Thein Sein's drug problem

By Brian McCartan, Apr 27, 2012  ... 

CHIANG MAI - As President Thein Sein's government strives to earn his long isolated country greater international respectability, its support for militias and their role in narcotics trafficking is one prickly issue his reform agenda has so far failed to address.
As Western countries suspend their sanctions and prepare to invest in the country, they will no doubt want assurances that their new ventures are not linked to Myanmar's still booming drug trade.

Since the 1960s, government-backed militias have been a part of the Myanmar government's counter-insurgency strategy, particularly in the northern Shan State. Created to guard villages against insurgents and support the army in its operations, militias have frequently become involved in the narcotics trade, often with the tacit approval and support of the military.

In the past year, Thein Sein's government has brokered ceasefire agreements with most of the country's ethno-nationalist insurgent groups. The deals have followed a tense standoff as major ethnic armed groups, mostly in Shan State, refused to join an earlier government program that aimed to incorporate their foot soldiers into army-led Border Guard Forces in the run-up to the 2010 elections.

The former ruling military junta had some success in pressuring several of the smaller groups to join its army-led, nationwide People's Militia Force (PMF). As PMF units, the former insurgent groups joined almost 400 other militias set up by the military in Shan State to battle ethnic rebel groups over the past decade.

These militias include ethnic Lahu militias in eastern Shan State, the former Kachin Defense Army (KDA) now in Kutkai township in northern Shan State and the Markkieng militia in southern Shan State. All are believed to be involved in narcotics trafficking.

In 2003-2004, Senior General Than Shwe, leader of the then-ruling State Peace and Development Council (SPDC), ordered that every village tract should have at least one PMF battalion. While the plan was never fully implemented, numerous units were set up in areas contested by both the government and insurgent groups. Many of these government-created units were established on ethnic lines.

While PMF units in southeastern Myanmar are composed primarily of villagers forced into the role of part-time militiamen trained and sometimes led by Myanmar Army officers and non-commissioned officers, in Shan State many of the PMFs operate effectively as small private armies with their own leaders, uniforms and unit patches.

Many of the militia leaders have become warlords over their respective areas, with assumed powers to conscript new members and order local villages to pay "taxes" and provide supplies. Although often organized along ethnic lines, the militias have little involvement with ethnic politics and their respective drives for autonomy.

Many of the militia commanders have become identified with human rights abuses, narcotics trafficking and extortion. This, however, did not hinder several militia commanders from being elected in the 2010 polls, most under the banner of the United Solidarity and Development Party (USDP), the political party most closely identified with the former military regime.

It seems unlikely that most of these commanders would have been elected if ethnic leaders from insurgent ethnic Shan or Wa organizations had been allowed to field their own candidates. Nor would they have likely won at the polls without the widespread and blatant vote-rigging carried out in support of the USDP.

Military-created militias in Shan State have long been involved in the narcotics trade. The first militias in the region, then known as Ka Kwe Yay (KKY), were set up in the early 1960s to fight the insurgent and China-backed Burmese Communist Party (BCP) and various other ethnic-based insurgencies in the region.

In reciprocation for their assistance, the government looked the other way on their opium trafficking activities. Many of these groups eventually began to spend more time and effort guarding opium caravans to Thailand than fighting ethnic insurgents, forcing the government to crackdown on and disband certain militias.

By then several militia commanders had become major players in the regional narcotics trade, including notorious warlords Khun Sa and Lo Hsing Han. Khun Sa's ethno-nationalist insurgent Mong Tai Army grew into the premier opium and heroin trafficking organization in the region's Golden Triangle drug-producing region encompassing areas of Myanmar, Thailand and Laos. Khun Sa eventually surrendered to the government in 1996 and lived out his final years in Yangon.

Lo Hsing Han also leveraged his involvement in the Ka Kwe Yay into becoming a major opium trafficker. He was arrested in Thailand in 1973 and later extradited to Myanmar. Released in a 1980 general amnesty, Lo was conscripted by the government to act as an intermediary in ceasefire negotiations with ethnic Kokang and Wa rebel groups following their 1989 mutiny from the BCP. In exchange, Lo was given lucrative business opportunities by the junta including, according to a 1993 Thailand Office of Narcotics Control Board report, the right to smuggle heroin from Myanmar to Thailand.

Together with his son Steven Law, Lo has created one of Myanmar's largest conglomerates, the Asia World Company. The company's interests include the lead construction role of the new capital at Naypyidaw, management of Yangon's main port, reconstruction following Cyclone Nargis, and a role in the construction of the recently suspended China-backed Myitsone dam project in Kachin State.

Lo and his son were placed on a US visa blacklist in 1996 for their suspected drug trafficking activities and added to the US Treasury Department's sanctions list in 2008 for their financial connections to the military regime. There has long been speculation that Lo Hsing Han built his business empire on narco-profits, although he has consistently denied the widespread allegations of involvement in drug trafficking.

New age warlords

Myanmar's current militia commanders in Shan State are unlikely ever to reach the drug producing heights of Khun Sa or Lo Hsing Han.

But like their predecessors they have been able to leverage their roles as counter-insurgent militia leaders to move into the narcotics trade, which in turn has allowed some to establish flourishing business concerns. Initially providing protection for heroin refineries and opium shipments, militias are known to have recently moved into trafficking and production of methamphetamine.

Myanmar is also the second largest producer of opium in the world, next to Afghanistan, and is a major regional producer of methamphetamine. Crystal methamphetamine, also known as "ice", rudimentary forms of ecstasy and other synthetic drugs are also produced in laboratories controlled by militias as well as many ethnic insurgency organizations.

Although Western countries have been the most vocal about the need for Myanmar to curb its prolific narcotics trade, much of Myanmar's narcotics production, both for opium-heroin and synthetic narcotics, is earmarked mainly for Chinese and Southeast Asian markets. 
 The involvement of government-created militias in the amphetamine trade expanded following the 2009 refusal of major ceasefire groups, including the United Wa State Army (UWSA), National Democratic Alliance Army (NDAA), and Myanmar National Democratic Alliance Army (MNDAA), to transform themselves into army-controlled Border Guard Force units. The militias are currently viewed by the military as more reliable and trustworthy than ethnic insurgent groups, which the military feels were disloyal in their rejection of the BGF scheme.

In apparent reprisal, militias were given more opportunities around 2010 to set up labs and protection extended to their trafficking activities as a way of undercutting the narcotics activities of the UWSA, NDAA and MNDAA, according to Sai Khuensai Jaiyen, editor of the Thailand-based Shan Herald Agency for News (SHAN).

These claims are supported by reports from his own organization as well as field research by the Paluang Women's Organization and other exile-run ethnic organizations. These militias used a portion of their narco-profits to fund their large and well-equipped fighting forces while the rest of the revenues have either gone into warlords' pockets or been used to establish more legitimate businesses.

Militia involvement in the narcotics trade has implications for regional security. Thailand is a major recipient of narcotics produced in Shan State and as a result studies show that addiction rates are soaring. Thailand acts not only as a consumer but also as a transit route to Malaysia and markets farther afield. Narcotics trafficking also plays a growing role in the financing of insurgent and criminal violence in Thailand's insurgency-hit southernmost border provinces.

Myanmar-produced narcotics are also increasingly being trafficked through Laos to markets in Thailand, China, Vietnam and Cambodia. Laos' growing role in the trade highlights the dangers of its goal of becoming an important transportation hub for the region, including a key transit route for the Association of Southeast Asian Nations (ASEAN)-China Free Trade Area.

Traffickers are believed to be exploiting Laos' central geographic position to circumvent better equipped narcotics suppression forces along the Thai and Chinese borders. As Myanmar's economic and trade links to the region grow in the years ahead, without a comprehensive suppression effort so too will criminal activities such as drug trafficking.

China has long pressured ethnic insurgents along its border with Myanmar to stop drug trafficking into the country. This has worked to a certain extent, yet narcotics remain a large and growing problem in China's adjacent southwestern Yunnan province.

The potential instability resulting from Myanmar's militia-driven narcotics trade came to the fore with the deaths of 13 Chinese sailors on the Mekong River in October 2011. The killings were linked to a former Shan militia commander, Naw Kham, who has become notorious in the Golden Triangle region for his extortion of river traffic and involvement in the narcotics trade.

Hunted by the military and police forces of Myanmar, Thailand and Laos, he has so far managed to elude capture. Some observers speculate his uncanny ability to avoid arrest is related to his close connections to members of those same security forces. Following the incident, Beijing made its first foray into a joint regional security mechanism through joint patrols along the Mekong involving Myanmar, Thai and Lao security forces.

Legally liable

Myanmar's 2008 constitution expressly gives legal responsibility for the militias and their activities to Myanmar's military. This legal liability has the potential to put Thein Sein's government on a collision course with the military top brass. As a formal part of the military, it is highly unlikely that top military commanders are not aware of the activities, including narcotics trafficking, of various militia units active across the country.

Numerous reports from exile media groups such as the Shan Herald Agency for News (SHAN), the Democratic Voice of Burma (DVB), and the Mizzima News, as well as independent observers of the narcotics trade, paint a picture of widespread militia involvement in drug trafficking across Shan State as well as parts of Kachin and Karenni States.

This geographical area is too large and the number of units involved too numerous for the military to claim with any credibility that involvement in the narcotics trade is confined to a few rogue militia commanders in remote areas. Militia units are known to be able to move drug shipments through army checkpoints and camps, some of which are believed to house drug laboratories.

Shan and foreign observers of the narcotics trade have accused the military of taking an active role in protecting the groups and earning profits from transportation "fees" and a possible cut from sales. Army officers have become accustomed to augmenting their meager salaries through outside activities and any government attempts to curtail these have the potential to spark discontent in the rank and file.

It is not clear yet that Thein Sein has either the political will or power to tackle military and militia linked drug dealing. Many senior members of his government are army commanders-cum-politicians who previously served in the narcotics-plagued Shan State. This includes Thein Sein, a former commander of the Triangle Regional Command from 1997-2001, and Vice President Tin Aung Myint Oo, commander of the Northeast Regional Command in the late 1990's.

Current army commander-in-chief Vice Senior General Min Aung Hlaing also served in Shan State, where he commanded the Triangle Region Command and later from 2008 to 2010 headed the Bureau of Special Operations 2, responsible for operations in Shan State.

These potentially embarrassing connections put Thein Sein in an awkward position, particularly at a time he angles to win United States and European Union recognition for his reform initiatives. Some speculate he could yet leverage growing international support for his government to reform the militia system and in the process wean the Shan State off its dependence on narcotics trafficking.

The necessity of maintaining the militias as counter-insurgency forces could wane if the peace process with ethnic insurgent groups is consolidated and moves towards lasting peace. New foreign investment in the region could provide business opportunities for former militia commanders and their followers to pursue more legitimate sources of income.

With the suspension of some Western sanctions, Myanmar is now well-positioned to request technical assistance and official development aid to help the Shan State region implement effective crop substitution programs and move away from drug trafficking and production.

But without a comprehensive peace that includes enforceable counter-narcotics measures, improvements in the rule of law, and wide-reaching reforms of the military, Myanmar's still thriving narcotics trade will continue to undermine Thein Sein's reform credentials and credibility.

Brian McCartan is a freelance journalist. He may be reached at bpmccartan1@gmail.com.

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