Text: 1999 Narcotics Report on the Asia-Pacific Region
(Statement of Explanation and Report on Burma)STATEMENT OF EXPLANATION
BURMA
Burma is the world's second largest source of illicit opium and heroin, exceeded only by Afghanistan, and currently accounts for approximately 80 percent of the total production of Southeast Asian opium. Largely due to severe drought conditions in poppy growing areas, production and cultivation continued to decline significantly in 1999 for the third year in a row. In 1999 there were an estimated 89,500 hectares under opium poppy cultivation, down 31 percent from 1998. This hectarage yielded a maximum of 1,090 metric tons of opium gum, 38 percent lower than in 1998 and less than half the average production during the last decade. The Government of Burma (GOB) maintained most of its opium crop-eradication efforts and expanded the program to an additional 9,800 acres.
Seizures of methamphetamine in 1999 exceeded 1998's record figures, although opium and heroin seizures were well below 1998 levels. Burma made its first airport seizures of illicit drugs in 1999. While there were cases of drug interdiction and arrests of members of some cease-fire groups for drug trafficking, the GOB has been unwilling or unable to take on the most powerful groups directly. Cease-fire agreements with insurgent ethnic groups dependent on the drug trade implicitly tolerate continued involvement in drug trafficking for varying periods of time. The ethnic armies, such as the United Wa State Army and the Myanmar National Democratic Alliance Army, remain armed and heavily involved in the heroin trade.
The GOB expressed support for eradication efforts, crop substitution, and development assistance, but allocated few resources to such projects. GOB policy is to force the leaders in the ethnic areas to spend their own revenues, including from the drug trade, on social and physical infrastructure. The approach limits the GOB's ability to continue or expand its counter-drug efforts.
Burma's 1993 Narcotic Drugs and Psychotropic Substances Law conforms to the 1988 UN Drug Convention and contains useful legal tools for addressing money laundering, seizing drug-related assets, and prosecuting drug conspiracy cases. GOB officials, claiming they lack sufficient expertise, have been slow to implement the law, targeting few, if any, major traffickers and their drug-related assets. Money laundering in Burma and the return of drug profits laundered elsewhere are thought to be significant factors in the overall Burmese economy, although the extent of this problem is impossible to measure accurately. The cease-fire agreements condone money laundering, as the government encouraged these groups to invest in "legitimate" businesses as an alternative to trafficking, thus extending to them the opportunity to sanitize past illicit proceeds with investments in hotels and construction companies, for example.
The Burmese continued to refuse to render drug lord Chang Qifu on grounds that he had not violated his 1996 surrender agreement. The 1988 U.N. Drug convention obligates parties, including Burma, to prosecute such traffickers.
The GOB's counter-drug efforts in 1999 showed progress in a number of areas: methamphetamine and ephedrine seizures increased; crop eradication continued with modest expansion; anti-drug forces conducted more vigorous law-enforcement efforts; and members of some cease-fire groups were arrested for drug trafficking. Such efforts must be stepped up, however, if they are to have a significant impact on the overall trafficking problem.
On balance, the USG remains concerned that Burma's efforts are not commensurate with the extent of the drug problem within its borders. Large-scale poppy cultivation and opium production continue, decreasing in the last few years largely because of severe drought conditions rather than eradication programs. The GOB's effective toleration of money laundering, its unwillingness to implement its drug laws, and its failure to render notorious traffickers under indictment in the United States all continue to be serious concerns.
Burma
I. Summary
Burma is the world's second largest source of illicit opium and heroin, with Burmese production exceeded only by that of Afghanistan. Due in large part to severe drought conditions in poppy growing areas, production and cultivation continued to decline significantly in 1999 for the third year in a row. In 1999 there were an estimated 89,500 hectares under opium poppy cultivation, down 31 percent from 1998. This cultivated area could yield up to a maximum of 1,090 metric tons of opium gum. The opium production figure is 38 percent lower than in 1998 and is less than half of the average amount of production during the last decade. The government maintained most of its opium crop-eradication efforts, expanding some of these only slightly. During 1999, seizures of methamphetamine continued to exceed last year's record seizures, although opium and heroin seizures were well below 1998 figures. Burma made its first airport seizures of narcotics in 1999. The Government of Burma (GOB) made little, if any, effort against money laundering during the year. While there were cases of interdiction and arrests of members of some cease-fire groups for narcotics trafficking, the GOB has been unwilling or unable to take on the most powerful groups directly. Cease-fire agreements with insurgent ethnic groups dependent on the narcotics trade involve an implicit tolerance of continued involvement in narcotics for varying periods of time. Burma is a party to the 1961 UN Single Convention, the 1971 UN Convention on Psychotropic Substances, and the 1988 UN Drug Convention.
II. Status of Country
Burma has been, and continues to be, one of the world's largest producers of illicit opium. Burmese opium production doubled in 1989, the year after the State Law and Order Restoration Council (SLORC-the military junta that now rules Burma under the Name State Peace and Development Council, or SPDC) took power. Production levels remained high and stable for several years, but production began to decline in 1997 and dropped significantly in 1998 and 1999. The decline in potential production in 1999 over 1998 is largely due to drought, although the drop also reflects the GOB's effort to keep areas out of opium cultivation as part of its eradication efforts. The U.S. Government (USG) discontinued most U.S. direct assistance to Burma in 1988 in response to massive human rights abuses.
Burma currently accounts for approximately 80 percent of the total production of Southeast Asian opium. Most of this supply of illicit opiates is produced in ethnic minority areas of Burma's Shan State. Over the past few years, the GOB has increased its presence in this region, particularly the southern portion of it, an area formerly under the control of Chang Qifu (Khun Sa). 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 achieve some measure of national integration; counternarcotics interests in these areas are a lesser priority, reflected in the fact that many of the cease-fire agreements effectively permit the minorities to continue their narcotics cultivation and trafficking activities. 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 as an alternative to trafficking and some chose this opportunity to sanitize past illicit proceeds with investments in hotels and construction companies, for example.
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 (UWSA) and the Myanmar National Democratic Alliance Army (MNDAA-Kokang Chinese), remain armed and heavily involved in the heroin trade. Through cease-fire agreements, the GOB appears to have given the trafficking armies varying degrees of autonomy; for example, Burmese troops cannot even enter Wa territory without explicit permission. Among the top leaders of those ethnic groups believed by the USG to be involved in the heroin and/or amphetamine trade are, 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); Mong Sa La and Yang Maoliang of the Mongko Defense Army (MDA); and Yawd Serk of 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 narcotics insurgent leader, but he has successfully rid his area of opium cultivation. There are no current, confirmed reports of 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.
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 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 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.
In the past four years, as overt military challenges to Rangoon's authority from the ethnic groups have eased somewhat, the government, while maintaining its primary focus on state security, has stepped up its counternarcotics enforcement efforts. The GOB garrisoned troops on a year-round basis for the first time in the Kokang region during 1997, but it still does not have troops in Wa territory. The MNDAA, the KDA, and the MDA in Shan State have declared their intention to establish opium-free zones in territory under their control by the year 2000; the ESSA has already 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. In view of the extensive opium cultivation in northern Shan State, the area of greatest opium density, expanded reduction in cultivation will require considerable eradication, much greater law-enforcement, and alternative-development efforts by the authorities. Such efforts necessitate vastly greater financial resources than the government has, however. Implementation of such a program would also require increased cooperation between the government and the ethnic groups involved in production and trafficking.
The GOB, for its part, stated that it would support its eradication efforts with development assistance in the form of infrastructure improvements and advice on crop substitution. The GOB also requested USG assistance in verifying whether these groups fulfill their commitments. The USG has requested additional information to pinpoint the areas in question. The GOB has promised to provide this information. Exchange of information on the status of opium cultivation could then occur during the opium poppy survey carried out jointly with the GOB on a year-by-year basis. In view of China's long border with the Wa area, the GOB asked China for assistance in curbing Wa trafficking. Both countries have established a regular forum for discussing counternarcotics cooperation.
III. Country Actions Against Drugs in 1999
Policy Initiatives. Burmese counternarcotics efforts in 1999 made progress with regard to increased methamphetamine and ephedrine seizures and Burma's first seizures of drugs transiting the airport in Rangoon. An improved security situation in parts of northern Shan State permitted the Burmese anti-drug forces to conduct more vigorous law-enforcement efforts, especially in the Kachin and Kokang regions. The GOB has continued its cooperation with Japan to plant opium substitute crops on 14,565 acres. Such efforts must be stepped up, if they are to have a significant impact on the overall trafficking problem.
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. Operation of a joint anti-drug task force in Tachilek, Burma and Mae Sai, Thailand, however, has been hampered by political disharmony between the two countries.
The Burmese continued to refuse to render drug lord Chang Qifu on grounds that he had not violated his 1996 surrender agreement. This 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 or 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 SPDC affirmed its intention to increase its efforts 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 providing viable economic alternatives to opium cultivation. Few GOB resources have been devoted to such development projects, however; health, education, and infrastructure in border areas remain poor. GOB policy is to force the leaders in the ethnic areas to spend their own revenues, including from the drug trade, on social and physical infrastructure. The GOB's ability to continue or expand its opium eradication efforts is likely to be adversely affected by the lack of such economic alternatives.
The UNDCP has begun an integrated rural development project in the southern portion of the Wa region in furtherance of the United Wa State Army's unilateral decision announced in 1995 to establish five "opium-poppy-free zones" in its area of control to reduce opium cultivation gradually. The project is part of a planned five-year, $15 million rural development project aimed at crop substitution and alternative development. The project area has expanded to include 2 more townships for a total of five, with over 200 villages participating. UNDCP has begun projects in agriculture, road building, water and sanitation, and community development. 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 developing the infrastructure as well as providing educational and health facilities in the Ho Tao and Mong Pawk districts of the Wa region.
Accomplishments. While the extent of the drug threat from Burma remained high, law-enforcement efforts, particularly seizures of amphetamine, showed some improvement. Opium production during 1999 showed a significant decline; much of the decline, however, was the result of a region-wide drought. Seizures of 28.8 million amphetamine tablets in 1999 represented a notable increase over the previous year's record seizures of 15 million tablets. Opium and heroin seizures as of October 1999 declined from the 1998 seizure rate. The decline largely resulted from changes in trafficking patterns and refining methods adopted by traffickers in response to GOB enforcement efforts in prior years. The combined police and military narcotics task forces seized 273.2 kilograms of heroin in 1999 compared to 490 kilograms seized in 1998. By October, officials seized 1.44 metric tons of opium, compared with 5.2 metric tons for all of 1998. As indicated above, opium cultivation dropped by 31 percent and potential opium production by 38 percent to the lowest level in ten years. GOB law enforcement also made its first arrests of traffickers at Mingaladon Airport in Rangoon in October and November, seizing a total of 10.7 kilograms of heroin. To date, the GOB has also seized 6.43 metric tons of ephedrine in 1999, most of it coming from India. The GOB destroyed 23 heroin refineries and six methamphetamine refineries during 1999. The GOB also eradicated 9,800 additional acres of poppy fields, according to Burmese figures. The USG is unable to verify the accuracy of the eradication figures.
Law Enforcement Measures. The 1993 Narcotic Drugs And Psychotropic Substances Law brought the Burmese legal code into conformity with the 1988 UN Drug 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, Burmese policy and judicial officials have been slow to implement the law, targeting few, if any, major traffickers and their drug-related assets. Burmese drug officials claim they lack sufficient expertise to deal with money laundering and financial crimes, but money laundering is believed to be carried out on a massive scale.
Formally, the Burmese government's drug-enforcement efforts were 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 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. 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. However, there are persistent and reliable reports that officials, particularly corrupt army personnel posted in outlying areas, are either involved in the drug business or are paid to allow the drug business to be conducted by others. Army personnel wield considerable political clout locally, and their involvement in trafficking is a significant problem. The Burmese have said that they would welcome information from others on corruption within their ranks, and a few military personnel are known to have been arrested for narcotics-related offenses in 1999.
The lack of an enforcement effort against money laundering encourages the use of drug proceeds in legitimate business ventures by traffickers or former traffickers. Businesses owned by family members of former or present traffickers have invested heavily in infrastructure projects, such as roads and port facilities, as well as in hotels and other 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.
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 Rangoon regime, however, has always refused to extradite Burmese citizens to other countries. The United States does not have a mutual legal assistance treaty (MLAT) with Burma. The USG believes that a 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 from Burma. The GOB continues to refuse to recognize the applicability of this treaty.
The GOB is one of six nations (Burma, Cambodia, China, Laos, Thailand, 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 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 is the world's second largest producer of opium. Potential production decreased sharply from 1998 levels, however, marking the third straight year of decline after a decade of steady production at a high level. Opium cultivation declined an estimated 31 percent and production declined an estimated 38 percent to 1,090 metric tons. Since the early 1990s the areas of most intense cultivation have gradually shifted from southern to northern Shan State. The bulk of the opium crop has been in areas controlled by ethnic minority groups. The GOB has signed or tried to sign cease-fire agreements with many of these groups since 1989. In the last few years, however, the GOB has begun to increase its presence in areas previously under ethnic control, with the notable exception of the Wa region. The government continued its eradication efforts during 1999 in areas previously subject to eradication, but did not expand the program significantly. A drought that affected both northern and southern areas of Shan State, was largely responsible for the sharp decline in potential opium production in 1999.
The GOB conducted a baseline survey of opium cultivation for the second year 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 cultivated in 1999, producing a total of 449 tons. The methodology used to arrive at these figures is unknown, and the U.S. must rely on the higher 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 in areas controlled by ethnic narcotics insurgencies. A growing amount of methamphetamine is reportedly produced in labs co-located with heroin refineries in the Wa region and the former Shan United Army territory in southern Shan State. Seizures of amphetamine tabs as of November had outpaced the record 15 million seized in 1998, reflecting the growing popularity of methamphetamine production among traffickers. Heroin and methamphetamine produced by Burma's ethnic 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 is on the increase.
Acetic anhydride, an essential chemical in the production of heroin, and ephedrine, the principal chemical ingredient of methamphetamine, are imported primarily from China and India. Traffickers continued moving heroin through central Burma, often from Lashio through Mandalay to Rangoon or other seaports, such as Moulmein, for shipment to Singapore or Malaysia. Trafficking routes leading through Kachin and Chin States and Sagaing Division in northern Burma to India continued to operate as secondary routes.
Demand Reduction. Drug abuse is a growing problem in Burma. Official estimates put the drug-addicted population at approximately 86,537, up from last year's estimate 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. Heroin is cheap in Burma, 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" is implementing a demand-reduction project in Kachin State.
IV. U.S. Policy Initiatives
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, by the U.S. NGO 101 Veterans, Inc., in 25 villages in the Kutkai area of northern Shan State. Currently, the USG engages the Burmese government on counternarcotics 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. Various U.S. agencies have conducted opium yield surveys in the mountainous regions of the Shan State in 1993, 1995, 1997, 1998, and 1999, with essential assistance provided by Burmese counterparts. In cooperation with Burmese counternarcotics personnel, the USG plans to conduct another survey in early 2000. Results from the 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 continues frequently to urge the Burmese government to take serious steps to curb Burma's large-scale opium production and heroin trafficking. Specifically, the Rangoon regime has been encouraged to:
-- Prosecute drug-trafficking organizations and their leaders, and deprive them of assets derived from the drug trade;
-- Take action against drug-related corruption, including prosecution and appropriate punishment of corrupt officials and money launderers;
-- Take action against fugitive drug-traffickers and turn them over to third countries;
-- 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 Kokang, and the Kachin, who have pledged to create opium-free zones in their regions, to make good on their commitments;
-- Enforce existing anti-drug, conspiracy, and anti-money-laundering legislation;
-- Provide strong support to multilateral drug-control projects in Shan State.
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 and will 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. 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.
Burma Statistics (1991-1999) 1999 1998 1997 1996 1995 1994 1993 1992 1991 Opium1 Potential Harvest (ha) 89,500 130,300 155,150 163,100 154,070 146,600 165,800 153,700 160,000 Eradication (ha) 9,800 16,194 10,501 0 0 3,345 604 1,215 1,012 Cultivation (ha) 99,300 146,494 165,651 163,100 154,070 149,945 166,404 154,915 161,012 Potential Yield(mt) 1,090 1,750 2,365 2,560 2,340 2,030 2,575 2,280 2,350 Seizures2 Opium(mt) 1.440 5.200 7.884 1.300 1.060 2.265 2.265 2.193 1.512 Heroin(mt) 0.273 0.386 1.401 0.505 0.070 0.347 0.300 0.266 0.183 Marijuana (mt) 0.274 0.160 0.288 0.259 0.239 0.290 0.600 0.292 0.724 Acetic Anhydride (gal) - - 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 6 Meth Labs Destroyed 6 Narcotics Arrests 6,413 4,456 4,522 4,522 5,541 7,134 7,520 6,109 7,357 Heroin Users (thousands) 300 300 300 150 100 30 30 30 30 Opium Users (thousands) 120 120 120 120 120 120 120 120 120
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