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Julien Moe  and his homepage www.users.interport.net\~moe
                          Wednesday  October 22  1997 [south china morning post]

                The Mekong Region 
                     Drugs keep junta
                   afloat as traffickers

                BURMA by William Barnes 
                The Burmese junta repeatedly claims it is taking
                steps to stem the massive outflow of heroin and
                opium from its borders.

                Yet in recent years the country has been enjoying
                much greater profits from drug sales than ever
                before, according to a recent report by the United
                States Embassy in Rangoon.

                The document states that behind the rhetoric of the
                State Law and Order Restoration Council there
                appears to be a willingness to do deals with known
                or suspected narcotics traffickers. These include
                former drug warlord Khun Sa who surrendered
                over New Year in 1996 and is now said to be
                engaged in transport and gems in the capital.

                "Reports suggest, however, that he had his Mong
                Tai Army colleagues continue to be involved in the
                narcotics trade," said this year's Foreign Economic
                Trends Report.

                The military regime cut cease-fire deals with
                notorious ethnic drug dealers such as the Wa hill
                tribe and the Kokang Chinese community in the late
                1980s and early 1990s.

                Recently the junta effectively encouraged traffickers
                to keep their ill-gotten gains in Burma when they
                stopped confiscating bank deposits that could not
                be shown to have been legally earned.

                "During the mid-1990s there was abundant
                anecdotal evidence . . . that a growing proportion
                of Burma's narcotics export receipts were staying
                home rather than being kept abroad," the document

                "Diverse businesses affiliated with these
                organisations began to flourish openly in Rangoon,
                presumably financed by proceeds from illicit
                trafficking in narcotics, gems and timber."

                Narcotics remain Burma's most valuable export
                with its estimated potential production value at the
                border rising from US$500 million (HK$3.8 billion)
                in 1994, to US$850 million in 1995 and US$1.2
                billion a year in 1996.

                These figures do not include the extremely lucrative
                rise of amphetamine exports in the 1990s. Thus
                drug prices have also risen dramatically for Western
                addicts buying, say, on a New York street.

                By contrast remittances from Burmese abroad, an
                important source of foreign exchange, were
                US$352 million in 1996.

                Profits from the drug trade have helped fuel a
                spending boom in Rangoon where luxury hotels and
                traffic jams have appeared even though the junta's
                attempt to kick-start the real economy seems to
                have largely failed.

                The traffickers are now evidently prospering in a
                country regarded as an international pariah and
                where military meddling has cramped the growth of
                legitimate businesses.

                "In Rangoon some Burmese business people . . .
                complained of the increasing difficulty of competing
                with firms affiliated and allegedly funded by
                narcotics-cultivating and exporting organisations,"
                the report said.

                "Some of Burma's private banks, legal since 1992,
                appear to be affiliated with these organisations."