Burma’s Fastest Growing Business: Drugs

By William Boot 25 October 2012

One of the unsavory consequences of Burma’s economic rejuvenation is a revival of the country’s reputation for producing and exporting illegal drugs.

A combination of economic pressures and opportunity is fostering an increase in both traditional poppy cultivation for opium and heroin manufacture, and methamphetamine pills, which are being churned out in their millions from hidden miniature factories close to border crossings.

Thailand is the main target market but a UN agency says there is evidence of organized crime links between Burmese traffickers and criminals in the Cambodian capital of Phnom Penh. The shadowy nature of the business makes it almost impossible to evaluate accurately, but is believed to now run into several billion US dollars a year.

In 2010, the US Congressional Research Service estimated Burma’s drugs export trade to be worth between US $1 billion and $2 billion per year.

Around two million pills were seized from vehicles by Thai police just this month in Thailand’s northern Chiang Mai Province bordering Burma. They were hidden among farm produce and are thought to have been smuggled across the frontier.

But that is only the tip of the iceberg: More than 31 million methamphetamine pills were discovered by Thai anti-drug units between October 2011 and March this year, according to a Bangkok government report. That represents a 45 percent rise over the same period a year earlier.

The United Nations Office for Drugs and Crime (UNODC) says Burma is the source of nearly one quarter of the poppy plants used to make opium and heroin, making it the world’s biggest illegal opiate supplier after Afghanistan. The area under poppy cultivation is growing and is now back to levels last saw eight years ago.

More than 200,000 farming families are estimated to be growing opium poppies across 100,000 acres (40,000 hectares) and 90 percent of them are in Shan State, said the UNODC.

“The main drivers behind recent increases in opium poppy cultivation are chronic poverty, decreasing rural food security and regional insecurity due to armed conflict,” said the UN agency.

Burmese local government officials and ethnic militias are accused of complicity in both poppy cultivation and methamphetamine production, according to a recent report in The New York Times quoting Thai border police. Others implicate the Burmese armed forces.

Aided by European Union funding and support from the German government, the UNODC has started a program to encourage poppy farmers to grow other crops to sustain themselves and raise incomes.

Burma remains on the United States blacklist of countries which are failing to deal with the cultivation of opium poppies, but has deferred taking any punitive action because of the country’s progress with political and economic reforms.

Al Jazeera recently named the United Wa State Army [UWSA] as “one of Southeast Asia’s largest drug-producing entities which continues to manufacture methamphetamine and heroin free of pressure from the [Burmese] government.”

The UWSA, based in northern Shan State, has a peace agreement with the Naypyidaw administration.

“The UWSA has more legitimate business interests: Aik Hauk, the son-in-law of founder Bo Yiouxang, owns Yangon Airways … [which] exemplifies how tight the nexus between the black market operators and the legal economy is,” said the Qatar-based news agency.

Burma watcher Prof. Des Ball, of the Australian National University’s Strategic and Defence Studies Centre, has alleged that Burma is the world’s biggest producer of methamphetamines.

For years he was on a military regime blacklist barring him from the country. The ban was lifted in September.

Ball alleges that in spite of political reform in Burma, the military is still heavily involved in the drugs business, especially via their links with the UWSA. Army units control roads, transport and the border and it would be impossible for them not to know about production and shipment, he said.

The US Congressional Research Service has implicated other ethnic groups which have reached ceasefire agreements with the Burmese armed forces in transnational criminal businesses.

But the drugs trade is not just an export business. The UNODC says there is circumstantial evidence that illegal drug-taking is growing rapidly in Burma, especially among young people, and it plans to make a formal study to properly assess the problem.

The Bangkok government recently estimated that there are more than one million methamphetamine users in Thailand.

The drugs business has forced the Burmese government to quietly put back its bold deadline of 2014 for eradicating the problem from the country. The danger is whether setting a new deadline of 2019 will merely allow the issue to expand in the shadows.