Executive Summary: "The people of Karenni State are living ghosts. Their daily survival is an achievement; however, it also signifies their further descent into poverty and a spiralling system of repression. Whilst this report documents the deteriorating situation in Karenni State over the past six years, this is nothing new for the ethnically diverse population of this geographically small area. They have been living in a protracted conflict zone for over 50 years with no respite from decades of low-intensity conflict and frequent human rights abuses. All the while both State and Non-State actors have marginalised the grassroots communities? voices, contributing to the militarisation of their communities and societies. Burmese soldiers oppress Karenni villagers on a daily basis. Villagers are isolated from members of their own communities, and other ethnic groups; they report daily to local Burmese troops about Karenni National Progressive Party (KNPP) troop movements and other activities in their areas; community members spy on one another, reporting back to the State Peace and Development Council (SPDC); and they are punished by the SPDC in retaliation for the actions of the KNPP. All of these strategies create an environment of fear and mistrust between ethnic groups, communities, and even family members. These tactics successfully oppress the villagers, as they are too fearful and busy to think beyond daily survival. Further exacerbating the situation is the fact that villagers face oppression not only from the Burmese army, but also ceasefire groups and the KNPP. Soldiers from both the KNPP and ceasefire groups physically maltreat villagers and undermine their livelihoods. While these occurrences are certainly less frequent and less severe than similar acts by the SPDC, they still oppress the civilian population and undermine their ability and capacity to survive. Additionally the presence of many different actors has resulted in the militarisation of Karenni State. Thousands of landmines have been indiscriminately planted throughout the state, without adequate mapping or markings to minimise civilian causalities. The SPDC, ceasefire groups and the KNPP all recruit and have child soldiers in their armies. The Burmese army has the largest number of child soldiers anywhere in the world, and approximately 20 per cent of the KNPP?s troops are under 18 (the minimum age for recruitment into the armed forces under Burma?s national law). The increased militarisation of Karenni State has resulted in increases in human rights abuses. However villagers are staging their own non-violent resistance movement. They have developed and implemented a number of early warning systems and household and village-wide risk management strategies so as to minimise the impact of the SPDC and other armed groups violence and abuses. These resistance strategies have become the biggest threat to local and regional authorities; consequently the villagers are increasingly becoming the targets of hostilities from the Burmese army. Most people in Karenni State rely on agriculture as their primary source of income and are living a subsistence existence. Despite the villagers? best efforts to secure their livelihoods, their ability and capacity to do so is constantly undermined by the SPDC and, to a lesser extent, ceasefire groups and the KNPP via crop procurement, forced production of dry season crops, arbitrary taxation and fines, theft and destruction of property and food, forced labour and land confiscation. This is further exacerbated by the drought that has been occurring in Karenni State for the past decade, which affects crop yields. When coupled with skyrocketing commodity prices, villagers? ability to ebb out a living is further eroded – to the point of impossibility in some cases. The abject poverty in Karenni State prevents villagers from accessing basic health and education services. Whilst the SPDC claims to provide free health care and education, in reality this does not occur. Health and education services provided by the state are extremely expensive and are well-below international standards. As a result, for most people education and medical treatment becomes a luxury they simply cannot afford. As a result of poverty some villagers are turning to illegal activities in order to survive - mainly poppy production. In Karenni State there are two areas where villagers are growing poppies with the permission of ceasefire groups. Farmers can earn a significantly higher monetary return on their poppy yields than for other crops using the same quantity of land. Poppy growers can earn up to 300,000 Kyat per 1.5 kilogram package of raw opium they produce (a 1.5 kilogram package of raw opium can be produced in four months). A teacher supported by the SPDC would have to work for 60 months in order to earn the same amount. Additionally amphetamine type stimulants (ATS) are being produced in Karenni State. Three factories producing ATS in Karenni State have been identified, again in areas controlled by ceasefire groups; however as it is difficult to distinguish between factories and ordinary dwellings it is possible that there are many other ATS factories in Karenni State that have not been identified. Each factory can produce between 250,000 and 300,000 pills per month. From the three known factories in Karenni State between 9 million and 10.8 million ATS pills are being produced and released into the international drug market each year. Today over a quarter of the population in Karenni State have been forced from their homes as a direct result of the actions of the Burmese military junta. Between 70 and 80 per cent of those displaced are women and children. Displacement has increased 42 per cent since 2002 and represents eight per cent of the total population in Karenni State. Karenni State has the highest level of displacement to population ratio in all of eastern Burma. When similar comparisons are made to the five countries with the largest displaced populations in the world (Sudan, Colombia, Uganda, Iraq and the Democratic Republic of Congo) the percentage of displaced persons in Karenni State is alarmingly higher. Over 12 per cent of Sudan?s population is displaced – less than half that of Karenni State. Internally displaced persons (IDPs) in eastern Burma receive very little assistance, if any at all, primarily due to the policies of the SPDC, which severely restrict humanitarian agencies accessing these vulnerable populations. The SPDC deems IDPs as enemies of the state and implements a shoot on sight policy, which includes children and the elderly. IDPs are vulnerable to human rights abuses, exploitation and violence from the SPDC, as well as food shortages and have severely limited access to education and health care services. The most pressing need of the people and the IDP population is physical security. Most people have the capacity to earn a livelihood mitigating food shortages, to educate their children, establish a medical clinic and develop their communities; however, they lack the security necessary to do so. There are humanitarian organisations working in Karenni State, including local community based organisations (CBOs), nongovernmental organisations (NGOs) and international agencies such as the United Nations Development Programme. Despite this presence the humanitarian situation in Karenni State continues to deteriorate and people are finding themselves slipping further and further into the poverty abyss – with no foreseeable escape. The impacts from the situation in Karenni State are not confined to the State?s boundaries - they spill over into other states and divisions in Burma and also across international borders, especially into Thailand. These spill over effects in