Myanmar’s rising drug trade

AHRN, 12 February 2012

By Phil Thornton, Thailand based investigative journalist

Professor Des Ball pushes plates of what is left of a roast duck and barbeque prawn dinner to the side as he spreads a large map across the dinner table and stabs his finger at a point where northern Thailand meets Myanmar.

Mr Ball works at the Strategic and Defence Studies Centre at the Australian National University in Canberra, and has been following and documenting the illicit drug trade in Myanmar for decades.

”I’ve been tracking not just opium, but also ya ba [methamphetamines] coming from Myanmar. During that time the amount of ya ba coming into Thailand reached as high as 800 million tablets. In 2009 and 2010 it got higher, closer to one billion. Myanmar is the largest producer of methamphetamines in the world and the second largest opium producer _ add the two together and Myanmar’s the largest narcotic state in the world.”

Media reports last month showed drugs from Myanmar are still flowing into Thailand. A drug bust on the outskirts of Bangkok netted a massive amount of methamphetamines coming from Myanmar _ 3,864,000 ya ba tablets and 71kg of ya ice (crystal methamphetamine) with a street value of more than one billion baht. A day earlier and close to where Mr Ball’s finger is firmly placed on his map, Thai soldiers shot dead two smugglers crossing from Muang Yon on the Myanmar side of the border to Chiang Mai’s Mae Ai district carrying bags containing 100,000 ya ba pills, eight kilogrammes of ya ice and some heroin.

In a 1999 working paper, ”Myanmar and Drugs: The Regime’s Complicity in the Global drug Trade”, Mr Ball stated that, ”according to US government estimates, Myanmar receives between $700 million and $1 billion in foreign currency from heroin exports annually.”

A report published by the US Congressional Research Service (CRS) in 2010 _ ”Myanmar and Transnational Crime” _ states Myanmar’s ”illicit narcotics reportedly generate between $1 billion and $2 billion annually in exports”.

”About 10 years ago, about 50% of Myanmar’s foreign exchange came from drugs. In recent years this has fallen, primarily because there are other forms of revenue such as gas and oil. Drugs are now less than 50%, but are still around 40%.”

Mr Ball says the Myanmar government does nothing to stop the drugs because it is making lots of money from it.

”The military government is still involved _ the two most relevant areas, the Golden Triangle and the North East Command are where the most opium and ya ba production takes place. The military units based there are intrinsically involved in the drug business _ they provide security through checkpoints, transportation, cross-border passes and extract taxes from farmers.”

Mr Ball says Mong Yawng on the Myanmar side of the border used to be the centre of the drug trade but it has now moved further east.

”Across the border from Ban Arunthai and for about a 60km stretch down the border to Pang Mah Pha on the Thai side is where drugs are now being trafficked across from Myanmar.”

Mr Ball says militia forces aligned to the Myanmar army are running mobile drug factories just across the border.

”They use up to 10 pickup trucks _ park them under the jungle canopy _ one provides power from a generator, another has a pill press to stamp out the drugs, one is a lab to mix the chemicals, another holds a communications setup and then there are trucks carrying soldiers for the security of the whole production facility.”

Ceasefire Arrangements

Mr Ball explains that a major factor in the growth of opium cultivation and heroin production has been ceasefire agreements and business deals that the regime struck with most of the armed ethnic armies in northeast Myanmar.

”These were mostly arranged by Lt-Gen Khin Nyunt, who was No3 in the regime at the time. It is more than disingenuous for the Myanmar government to say they are not involved or making money from the drugs _ they’re up to their necks in it.”

Mr Ball’s position contradicts the recent report from the UN Office on Drugs and Crime (UNODC) ”Southeast Asia Opium Survey 2011”, which credits the Myanmar government’s ceasefire agreements (since 1996) with armed groups that led to a reduction in opium cultivation. The UNODC report states, ”This paved the way for greater control by the government of opium poppy-growing regions and allowed the implementation of measures to reduce opium poppy cultivation.”

Mr Ball is contemptuous of the UNODC report. ”The explanations they provide are ridiculous. The UN has no understanding of the dynamics involved in the narcotics trade in Myanmar. This argument that the ceasefire groups have led to greater control over the drugs is absurd. We know the groups who have had the longstanding ceasefire arrangements are those who have the greatest motivation in the drug trade. Starting with the Wa, the Kokang, and various militia and Democratic Karen Buddhist Army factions. It’s part of the ceasefire deals _ on one hand you accept the control of the government and on the other hand you are free to engage in drugs.”

One man who agrees with Mr Ball’s criticisms of the UNODC and his assessment of the drug trade is Col Sai Htoo, assistant secretary-general of the Shan State Progressive Party (SSPP). Its armed wing, the Shan State Army, had a 22-year ceasefire with the former Myanmar regime.

Col Sai Htoo is prepared to name Myanmar army generals and militia leaders he alleges have close links to the drug trade.

”Myanmar’s president, Thein Sein, was the commander of the Golden Triangle region based in Kentaung 20 years ago _ he was very close to Yee Say and Ja Hsi Bo, [the] Lahu militia leaders and drug bosses.”

Col Sai Htoo explains how the Myanmar army helps vehicles carrying drugs negotiate their way through the many checkpoints and roadblocks in Shan State.

”The Myanmar army drives the lead escort car through the checkpoints and the drug cars follow _ nobody in their convoy is stopped.”

Col Sai Htoo says farmers make little money from drugs.

”In Myanmar the drug money goes all the way to the top _ they and the international drug gangs make the money. The Myanmar army has an understanding with the drug traffickers _ one eye open, one eye shut _ the top generals give orders to stop growing poppy, but it is only an order. When the DEA [US Drug Enforcement Administration], UN or other international agencies give money to Myanmar to eradicate drugs, the money goes straight into the pockets of the generals.”

The CRS report, ”Myanmar and Transnational Crime”, concurs with Mr Ball’s and Col Sai Htoo’s position that the ceasefires aided the drug traffickers rather than controlled them: ”Recent ceasefire agreements in other border regions have not markedly improved the situation; instead, these ceasefires have provided groups known for their activity in transnational crime with near autonomy, essentially placing these areas beyond the reach of Burmese law.”

Col Sai Htoo says he is surprised, considering the evidence, that agencies such as the UN continue to rely on the government’s support to carry out their drug surveys. ”Drugs in Myanmar don’t go down, production keeps going up. If they are serious about stopping the drugs, do what Thailand did 20-years-ago _ set up a programme to educate and support farmers to grow alternative crops _ the government has received millions to stop drugs [donated by international agencies], but none of it gets to the people.”

Col Sai Htoo said he is willing to talk to any agency if they are serious about stopping the flow of drugs. He says his ceasefire group does not grow poppies or benefit from the drug trade as the SSPP has had an anti-drug policy since 1973. The SSPP has just signed another ceasefire agreement with a Myanmar government ”peace talks” delegation.

”We recently signed an agreement, but for a ceasefire only and for the Myanmar army to withdraw from our territory. Despite the ceasefire the Myanmar army is still fighting in our area _ it seems the government has a problem _ its army is not following its orders.”

Col Sai Htoo warns that stopping drugs in Myanmar will not be easy.

”There’s no rule of law in Myanmar. Who has the most guns has the most power and who in Myanmar has the most guns?”

Local Knowledge

Community-based organisations such as the Palaung Women’s Association (PWA) and investigations by the Shan Herald Agency for News question the reliability of the UNODC drug surveys, claiming they rely too much on ”eradication reports and ground truthing” of satellite imagery by the Burmese military and police personnel.

At the PWA office located on the Thai-Myanmar border Nway H’noung points to a photograph of ”Panhsay” Kway Myint, the recently elected member of parliament for Namkham, and alleges he is the most ”prominent militia leader and drug lord in the area”.

Kway Myint is a member of Myanmar’s ruling party _ the military-backed Union Solidarity and Development Party (USDP).

Nway H’noung acknowledges that Kway Myint did make good on his election promises.

”He promised people who voted for him that they could grow opium for five years and they can. He is the leader of the Panhsay People’s Militia, a drug lord and now a government MP. His militia can be seen growing opium and they have the biggest acreage in the area. Kyaw Myint has close links to the Myanmar army Light Infantry Battalion 144.”

Nway H’noung is sceptical that since Myanmar’s elections the government’s reforms have done a lot for citizens and says it is more a case of how low the bar has been dropped by international groups on what is acceptable to allow them to engage with the government.

Nway H’noung gives an example of how the drug trade in her area has allegedly increased since the 2010 election.

”In the 2008-2009 poppy season the total cultivation across 15 villages in Nakham was 617 hectares. In the 2010-2011 season it had almost doubled to 1,109 hectares _ that’s a 78.58% increase. Most of the opium cultivation in Namkham occurs in the areas under the control of MP Kyaw Myint.”

And Nway H’noung accuses the Myanmar army of running tax gates at Namkham checkpoints. ”Everybody going through has to pay. A charcoal seller said after he paid the tax he’d never sell enough to make it worth working _ he asked the soldiers if he could go back home and not have to pay … He was made to pay.”

The Shan Herald Agency for News ”2011 Drug Watch Report” alleges that seven USDP members of parliament are also key drug lords. Khuensai Jaiyen, the editor of the Shan Herald Agency for News, has been reporting on Myanmar’s drug trade for more than 20 years and names the seven as _ ”Liu Guoxi in the national assembly, Ho Xiaochang [aka U Haw and Haw Laosang] in the people’s assembly, Khun Myat in the people’s assembly, Kyaw Myint [aka Win Maung] in the Shan State Assembly, Keng Mai in the State Assembly, Bai Xuoqian [aka Pei Hsauk Chen] in the Shan State Assembly and Myint Lwin [aka Wang Guoda],” Khuensai Jaiyen adds that, ”all seven are either militia or Border Guard Force leaders”.

Khuensai Jaiyen says the international community and Asean have been conned by the government’s assertions that it runs aggressive crop substitution and drug eradication programmes.

”In Shan State there are 55 townships. Only 11 can claim to be reasonably poppy free. Out of those eleven, seven are along the Chinese border and under pressure from Chinese authorities not to cultivate poppies, the rest grow poppy.”

Khuensai Jaiyen accuses the Myanmar army of providing security for the drug manufacturers.

”Refineries in Punako, Monghsat townships, opposite Thailand’s Chiang Rai, are guarded by Myanmar army Light Infantry Battalions 553 and 554. The Myanmar army local units know their rice pots are in the poppy fields. When on a poppy destroying mission they get paid for not destroying the poppies or for destroying poor quality fields chosen by the growers.”

Khuensai Jaiyen explains that ”tax scales for growing are fixed locally with the understanding that poppy fields will be left alone by the army and, in the event that they have to be cut down in order to satisfy Naypyidaw’s public relation needs, the farmers will be informed in advance so they have time to select suitable fields that are either poor or already harvested.”

”2011 Drug Watch Report”, states that in Namkham, in northern Shan State, each village is required to pay as much as 300,000 kyat (9,250 baht) to the Myanmar army to be allowed to grow opium.

The CRS report ”Myanmar and Transnational Crime” points out that the level of corruption in Myanmar is rampant among authorities.

”The US State Department and other observers indicate that corruption is common among the bureaucracy and military in Myanmar. Myanmar officials, especially army and police personnel in the border areas, are widely believed to be involved in the smuggling of goods and drugs, money laundering, and corruption.”

The Opium Farmers

Across the northern Thai border, layers of hills stretch, buckle and blur into a distant Shan horizon.

A single plume of smoke rises white against the vast green landscape. A thin dirt track scars the closest mountainside before disappearing over a ridge.

Sai Wun, an opium grower, points to burnt scabs of hillside that are being readied for poppies and explains why he grows them.

”If we grew other crops like vegetables to sell _ there’s no road, no market _ how could we survive? We get no support from the government to grow vegetables, but if we grow poppies the army comes to our place to buy it.”

Sai Wun planted 120 hectares of poppies last year on the side of Nong Khang and says it was a bad year for him and his family.

”The rains came too early and there was too much of it. Poppies need cold. It’s not the terrain high or low, but the cold that’s important _ if your teeth are chattering, it’s going to be a good crop,” Sai Wun said.

Sai Wun has been farming poppies for more than 10 years and says this is the third time the Myanmar army has supported the growing.

”In the past we had to hide, now we don’t, we even build huts in the middle of our fields to sleep in. The Myanmar army controls our area together with a Lahu militia. The Myanmar army are our main investors, we sell 100% of our opium to them, they won’t allow us to sell it to outsiders or traders.”

Sai Wun explains that the militia comes to the farm to buy the opium resin.

Despite the rate, Sai Wun says it is hard work growing poppies.

”You need good soil, you need to weed three or four times, no watering, we rely on the mist, there’s enough moisture in it _ a bit of rain just before cutting is good. We scatter seeds on the cleared land, when it takes, we sort the plants into rows to give them room to grow.”

Leaving Sai Mun, the Myanmar army and militia camps behind and driving 100km east along the Thai-Myanmar border. Passing Chinese graveyards, tea plantations and crashed pickups we arrive at a meeting point to talk to three opium farmers from the Shan towns of Mongton, Mongpan and Namzang. Interviewing people involved in the drug trade generates a certain amount of paranoia and a need for secrecy, but the farmers interviewed for this story discussed the difficulties of growing opium and said that if they didn’t have it to grow, they wouldn’t be able to feed their families.

Mist rolled over the mountains and down into steep valleys, swirling around the hillside village cutting visibility to less than 50m.

Nai Saw, squats on the concrete floor, sips at a hot, black tea held in his work-hardened hands and says he paid the Myanmar army tax on his poppy crop for 10 years.

”I paid them direct. Some years they came three times, it depended on the officers and how much they needed. I was caught between two army battalions, IB 66 and LIB 246. The soldiers also come and demand chickens, pigs and even rice _ I had to give to them.”

Nai Thi sitting next to Nai Saw chips in, ”10 years ago we were paid 3,000 baht on the border to sell to Khun Sa, we had to deliver it to him, now the buyers come all the way to us. I had four rai [0.64 hectares] and in a good season I can get 40,000 baht for 1.6kg. I had to pay the Myanmar army 200,000 kyat tax for each rai.”

Nai Thi explains how the tax system works: ”Each group or village that is growing is assigned to collect the tax. The village headman takes the money to the army camp and pays the officers, or in some cases it is given to the militia who pass it onto the army. You can’t refuse to pay.”

Farmer Wai Ta, 73, says his soil is poor and he harvests lower-quality opium.

”Last year was bad for me I only got 20,000 baht for 1.6kg. My quality was so low they needed to double the weight of my opium compared to that of other farmers to get just one kilogramme of heroin.”

The three farmers laugh and exchange looks when I ask them to clarify the role of the Myanmar army in the opium production.

”It’s a stupid question _ if the Myanmar army say don’t grow it, we can’t grow it _ it’s that simple. If there’s no buyers, villagers wouldn’t grow it.”

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