Under the rule of the State Peace and Development Council (SPDC) junta (known until November 1997 as the State Law and Order Restoration Council, or SLORC), Burma has become a global capital for the production of heroin and methamphetamines. Burma is second only to Taliban-ruled Afghanistan in heroin production, but an opium eradication campaign there may soon return Burma to its former number one position world-wide. Heroin production has leaped sharply since the SLORC declared itself Burma's government after massacring thousands of pro-democracy demonstrators in August and September 1988. This unprecedented surge in Burmese drug production is fueling an alarming global increase in heroin use. Never before has such pure and cheap heroin been so readily available in Burma and around the world. Burma's drug lords are now major investors in the country's economy, and Burma's army rulers are clearly abetting in and benefiting from the heroin trade.

The "Golden Triangle," where the frontiers of Burma, Laos, and Thailand meet along the Mekong River, has long been an important heroin producing area. The drug is refined from opium harvested from poppy flowers grown there. Much of the land is ill-suited to intensive farming, and local farmers rely on the poppy crop for a small income. But most of the immense profits from heroin trafficking have always gone to certain ethnic opposition armies and to military or government officials who promote or tolerate the trade. The area is now also becoming a major illicit manufacturer of methamphetamine, or "speed."

The 1988 return to direct military rule in Burma marked a sharp turn for the worse in international efforts to control the heroin trade. Even before the military coup, long-term cooperation between the United States and the Burmese government to stem heroin production had little effect. Ethnic opposition groups controlled most of the heroin producing frontier areas, and anti-drug assistance was sometimes diverted to counter-insurgency uses as successive Burmese regimes sought to quell powerful ethnic armies demanding autonomy or independence. But before the SLORC takeover, the Burmese government was not considered a partner in the trade even if it was virtually impotent in combating it.

In 1989, the Burmese military adopted a new strategy to consolidate its rule. The regime negotiated cease-fire agreements with several ethnic groups. Among the first were opposition armies comprised of Wa and Kokang peoples that had formerly served the Communist Party of Burma and were deeply involved in heroin trafficking. The pacts allowed the United Wa State Army, the Myanmar National Democratic Alliance Army of Kokang, and others to trade freely within Burma without governmental interference. The agreements also allowed opium cultivation - the main source of income for many poor farmers - to continue. The U.S. State Department declares in its 2000 International Narcotics Control Strategy Report, "…many of the cease-fire agreements have permitted former insurgents to continue their involvement in narcotics cultivation and trafficking activities. The cease-fire agreements have also had the practical effect of condoning money laundering."

In many cease-fire areas, opium cultivation has risen sharply, promoting a massive expansion of Burma's heroin production. Around the world, the drug is available in greater quantities than ever before, drawing hundreds of thousands of new users in New York City alone, where heroin arrests rose more than 50% from 1988-1997, and the average purity of street heroin leapt from 34.2% to 62.5%. The epidemic of addiction has also spread within Burma and neighboring countries. Along with it has come an explosion of AIDS spread by the sharing of needles among heroin users. In Burma's northern Kachin State, tests found that over 90% of heroin users were HIV-positive, and that most acquired the disease within a few weeks of beginning intravenous drug use. The military regime, which spends little on health and social services, has virtually ignored what is so far a silent but severe and rapidly escalating pandemic. Burma's Asian neighbors, including Bangladesh, China, India, Thailand, Malaysia, and Singapore, and even Cambodia, Vietnam, and the Central Asian republics, are all increasingly affected by the rising tide of heroin exports, addiction, AIDS, and corruption linked to the drug trade.

Hard evidence to back persistent allegations that the junta takes huge profits from heroin exports is not publicly available. But analysts believe earnings from heroin smuggling may now exceed those from all of Burma's legal exports, and are in effect criminalizing much of Burma's economy. Immense heroin profits are allegedly laundered through Burma's weak and ill-regulated banking system. Burmese banking regulations are notably pliant, permitting any amount of desperately-needed foreign exchange to be deposited upon payment of a 30% tax (or less during periodic amnesties or if certified by the junta as "investment for national development"). Since cease-fires with Wa and Kokang armies came into effect, Lo Hsing Han and other reputed drug lords with close ties to the Burmese generals have invested heavily in hotels and other businesses.

It is clear that at a minimum, the junta condones and abets the trade and has made little effort to control burgeoning heroin production or to prosecute those involved. A Shan opposition leader and long-time leading heroin trafficker, Khun Sa, "surrendered" to the junta in January 1996. Khun Sa had long been denounced by the SLORC and is under indictment in the United States for conspiracy to smuggle heroin. American demands for Khun Sa's extradition have been dismissed, and he has embarked on a comfortable new life as a businessman in Rangoon while enjoying the fruits of his long involvement in the drug trade. And despite Khun Sa's surrender, no reduction in heroin production in Southern Shan State - now mostly controlled by the Burmese army - has been reported. And even under the wings of the junta in Rangoon, Khun Sa apparently remains deeply engaged in the heroin trade. In February 2001, US authorities seized 126 kilograms of heroin arriving by ship in New York. This came two weeks after Thai authorities arrested a wife of Khun Sa's along with one of his chief aides in connection with the shipment.

There is little hope that Burma's heroin production, and the suffering and destruction that rising addiction is causing around the globe, will diminish as long as the army, which flaunts its public dealings with drug barons, rules Burma. Furthermore, the junta's draft constitution now under consideration offers neither democracy nor respect for ethnic autonomy. Lasting peace and genuine economic development in a democratic environment are keys to providing local farmers with viable alternatives to poppy growing. But even a democratic government in Burma would be hard-pressed to end narcotics trafficking. However, a freely elected government would receive considerable international aid in both drug control and rural development. And only a government accepted by ethnic minorities will be able to resolve the conflicts that block peace and development and provide fertile ground for Burma's heroin trade.

Burma: Country in Crisis was prepared by Open Society Institute's Burma project

Content:

• Executive summary

• Introduction

• Brief history

• Human Rights

• Heroin & Drug Trade

• Burma & Asian Security

• Refugees

• Women

• Environment

• Economy

• Foreign Trade & Investment

• Tourism

• Health and Education

• Frequently Asked Questions

Republished with permission from Open Society Institute