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Burma:The World's Largest Narco-Sou



Source:U.S. Department of State 


	BURMA


I.  Summary


Burma is the world's largest source of illicit opium and, potentially, heroin, 

as opium cultivation and production in 1996 increased to near record levels.  

The 1996 crop estimates indicate there were 163,000 hectares under opium poppy 

cultivation which could yield up to 2,560 mt of opium gum -- enough to produce 

250 mt of heroin and to satisfy the US heroin market many times over.  

Although there were some limited improvements in the Burmese Government's 

counternarcotics performance with regard to drug and precursor chemical 

seizures, these efforts fell far short of what is needed to cope with Burma's 

burgeoning drug trade.  Burma's antidrug efforts suffer from a lack of 

resources as well as the lack of a strong and consistent commitment.


Although the "surrender" of drug lord Khun Sa and the dismantling of his Mong 

Tai Army (MTA) was portrayed by the State Law and Order Restoration Council 

(SLORC) as a positive development, Khun Sa has not been brought to justice and 

has apparently been granted personal clemency from prosecution or extradition. 

 He is said by authorities to be under a form of house confinement in Rangoon 

and permitted to engage in business activities, but not narcotics-related 

activities.  Reports suggest, however, that he and his MTA colleagues continue 

to be involved in the narcotics trade.  


The ethnic drug trafficking armies with which the government has negotiated 

cease-fires, such as the United Wa State Army (UWSA) and the Myanmar National 

Democratic Alliance Army (MNDAA-Kokang Chinese), remain armed and heavily 

involved in the heroin trade and have to some extent moved into territory 

vacated by Khun Sa's former MTA.  The top leaders of these ethnic groups are: 

 U Sai Lin (Lin Ming-Shing) of the Eastern Shan State Army (ESSA); Yang 

Mao-Liang, Peng Chia-Sheng and Liu Go-Shi of the MNDAA; Pao Yu-Chiang, Li 

Tzu-Ju and Wei Hsueh-Kang of the United Wa State Army; and U Mahtu Naw of the 

Kachin Defense Army (KDA).  Nevertheless, the government's limited efforts to 

extend law enforcement into the ethnic areas during the year resulted in some 

seizures of narcotics and precursor chemical and the destruction of some 

heroin refineries.  These seizures pale in comparison with overall production, 

however, and are less than those in neighboring, non-producing states.


Money laundering is a growing problem in Burma, and there is reason to believe 

that the laundering of drug profits is having a substantial impact on the 

Burmese economy.  An underdeveloped banking system and lack of enforcement 

against money laundering have created a business and investment environment 

conducive to the use of drug-related proceeds in legitimate commerce.  Drug 

abuse -- in particular intravenous drug use -- is increasing, as is the 

incidence of HIV/AIDS infection.


II.  Status of Country


Burma provides the bulk of the world's opium supply.  It produces about 84 

percent of the opium cultivated in Southeast Asia.  Most of this supply of 

illicit opiates is produced in ethnic minority areas of Burma's Shan State, 

such as the Kokang and Wa territories over which Burmese  authorities have 

minimal control.  Since 1989, the SLORC has negotiated cease-fire agreements 

with the drug trafficking groups that control these areas, offering them 

limited autonomy and developmental assistance in exchange for ending their 

insurgencies.  Because the SLORC's highest priority has been to end the 

fighting and the threat to its national security, counternarcotics efforts in 

these areas have been a secondary consideration, even though the groups are 

said to have agreed to the gradual phaseout of opium cultivation and drug 

trafficking within their areas.  Nevertheless, we have seen no discernible 

effort by these groups to reduce trafficking or production.  Following the 

surrender of Khun Sa, the Kokang, Wa and Essa areas in particular became drug 

trafficking havens where opium was produced and refined with relative 

impunity.  


As part of the SLORC's efforts to bring the ethnic groups under its control, 

it granted leaders of these drug trafficking armies significant political 

legitimacy, and several participate in the government's National 

Constitutional Convention.  These leaders have exploited their relationship 

with Rangoon to expand their businesses -- legitimate and illegitimate -- 

although their prosperity has not filtered down to the ordinary people of the 

ethnic areas.  


III. Country Actions Against Drugs in 1996


Policy Initiatives.  Burmese counternarcotics activities increased from a 

very low base during 1996, especially with regard to heroin, precursor 

chemical, and amphetamine seizures, but remained grossly inadequate compared 

to the magnitude of Burma's drug problem.  


The "surrender" of Khun Sa allowed the Burma Army to project its  authority 

into the former MTA area.  The military disrupted, at least temporarily, 

trafficking routes and destroyed a number of heroin refineries in the area.  

There are also reports, however, of officials turning a blind eye to refining 

activity in return for bribes.


The SLORC did not announce any new drug control policy initiatives during 

1996.  It continued limited efforts to implement its "Master Plan for the 

Development of Border Areas and National Races."  This plan calls for a 

program of integrated development combined with law enforcement.  The stated 

aim is to improve the living standards in the ethnic areas and provide viable 

economic alternatives to opium cultivation.  In 1993, the Government of Burma 

(GOB) and UNDCP launched the China/Myanmar project and the Thailand/Myanmar 

project in Mong Yang and Tachilek districts, respectively.  These projects, 

while improving living standards and introducing alternative crops to farmers 

within the project areas themselves, had little, if any, impact on the 

enormous problem of opium cultivation even in neighboring areas, much less 

other areas of eastern and northern Burma.  The projects drew to a close in 

December 1996.


The GOB and UNDCP initiated a 12-month pilot integrated rural development 

project in 1994 in the Wa region in an effort to take advantage of the United 

Wa State Army's decision to establish five "opium poppy-free zones" in its 

area of control.  The stated goal was to bring about a gradual reduction of 

opium cultivation in the WA area.  The pilot project was designed to test the 

feasibility of a planned five-year, $15 million  rural development project 

aimed at crop substitution.  Negotiations on the "Drug Control and Development 

in the Wa Region of Shan State" project between the GOB, the UNDCP, and the Wa 

leaders were concluded in November 1996.  The SLORC raised a number of 

obstacles to implementation of the project.  Protracted negotiations between 

UNDCP and the Burmese resolved many of these issues, but some remain, and 

donors are concerned about implementation.  The Burmese cabinet has not yet 

formally approved the project.  In contrast to UNDCP's previous projects in 

Mong Yang and Tachilek, the Wa project will incorporate a monitoring and 

evaluation component designed to measure progress in eliminating opium 

cultivation.  As an integrated development scheme, it will also focus on 

infrastructure, as well as on the provision of educational and health 

facilities in the Ho Tao and Mong Pawk districts of the Wa region.


Accomplishments.  The GOB negotiated the "surrender" of the notorious drug 

lord Khun Sa and his MTA in January 1996.  According to the GOB, the terms of 

the surrender stipulated that in return for ending his insurgency and 

surrendering his weaponry, Khun Sa would be allowed to live under close 

government supervision in Rangoon, where he could engage indirectly, via 

third-party investors, in legitimate business -- but not drug trafficking -- 

and would not be prosecuted for his trafficking activities or extradited to 

the US.  The MTA drug trafficking network has been disrupted, but reports 

suggest that Khun Sa and his MTA associates are still involved in the trade.  

Overall trafficking from Burma has not diminished, as other groups, 

particularly the Wa, took up the slack caused by the dissolution of Khun Sa's 

army.  Moreover, Khun Sa has not been brought to justice in Burma, and the GOB 

has refused USG requests to turn him over for prosecution in the US.  Indeed, 

the SLORC treats him with respect, addressing him with the traditional 

honorific.


Seizure of drugs and precursor chemicals, while still minimal, increased from 

a low base during 1996.  The combined police and military narcotics task 

forces seized 493 kgs of heroin, as opposed to 72 kgs in 1995.  In October, 

the authorities seized for the first time the amphetamine precursor ephedrine 

-- more than three mt --  which apparently originated in China for conversion 

at labs in Burma.  They also seized 5.6 million tablets of amphetamines.  

Seizures of acetic anhydride more than doubled from 1995 totals to 2,668 

gallons.  However, opium gum seizures continued to decline from previous 

years, totaling 992 kgs versus 1,060 kgs in 1995.  In the July-October period, 

the Burmese reported that they destroyed 11 heroin refineries compared to the 

12 destroyed from 1988 through June 1996.  The GOB conducted these 

counternarcotics activities in areas controlled by ethnic drug trafficking 

groups such as the Kachin Defense Army, the Kokang Army, the MNDAA, and the 

United Wa State Army.  These limited inroads into the ethnic areas do not, 

however, constitute a serious challenge to the drug trafficking armies, which 

by and large continue to conduct their trade unimpeded.


Unlike previous years, when heroin seizures involved small quantities, this 

year the SLORC claimed some larger seizures, including the largest ever 

recorded in Burma -- 143 kgs seized near Kutkai in Northern Shan State in 

August.  Authorities seized another 44.8 kgs in Hopong in Northern Shan State 

in August and  45 kgs in Tachilek in September.  These  seizures are small in 

comparison with Burma's actual production and with seizures in neighboring 

countries.  The unprecedented precursor and amphetamine seizures have alarmed 

the Burmese authorities because they signal a possible future stimulants 

problem for the Burmese populace.  Thus far, the amphetamines produced in 

Burma have been primarily for export to Thailand and China rather than for 

domestic consumption.


The 1993 Narcotic Drugs and Psychotropic Substances Law brought the Burmese 

legal code into conformity with the 1988 UN  Convention.  As such, the 1993 

law contains useful legal tools for addressing money laundering, the seizure 

of drug-related assets, and the prosecution of drug conspiracy cases.  

However, to date these provisions remain largely unused as Burmese police and 

judicial officials have been slow to implement the law, targeting few if any 

major traffickers and their drug-related assets.  Undermining SLORC 

credibility, a Burmese official involved in counternarcotics declared flatly 

in December that money laundering did not exist in Burma because of the 

country's strict banking laws.  In one instance, however, the authorities 

reportedly seized buildings belonging to the Wa of the southern military 

region as the result of the heroin seizure in Tachilek mentioned above, 

although the disposition of these assets is unknown.


Law Enforcement Efforts.  The GOB's coordinated drug enforcement effort is 

led by the Office of the Central Committee for Drug Abuse Control (CCDAC), 

which is comprised of personnel from various security services, including the 

police, customs, military intelligence, and the army.  CCDAC now has 18 drug 

enforcement task forces around the country, most located in major cities and 

along key transit routes near Burma's borders with China, India and Thailand. 

 While CCDAC and its task forces are responsible for effecting the bulk of 

narcotics seizures and arrests, the agency suffers from a lack of adequate 

resources.  The UNDCP and DEA in the past provided various CCDAC units with 

modest equipment and training, but they were unable to do so this year.  

CCDAC's resources are inadequate to support its law enforcement mission.


Corruption.  There is no evidence that the government, on an institutional 

level, is involved in the drug trade.  However, there are persistent reports 

that lower level officials, particularly in outlying areas of the border 

regions, take bribes in return for looking the other way and that some local 

officials and commanders are actively involved in the drug trade.  The lack of 

a vigorous enforcement effort against money laundering leaves Burma vulnerable 

to the growing influence of traffickers through the use of drug proceeds in 

legitimate business ventures.  Although there is no concrete proof that drug 

money is involved, businesses owned by family members of known traffickers 

invested heavily during the year in infrastructure projects, such as roads and 

port facilities, as well as in hotels and other real estate development 

projects.


Agreements and Treaties.  Burma is a party to the 1971 and 1988 UN drug 

conventions.  The SLORC deposited instruments of ratification to the 1988 

Convention with the UN International Narcotics Control Board in Vienna.  

However, the Rangoon regime maintains its reservations on two of the 

Convention's Articles, one on extradition of Burmese citizens to third 

countries, and one on the use of the International Court of  Justice to 

resolve disputes relating to the Convention (Articles 6 and 32, respectively). 

 The US does not have a mutual legal assistance treaty with Burma.  It is the 

opinion of the USG, however, that a US-UK extradition treaty, which was 

accepted by the post-independence Burmese Government in 1948, remains in force 

and is applicable to the extradition of drug fugitives from Burma to the US.  

The SLORC refuses to recognize the applicability of this treaty, as well as 

the US request to render Khun Sa to face trial in the US.  In May, the GOB and 

the UNDCP signed a six-nation (Burma, Cambodia, China, Laos, Thailand, 

Vietnam) memorandum of understanding on a sub-regional action plan aimed at 

controlling precursor chemicals and reducing illicit drug use in the highlands 

of Southeast Asia.


Cultivation and Production.  Burma is by far the world's largest producer 

of opium, as opium poppy cultivation increased six percent and production 

increased nine percent over 1995 levels due to good weather, growing 

conditions and lax enforcement.  The 163,100 hectares cultivated in 1995-96 

had the potential of producing up to 2,560 mt of opium.  The bulk of Burma's 

opium poppy cultivation traditionally has been in the mountainous regions of 

the Shan Plateau, which extends the length of the Shan State, from the Chinese 

border to the Thai border.  Since 1989, however, cultivation has been 

expanding into areas under Burmese Government control on the west bank of the 

Salween River.


Drug Flow/Transit.  Until 1996, heroin tended to be produced in large, 

relatively static refineries in the Shan State, well ensconced in ethnic 

enclaves protected by drug trafficking armies.  These labs, run by the ESSA, 

MNDAA (Kokang), KDA, UWSA, and MTA, were left untouched by the GOB, in keeping 

with the SLORC's cease-fire agreements with these drug militias.  However, in 

1996 the GOB made inroads into these defended areas, reportedly destroying a 

number of labs and forcing some traffickers to use smaller and more mobile 

labs to refine heroin.  A growing amount of methamphetamines reportedly is 

produced in labs co-located with heroin refineries along the Chinese, Thai and 

Lao borders.  Heroin produced by Burma's ethnic groups is trafficked largely 

through unmarked transit routes crossing the porous Chinese and Thai borders 

and, to a lesser extent, the Indian, Bangladeshi and Lao borders.  Although 

Thailand was once the primary route for Burmese heroin to exit Southeast Asia, 

trafficking through China is now increasing.


As in 1995, traffickers moved a growing amount of heroin through central 

Burma, often from Lashio, through Mandalay to Rangoon or other seaports such 

as Moulmein, for sea-borne export to Singapore or Malaysia.  Trafficking 

routes leading through Kachin and Chin States and Sagaing Division in northern 

Burma to India also are  used to a lesser extent.  Traffickers import acetic 

anhydride, an essential chemical in the production of heroin, primarily from 

China, India and, to a lesser extent, from Thailand.


Demand Reduction/Domestic Programs.  Drug abuse is a growing problem in 

Burma.  Official estimates put the addict population at approximately 60,000, 

but UNDCP and NGO's working in the health sector estimate the actual 

population is at least five times that figure.  Heroin is the drug of choice 

and its intravenous use is contributing to the rapid spread of HIV/AIDS, 

particularly in the Kachin and Shan states.  According to  the GOB's "Rapid 

Assessment Study of Drug Abuse in Myanmar," sponsored by the Ministry of 

Health and UNDCP in 1995, drug treatment services are not reaching most drug 

users because of a lack of facilities, lack of properly trained personnel, and 

inadequate treatment methods.


IV. US Policy Initiatives and Programs


Policy Initiatives.  Direct USG counternarcotics aid to Burma has remained 

suspended since 1988, when the Burmese military brutally suppressed the 

popular pro-democracy movement.  Initiatives such as an aerial eradication 

program, which had been effective in containing the expansion of Burmese opium 

cultivation, have not been carried out by the Burmese Government since 1988.  

Currently, the USG engages the Burmese Government on a very limited level.  

DEA shares drug-related information with the GOB and conducts joint drug 

enforcement investigations with Burmese police and military intelligence.  

Various US agencies have twice joined Burmese counterparts in conducting 

annual opium yield surveys in the mountainous regions of the Shan State; the 

Burmese Government invited USG participation in a third such joint survey in 

February 1997.  However, the Burmese Government cancelled a planned survey in 

1996 at the last minute, shortly after the "surrender" of Khun Sa.  Results 

from the surveys gave both governments a more accurate understanding of the 

scope and magnitude of Burma's opium crop.


The USG continues to urge the SLORC to take serious steps to curb Burma's 

runaway opium production and heroin trafficking.  Specifically, the Rangoon 

regime has been encouraged to:


--undertake opium poppy eradication on a wide scale in areas under its direct 

control or immediate influence;


--press ethnic groups such as the Wa, the Eastern Shan State Army and the 

Kokang, with which it has made political accommodations, to undertake credible 

measures to reduce opium cultivation and end heroin trafficking and 

production;


--actively enforce existing antidrug, conspiracy and money laundering 

legislation;


--provide strong support to multilateral drug control projects in the Shan 

State;


--hold Khun Sa accountable for his decades of drug trafficking and deprive him 

of assets derived from the drug trade;


--take action against drug-related corruption, including prosecution and 

appropriate punishment of corrupt officials and money launderers.


Bilateral Cooperation.  USG counternarcotics cooperation with the Burmese 

regime is restricted to basic law enforcement operations and involves no 

bilateral material or training assistance from the US, due to concerns over 

Burma's shallow commitment to the counternarcotics effort, disregard for the 

rule of law, and violation of basic standards of human decency.  DEA's liaison 

with Burmese police and military -- conducted through DEA's three-person 

office in Rangoon -- will continue at its limited level.  Although  DEA was 

unable to provide training to Burmese counternarcotics personnel during the 

year, it did encourage cooperation by the CCDAC on two major investigations of 

international drug trafficking groups operating in Burma.


The Road Ahead.  Based on experience in dealing with large-scale narcotics 

trafficking problems elsewhere around the world, the USG recognizes that 

ultimately large-scale international aid, including developmental assistance 

and law enforcement aid, will be needed to curb drug production and 

trafficking.  The USG is prepared to consider such assistance, contingent upon 

the GOB's demonstration of a strong commitment to counternarcotics, the rule 

of law and significant movement toward political reform.

End