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1/3: THE USG INTER.NARCOTICS STRATE



Posted: 22-Feb-99, 6:00am
[Added note: Amidst controversial aspects of INTERPOL Heroin Conference
in Rangoon, it is time to refresh our memories about the illicit drug
issues on Burma. --- U Ne Oo]

Part 1 of 3.

INTERNATIONAL NARCOTICE CONTROL STRATEGY REPORT, 1997
RELEASED BY THE BUREAU FOR INTERNATIONAL NARCOTICS AND LAW ENFORCEMENT
AFFAIRS, US DEPARTMENT OF STATE, WASHINGTON, DC, MARCH  1998(source: US
State Dept. Homepage)

SOUTHEAST ASIA AND THE PACIFIC: BURMA

I. SUMMARY

Burma continues to be the world's largest source of illicit opium and
herion. Production declined slightly from 1996 levels. The 1997 crop
estimates indicates there were 155,150 hectres under opium poppy
cultivation which could yield up to a maximum of 2,365 metric tons of
opium gum -- enough to produce an estimated 197 metric tons of herion
and satisfy the US herion market many times over. The Burmese government
increased seizures of opium and herion and destroyed more herion
refineries than in the past, and engaged in greater drug control
cooperation with the USG and Thailand. Overall efforts, however, paled
in comparison with the narcotics problem and continued to suffer from a
lack of resources and political will. There was no discernible effort
during the year to stop money laundering, suspected to be carried out on
a massive scale. The government systematically encouraged leading drug
traffickers to invest in infrastructure and other domestic projects.

The ethnic drug trafficking armies with whom the government has
negotiated cease-fires (but not permanent peace accords), such as the
United Wa State Army and the Myanmar Democratic Alliance Army
(MNDAA-Kokang Chinese), remain armed and heavily involved in the herion
trade. Through cease-fire agreements, the GOB appears to have given the
trafficking armies free hand to continue their trade, although there are
reports that the agreements provide for an end to the trade at some
future date.

Among the top leaders of those ethnic groups believed by the USG to be
involved in the herion and/or amphetamine trade are: Sai Lin( LIn
MIngxian) of the Eastern Shan State Army(ESSA); Yang Maoliang, Peng
Jiasheng and Liu Goushi of the NMDAA;  Pao Yuqiang, Li Zuru and Wei
SXuekang of the United Wa State Army; Mahtu Naw of the Kachin Defense
Army(KDA); Mong Sa La of the Mongkoe Defense Army(MDA); and Yawd Serk of
the Shan United Revolutionary Army(SURA) , which was formerly allied
with drug lord Chang Qifu's (Khun Sa's) Mong Tai Army. Chang Qifu
disbanded his army in January 1996 in return for generous terms of
surrender, which allow him to avoid criminal procedures. Reporting
continues to suggest that Chang remains involved, at least indirectly,
in the narcotics trade through his subordinates.

A number of ethnic groups announced opium free areas in 1997, but they
did not offer details on how these objectives would be met. In the past,
similar pledges have been unfulfilled. Toward the end of the year, there
were reports of crop eradication in some of these areas.

There is reason to believe that money laundering in Burma and the return
of narcotics profits laundered elsewhere is a significant factor in the
overall Burmese economy, though the extent is impossible to measure
accurately. Political and economic constraints on legal capital inflows
magnify the importance of narcotics-derived funds in the economy. An
underdeveloped banking system and lack of enforcement against money
laundering have created a business and investment environment conducive
to the use of durg-related proceeds in legitimate commerce.

Drug abuse-- in particular intravenous drug use-- is on the rise in
Burma and with it an alarming spread of the HIV/AIDS virus., especially
in the ethnic minority areas that are the source of the drugs.

II. STATUS OF COUNTRY

Burma provides over half of the world's supply of illicit opium and has
done so for years. According to USG estimates, Burmese opium production
has remained at high and stable levels for the past eight years, since
doubling in 1989, the year after the State Law and Order Restoration
Council(SLORC), now known as the State Peace and DEvelopment
Council(SPDC) took power. This increase may be correlatyed with
political accommodations the regime reached with sevveral drug
trafficking insurgent groups, and the regime's abandonment of effective
eradication efforts. (As noted above, at the end of the year there were
reports of renewed interest in eradication.) The US also ended its
narcotics assistance in 1988, in response to massive human rights abuses
and further disintegration of the rule of law.

Burma currently accounts for approximately 90 percent of the total
production of Southeast Asian opium. Most of this supply o f illicit
opiates is produced in ethnic minority areas of Burma's Shan State. Over
the past year, the GOB has increased its presence in this region,
particularly the area formerly under the control of Chang Qifu. Since
1989, Rangoon has negotiated cease-fire agreements with most of the
drug-trafficking groups that control these areas, offering them limited
autonomy and development assistance in exchange for ending their
insurgencies. The regime's highest priority is to end insurrection, and
counternarcotics interests in these areas are a secondary consideration.
Moreover, the cease-fire agreements have had the practical effect of
condoning money laundering, as the government encouraged these groups to
invest in"legitimate" businesses.

In the past two years, as overt military challenges to RAngoon's
authority from the ethnic groups have diminished somewhat, the
government, while maintaining its primary focus on state security, has
stepped up its counternarcotics enforcement efforts. Teh GOB garrisoned
troops on a year-eound basis for the first time in the Kokang region
during 1997. (The WA, however, have not accepted a permanent GOB
presence.) Perhaps at GOB urging, the MNDAA, the kDA, and the MDA in
northern Shan State declared their intention to establish opium-free
zones in territory under their control by the year 2000. Earlier in the
year, ESSA leader Sai LIn had also declared an opium-free zone in the
area known as Special REgion-4 in northeastern Shan State. This region,
however, has traditionally had low density opium cultivation. The Wa
announced opium free zones in 1995.

The GOB, for its part, stated that it would support these eradication
efforts with developement assistance in the form of infrastructure
improvements and advice on crop substitution. The GOB also requested USG
assistance in verifying whether these groups fufill their commitments.
The USG has requested additional information to pinpoint the areas in
question. This information has been provided. IN view of China's long
border with the Wa area, the GOB asked China for assistance in curbing
Wa trafficking.

Ethnic groups have made "opium free" pledges since 1989, but, with the
exception of the Kachin, have shown no success in enforcing their stated
intentions. IN view of the extensive opium cultivation in northern Shan
State, the area of greatest opium density, any reduction in cultivation
would require considerable eradication, law enforcement and alternative
development efforts by the authorities. Implementation of such a paogram
would also require a spirit of cooperation between the government and
ethnic groups. It is too early to assess these latest pledges.

III. COUNTRY ACTIONS AGAINST DRUGS IN 1997

--
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