"Poor decision-making and an inflexible strategy are compounding the junta’s losses and driving discontent among army commanders. On 5 January, the Myanmar National Democratic Alliance Army (MNDAA) accepted the conditional surrender of the Laukkaing Regional Operations Command, giving it control of Laukkaing city, the prime objective of the joint anti-junta Operation 1027. One hundred kilometres to the west, the Ta’ang National Liberation Army (TNLA) has expelled junta forces from large towns and strategic roadways and gained near-total control of its primary area of operation. On the other side of the country, in Rakhine State, the Arakan Army’s (AA) campaign has accelerated in recent weeks, resulting in the rapid retreat of junta forces. And yet the impact of Operation 1027 is not confined to the battlefield, with the junta’s failure to stem its losses stirring deep dissatisfaction among its ranks according to sources close to the army and regime. After spending three years on the sidelines, the Brotherhood Alliance, comprising the MNDAA, TNLA and AA, entered the post-coup war by launching Operation 1027 along the border with China in late October 2023. The blitz has expelled the regime from swathes of territory in the country’s north and inspired fresh attacks by opposition forces elsewhere. This month’s conflict update explores recent battlefield developments and analyses what went wrong for the regime’s forces in northern Shan State, where a new ceasefire came into effect on 11 January.....Following two rounds of talks brokered by Beijing, junta forces ceded control of Laukkaing city to the MNDAA on 5 January. About 2,400 personnel, including six brigadier generals, were granted safe passage as a part of a negotiated withdrawal.....Junta soldiers managed to disable or destroy some of their larger weapon systems before leaving, but were required to surrender their small arms.....The Myanmar armed forces expelled the MNDAA from Laukkaing in 2009, so the city’s capture marks the end of a nearly 15-year campaign to ‘return home’. The MNDAA is now effectively in control of the Kokang Self-Administered Zone (SAZ). In December 2023, Chinese officials began pressuring the Brotherhood Alliance to de-escalate and negotiate with the junta. The MNDAA mostly complied, having already won itself a favourable bargaining position. The TNLA’s progress had been more limited. The group responded to Chinese pressure by instead accelerating assaults on junta bases and towns. The MNDAA assisted its partner by sending units to fight in TNLA uniforms.....The TNLA is now effectively in control of the Palaung SAZ, the heartland of the Ta’ang people. It also secured a land bridge to the Myanmar–China border by capturing Namhkam Town on 18 December. The TNLA has made inroads outside the SAZ as well. Ta’ang fighters captured Namtu Town on 28 December, and occupied the town of Kutkai after the junta withdrew on 7 January.....TNLA fighters also captured Monglon and a small base outside Mongmit Town. The bases lie near or along a key weapons-smuggling route that links Shan to both Kachin and Myanmar’s interior.....Though the junta retains an isolated presence at Muse, the country’s largest border gate, it has lost control of the two most important roads linking Myanmar to China. Many of the units forced out by the Brotherhood Alliance have regrouped in Lashio......After a slow start, the AA’s offensive in Rakhine and southern Chin states began to accelerate in late December.....The AA has overrun more than 20 outposts across Paletwa Township, Chin State. On 15 January, AA fighters captured Paletwa Town.....Though some regime outposts remain, the AA is now the dominant force in Paletwa. Control here opens access to the Indian and Bangladeshi borders, and an alternative supply route via Matupi, Chin State.....The fighting between the AA and the regime has implications for regional development. A key segment of India’s Kaladan Multi-Modal Transit Transport Project, a US$500-million effort to link Kolkata with Mizoram, runs through Paletwa.....On 7 and 8 January, the AA fired rockets at the Dhanyawadi naval base on Ramree island, just ten kms from the terminus of the Sino-Myanmar pipeline. China plans to build a Special Economic Zone and deep-sea port on the island.....Elsewhere in the country, opposition forces continue to experience advances and setbacks.....Inspired by Operation 1027, a coalition of Karenni resistance groups began a large-scale assault on Loikaw, the Kayah State capital, on 11 November. Despite the initial capture of about half the city, the offensive has stalled.....But the operation forced the regime to pull its forces from other positions around the state, allowing the Karenni resistance to consolidate control across remote areas and several small towns.....In the southeast, an opposition coalition involving elements of the Karen National Union (KNU) and People’s Defense Forces (PDF) tied to the National Unity Government (NUG) has not recreated the territorial successes seen elsewhere.....An early December assault on the town of Kawkareik failed, but the fighting over the past month has disrupted Asian Highway 1, the main trade route between Thailand and Myanmar.....In early November, coalition forces captured the police station and bridge at Chaung Hna Khwa, on the border of Mon and Kayin states. Regime forces retook the village on 29 December, though the bridge is now destroyed.....On 4 January, a joint KNU and PDF unit destroyed a small bridge along the road somewhere between the towns of Kyauktaga and Phyu. That same day, opposition fighters reportedly downed powerlines near the village of Zee Kone.....In early November, PDF fighters linked to the NUG took part in the capture of Kawlin and Khampat, the first towns to fall in Sagaing Region. The NUG now claims to administer both.....To deny the NUG’s ability to govern, the junta has adopted a strategy of attacking civilians in the towns, probably with the aim of making the areas uninhabitable.....On 28 December, junta soldiers stationed in Wuntho Town fired shells at Kawlin, which lies just 12 km to the south. Four civilians, including two children, were reportedly killed. Six more civilians were killed by a second artillery attack days later.....On 7 January, a regime airstrike on the edge of Khampat reportedly killed 17 civilians, including nine children. Twenty more civilians were wounded.....Junta missteps compound losses As early as the second week of Operation 1027, Chinese officials acting as mediators suggested to the junta that it allow the MNDAA and TNLA to administer their own areas. The junta refused to concede territories it had not yet lost, like Laukkaing, and opted to fight it out instead. But the army ultimately failed to launch a counter-offensive or utilise available resources to defend its remaining positions. Though some battalions pivoted to mobile defense, many were left to guard exposed or isolated hilltop positions and so they were overrun, partially destroyed, or forced to surrender. Sources indicated that Naypyidaw’s inflexible strategy and the avoidable losses that followed have harmed morale among ground commanders. The army’s withdrawal from Laukkaing on 5 January forfeited its greatest bargaining chip, yet it is unclear what, if anything, the junta received in exchange. According to various reports, the second round of talks held between 22 and 24 December had not produced a concrete agreement on the fate of Laukkaing. Surprisingly, the withdrawal took place before all sides convened in Kunming, China for a third round of talks on 10 and 11 January. This suggests that the city’s commanding officers may have prematurely withdrawn, leaving the junta with little to no leverage over its opponents. Media reported that the six brigadier generals were detained upon arriving in Lashio after the withdrawal. A source confirmed that at least five of them are facing court martial. The ceasefire deal struck on 11 January appeared to freeze the conflict along the new lines of demarcation that the Brotherhood won by force, so the regime’s acceptance is indicative of a decisive defeat, rather than a compromise. Moreover, the junta can no longer access the border area in Shan State, raising the prospect of a long-term inability to tax a significant portion of the country’s trade with China. Its losses now include large towns like Hseni and Kutkai, which were not necessarily primary objectives for the Brotherhood Alliance. By refusing to bargain, the junta has lost more territory, depleted its fighting strength, allowed the capture of large arms and munitions stockpiles, and precipitated a crisis of confidence among its officer corps. Several sources close to the regime and army have indicated widespread dissatisfaction with Senior General Min Aung Hlaing, and even consideration of a leadership change among at least some internal elements. While the territorial losses inflicted by Operation 1027 do not pose an existential threat to the regime, the embarrassment of the defeat and its impact on morale could potentially generate some internal instability. Yet any effort to sideline Min Aung Hlaing will be difficult. Since the coup, the junta leader has carefully consolidated his power by removing potential rivals from important positions (the regime announced a reshuffle of several senior officials immediately after the fall of Laukkaing). Although Min Aung Hlaing has lost respect, unseating him would also equate to challenging the long-standing norms of the Tatmadaw, which most senior officers still view as sacrosanct. Moreover, it would be hard for any reform-minded faction to initiate a negotiated transition, given how deeply the regime is reviled both at home and abroad..."