Monday, July 25, 2011

Laos and the drugs trade -A second wind from the Golden Triangle

THE new prime minister of Laos, Thongsing Thammavong, has taken the country's drugs problem into his own hands with good Communist brio. At an event co-sponsored by the government and the UN Office on Drugs and Crime (UNODC) in late June Mr Thongsing, wearing a business suit and wielding a giant torch, helped put fire to an enormous stash of seized opium, heroin and cannabis. Three weeks later the prime minister reinforced his message by concluding a co-operation agreement with Myanmar, Laos’s big neighbour to the north-west, on the prosecution of drug trafficking. Although official policy in the Lao People’s Democratic Republic is usually kept opaque, it is easy to see that the government, led by a man eager to make an impression—is gearing up for a new stage in the war against drug producers and traffickers. In recent years it had shifted to the back foot; the production of both opium and methamphetamine is on the rise.

Laos was long regarded as one side of the Golden Triangle, which was responsible for producing over half of the world's opium as recently as the 1990s. At one point smoking crude opium had become a macabre tourist attraction for foreign visitors slumming it in northern Laos. Facing pressure from America and the UN, the Laotian government, together with its counterparts in Myanmar and Thailand, conducted a wildly successful eradication programme in the late 1990s that saw poppy cultivation plummet. From the 27,000 hectares (over 40,000 football pitches) that were under cultivation in 1998, within eight years the Laotian government had brought the total crop yield close to nil. Close enough that it was able to declare the country opium-free by early 2006. Contemporary reports suggested that it was no Potemkin clean-up job—towns such as Vang Vieng reinvented themselves as destinations for a different type of visitor.

The government’s efforts at repressing production were augmented happily by a simultaneous explosion in poppy growth in Afghanistan. The Taliban had seized Kabul in 1996 but it wasn’t until 1999 that Afghanistan’s opium producers really hit their stride. That year Afghanistan’s market overtook Myanmar as the world's largest and began dictating prices worldwide (to ignore the remarkable blip of 2001). By 2006 it was growing seven times the amount of Myanmar, Thailand and Laos combined. A subsequent glut sent global prices plummeting, aiding the eradication efforts of the South-East Asian governments.

It now appears that the Laotian government became complacent almost immediately upon declaring victory. Opium production has grown every year since 2007, and in 2010 the area under cultivation leapt by 58% year-on-year, according to a recent UNODC report. The government has proved its ability to locate and destroy poppy fields, but its dedication to disbursing aid—such as might motivate the erstwhile growers to pursue other livelihoods—is more questionable. UNODC believes that less than 10% of the villages declared opium-free have received funds promised for growing alternative crops. The effects of this failure were exacerbated by the global financial crisis. Weaker demand led to a fall in farm-gate prices for legal crops, while higher input costs raised prices for household goods. As standards of living declined, the reasons to return to poppies grew stronger.

Unhelpfully, the spot price of opium has also continued to rise. As expected, a reduction in local cultivation pushed up domestic prices, from around $250 per kilogram in 2002 to almost five times that in 2008. However, even as local supply began to rise again, the price continued to increase, reaching $1,670 per kilo in 2010. Why this is happening is unclear. One theory is that the drug remains in short supply locally because traffickers have opened new supply routes, taking advantage of new road links to China; the size of its import market is almost totally unknown.

Meanwhile, hidden among the stash burned by Mr Thongsing were 1.2m tablets of methamphetamine, known in Thai or Lao as yaba. Production of yaba in hidden factories in the Golden Triangle rocketed while opium production shrank in the early 2000s, and it has now supplanted opium as the consumer’s drug of choice in Laos. It finds a ready market in the growing cities as well as in the countryside.

According to UNODC, the number of yaba pills seized in Laos is rising sharply, from 1.3m in 2007 to 2.3m in 2009. But it is hard to know whether this has anything to do with Mr Thongsing’s new campaign, which for once addresses yaba on a par with opium. The ease and speed with which yaba factories can be assembled and relocated, combined with Laos' porous borders, makes it a cinch to evade the police. Unlike poppy plots, meth labs are not easily spotted by helicopter surveillance. So it is difficult to determine whether police are making inroads or whether factories are simply scaling up production. Nor is it possible to tell if seized pills originated in Laos or only indicted midway along their journey to markets in Europe, America and elsewhere in Asia.

Mr Thongsing's very public involvement in the drug war indicates that the Laotian government is readying itself for another crackdown. The speed with which it set about destroying poppy fields a decade ago indicates that it will be a formidable foe. Its dormancy since then however seems to have given the drug industry a chance to evolve and wise up. Whether it does the country any good or not, Mr Thongsing should have plenty of torch-brandishing ahead of him. The Economist

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