When the production of opium and its derivative heroin in Myanmar reached record levels in the late 1980s, Daniel O’Donahue, a former ambassador to Thailand and Myanmar, offered a simple explanation. In an interview published in the July 14, 1989 issue of the Bangkok Post, he stated that “many Burma Army troops, previously dedicated to anti-narcotics operations, were withdrawn from the field and redeployed to enforce martial law.” And that was after Myanmar had been shaken by nationwide demonstrations against the country’s dictatorship. Fast forward to 2021 and the aftermath of Senior General Min Aung Hlaing’s Feb. 1 coup. Myanmar’s drug production is rising once again, according to the United Nations Office on Drugs and Crime (UNODC), whose regional representative in Southeast Asia, Jeremy Douglas, told the Financial Times in an article published on Aug. 22: “The harm that’s being done to the people in the region is incalculable.” Richard Horsey, Myanmar adviser to the International Crisis Group, stated in the same issue of the newspaper: “What the coup has done is completely distract the police from their anti-drug activities” and “created a perfect storm for these criminal organizations, who thrive in the gaps where justice authorities can’t easily get.”
But what was pure fantasy in 1989 is no more true today. In reality, there were at the time no troop rotations as those claimed by O’Donahue. The forces which were used to quell the demonstrations in 1988 came mainly from the 22nd and 44th Light Infantry Divisions from Karen State, an area where no poppies were grown. And are we supposed to believe that the policemen who have been gunning down peaceful demonstrators in Yangon, Naypyitaw, Mandalay and other cities and towns were busy chasing drug traffickers until Min Aung Hlaing staged his coup? And that the same “justice authorities” that now are meting out stiff sentences to journalists and pro-democracy activists would otherwise be going after dealers in opium, heroin and methamphetamine?
In the late 1980s as well as in Myanmar today, the military (or Tatmadaw) and the police could hardly be described as anti-drug crusaders. On the contrary, Myanmar’s security forces have a long history of working together with drug-trafficking gangs and the benefits have been both economic—personal gains for officers—and tactical: drug traffickers are useful intelligence assets and can be used to fight the country’s ethnic rebel armies. The first coup in 1962 and the introduction of the so-called “Burmese Way to Socialism” had a devastating impact on the country’s economy at the same time as it caused Myanmar’s ethnic rebellions to flare anew.
Its effects on the opium trade and subsequent developments were explained succinctly and comprehensively in a 1982 essay by Chao Tzang Yawnghwe, one of the sons of Shan leader and Myanmar’s first president Sao Shwe Thaike: “The fast rolling opium bandwagon was further oiled by the introduction of the Burmese Way to Socialism following Gen. Ne Win’s coup of 1962. All businesses and banks (foreign and otherwise), shops, industries, factories, etc., were nationalized, and business and trade by individuals and private concerns came to a dead stop. Naturally, in such an economic vacuum there arose a black-market economy, which for the opium traffickers was a boon as they, and only they, were equipped to exploit this sad situation. Opium was bought by them at very low price from ragged cultivators, transported in armed caravans to the [Thai] border and refined into heroin. And on the return trip to get more opium, Thai goods and commodities were taken up and sold in Shan State at very high prices—thus a killing was made both ways, at least thrice yearly. Rather than creating socialism, the Burmese Way to Socialism in effect delivered the economy into the hands of the opium traffickers. As such, opium became the only viable crop and medium of exchange. Thus, cultivation of opium, limited to east of the Salween River prior to 1963, not only spread all over Shan State, but to Kachin, [Kayah] and Chin states as well.”
Within a few years of this disastrous experiment with “socialism”, more than 80 percent of all consumer goods available in Myanmar were smuggled in from neighboring countries, primarily Thailand. Opium—and increasingly heroin—became the medium of exchange, as the Myanmar kyat had become worthless for trading with other countries. The central government soon became incapable of overcoming the innumerable rebel armies. And then, in order to fight the insurgents, Gen. Ne Win had in 1963 authorized the setting up of local home guard units called Ka Kwe Ye (KKY; the actual meaning in Burmese is “defense”). They were given the right to use all government-controlled roads and towns in Shan State for opium smuggling in exchange for fighting the rebels. By allowing them to trade in opium, the Burmese government hoped that the KKY militias would be self-supporting; there was hardly any money in the central coffer in
Rangoon (now Yangon) to support a sustained counterinsurgency campaign at this stage.
Many KKY commanders became rich on the deal. The most famous were Lo Hsing-han (Luo Xinghan), the chief of the Kokang KKY, and Chang Chifu (Zhang Qifu) alias Khun Sa, who headed the KKY unit in Loi Maw near the Myanmar army’s garrison town of Tang-yan. Lo fought alongside the Myanmar army against the insurgent Communist Party of Burma (CPB) in the early 1970s, and Khun Sa guarded the banks of the Salween River opposite the Wa hills, one of the CPB’s most important strongholds. It was only when those commanders began negotiating deals with the ethnic insurgents, who controlled the countryside through which they had to conduct their caravans, that they were arrested, Khun Sa in 1969 and Lo in 1973. Khun Sa was released in 1974 and Lo during a general amnesty in 1980—and both soon returned to their old ways after winning their freedom.
After the 1988 uprising the old socialist system was abolished—and gave way to cut-throat capitalism where military-connected tycoons took over and ran the economy without any regard for normal business ethics. The opium boom in the late 1980s and early 1990s was also the outcome of those and other inept government policies. It began when the hilltribe rank and file of the CPB mutinied in 1989 and drove the old, mainly Burmese leadership into exile in China. Suddenly, there was no longer any communist insurgency in Myanmar, only ethnic rebels, and the then junta, the State Law and Order Restoration Council (SLORC), grew worried about potential collaboration between these four new, well-armed forces in the northeast and the ethnic minority groups along the Thai border, as well as the urban dissidents who had taken refuge there. To thwart that potential threat, SLORC sent Lo Hsing-han and two other Sino-Burmese to negotiate with the mutineers and a deal was struck: the former CPB forces along the Chinese frontier were allowed to retain their arms and engage in any kind of business—as long as they did not fight the Tatmadaw, or share their respective arsenals with the ethnic rebels and the urban dissidents.
Therefore, in the late 1980s, Myanmar’s opium production suddenly more than doubled. According to US government estimates, the 1987 harvest —so before the CPB mutiny—yielded 836 tons of raw opium; by 1995, production had increased to 2,340 tons. Satellite imagery showed that the area under poppy cultivation increased from 92,300 hectares in 1987 to 142,700 in 1989 and 154,000 in 1995. The potential heroin output soared from 54 tons in 1987 to 166 tons in 1995, making drugs the impoverished and mismanaged country’s only growth industry. At the same time, a string of new heroin refineries was set up in Kokang and the Wa hills, conveniently located near the main growing areas in northern Burma and, equally important, close to the then rapidly growing Chinese drug market and seemingly easier routes through Yunnan to the outside world. The SLORC survived, but the region had to pay a heavy price for its success. The drug production reached levels never seen before.
The situation today follows a similar pattern. While some of the former CPB forces, among them the United Wa State Army, have by and large turned to other lucrative businesses such as casinos, rare earth mining and investment in real estate, new government-allied militias called pyi thu sit (“people’s militia”) have emerged. These new militias are not as powerful as the old KKY, but the agreement between them and the central authorities is basically the same. They are dealing in drugs—and working together with Myanmar’s security forces against the ethnic rebels.
Contrary to all historical and empirical evidence, the UNODC has consistently asserted that Myanmar’s ethnic rebels are responsible for the country’s drug production—and then turned a blind eye to official complicity in the narcotics business. While no one is accusing the UNODC of also being complicit in the trade, it is hard not to come to the conclusion that its misleading reports and statements amount to cover-ups.
The UNODC claimed in its 2018 “Myanmar Opium Survey” that, “in Kachin State, the highest density of poppy cultivation took place in areas under the control or influence of the Kachin Independence Army (KIA).” That assertion prompted the Kachin rebels to issue a statement on Feb. 14, 2019, pointing out that the UNODC’s own map in its report showed that most opium-growing areas in Kachin State are located not in areas controlled by the KIA, but by a government-recognized Border Guard Force and other militias allied with the Tatmadaw. One of those forces is a former CPB unit which is based at Kambaiti pass on the Kachin State border with China. After the 1989 mutiny, it made peace with the Tatmadaw—and has since then been engaged in battles against the KIA.
Supporting the KIA’s version of what was happening on the drug front in Kachin State, the Transnational Institute (TNI), a Dutch-based international research and advocacy group, stated on March 5, 2019: “There is presently no substantial opium cultivation” in rebel-held territory. The TNI has even criticized the KIA and Pat Jasan, a community-based, anti-drugs Kachin vigilante organization “for being overly repressive towards opium farmers and people who use drugs, rather than being in any way permissive.”
The TNI goes on to state that the UNODC claims that the highest density of opium cultivation in northern Shan State is in “areas under the control or influence of the Myanmar National Democratic Alliance Army”, a Kokang guerilla army that does not control any territory, while opium is actually being grown and traded in areas that are controlled by local militias backed by the Tatmadaw. After the Kachin rebels had complained about the UNODC report, its Bangkok and Yangon offices issued a statement on Feb. 27, which, however, did not address the main issue of wrongful identification of armed groups in the opium-growing areas. It contained only a couple of satellite images of Kachin State and how those could be interpreted.
The UNODC has also adhered to the grossly flawed theory of “kingpins” directing the trade—and, a couple of years ago, the Asia-Pacific narcotics business was supposed to have a new such overlord. His name: Tse Chi Lop, a Chinese-born Canadian citizen also known as Sam Gor, or Brother No. 3 in Cantonese, who was said to be the leader of a gang that controlled most of the region’s illegal and wide-reaching methamphetamine trade. On Oct. 14, 2019 Reuters published an in-depth investigation exposing Tse’s new “Asian meth syndicate”, which, according to the report, controlled the bulk of the region’s rampant trade in the narcotic.
Reuters based its findings on a UNODC report and referred to Tse as “Asia’s most-wanted man” who allegedly ran a “vast multinational drug trafficking syndicate” in alliance with “five of Asia’s triad groups.” The UNODC report estimated the Tse syndicate’s 2018 revenues to be on the order of US$8 billion-$17.7 billion in 2018, with regional sales reaching from Japan to New Zealand. Reuters quoted UNODC’s Jeremy Douglas as saying: “Tse Chi Lop is in the league of El Chapo or maybe Pablo Escobar. The word kingpin often gets thrown around, but there is no doubt it applies here.”
Other more levelheaded observers, however, took issue with the Hollywood-like portrayal of Asia’s drug trade, which they argue is instead run by loosely and informally organized networks and not by an overarching, all-powerful “kingpin.” Ko-lin Chin and Sheldon X Zhang, two of America’s most accomplished criminologists, have shown in seminal books like “The Chinese Heroin Trade” and “The Golden Triangle: Inside Southeast Asia’s Drug Trade,” as well as numerous papers and articles, that “Chinese [drug and crime] networks are horizontally structured, fluid, and opportunistic.”
Chin and Zhang have also argued that, in private conversations, “even US drug enforcement officials in the field have acknowledged that there are no drug kingpins, or at least they have not seen any in China or Southeast Asia.” Chin and Zhang also state categorically in their books and research papers that they have never uncovered any evidence of significant triad involvement in the drug trade. Some triad members may deal in drugs but their main illicit income derives chiefly from enterprises such as construction, extortion, gambling, prostitution and fraud.
And then, in January this year, Tse was arrested at Amsterdam’s Schiphol airport and is awaiting extradition to Australia, where he is wanted on drug-trafficking charges. The BBC reported on July 2: “Mr. Tse denies he is a kingpin and claims his arrest was effectively set up by Australian authorities, alleging they illegally arranged for his expulsion from Taiwan to Canada to include a stop in the Netherlands so that he could be arrested there.” The globetrotting Tse may not be a credible source for anything, but if he was really that big, how is it that his arrest has had no tangible impact on the trade in narcotics in Southeast Asia? On the contrary, if the UNODC is to believed, we are right now seeing yet another surge in drug production in Myanmar, still the region’s main source of illicit narcotics.
It is high time that UNODC and other international agencies get serious and tackle the root causes of the scourge of drug production, smuggling and addiction. Cover-ups and imaginative reports serve no other purpose than serving the interest of those actually running the trade. But that would mean addressing official complicity in the trade, corruption and atrocities being committed by the Tatmadaw in ethnic minority areas. And would the UNODC, which provides its officials with comfortable and highly lucrative jobs, be prepared to do that? So far, however, we have seen nothing but fanciful tales about kingpins and fallacious statements like those in the 2018 opium report and the recent Financial Times article.
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