Myanmar’s immigration ministry says it has ceased issuing new licences for nationals to work in wealthier Malaysia.
At least 11 people have died this month in northern Myanmar in escalating clashes between security forces and armed rebel fighters.
Thousands have fled their homes in the northern Shan state since fighting erupted in late November, with many crossing the border into China.
In response, the Chinese government has placed its military on high alert, fearing the violence could once again spill into its territory after several of its nationals were killed last year.
The bodies of nine policemen allegedly killed by rebels on December 2 have been recovered, state-run Global New Light of Myanmar said on Thursday. Two civilians were also reportedly killed in that incident.
In total at least 30 soldiers, police, pro-government militia and civilians have died since the fighting began, according to a tally of state media figures.
The clashes have delivered a fresh blow to de facto leader Aung Suu Kyi’s hopes of forging a nationwide peace agreement to end decades of uprisings rumbling along Myanmar’s borderlands.
Suu Kyi prioritised tackling the simmering conflicts after her elected government took power earlier this year, ending decades of military-backed rule.
But fighting in the northern states of Kachin and Shan, and in the south in Karen, have cast a pall over her efforts and any ceasefire is expected to take years to agree on.
Analysts say the recent bout of unrest in Shan threatens the second round of peace talks she had scheduled for February and has strengthened the role of the army, who still control key levers of power.
Three of the rebel groups fighting in Shan – the Arakan Army, the Ta’ang National Liberation Army (TNLA) and the Myanmar National Democratic Alliance Army – have not been invited to the negotiations.
China-brokered talks between government negotiators and the groups reportedly broke down earlier this week.
But TNLA spokesman Colonel Tar Phone Kyaw said the groups were open to negotiations if the army wanted to talk in good faith.
“Our alliance from Northern Shan state will stand our ground and defend it if they launch more attacks,” he told AFP. “But if they stop the fighting, we welcome negotiations to find a solution.”
Myanmar’s army has also been carrying out a bloody crackdown in the north of Rakhine state that has sent more than 20,000 from the Muslim Rohingya minority fleeing to Bangladesh.
Malaysia has accused Myanmar of engaging in “ethnic cleansing” of the Rohingya.
Tens of thousands of Rohingya have fled their homes since a bloody crackdown by the Myanmar army in Rakhine began in October, sparked by a string of deadly attacks on police border posts.
“The fact that only one particular ethnicity is being driven out is by definition ethnic cleansing,” Malaysia’s foreign ministry said on Saturday in an unusually strongly-worded statement.
Myanmar has restricted access to the northern part of the state and says its military is hunting down the perpetrators of the attacks.
Earlier this week, Myanmar banned workers from travelling to Muslim-majority Malaysia.
The Rohingya have long faced persecution and government restrictions on movement that has been likened to apartheid.