Is Burma the next Mexico?

By Federico Varese
December 6, 2011

By Federico Varese
The opinions expressed are his own.

Hillary Clinton had many “hard issues” to tackle during her recent visit to Myanmar. Yet there was no mention of one of the most, if not the most, difficult issue Burma faces: their lucrative drug trade.

Northern Burma is the home of the “Golden Triangle,” a hub for opium production and the location of hundreds of heroin and amphetamine refineries. So how do political leaders and the international community plan to tackle this problem in the event that Burma truly becomes  a democratic country?

The totalitarian regime which has ruled Burma since 1962 has been, to a point, successful in keeping the production of illicit substances under control. In 1999, Burma’s notorious military junta (which is now dissolved) started a ruthless elimination plan of opium in the Golden Triangle (the Shan State, the Wa Region and the Kachin State). The region produced one-third of the world’s opium in 1998, but that figure was down to about 5% nine years later. From 2006 to 2007, the army eradicated 8,895 acres of opium fields. A 2007 United Nations Report trumpeted that “a decade-long process of drug control is clearly paying off.”

The actual story is a little more complicated. The regime did manage to reduce opium production, but this policy led to an increase in the production of amphetamines, methamphetamine in particular. The U.N. estimated that at least 700 million tablets were shipped from Burma to Thailand in 2003 alone, which is about 20 tons of methamphetamine, or 7.5% of what is manufactured globally.

Most recently, opium production in Burma is on the rise again, pushed by an ever-increasing demand for heroin in China, as documented by an eye-opening report compiled by the Transnational Institute, an NGO based in Amsterdam.

In order to see these developments for myself, I spent time this past summer in Muse, a town in the northeast section of Myanmar, and Ruili, right across the border in the Chinese province of Yunnan. “What you’ll see in Ruili you won’t be able to observe in any other part of China,” the taxi driver told me, surprised to find a foreigner around these parts. The place is reminiscent of a Mediterranean country, a relaxed atmosphere reigning supreme, where it’s hard to come by taxis and open shops in the mornings.

But the people are busy. The city is the entry point for heroin, also known as “number 4”, and amphetamines produced in the Golden Triangle. It stands next to the semi-autonomous region of Kachin, the engine room of opium cultivation and the production of illegal substances.

When China opened up to the market economy in 1989, Myanmar became the first-choice destination for unscrupulous businessmen to flock to in hope of striking gold. According to one estimate from the Transnational Institute, more than a million Chinese entrepreneurs crossed the border and settled in Myanmar in the nineties. Some returned home with their pockets full. But the majority of them did not find success and remained stuck in an underdeveloped, corrupt and inhospitable country. They did, however, have one card to play: thanks to their contacts in China, they were able to import the technology necessary for refining heroin and producing amphetamine tablets.

The laboratories refining heroin and amphetamines nestled away in the Burmese jungle of Kachin are now around a hundred strong. Producers sell their product on the spot to Chinese traffickers who transport it across the border. According to Ko-lin Chin, who is of Burmese origins and a professor at Rutgers School of Criminal Justice, the autonomist militias and the units of the regular army act as local protectors of the laboratories, and invest their own money in the drug production.

According to Chin, Wei Hsueh-kang is the most important trafficker in the Golden Triangle, where he runs several refineries. Wei Hsueh-kang is a respected businessman in China, but he is wanted by the American courts, which are offering two million dollars for information leading to his arrest. Despite his Chinese origins, he has successfully gained the trust of the local militias, and is a commander of an independent army. With his proceeds from the drugs trade, he founded a business group in 1998 with vast interests in construction, agriculture, jade extraction, minerals, oil, electronics, and telecommunications, with branches in China and Myanmar, including one in Mandalay.

This is not an uncommon economic dilemma of Burma. In fact, many traffickers recycle their proceeds in Ruili where they have bought hotels and restaurants. One trafficker in Ruili, I am told, recently has made a large investment to build golf courses a few miles outside the city center. He also apparently owns the hotel where I stayed.

Beside drugs production, a future democratic Burma will have to tackle its collapsing health care system, uncertain property rights, pervasive corruption and lack of infrastructure — the sewage system in the former capital of Mandalay fails to work when it rains, as I discovered during their monsoon season in the summer.

In 2010, Myanmar was ranked the second most corrupt country in the world by Transparency International. Even if Burma is able to become a democratic country, it will still have a drug trade problem to solve.

Mexico became more democratic with the demise of the Partido Revolucionario Institucional (PRI) in 2000, but then a drugs war erupted, with some 40,000 people killed. There’s no question that transitioning to a democracy and providing greater economic freedom is the only way forward for Burma, but will it be possible to escape the fate of Mexico during the transition?

Phot0s, top to bottom: A worker cuts opium near the Myanmar border in this undated handout photo. The heroin trade is burgeoning in Myanmar’s Golden Triangle, a reality hidden from the international community by the lies and cunning of the former Burma’s military junta, a top rebel leader said. REUTERS/Stringer; A policeman rides past officials as a huge fire engulfs about $930 million worth of illicit drugs at a destruction ceremony conducted by Myanmar’s government in Yangon May 12, 2001. REUTERS/Jason Reed

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Unlike Thailand, see if you can score drugs on the streets of Burma . . .

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