By UNODC Regional Office for Southeast Asia and the Pacific.

This report presents the results of the sixteenth opium survey in Myanmar. It was conducted jointly by the Central Committee for Drug Abuse Control (CCDAC) of the Ministry of Home Affairs and UNODC, which has been collecting statistical information on illicit crop cultivation in Myanmar within the framework of its Illicit Crop Monitoring Programme. The methodology used in this report combines satellite imagery and a yield survey to evaluate the extent of opium poppy cultivation and production. The 2018 survey builds on years of data regarding illicit opium production in Myanmar, estimating and comparing the area under cultivation, and assessing yield and production. In 1996 over 160,000 hectares (ha) were used for cultivating opium poppy, making Myanmar temporarily the most prominent country with cultivation in the world. However, cultivation decreased significantly over the following ten years, reaching a low of just over 20,000 ha in 2006.

The area of opium cultivation increased again between 2006 and 2014 to just under 60,000 ha, but it has subsequently been in sharp decline. In 2017, the total area of opium poppy consisted of 41,000 ha, a 25% decrease from the 55,000 ha recorded in 2015.  The downward trend has continued in 2018 with 37,300 ha of opium poppy. In the two main producing states, Shan and Kachin, the cultivation area decreased by 12 percent from 41,000 hectares in 2017 to 36,100 hectares in 2018. As in previous years, the majority of opium poppy is again cultivated in Shan State ‐nearly 90%‐ followed at a distance by Kachin State 9%, with negligible cultivation in Chin and Kayah states.

The biggest dropsin cultivation have been seen in areasthat have had relatively good security. However, in parts of Shan and Kachin experiencing a protracted state of conflict, high concentrations of poppy cultivation have continued – a clear correlation between conflict and opium production. For example: in Kachin State, the highest density of poppy cultivation took place in areas under the control or influence of the Kachin Independence Army (KIA); in North Shan, in areas of the Myanmar National Democratic Alliance Army (MNDAA); in South Shan, of the Pa‐O National Liberation Army (PNLA), and the Restoration Council of Shan State (RCSS) Shan State Army South (SSA‐S); and in East Shan, the People Militia’s Force (PMF); with each engaged in conflicts of varying intensity and frequency.

A ceasefire agreement providing a degree of self‐administration has been concluded with most of the armed groupsin Myanmar, and the Government haslimited accessto, and limited influence in, territories controlled by many militias. There are also several drivers for the illicit cultivation of opium poppy in Myanmar. The most recent UNODC socio‐economic survey identified insecurity, lack of employment opportunities, income inequality, and lack of infrastructure (access to markets, availability of clinics) as conditions associated with the cultivation of opium poppy. Illicit cultivation is also linked to limitations on access to areas of cultivation and the absence of a process for independently monitoring compliance with ceasefire provisions which include, among other conditions, the non‐engagement in drug production. The presence of organized crime groups in the same areas is also associated with the manufacturing and trafficking of heroin. According to the Government of Myanmar, criminal activity in the country is estimated to generate US$15 billion per year – the equivalent of approximately 24% of Gross Domestic Product (GDP)15 – with 84% or US$12.6 billion related to organized crime of which a significant portion would be transnational and drug related.

However, the illicit drug economy is increasingly diverse and revenue is not only generated from opiates. There has been a sharp increase in the supply of, and demand for, synthetic drugs and particularly methamphetamine across East and Southeast Asia and neighbouring regions, and the downward trend in opium cultivation and related heroin production in Myanmar needs to be understood in this context. Of the 11 countries in the region systematically sharing drug data and information with UNODC, 9 are now reporting methamphetamine as their primary drug of concern, as opposed to 10 years ago when there were 4 countries reporting methamphetamine and 7 reporting heroin. Even countries with traditionally large heroin markets, including China and Malaysia, have reported this dramatic change.  

Most countries in the region do not have reliable data on drug use making it difficult to determine if the rapid expansion of methamphetamine and synthetic drugs has happened at the expense of, or in addition to, heroin, but findings of the opium survey point to the shrinking of the market for opiates originating from Myanmar: between 2015 and 2018, farm‐ gate prices of fresh and dry opium have decreased by 34 and 45 % respectively. Declining prices considered together with a reduction in the supply of opium and heroin are a possible indication of decreased demand for opiates from Myanmar, although data on other opioids which may be in the regional market are limited.

The 2018 opium survey report finds that the current value of Myanmar’s opiate economy is a noticeable share of the overall national economy, ranging from 1.5%‐3.3% of GDP.16 with geographic pockets of Shan and Kachin where the opiate economy dominates.  Where drug‐ related proceeds comprise a sizeable portion of the total economy of an area or community, dynamics are distorted with unfair competition, skewed income and wealth distributions, and increased corruption.

Myanmar is the major supplier of opium and heroin in East and Southeast Asia, and Australia, and the value of opiates in the region is much higher than the US$1.1‐$2.3 billion estimated inside the country given the escalation of value as it approaches retail level.  Manufacture and trafficking of heroin within the borders of Myanmar constitutes the largest value of the Myanmar opiate economy with a value range of US$1.0 to $2.2 billion – although this estimate does not take into account certain input costs including smuggled precursor chemicals. Traffickers and organized crime groups are the main beneficiaries of the opiate economy in Myanmar, with farming’ income, or the farm‐gate value of opium, comparatively small and estimated between US$62 and $103 million.  

Efforts to eradicate opium poppy decreased in 2018, with a reported total of 2,605 ha eradicated. This is 26% less than in 2017, and follows a continuous annual decline in the hectares of opium poppy eradicated since 2015. The slowdown in eradication efforts is reportedly linked to the existence of protracted conflict and limited access to areas under thecontrol of non‐state armed groups. Opium poppy is now mainly concentrated in areas where government action against cultivation and organized crime groups is inhibited.  

Opium cultivation, heroin manufacturing and the drug economy are important elements to consider in the context of the peace process and the establishment of long‐term stability in Myanmar. There is a direct connection between drugs and conflict in the country, with the drug economy supporting the conflict and in‐turn the conflict facilitating the drug economy. Providing solutions to the conflict requires breaking this cycle. The influence of the drug economy can be mitigated through, among other things, scaling‐up alternative development programmes that provide viable sources of legitimate income, as well as by addressing the presence of transnational organized crime groups that continue to produce and traffic heroin and that have significantly scaled‐up the production of methamphetamine and synthetic drugs for the Asia Pacific market. Countering drug production and organized crime networks active in Myanmar are also vital for providing sustainable peace and security to Shan and Kachin states, and border areas of the surrounding Mekong region.  

The annual opium survey remains an essential tool for assessing the extent of opium poppy cultivation in Myanmar, as well as understanding changes in patterns and the links between drugs and the economy. This information is useful for understanding farming techniques and rural livelihoods, and for designing effective alternative development options and programmes. It is also essential for supporting decision makers to develop effective strategies to sustain the transition from an illicit to a licit economy, and as a basis for understanding the connection between the drug economy and ongoing conflict.