How Myanmar's Opium Grows

BANGKOK - The controversy over the scale of Myanmar's opium production took another turn with the release of a new report that claims cultivation has surged in territories where the military government has recently taken control. The report draws more extreme conclusions than recent research released by the United Nations Office for Drugs and Crime (UNODC), whose Bangkok-based representatives declined an invitation to attend the new report's release.

Entitled "Poisoned Hills: Opium cultivation surges under government control in Burma", the report was released by the Palaung Women's Organization (PWO), a non-governmental organization based in Mae Sot, Thailand. The new research corroborates the findings of previous reports about the drug trade in Myanmar, also known as Burma, published by the Shan Herald Agency for News (SHAN), which unlike the UNODC relies on an extensive network of sources inside the Shan state for its data.


The PWO report said that "amounts [of opium grown] are far higher than reported in the annual surveys of the [UNODC], and are flourishing not in 'insurgent and ceasefire areas,' as claimed by the UN, but in areas controlled by Burma's military government". The report described how Myanmar authorities systematically extort fees from opium poppy farmers and file false eradication reports. The group
concluded that "unless the regime's militarization strategies are challenged, international funding will make little difference to the drug problem in Burma".

Those findings contrast sharply with the UNODC's own survey of opium production in Southeast Asia, which was released on December 14 to a large crowd of UN representatives, embassy officials and Thai and Western counter-narcotics officials, none of whom were present for the PWO's report's release. That's potentially because the UNODC relies on exclusive cooperation with Myanmar's military and government ministries and departments for its information and ground surveys, some analysts suggested at the PWO's report release.


The PWO report's findings are consistent with SHAN claims that the spread of opium poppy cultivation is directly related to the spread of government-backed and -trained militias in the area. According to SHAN editor Sai Khuensai Jaiyen, a long-time observer of the narcotics trade in Myanmar, Shan State areas that have fallen from insurgent to government control have seen a marked increase in the opium production.

At a press conference on Tuesday, he characterized that surge as a "balloon effect", wherein ceasefire groups that have banned cultivation in their own territories have seen it spread to new adjacent areas - all of which is under government control. By 2006, all known major drug-producing groups in Shan State had declared their areas free of poppy cultivation.

The National Democratic Alliance Army in northeastern Shan State made the claim in 1997; the Kokang in northern Shan State in 2002; the United Wa State Army, which is known to have diversified into methamphetamine production, in 2005; and the Loi Maw area in northern Shan State, the birthplace and one of the former operating areas of notorious drug lord Khun Sa, in 2006.

Although opium is no longer grown in these groups' controlled areas, Sai Kheunsai and sources close to Thai counter-narcotics officials say they are still involved in purchasing raw opium from growers and refining it into heroin. Much of the opium and heroin is then sold in the Golden Triangle region of Myanmar, Laos and Thailand to buyers from Hong Kong, from where it is often trafficked into China.


Drug-dealing militias

Since 2004, the junta has encouraged the formation of militias as an armed hedge against increasingly recalcitrant ceasefire armies. The trade-off is that the militias are allowed to engage in business activities, both legal and illegal, to support their operations. Members of community organizations representing ethnic Shan, Palaung, Kachin, Lahu and other groups in Shan State have claimed in interviews with this correspondent that government-backed militia commanders are involved in the cultivation, purchase and processing of opium in their controlled areas.

"The situation now is not unlike the Ka Kwe Yay time," said Sai Khuensai, referring to the historical period between 1963 and 1972 when government-recognized militia groups were allowed to trade in opium in exchange for fighting against various rebel groups then active in the Shan State.

Because many of the militia groups were more interested in the narcotics trade than fighting and eventually struck their own deals with rebels, the program was disbanded. By then, the program had spawned several now notorious druglords, including former Mong Tai Army leader Khun Sa and narcotics trafficker-turned-businessman and regime confidante Lo Hsing Han.

Curiously, the UNODC's 2009 opium survey for Myanmar makes no mention of these militia groups or their possible role in opium production. It does, however, note "indications that ceasefire groups are selling drugs to buy weapons and moving stocks to avoid detection". The leaders of those same groups, including Peng Jiasheng of the Kokang, Bao Youxiang of the UWSA and Lin Minxiang of the NDAA, were until recently lauded by the military government as "national race leaders" (ethnic group representatives) and their opium eradication efforts were praised by the generals as well as some counter-narcotics experts.

The UNODC has maintained a presence in Wa areas since 1998 and has facilitated other UN agencies and development organizations to establish programs in Wa and Kokang areas. The UN agency has also promoted programs in crop substitution and rural development. While the regime praised leaders such as Peng and Bao and the UNODC worked with them on development and opium eradication projects, little was said about their continued purchase of raw opium and its refinement into heroin.

Nor did the UNODC acknowledge some groups' switch to large-scale amphetamine production, which has helped to cover profits lost from opium eradication. The UNODC's 2009 opium survey says, "In 1996, the surrender of the notorious drug trafficker Khun Sa, leader of the Mong Tai Army, resulted in the collapse of armed resistance movements and led to the negotiation of a series of truce agreements with most breakaway factions."

Analysts note that the end of large-scale warfare in the Shan State occurred seven years earlier, when the factions of the former Burmese Communist Party that mutinied in 1989 agreed to ceasefires with the government. All of these groups were given tacit approval to continue their activities in the narcotics trade in exchange for ceasefire agreements.


In order to pressure ceasefire groups to transform their armed wings into military-controlled border guard forces, ahead of general elections planned for this year, the junta has recently condemned certain ceasefire group leaders. That includes the junta's publicizing of UWSA involvement in producing amphetamine shipments that have recently been seized along the Thai-Myanmar border.
A search for drugs sparked the crisis that culminated in last August's offensive against former national race leader Peng Jiasheng and his Kokang ceasefire army. (See Border war rattles China-Myanmar ties, Asia Times Online, September 1, 2009)
Since the late 1980s, the military regime has increased the number of battalions stationed in northern Myanmar. Currently over 150 battalions are based in Shan State alone. Rather than improve the security situation and end opium production, the increased military presence has resulted in rampant corruption.

The PWO report describes in detail the extortion money - which authorities refer to as "taxes" - demanded by the government and military on opium farmers. The unofficial levies are similar to those human-rights groups such as the Karen Human Rights Group (KHRG), Chin Human Rights Organization (CHRO) and others claim are imposed on farmers for both legal and illegal crops across the country.

Corruption-riddled statistics

Corruption also makes official eradication figures, frequently quoted by the UNODC, suspect. The PWO found in its research that only 11% of poppy fields in two townships they investigated were destroyed during the 2008-2009 growing season - and most of this was only in areas that were easily visible. It also noted that while the police claimed in their reports - which the PWO obtained - that 25% of fields were destroyed in the 2008-9 growing period, the actual figure was closer to 11%.

Many of the fields that were reported as destroyed were actually left intact after the unofficial fees were paid and collected.


Despite the many reports detailing official corruption in Myanmar, the UNODC has relied heavily on government eradication reports, as well as ground surveys carried out by authorities, to verify its satellite imagery-produced data used to produce its yearly survey. In one telling contradiction, the PWO found that in the two townships of Mantong and Namkham 963 hectares were under opium cultivation during the 2006-2007 growing season, 1,458 ha in 2007-2008 and 4,545 ha in 2008-2009.

In contrast, the UNODC's survey claimed that 390 ha, 800 ha and 1,600 ha were under opium cultivation for those same years in all 23 townships in northern Shan State.

The discrepancy in data raises questions about how a group of local women using researchers based in their own areas and on a limited budget where able to derive seemingly more comprehensive figures than the UNODC.

Part of the reason for the increase in opium production can be blamed on economic mismanagement and poorly planned crop substitution programs. Farmers across the country have been hard hit by rising prices. In addition, traditional crops such as tea for the Palaung and the growing of leaves for cheroots by the Pa-O have seen drastic drops in price. At the same time, money must be found to pay the legal taxes and extortion fees by military units, police and government officials.


Failures of substitution crops such as rubber and sugar have also impacted farmers. As the UNODC's opium survey noted, many farmers who had stopped opium cultivation for more than two years could not land upon adequate means of substituting for their lost income. Other farmers have been hit by the high costs of fertilizers and seeds for crops meant as opium poppy substitutes, such as maize and improved rice varieties from China. To pay for these inputs, many farmers have been forced into debt. The result, say researchers in Shan State, is many would rather risk farming opium and paying the unofficial "taxes".

With the money being made from opium "taxes", the spread of opium-peddling government-backed militias and the tacit allowance of ceasefire groups to process opium in their areas, it is no wonder that the ruling State Peace and Development Council (SPDC) is behind on its 15-year eradication plan. According to Sai Khuensai, only 13 of 51 townships in Shan, Kachin, China and Kayah States targeted by the government have after 11 years become opium-free.

He and other observers claim that in the meanwhile, opium cultivation has spread into areas of the country that had never previously grown poppies, including in Mandalay, Magwe and Sagaing divisions, as well as Arakan, Kayah and Chin States. Notably, none of those areas of the country was surveyed in the UNODC's 2009 survey report.

At the root of the problem, say local groups such as PWO and SHAN as well asindependent drug trade observers, is a dire need for political reform. Instead of taking the government's figures at face value and calling for an increase in international development assistance for the junta's flawed eradication efforts, the UNODC should push for more input from community-based organizations to improve the accuracy of its surveys.

That would be a tough sell as curtailing the drug trade would cancel many of the incentives for ethnic leaders to form and lead militias loyal to the regime. It would also require vast new outlays from the central treasury to supply and equip much of the army which currently survives on revenues it collects from extortion fees. And more local-level collaboration with the UN agency would ultimately expose the regime's relations with drug trafficking organizations and the role the drug trade plays in perpetuating military rule. By By Brian McCartan For the Asia TimesBrian McCartan is a Bangkok-based freelance journalist.