Source: 2000
Released by the Bureau for International Narcotics and Law Enforcement Affairs
Burma remains the world's second largest producer of illicit opium and heroin. Since 1996, however, production of both heroin and opium in Burma has steadily declined due to Burmese government eradication efforts and adverse weather conditions in major poppy growing areas. Cultivation of opium poppy expanded in 2000 to 108,700 hectares, a 21 percent increase over the 89,500 hectares under cultivation in 1999. The increase primarily resulted from better germination in existing fields and only secondarily from increased planting. Because of localized bad weather, Burma produced 1,085 metric tons of opium in 2000, a decrease of 5 metric tons from the 1,090 metric tons produced in 1999. Production of methamphetamines has skyrocketed over the past few years. Burmese counternarcotics officers continued to seize heroin and methamphetamines, but total seizures of both narcotics declined in 2000. Overall, in 2000 the Burmese seized approximately 27 million methamphetamine tablets, compared with nearly 29 million seized in 1999. Heroin seizures declined from approximately 273 kilograms in 1999 to 171 kilograms in 2000. Opium seizures increased slightly to 1,528 kilograms in 2000 from 1,445 kilograms in 1999.
The Government of Burma (GOB) continued to pursue and arrest individual drug traffickers in 2000, including members of some former insurgent groups, but has been unwilling or unable to take on the most powerful groups directly. The cease-fire agreements that the government has signed with these insurgent groups often implicitly condone their continued participation in narcotics production and trafficking, at least over the short term.
Burma is a party to the 1961 UN Single Convention, the 1971 UN Convention on Psychotropic Substances, and the 1988 UN Drug Convention.
Second only to Afghanistan, Burma remains one of the world's largest producers of illicit opium. Burmese opium production doubled in 1989, the year after the current military regime took power, and remained high throughout the early 1990s. Since 1996, however, opium production has declined sharply to levels that are now less than half Burma's annual production during the early 1990s. Burma has become a major source of methamphetamines trafficked throughout the region.
Burma currently accounts for approximately 80 percent of Southeast Asia's opium production, and 20 percent of the world's production. Most of the opium is produced in Burma's Shan State, particularly in areas under the control of former insurgent groups. Since 1989, the government has negotiated cease-fire agreements with most of the former insurgent groups that control these areas, offering them limited autonomy and development assistance in exchange for peace. In negotiating these agreements, the regime's highest priority has been to end the ethnic conflicts and achieve some measure of national integration. Narcotics control has been a lesser priority, and 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. The government has encouraged former insurgent groups to invest in "legitimate" businesses and some have used the opportunity to launder money through investments in banks, hotels and construction companies.
The former insurgent groups with whom the government has negotiated cease-fire agreements, including 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 in the manufacturing and distribution of synthetic drugs. They are also largely immune from government action. To cite only one example, under the terms of the cease-fire agreement, Burmese troops cannot even enter Wa territory without permission from the UWSA.
Many of the leaders of these ethnic groups are involved in the heroin and/or amphetamine trade. They include Peng Jiasheng and Liu Goushi of the MNDAA; Pao Yuqiang, Li Zuru, and Wei Xuekang of the UWSA; Mahtu Naw of the Kachin Defense Army (KDA); and Yawd Serk of the Shan State Army South (SSA South), also known as the Shan United Revolutionary Army (SURA), which was formerly part of drug lord Chang Qifu's Mong Tai Army. Chang Qifu disbanded his army in January 1996 in return for generous terms of surrender, which allowed him to avoid criminal prosecution. U Sai Lin (Lin Mingxian) of the Eastern Shan State Army (ESSA) has been listed in previous years as a major narco-insurgent leader, but he has successfully rid his area of opium cultivation. There are no current, confirmed reports of U Sai Lin or the ESSA still being involved in narcotics trafficking, although it is likely that ESSA territory is a trafficking route because of its location along the border with China. Mon Sa La, the former head of the Mong Ko Defense Army, is now in custody in Burma, and the Mong Ko Defense Army has been destroyed.
There is reason to believe that money laundering in Burma and the return of narcotics profits laundered elsewhere are significant factors in the overall Burmese economy, although the extent is difficult to measure accurately. Political and economic constraints on legal capital inflows magnify the importance of narcotics-derived funds in the economy. An under-regulated banking system and ineffective money laundering legislation 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 on the rise in Burma and is accompanied by an alarming spread of the HIV/AIDS virus, especially in the ethnic minority areas that are the source of the drugs. HIV/AIDS infection rates in gem and jade mining areas are particularly high. The GOB has not taken decisive action against the spread of HIV/AIDS.
In the past five years, as overt military challenges to Rangoon's authority from the ethnic groups have eased, the government has increased its counternarcotics enforcement efforts. In 1997 the GOB garrisoned troops on a year-round basis in the Kokang region, and in November 2000 the Burmese military occupied Mong Ko. The GOB has only a token presence in Wa territory, however.
Under pressure from the government, the MNDAA, the KDA, and the MDA in Shan State had declared their intention to establish opium-free zones in territory under their control by the year 2000. Unable to meet that deadline, those groups have now pledged to achieve that goal in 2001. The ESSA has declared its territory an opium-free zone. The Wa have announced their territory will be an opium-free zone by the year 2005.
Ethnic groups have made "opium-free" pledges since 1989, but, with the exception of the Kachin State and ESSA territory, results have been limited. The long tradition of opium cultivation in northern Shan State, the lack of viable alternatives for some farmers, and the sheer profitability of growing opium intensify the extent of the problem. Accordingly, meaningful poppy crop reduction and eventual elimination of opium production in these areas will require considerable eradication, law-enforcement, and alternative-development efforts by the GOB, supplemented, where possible, by the international community. The government will also need to strengthen its commitment to provide resources for the counternarcotics effort and to foster increased cooperation between the government and the ethnic groups involved in production and trafficking.
The GOB has stated that it would bolster eradication efforts by providing development assistance, infrastructure improvements, and advice on crop substitution. The GOB has also requested assistance from the U.S. Government (USG) in verifying whether these groups fulfill their commitments. Exchange of information on opium cultivation throughout Burma now occurs during the joint USG-GOB year-by-year opium poppy survey. The GOB has also asked China for assistance in curbing narcotics trafficking and has established a regular forum with China for discussing counternarcotics cooperation.
Policy Initiatives. During 2000, the Government of Burma pursued a cautious, low-risk counternarcotics program. The GOB introduced no new counternarcotics policies and continued to exert little direct pressure on major drug organizations, particularly the UWSA. Counternarcotics authorities made little attempt to seize drugs or destroy heroin and/or methamphetamine factories in UWSA-controlled territories.
Burmese counternarcotics efforts in 1999 and 2000 produced new legislation designating caffeine a drug precursor, and initial efforts to draft more comprehensive money laundering legislation.
With encouragement from the Drug Enforcement Administration (DEA) and U.S. Embassies in Rangoon and Bangkok, the Burmese and Thai governments agreed to undertake joint operations against drug trafficking along Thailand's northern border with Burma. The long-standing agreement has yet to be implemented, however. Operation of a joint antidrug task force in Tachilek, Burma, and Mae Sai, Thailand has been hindered by political tensions between Burma and Thailand.
The Burmese government maintains its refusal to render drug lord Chang Qifu to the U.S. on the grounds that he had not violated his 1996 surrender agreement. The agreement reportedly stipulated that if Chang Qifu ended his insurgency and retired from the drug trade, the GOB would provide him with security in Rangoon and allow him to conduct legitimate business. Burmese authorities assert that he will continue to enjoy immunity from prosecution in Burma and exemption from rendition to another country as long as he does not violate his surrender agreement. This issue remains a source of friction between Burma and the U.S. The 1988 UN Drug Convention obligates parties, including Burma, to prosecute such traffickers. GOB officials have stated they would be willing to prosecute Chang Qifu or his subordinates, if it can be proven that they have engaged in narcotics trafficking after the surrender agreement was signed.
The military regime, the State Peace and Development Council (SPDC), has affirmed its intention to implement the ongoing "Master Plan for the Development of Border Areas and National Races." The plan calls for a program of integrated development combined with law enforcement aimed at improving living standards in the ethnic areas and viable economic alternatives to opium poppy cultivation. Few GOB resources have been devoted to the program, however. As a result, health, education, and infrastructure in border areas remain poor, and the GOB's opium eradication efforts are likely to be undercut by the lack of viable economic alternatives available to farmers and villagers.
With support from the United States and Japan, the UN Drug Control Program (UNDCP) continues to implement a community based, alternative development project in the southern portion of the Wa region. The project complements the United Wa State Army's decision to eradicate opium production in the areas under its control by 2005. Known as the Wa Alternative Development Project (WADP), the project is a five-year, $15 million program intended to introduce economically viable alternative crops to replace reliance on opium poppy cultivation. Already established in ten pilot villages, the project will gradually expand into more than two-thirds of the 334 villages in Mong Pawk Township in the Wa territories. The U.S. also funded smaller UNDCP alternative-development projects in the Nam Tit and Lao Kai areas of Northern Shan State. In addition, the GOB and Japan have developed a crop-substitution program on 14,565 acres in northern Shan State to replace opium poppy cultivation.
Accomplishments. Although the drug threat from Burma continues to be very high, seizures of illicit narcotics remained close to or below 1999 levels. In 2000 Burmese officers seized approximately 27 million methamphetamine tablets, somewhat less than the nearly 29 million tablets seized in 1999. Even though sizeable quantities of methamphetamine tablets have been confiscated, the seizures represent only a small fraction of the methamphetamines produced within Burma.
In 2000 seizures of ephedrine, the precursor used to manufacture methamphetamines, were less than half the quantity seized in 1999. Burmese officers seized only about 2,700 kilograms of ephedrine in 2000 compared to seizures of nearly 6,500 kilograms in 1999.
Seizures of heroin declined for the third straight year, and seizures of opium gum rose only slightly over previous years. Heroin seizures in 2000 totaled only 171 kilograms, only 273 kilograms in 1999, and only 404 kilograms in 1998. Opium seizures in 2000 totaled 1,528 kilograms, slightly more than the 1,445 kilograms seized in 1999, but significantly less than the 5,400 kilograms seized in 1998. The GOB claimed to have eradicated 10,985 acres under poppy cultivation during the 1999/2000 growing season and 9,800 acres during the 1998/1999 growing season.
According to Burmese reports, at least eight heroin refineries and two methamphetamine laboratories were seized in 2000. During 1999 the government destroyed 23 heroin refineries and six methamphetamine refineries.
Law Enforcement Measures. The 1993 Narcotic Drugs and Psychotropic Substances Law brought the Burmese legal code into basic conformity with the 1988 UN Drug Convention. The law contains some legal tools for addressing money laundering, the seizure of drug-related assets, and the prosecution of drug conspiracy cases. Burmese policy and judicial officials have been slow to implement the law, however, targeting few, if any, major traffickers and their drug-related assets.
The lack of effective legislation and enforcement encourages the investment of drug proceeds in legitimate business ventures by traffickers or former traffickers. Family members of former or present traffickers have invested heavily in infrastructure projects, such as roads and port facilities, as well as in banks, airlines, hotels and real-estate-development projects during the year. Some of these investments are intended to supplement government expenditures on rural development projects in areas under control of the ethnic insurgent and trafficking groups. There is solid evidence indicating that drug profits formed the seed capital for many otherwise legitimate enterprises in the commercial services and manufacturing sectors.
Formally, the Burmese government's drug-enforcement efforts are led by 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 21 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. The CCDAC, which is under the effective control of the Directorate of Defense Services Intelligence (DDSI) and relies, in part, on military personnel to execute law-enforcement duties, continues to suffer from a lack of adequate resources to support its law-enforcement mission.
Corruption. There is no evidence that the government, on an institutional level, is involved in the drug trade. There are persistent and reliable reports, however, that officials, particularly corrupt army personnel posted in outlying areas, are either directly involved in drug production and/or trafficking or are paid to allow others to engage unhindered in drug activities. Army personnel wield considerable political clout locally, and their involvement in trafficking is a significant problem. The GOB has said that it welcomes information on corruption within its ranks, and a few military personnel were arrested for narcotics-related offenses in 1999.
Asset Forfeiture. Burma has made no changes to its asset-forfeiture law. Currently, the 1993 Narcotic Drugs and Psychotropic Substances Law gives the GOB authority to seize money, property, or proceeds involved in or derived from narcotics trafficking. As long as the required taxes are paid, however, the GOB does not exercise this authority, particularly in cases where assets are invested in a legitimate business or in real estate.
Agreements and Treaties. Burma is a party to the 1961 UN Single Convention, the 1971 UN Convention on Psychotropic Substances, and the 1988 UN Drug Convention. The U.S. believes that the 1931 U.S.-U.K. Extradition treaty, which was accepted by the post-independence Burmese government in 1948, remains in force and is applicable to U.S. requests for extradition of drug fugitives and other criminals from Burma. The GOB continues to reject the validity of this treaty.
The GOB is one of six nations (Burma, Cambodia, China, Laos, Thailand, and Vietnam) that, along with the UNDCP, signed a Memorandum of Understanding (MOU) covering a sub-regional action plan aimed at controlling precursor chemicals and reducing illicit drug trafficking and use in the highlands of Southeast Asia. In addition to periodic meetings with counterparts from the other signatories to the MOU, Burma has held counternarcotics discussions with Russia and India in 1999. The GOB signed bilateral drug control agreements with India in 1993, with Bangladesh in 1994, with Vietnam in 1995, and with the Russian Federation, Laos, and the Philippines in 1997.
Cultivation and Production. Burma remains a leading producer of opium, despite a sharp decline in production since 1996. Over the past four years, opium cultivation has declined by nearly one-third and opium production has dropped by approximately 58 percent to an estimated maximum production of 1,085 metric tons in 2000. Two factors appear to have contributed to this result. The first is continued eradication efforts by the government. In 2000, the government reported having destroyed approximately 10,985 acres of poppy, but those claims cannot be verified by satellite imagery. The second, and perhaps most important, factor is adverse weather conditions. During the 1999/2000 crop years, unseasonable rains during the planting season in October and a subsequent severe frost in December severely affected the opium poppy crop. As a result, even with an increase of 21 percent in land under cultivation (108,700 hectares in 2000 versus 89,500 hectares in 1999), actual opium yield marginally declined to 1,085 metric tons in 2000 compared to 1,090 metric tons produced in 1999.
The GOB conducted a baseline survey of opium cultivation in 1999 aimed at determining actual opium production (as opposed to potential production that the USG measures) throughout the country. According to Burmese figures, there were 102,066 acres used for opium poppy cultivation in 1999, producing a total of 449 tons of opium. However, the government has never explained the methodology used to arrive at these totals, and the U.S. has continued to rely on the figures resulting from the joint U.S.-Burma opium yield survey.
Drug Flow/Transit. Most heroin in Burma is produced in small, mobile labs located near the borders with Thailand and China in Shan State areas controlled by former insurgent groups. An increasing amount of methamphetamine is reportedly produced in laboratories co-located with heroin refineries in the Wa region and in the territory of the former Shan United Revolutionary Army in southern Shan State. Heroin and methamphetamine produced by Burma's former insurgent groups are trafficked largely through transit routes crossing the porous Chinese and Thai borders; to a lesser extent over the Indian, Bangladeshi, and Lao borders; and through Rangoon onward by ship to other countries in the region. Although Thailand remains an important route for Burmese heroin to exit Southeast Asia, trafficking through China has increased significantly over the past several years. Traffickers continued moving heroin through central Burma, often from Lashio through Mandalay to Rangoon or other seaports. Trafficking routes leading through Kachin and Chin States and Sagaing Division in northern Burma to India continued to operate as secondary routes.
China and India are the principal sources for acetic anhydride, an essential chemical in the production of heroin, and ephedrine, the primary chemical ingredient of methamphetamine.
Demand Reduction. Drug abuse continues to escalate in Burma. Official estimates in 1999 put the number of drug addicts at approximately 86,537, up from the estimate in 1998 of 66,463. According to UNDCP and non-governmental organizations working in the health sector, the actual number is significantly higher, totaling about 400-500,000 addicts. Heroin, relatively cheap in Burma, is more widely used, and intravenous use of heroin contributed 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. The non-governmental organization (NGO) "World Concern" conducts a demand-reduction project in Kachin State.
Policy and Programs. Direct material USG counternarcotics aid to Burma has remained suspended since 1988, when the Burmese military brutally repressed the pro-democracy movement. In 1998, the GOB refused to renew a crop-substitution project, Project Old Soldier, that was being conducted by the U.S. NGO, 101 Veterans, Inc., in 25 villages in the Kutkai area of northern Shan State. The project had been in operation for two years, with USG support.
Currently, the USG engages the Burmese government on narcotics control on a very limited level. DEA, through the U.S. Embassy in Rangoon, shares drug-related intelligence with the GOB and conducts joint drug-enforcement investigations with Burmese counternarcotics authorities. U.S. agencies have conducted opium yield surveys in the mountainous regions of the Shan State in 1993, 1995, 1997, 1998, 1999, and 2000, with essential assistance provided by Burmese counterparts. These surveys give both governments a much more accurate understanding of the scope, magnitude, and changing geographic distribution of Burma's opium crop.
The U.S. government regularly urges the Burmese government to take serious steps to curb Burma's large-scale opium production and heroin trafficking and, more recently production of and trafficking in methamphetamines. Specifically, the Rangoon regime has been encouraged to:
Bilateral Cooperation. USG counternarcotics cooperation with the Burmese regime is restricted to basic law-enforcement operations. The U.S. provides no bilateral material or training assistance due to U.S. concerns over Burma's commitment to effective counternarcotics measures, human rights, and political reform. DEA's liaison with Burmese policymakers and military officials--conducted mainly through DEA's office in Rangoon--will continue to focus on providing intelligence on enforcement targets and coordinating investigations of international drug-trafficking groups.
The Road Ahead. Based on experience in dealing with significant narcotics-trafficking problems elsewhere around the world, the USG recognizes that ultimately large-scale and long-term international aid, including development assistance and law- enforcement aid, will be needed to curb fundamentally and irreversibly drug production and trafficking in Burma. The USG strongly urges the GOB to commit itself fully and unambiguously to implementing effective counternarcotics measures, respecting the rule of law, punishing drug traffickers and major trafficking organizations (including asset forfeiture and seizure), combating corruption, enforcing anti-money-laundering legislation, continuing eradication of opium cultivation, destroying drug-processing laboratories, and respecting human rights.
| 2000 | 1999 | 1998 | 1997 | 1996 | 1995 | 1994 | 1993 | 1992 | |
|---|---|---|---|---|---|---|---|---|---|
| Opium | |||||||||
| Potential Harvest (ha) | 108,700 | 89,500 | 130,300 | 155,150 | 163,100 | 154,070 | 146,600 | 165,800 | 153,700 |
| Eradication (ha) | 0 | 9,800 | 16,194 | 10,501 | 0 | 0 | 3,345 | 604 | 1,215 |
| Cultivation (ha) | 108,700 | 99,300 | 146,494 | 165,651 | 163,100 | 154,070 | 149,945 | 166,404 | 154,915 |
| Potential Yield (mt) | 1,085 | 1,090 | 1,750 | 2,365 | 2,560 | 2,340 | 2,030 | 2,575 | 2,280 |
| Seizures | |||||||||
| Opium (mt) | 1.528 | 1.445 | 5.200 | 7.884 | 1.300 | 1.060 | 2.265 | 2.265 | 2.193 |
| Heroin (mt) | 0.171 | 0.273 | 0.386 | 1.401 | 0.505 | 0.070 | 0.347 | 0.300 | 0.266 |
| Marijuana (mt) | -- | 0.274 | 0.160 | 0.288 | 0.259 | 0.239 | 0.290 | 0.600 | 0.292 |
| Ephedrine (mt) | 2.671 | 6.485 | 3.819 | -- | -- | -- | -- | -- | -- |
| Acetic Anhydride (gal) | 3,945 | 1,620 | 424 | 2,137 | 5,082 | 1,159 | 1,191 | 1,016 | 1,136 |
| Other Data | |||||||||
| Heroin Labs Destroyed | -- | 23 | 32 | 33 | 11 | 3 | 4 | 0 | 2 |
| Meth Labs Destroyed | -- | 6 | |||||||
| Narcotics Arrests | -- | 6,413 | 4,456 | 4,522 | 4,522 | 5,541 | 7,134 | 7,520 | 6,109 |
| Heroin Users (thousands) | -- | 300 | 300 | 300 | 150 | 100 | 30 | 30 | 30 |
| Opium Users (thousands) | 120 | 120 | 120 | 120 | 120 | 120 | 120 | 120 | 120 |
| Arrests | 4,881 | 6,413 | 4,845 | -- | -- | -- | -- | -- | -- |
Burma is number two in worldwide heroin production after Afghanistan. It is becoming an important manufacturer of amphetamine-type-stimulants (ATS) to meet growing demand, primarily is Southeast Asia. Burma is a party to the 1988 UN Drug Convention, but it does not have a viable system in place to satisfy its chemical control provisions. The bulk of the key chemicals required for illicit drug manufacture, most importantly acetic anhydride for heroin and ephedrine for ATS, are smuggled across porous borders from China and India, where they were diverted from domestic commerce.
Burma's economy continues to be vulnerable to drug money laundering because of its under-regulated financial system, weak anti-money laundering regime, and policies that facilitate the funneling of drug money into commercial enterprises and infrastructure investment.
Political and economic constraints on the flow of legitimate capital into Burma have increased the importance of narcotics-derived funds to the Burmese economy. As a result of cease-fire agreements, the Government of Burma (GOB) has encouraged former insurgent groups to invest money into legitimate commercial ventures. This policy has the effect of facilitating the laundering of illegal drug proceeds by some of the former insurgent groups through investments in banks, hotels, and construction companies. Businesses owned by family members of former or present drug traffickers also have invested heavily in infrastructure projects such as roads and port facilities, banks, hotels, casinos, and other real estate development projects.
In 1993, the GOB adopted the Narcotics Drugs and Psychotropic Substances Law. This law criminalizes narcotics-related money laundering and allows for seizure of assets that are derived from the drug trade. The GOB has been slow to implement provisions of this law, and has targeted few, if any, traffickers or their assets. GOB officials admit to having difficulty in implementing provisions related to money laundering because of their lack of expertise in money laundering and financial crimes investigations. The GOB reportedly is drafting new anti-money laundering legislation that would address deficiencies in its present legislation.
Burma does not have a financial intelligence unit, and is not active in international or regional anti-money laundering fora. Burma is an observer jurisdiction to the Asia/Pacific Group on Money Laundering. Burma is a party to the 1988 UN Drug Convention. The GOB has bilateral drug control agreements with India, Bangladesh, Vietnam, Russia, Laos, and the Philippines. It is not known whether these agreements cover cooperation on money laundering issues.
Burma must increase the regulation and oversight of its banking system, and end policies that facilitate the investment of drug money into the legitimate economy. Burma also should step up efforts to enforce existing money laundering legislation by investigating and prosecuting money launderers. Moreover, Burma is urged to pass new legislation that would expand predicate crimes for money laundering and provide additional tools to authorities for the detection and prosecution of money laundering.