29 March 2017, the group released a press statement under a new name, the Arakan Rohingya Salvation Army (ARSA). The document included demands made to the Burmese government.[23]

Ref: https://en.wikipedia.org/wiki/Arakan_Rohingya_Salvation_Army

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