MYAWADDY, Myanmar - Myawaddy, a critical trading post in Myanmar that rebel forces seized from the ruling junta last week, offers a glimpse of dynamics playing out across the Southeast Asian country as its vaunted military reels from battlefield losses.
At the border town's outskirts, the site of the most intense fighting, abandoned homes sat next to buildings pockmarked with bullet holes, gas stations damaged by blasts and structures flattened by airstrikes, Reuters reporters saw on a visit this week.
Rebels who fought against junta troops in Myawaddy described a demoralised military that was unwilling to hold its ground.
"We managed to seize three bases and control the area in a very short period of time," said Saw Kaw, a commander of a rebel unit involved in the battle for Myawaddy. "Then, they fled."
Guards from ethnic militias until recently loyal to the military administration roamed streets in the town - normally a conduit for over US$1 billion (S$1.36 billion) of annual border trade with nearby Thailand. Those fighters stood aside when forces led by the Karen National Union (KNU) laid siege in early April.
Reuters gained rare access to rebel-held territory on April 15 and interviewed seven resistance officials for this story, alongside three Thai officials with detailed knowledge of the conflict and four security analysts.
They provided insight into the delicate diplomacy between armed groups with longstanding rivalries as they seek to hold key population centres and keep the junta they want to topple on the backfoot.
The fall of Myawaddy means that Myanmar's two most important land border crossings are in resistance hands, after the rebels last year claimed control of Muse, near the Chinese border.
Rebel successes have now cut off the cash-strapped junta from almost all the country's major land borders, with the economy in free-fall and poverty doubling since 2017, according to UN data.
The Thailand-based Institute for Strategy and Policy-Myanmar (ISP) think-tank said in an estimate after Myawaddy's fall that the junta has been deprived of 60 per cent of land-based customs revenue.
It leaves the junta, which has failed to repel any major rebel offensive since October, in its weakest position since its 2021 coup against Aung San Suu Kyi's elected civilian government, according to analysts.
Neighbours such as Thailand, who were p...