Tuesday, November 3, 2009

Drugs, Guns and War in Myanmar

BANGKOK - Mounting tensions between Myanmar's military government and ethnic groups with which it has ceasefire agreements in the country's northern regions have spurred a surge in drug trafficking. Driven by militias' growing demand for weapons to counter anticipated government offensives, a narcotics fire-sale is raising concerns of greater instability along the borders of several neighboring countries, including China.

Myanmar's military regime has demanded that the insurgent groups with which it agreed ceasefires in the late 1980s and early 1990s hand over their arms to government control. A deadline set for the end of October has been allowed to pass and discussions between the military and two main ethnic armies, the United Wa State Army (UWSA) and the National Democratic Alliance Army (Eastern Shan State) (NDAA), are reportedly continuing.

Neither side appears willing to back down, prompting speculation that new fighting may be imminent. Under the government's proposed Border Guard Force plan, ethnic armies would be downsized into several battalions consisting of 326 men. Each would have a contingent of Myanmar army and non-commissioned officers and operate under the central command of the Myanmar Army. The junta has said it will provide weapons, equipment, uniforms and even salaries to the proposed units.

The generals have indicated that a handover of weapons, either through the border guard scheme or through forced surrender, is key to their plan to achieve national reconciliation by holding general elections next year. The political stakes for that plan are high. The junta has demonstrated a willingness to risk the ire of ally China through an assault in August on the Kokang ceasefire group, which caused a flood of refugees to stream across the border into neighboring China.

Both the Myanmar army and the Kokang have since reinforced their troops and appear to be preparing for further hostilities that security analysts predict could spill over into other insurgent-controlled territories. It's still unclear if Myanmar will risk its relations with Beijing by attacking the remaining and better armed ceasefire groups along the Myanmar-China border, a battle plan that has the potential to significantly destabilize southern China.

Under the government's plan, the ceasefire groups' political wings will be allowed to transform into political parties to contest the general elections. Ethnic leaders, however, say that handing over their armed forces to government control would entail relinquishing their bargaining power vis-a-vis a regime that frequently uses military force to press its demands. It would also mean handing over much of the apparatus that protects, produces and transports their narcotics trafficking operations.

Since a 1989 mutiny that broke up the Communist Party of Burma (CPB) and spawned several ethnic armies in the north - including the UWSA, NDAA and the Kokang group - the drug trade has steadily expanded in the region. The military government has both permitted and profited from the groups' drug production and trafficking, despite official claims to lead an internationally assisted counter narcotics campaign and disingenuous pledges by several of the insurgent groups to be drug-free.

The ceasefire groups have plowed their profits into places such as Panghsang and Mong La along the Myanmar-China border, transforming them into boom towns. They have also invested in more legitimate businesses in central Myanmar, as well as in neighboring China and Thailand. For example, the UWSA's financial controller, Wei Xuegang, who is wanted for narcotics trafficking in the United States and Thailand, has built an extensive business empire in Myanmar around his Hong Pang Group.

Without firm autonomy agreements with the Myanmar government, a substantial portion of ceasefire groups' profits have gone towards the upkeep of their armies and the procurement of new weapons. According to security analysts, the UWSA has since its 1989 ceasefire agreement grown into the largest and best armed fighting force in Myanmar outside the government's army. The narco-trafficking militia consists of between 15,000 and 20,000 heavily armed foot soldiers.

Should negotiations over the border guard plan collapse and a renewed civil war break out in northern Myanmar, ethnic insurgents risk losing access to their extensive drug-financed business operations. According to Sai Khuensai Jaiyen of the Shan Herald Agency for News, an exile-run media organization that closely tracks the drug trade in Shan State, there are reports that Wei has started to sell parts of his business holdings and has suspended some of Hong Pang Group's operations in apparent preparation for hostilities. The company is involved, among other things, in lumber, agriculture, gas stations and department stores in the towns of Lashio, Mandalay and Yangon.

Security analysts and counter-narcotics officials in Thailand believe that, without access to funds from their business interests, insurgent groups like the UWSA will be forced to step up their narcotics production and trafficking activities. As nationalist Chinese Kuomintang general Duan Xiwen said in 1967 about fighting in Shan State: " ... to fight you must have an army, and an army must have guns, and to buy guns you must have money. In these mountains the only money is opium" - and now methamphetamines.

Insurgent Patron

China has been the main patron of the ceasefire groups along its border since the CPB mutiny in 1989. The relationship, from Beijing's perspective, is a pragmatic one that ensures that China has leverage against Myanmar's generals with which to protect its large and growing economic and strategic interests in the country. China has provided development and economic assistance to the ceasefire groups, as well as advanced weapons and even some training in their usage. This has included 120mm and 130mm artillery and hand-held surface-to-air missiles.

China's goodwill towards the ceasefire groups has been partly contingent on their agreement to curtail drug smuggling into and through China. Pressure from Chinese officials has been placed on ethnic insurgent leaders to prohibit the smuggling of
narcotics into China. Much of the drug trade to China consists of opium and heroin, which is becoming a growing problem seen in rising addiction rates in the country.
The ability of the UWSA, NDAA and other ceasefire groups to fight will be partially dependant on whether China permits them to maintain their known cross-border businesses and investments, as well as access to weapons and ammunition. Without the ability to generate income through these operations, ethnic insurgent leaders will be faced with the choice of either surrendering once their stocks of ammunition are depleted - as happened to the Kokang in August - or stepping up narcotics production and trafficking to raise funds and purchase arms and ammunition from dealers in Thailand and China.

The insurgent groups' main market for narcotics is Thailand. While heroin is still exported to the outside world via well-established and well-protected trafficking routes in Thailand, most of the methamphetamines produced are destined for Thai consumption. China, too, could soon be faced with an upsurge in narcotics smuggling, both to its growing addict population and through well-documented routes across its southern region out to Shanghai and Hong Kong. Myanmar remains China's main source of heroin.

Thai counter-narcotics officials are already claiming that the UWSA is engaged in a fire sale by cutting prices to quickly move its stores of narcotics to buy more weapons before hostilities with government forces begin in the approaching cool season. In August, the Thai army quietly revived an elite counter-narcotics force previously known as Task Force 399 and renamed as 151st Special Warfare Company.
Task Force 399, which was tasked with interdiction at the border and supported by US Special Forces personnel, was known previously for taking a proactive approach to interdicting drug traffickers including, some analysts of the drug trade say, pursuit across the border into Myanmar territory.

Over the past five months, there have been frequent reports in the Thai media about arrests of drug traffickers, disruption of smuggling gangs and seizures of large quantities of narcotics. The New York Times in an October 1 article cited Thai Office of Narcotics Control Board (ONCB) figures that 1,268 kilograms of heroin had been seized between January and August this year, a huge increase on the 57 kilograms seized in the region last year.

Last week, the government announced plans for a new drug suppression force to combat trafficking in border provinces next to Myanmar. Thai Deputy Prime Minister Suthep Thaugsuban linked the creation of the new force to an increase in drug trafficking from Myanmar, according to media reports. The plan still needs government approval, but if enacted the new unit will by coordinated by the army's Internal Security Operations Command (ISOC).

Regional Reach

While the bulk of the drug trafficking ceasefire armies are stationed along the Myanmar-China border, the UWSA has also built up a substantial area along the Thai border, contiguous with Thailand's northern Chiang Mai and Chiang Rai provinces, through which much of its heroin and amphetamine trade now passes. Because the Myanmar army controls territory between the main UWSA units, each is largely self-sustaining through their narcotics trafficking. Maintaining the security of this area will be key for access to the Thai market.

Another key narcotics trade point is across the Mekong River into Laos. The NDAA operates at least one major trade point jointly with the UWSA at Sop Lwe on the Myanmar side of the river near the small Lao town of Xieng Kok in the northern Luang Nam Tha province, says a researcher familiar with the trade who recently visited the site. This route, stretching across the width of UWSA and NDAA-held territory along the China-Myanmar border, avoids the necessity of sending narcotics shipments south across government-held territory to reach the Thai border.

Observers of the regional drug trade have claimed that the UWSA and NDAA have established methamphetamine laboratories in Laos, an accusation that Lao officials have consistently denied. Trafficking routes, however, are much harder to deny. Thai counter-narcotics officials claim methamphetamines and heroin are smuggled through Laos to less well-patrolled points in northeastern Thailand, including Nong Khai, Mukdahan and Ubon Ratchathani provinces.

The ONCB reckons between three million and five million methamphetamine pills are smuggled into northeastern Thailand from Laos each year. In a sting operation in July, Thai police arrested two Lao men and a Thai woman in northeastern Udon Thani
province with 160,000 methamphetamine tablets worth as much as US$1.4 million when sold in Bangkok. Police allege one of the Lao men was an important trafficker in Laos with direct contact to Myanmar-linked drug labs.

An increase in production and trafficking in Myanmar could have far-reaching regional implications. In Vietnam, there has been in recent years an upsurge in trafficking of methamphetamines and other synthetic drugs smuggled through Laos and traced back to northeastern Myanmar. The drugs are known to be smuggled to the northern cities of Hanoi and Haiphong and down the length of country to Ho Chi Minh City, feeding a growing addiction problem. Demand has increased in Vietnam as its large population becomes more affluent. Cambodia and Malaysia have also seen an increase in narcotics trafficked from Myanmar.

The production and trafficking of narcotics has fueled a succession of insurgent groups in Myanmar's northeastern region since the 1950's and will continue to do so should fighting with the government resume. Better communications and more efficient trafficking routes and methods, as well as more easily produced synthetic drugs in mobile laboratories, have financed the growth of certain Myanmar insurgent groups. And as they prepare for new hostilities against the government, the region's narcotics problem seems set to grow.

By Brian McCartan, Bangkok-based freelance journalist.

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