A bitter debate is raging over the role of Myanmar's generals in fighting the narcotics trade: are they serious about cracking down on their country's status as the world's number-one exporter of heroin, or are they partners in crime with such legendary drug barons as Lo Hsing-han and Khun Sa, who now openly launder their narco-profits in the capital, Yangon?
Some Western observers claim that the government's anti-narcotics unit is is getting results. Jean-Luc Lemahieu, the Yangon representative of the United Nations Drug Control Program (UNDCP), told Asia Times Online that "we accept the government is serious about drug eradication based on tangible results". Opium cultivation and production have been reduced in recent years, and drug seizures have increased.
A senior US diplomat based in Myanmar adopted a similarly positive stance, pointing out that the embassy now takes the view that "there was no evidence of institutional involvement in the drug trade", meaning that the George W Bush administration feels that it can work with Yangon in an attempt to stop the flow of narcotics from Myanmar to Western countries, including the United States.
UN drug officials were excited by a recent narcotics bonfire show in June staged by Yangon. Drugs seized by Myanmese military and police were ceremonially put to the torch in front of a selected audience of diplomats and VIPs. A UNDCP spokesman claimed that the bonfire was "more than symbolic, as it indicates the willingness of those directly involved to get rid of the opium".
Whatever the reductions in the opium harvest and increases in narcotic seizures, heroin exports from Myanmar's section of Southeast Asia's Golden Triangle continue to flood the world market. However, the UNDCP is so impressed with "progress by Burmese efforts at narcotics control" that it has gone out on a limb to launch an appeal for more international aid, which is in effect asking Western nations, especially the European Union, to revise their current policy of sanctions against the Myanmar government.
Since the release of opposition leader and symbol of resistance Aung San Suu Kyi from house arrest, Yangon's generals have stayed silent on the question of moves toward democratization and serious dialogue with the opposition. However, their embassy in the United States officially declared their enthusiasm to work with the US on drug suppression and anti-terrorism. These twin avenues are seen as alternative routes toward obtaining international aid and recognition, and paths that do not oblige Myanmar's military to give up any power to the opposition.
Outside the United States, others are more skeptical. The Thai military has been been assigned to assist that country's police in trying to stem the flow of another drug from Myanmar known as ya ba, or "crazy medicine", that has produced an epidemic of addiction to this Golden Triangle brand of amphetamines. Thailand's anti- narcotics specialists have no confidence in their Myanmese counterparts as long as the current leading drug lord, an ethnic Wa Chinese named Wei Hsueh Kang, is given a free hand by Myanmar's generals to continue production and export of heroin and speed on a massive scale.
Wei is a wanted man, indicted by a US court and with a State Department offer of a US$2 million reward on his head. Far from making any effort to capture the drug lord, the junta's intelligence chief, Lieutenant-General Khin Nyunt, views Wei as a useful ally in the government's war with the ethnic minority Shan people and their rebel army.
Strategic alliances with opium warlords are nothing new in Myanmar since the Golden Triangle, also comprising parts of Thailand and Laos, first became established as a major opium-growing region in the early 1960s. In those days remnants of the anti-communist Kuomintang Chinese who had fled to Shan state after Mao Zedong's 1949 revolution expanded poppy cultivation and developed heroin- distribution networks with the active connivance of the US Central Intelligence Agency (CIA). In 1989, the number-three man in the hierarchy of the junta, General Khin Nyunt, forged a ceasefire agreement with the United Wa State (UNWSA) setting up a new strategic alliance between Yangon and the opium-trafficking armies of the Wa against the secessionist Shan State Army and other ethnic minorities opposed to the government.
Drug infusions for a moribund economy
All major growth sectors of Myanmar's economy since 1988 - the banks, hotels and construction companies - are tainted with narco- profits. Lo Hsing-han's family runs the nation's single biggest corporate group, Asiaworld, a part-owner of the four-star Traders Hotel in Yangon together with foreign partners from Malaysia and Singapore.
Wa businessmen have become key investors in Yangon real estate and control the new Mayflower bank, Hong Pang trading company and an assortment of other post -1990 companies. Wei Hsueh-kang is a leading shareholder in Hong Pang, and also runs another enterprise called Green Land.
Khun Sa, who until 1996 was viewed as the region's top heroin warlord, has apparently retired from the trade, and has been rewarded by the government with a lavish mansion on Inya Lake, one of the elite residential districts of the capital. He too has become part of Myanmar's nouveau riche and runs a major bus company.
This correspondent questioned the UNDCP about drug barons such as Lo Sing Han, Khun Sa and the Wa Chinese who appear to be the new business class, usually in partnership with the generals. UN drug-control chief Lemahieu, who advocates more Western aid for Yangon's drug-suppression operations, conceded that the specter of these drug lords enjoying full protection from the government as they conduct money-laundering on a grand scale "is highly embarrassing".
Francois Casanier, research analyst with Geopolitical Drugwatch in Paris, says: "All normal economic activities, if you can call anything in Burma normal, are instruments of drug-money-laundering. And no drug operation in Burma can be run without the Slorc." (Slorc is an acronym for State Law and Order Restoration Council, the old name of Yangon's ruling junta. It is now officially renamed the SPDC: the State and People's Development Council.)
One indication that the Myanmar government benefits directly from narcotics comes from an International Monetary Fund study that found large expenditures unaccounted for: despite the fact that foreign-exchange reserves for 1991-93 were only about US$300 million, Slorc purchased arms from China valued at $1.2 billion during the period.
Peter Gutter, an adviser to the Burma Lawyers Council in Bangkok, claims that "at least 50 percent of Burma's economy is unaccounted for and extralegal. The earnings from heroin now exceed those from all of Burma's legal exports."
After a four-year investigation, Casanier and a team of researchers reported that the state-owned Myanmar Oil and Gas Enterprise (MOGE) was "the main channel for laundering the revenues of heroin produced and exported under the control of the Burmese army".Casanier concludes, "Drug money is irrigating every economic activity in Burma, and big foreign partners are seen by the Slorc as big shields for money-laundering."
To aid or not to aid Yangon?
Myanmar's military junta is trying hard to woo Washington, hiring a US public-relations firm to lobby on its behalf at a cost of $450,000. Promoting the case for the junta is Arizona-based DCI Associates, which also represents the tobacco industry and the National Rifle Association, as well as George W Bush when he was governor of Texas. The first success for Yangon and DCI was swinging an invitation to the head of Myanmar's anti-drug unit, Colonel Kyaw Thein, to Washington in May.
However, Shan dissidents and the Myanmese opposition are opposed to more aid for narcotics suppression. Aung San Suu Kyi has opposed all international aid that ends up in the hands of the government as only boosting the generals and bringing no benefit to the people.
Given that Myanmar is the only country in the Asia-Pacific region that appears to meet all the criteria of a firmly established narco- economy, the Myanmese opposition argues that only serious steps toward democracy, a free press and the setting up of an independent police force can turn things around.