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Shan Drug Watch Newsletter October 2011 issue 4

Druglords in Parliament

A publication of the Shan Herald Agency for News (S.H.A.N.) Contents

Message to the Reader ...... 3

Countdown to 2014 ...... 5

Results of SDW opium survey: 2010-2011 season ...... 7

2010-2011: The best output in 3 years ...... 12

Poppy fields return to the north ...... 14

How to deal in drugs without fear...... 15

Naw Kham: Who is he serving? ...... 16

Druglords in Parliament ...... 19

Restless neighbors ...... 25

Loan wolves ...... 26

Crop substitution for whom? ...... 27

Rising drug use ...... 28

How drugs are taken ...... 29

Taking action against offenders ...... 31

Hsengzeun Salawin Adrian Cowell

The report is dedicated to two of our lifelong friends and colleagues : q Hsengzeun Salawin, who passed away on 15 September 2011, and q Adrian Cowell, who passed away on 11 October 2011 Message to the Reader

The drug problem in Burma is an issue that few people, even academics and politicians, understand, despite the availability of a host of reading material by experts like Alfred W.McCoy (Politics of in Southeast Asia), Bertil Lintner (The Politics of the Drug Trade in Burma) and Chao Tzang Yawnghwe (The Shan of Burma).

While quick to interpret new developments in other fields -- whether political, military or cultural -- and to criticize the country’s ruling military junta, observers almost always blame the armed ethnic rebels as the main culprits when talking about the drug trade.

A case in point is the upsurge in drug production and rising number of seizures by law enforcement agencies in , and during the past few years. Predictably, a number of experts have concluded that the ceasefire groups, especially the Wa, which have spurned Naypyitaw's call to forget their self rule ambitions and become Burma Army- run Border Guard Forces (BGFs), are furiously churning out more drugs to sell and buy weapons to fight.

However, such analysis ignores a number of glaring details:

The Burma Army’s Self Reliance policy imposed on its border-based units, requiring them to raise funds by every means available, legal or not;

Burmese authorities blocking all income generating activities, especially drug pro- duction and trafficking, of the ceasefire groups, particularly the Wa;

Burmese military commanders giving the green light to People’s Militia Forces (PMFs) - the paramilitary forces built up among the local populace by the Army - to establish their own drug production plants and trafficking networks and thereby wrest the market away from the ceasefire groups;

The resulting shift by investors, both domestic and foreign, away from the Wa and their allies to areas under the control of the Burma Army and the People’s Militia Forces (PMFs) where their drug activities are more secure and their profits more assured;

A massive increase in poppy cultivation, and heroin and methamphetamine produc- tion, in the Burma Army-People’s Militia controlled areas, far more than in areas under rebel-ceasefire control.

It is precisely to throw some light on the confused analysis surrounding the drug problem, that we have been publishing this newsletter. In this issue, we examine the situation in post-election, in particular the rise of Burma Army-backed drug-lords into the new parliament.

3 The irony is that while Shan Drug Watch is being accused in some quarters of champion- ing the Wa cause, the Wa themselves are saying we are damaging their image. They have warned us we have wronged them “twice already” and that they hoped “there won’t be a third time”.

We sincerely hope their warnings are just empty threats.

Thank you for your attention and support.

Mysoong Kha! (All the best!) Shan Drug Watch team Shan Herald Agency for News 14 October 2011

Wa, Mongla conclude new truce

As SDW was preparing this report, news came that the (UWSA) and its closest ally the Mongla-based National Democratic Alliance Army (NDAA) had signed a new ceasefire pact with Naypyitaw on 6 and 7 September, 2011, respec- tively. Follow-up agreements concluded on 1 and 9 October respectively stated that the two would cooperate with the new civilianized government on the 15 year plan (1999-2014) to make the country drug-free.

It remains to be seen how the two will stick to their part of the agreement when the other side does not appear to be doing so. In fact, local media have reported that Wa and/or Mongla were involved in the drug scandal in which 13 Chinese crewmen and women were brutally killed on 5 October at the Golden Triangle. Both have categori- cally rejected the charge.

4 Countdown to 2014 The Association of Southeast Township Ceasefire Group Asian Nations (ASEAN) is targeting 2015 as the drug Laogai National Democratic Alliance free year for the grouping. Army (MNDAA) or Kokang Naturally, its most important Kunggyan Myanmar National Democratic Alliance member (in the drug respect) Army (MNDAA) or Kokang Burma has to assure its Mongla National Democratic Alliance Army neighbors there is no need to (NDAA) or Mongla worry it will fulfill its part of the Pangwai United Wa State Army responsibility. Its target year Manphang United Wa State Army therefore is one year ahead Napharn United Wa State Army of Asean's: 2014. Mongmai United Wa State Army In 1999, it designated 51 out Pangyang United Wa State Army of 300 townships in the coun- Wiangkao United Wa State Army try for its 15-year drug elimi- nation master plan: However, Kunggyan, one of the townships under the new 43 in Shan State Kokang leadership that agreed to become a Border Guard 4 in Force (BGF) under the Burma Army in 2009, has since re- 2 in Kayah (Karenni) State turned to poppy cultivation. 2 in Chin State The only other targeted townships in Shan State under Burma (Actually, a lot of the former Army control that can boast of being opium free appear to townships have been re-ar- be Panghsai and Mongyawng. ranged into new ones, so there are only 39 targeted townships left in Shan State: Mongkoe, Panghsai and Muse have become one township (Muse), while Pangwai, Manphang, Na- pharn, Mongmai, Pangyang and Wiangkao have become four townships: Pangwai, Napharn, Mongmai and Panghsang.)

Until 2010 if one looked at the progress chart of the 15 year plan, one would find most of the “opium free” townships under the control of the ceasefire groups: MNDAA soldiers

5 Significantly, many of the “Not Free” townships are also un- Army control places some der BGF control: very large question marks against Burma's supposed State township BGF# drug eradication plans. Kachin Gangwin-Chihpwe 1001 Lupi-Chihpwe-Pangwa 1002 Asked recently if he believed Sinkyaing-Kambaiti 1003 the much touted Asean Com- munity would become a re- Kayah Loikaw 1005 ality in 2015, Asean Secretary Dimawso 1005 General Surin Pitsuwan said: Shan Kunggyan 1006 “4 years is just a target-date. Mongton 1007 It is not an end-date.” Markmang (Metman) 1010 New president Thein Sein may need to take a leaf out In the meantime, many town- lowing pages. of Surin’s book when talking ships not targeted in the 15- about drug-free target dates year plan are increasingly The fact that these newly in Burma. growing poppies, as can be formed Border Guard Forces seen in the charts on the fol- are directly under Burma

New drug kings in Burma

People’s Militia Forces

6 Results of SDW opium survey: 2010-2011 season

Phase One (1999-2004): 22 townships targeted by SPDC for opium elimination

SHAN TOWNSHIP FREE NOT FREE REMARK STATE North (15) Mongkoe NF Kunggyan NF Border Guard Force 1006 (formerly MNDAA Kokang territory) Laokai F Border Guard Force 1006 (formerly MNDAA Kokang territory) NF NF Mongyai NF Tangyan NF NF NF Mantong NF Hsenwi NF Kutkhai NF Namkham NF Muse NF Panghsai F Burma Army East (1) Mongla F NDAA-ESS terrirory South (6) NF Mongpan NF Langkher NF Hsihseng NF Faikhun (Pekhon) NF Mong Keung NF Total 22 3 19

Note: MNDAA = Myanmar National Democratic Alliance Army, a former ceasefire group NDAA-ESS = National Democratic Alliance Army - Eastern Shan State, a ceasefire group

7 Phase Two (2004-2009): 20 townships targeted by SPDC for opium elimination STATE TOWNSHIP FREE NOT FREE REMARK Kachin Karmaing NF NF Moemauk F Moehnyin NF Shan North Pangwai F UWSA territory Manphang F UWSA territory Napharn F UWSA territory Mongmai F UWSA territory Pangyang F UWSA territory Wiangkao F UWSA territory Shan East Mongyang NF NF Mongyawng NF Monghsat NF Mongton NF Mongpiang NF Mongkhark NF Shan South NF Mongnai NF Panglawng NF Total 20 7 13 Note: UWSA = United Wa State Army, a ceasefire group

Phase Three (2009-2014): 9 townships targeted by SPDC for opium elimination STATE TOWNSHIP FREE NOT FREE REMARK Shan State Kehsi NF South Monghsu NF Namzang NF Yawnghwe NF Laikha NF Kayah Loikaw NF (Karenni) Dimawso NF Chin Tonzang NF Falam NF Total 9 - 9 Grand Total 51 10 41

Reports from both the Shan Herald Agency for News and other agencies also indicate that at least 26 townships not targeted in the 15-year plan are also growing poppies:

8 Northern Shan State - Mongmit, , Kyaukme, Nawngkhio and Southern Shan State - ,, , and Eastern Shan State - Markmang (Metman), Tachilek and Mongphyak Kachin State - Hsaw Law, Chihpwe, , , Putao, Machangbaw and Kayah State - Phruso, Shadaw Chin State - Tiddim and Pletwa Sagaing - Kalemyo and Tamu - Areas adjoining Shan State Magwe - Areas adjoining Arakan State

Opium field in (February 2011)

New approach proposed

Global Commission on Drug Policy, made up of 19 members, including former UN chief Kofi Annan and former secretary of state George Shultz, says the war on drugs “has failed” and urges new approach; l To replace crimilization and punishment of drug users who “do not hurt other people” with health and treatment services l To consider legalizing marijuana and perhaps other illicit drugs “to undermine the power of organized crime and drug traffickers”

“Victories” are negated by emergence of other sources and traffickers, the report states. (Reuters)

9 “The more battalions, the more poppy fields.”

Lway Aye Nang, Palaung Women’s Organization (PWO), speaking at Foreign Correspondents Club of Thailand, 29 September 2010

10 11 2010-11: The best output in 3 years According to the UN Office weather was uncommonly q In the north, there were on Drugs and Crime dry. “There wasn’t even the little or no devastation by (UNODC) both opium culti- usual morning dew (to irri- either heavy rains or frost. As vation and output have been gate the fields),” said a farmer a result, the output “couldn’t steadily climbing over the last in the south. The result: the have been better,” according two years: output was even less than to several sources. 2009 330 tonnes the previous year. 2010 580 tonnes q In the south, there were Much of this has been places like Monghsu, While the increase in cultiva- blamed on El Nino, a change where the first crop had a tion concurs with SDW data, in the weather which hap- better yield than the second. the increase in output does pens when the usually cool “It was so cold in December, not. Farmers and traders ex- ocean current in the Pacific there was little or no sap in pressed surprised about the is replaced by a warm cur- the pods,” said a trader com- UNODC analysis. “Perhaps rent. ing to the border. But in most these people were just work- places, especially in Loilem, ing out the output from the The 2010-11 season how- Laikha, Hsihseng, Hopong acreage and did not take the ever saw El Nino being re- and Faikhun (Pekhon), the weather into account,” one placed by La Nina, a time of yield from both crops was businessman in Shan State colder weather that comes satisfactory. South commented. after El Nino. The effect on the output was felt differently q In the east, farmers in According to those on the in each part of Shan State: places like Mong Kang in ground, weather conditions damaged output in both sea- sons:

2008-09 During the first crop (June- October) there were unusu- ally heavy downpours that washed away a large num- ber of fields. During the sec- ond crop (October-March), there was frost which re- duced the volume of the opium sap.

2009-2010 During the first crop, there were again heavy rains. And during the second crop, the Traditional incision method to allow opium sap to flow out

12 Mongton township, across Post in January 2011 that the only from the pods, but from Thailand’s Chiangmai, output was better than last also from the stem. This said, “The first crop wasn’t year “when there was too practice has started in cen- good, but the second crop much rain. The climate this tral Shan State, where the was better.” But many agreed year has been really obliging.” north and south meet. “It isn't it was a good year on the quite as juicy as from the whole. The overall result was that pod, but the farmers are this year’s harvest was twice happy, because they are get- Even Laota Saenli, 74, a as good as last year’s. ting more,” reported one of known druglord who spent a our researchers. few years in Thai prison on One new innovation un- drug charges, couldn't help heard of before is the col- remarking to the Bangkok lection of opium sap not

One to three crops per year

In a few mountainous regions rainy season, and the last end of the rainy season. in Shan State, like near during the time when farm- Homong, opposite Thai- ers can rely on mountain dew In the north, most of the land’s Mae Hong Son, the for irrigation. poppy farmers prefer only word “poppy season” is a one crop, that is, the one to- misnomer, because farmers In the south and east, more ward the end of the rainy sea- grow 3 crops a year: one dur- farmers prefer 2 crops: the son, commonly regarded as ing the rainy season; the first during the rainy season, the main season. other toward the end of the and the second toward the

“The rich want the drugs and the poor traffic them.”

Laota Saenlee, former Kuomintang officer, Bangkok Post, 30 January 2011

13 Poppy fields return to the north

Shan State North almost be- eas and most particularly in Kokang Self-Administered came poppy-free in 2002, areas that have elected mili- Zone. “Evidently, the output is when the ruling military junta tia leaders known for their still small and not enough for initiated a rapprochement heavy involvement in the the refineries there,” said a policy with the United States drug business. researcher. “Because the and a vigorous anti-narcotics price in Kunggyan is K1.1-1.2 campaign was launched. “Vote for us and you’ll be million (USD 1,800-1,390) The rapprochement did not free to grow poppies,” was per viss of opium - much work out, but the Kokang (in one of the campaign prom- higher than other townships 2003) and the Wa (in 2005), ises given by candidates of in the north.” (Note: one viss apparently due to Chinese the military proxy Union Soli- = approx 1.63 kg) pressure, launched their own darity and Development drug eradication campaigns, Party (USDP), popularly The buyer is said to be Luo thereby bringing opium culti- known as the “Lion party” for Guangzhong, assistant to Liu vation in the north almost to its logo. Guoxi, now elected in a stop. This was except for a Burma’s new government as few selective areas like a National Assembly Namkham, Mantong, Kutkhai (Amyotha-Hluttaw) member and Tangyan where the for Kokang. regime’s favorite militia groups remained supreme: Another indicator that more Panhsay, the Kachin De- poppies are being grown and fense Army, Manpang and the output high is the price of Mongha. opium in northern Shan State. “In the past, following The result was a balloon ef- The USDP logo the 2002 crackdown, prices fect in the south and east of had gone up to 1 million kyat Shan State. By 2007, accord- One of the townships that (USD 1,160) and over per ing to Khun Hseng, ’s had long been poppy free, but viss, but now it is only uncle who used to handle his is now growing poppies K600,000 (USD 690)”, a re- business dealings, produc- again, is Kunggyan, one of searcher said by the end of tion levels in Shan State were the two townships in the now February 2011. back to what they had been prior to the Kokang and Wa bans. On 27 March, 2010, militia leaders who were attending the 63rd anniversary of Burma’s Armed Forces Day ceremony Today, as poppies in the in Tachilek were reportedly told by the Tachilek area com- south and east continue to mander Col Khin Maung Soe on the sidelines: “This is your flourish, they have also re- great opportunity. You would do well not to let it slip by. My turned to the north with a ven- only advice is to sell as much drugs as you can across the geance, especially in Burma border (i.e. in Thailand) but not on this side of the border.” Army-run People’s Militia ar-

14 How to deal in drugs without fear

In Mantong, now a township fields, after receiving a cer- An esteemed lawyer in north- in the Palaung Self-Adminis- tain amount of “tax” from the ern Shan State told SDW in trative Zone in northern Shan villagers. January 2011, that he had not State, since the military- had a drug case to handle for drawn constitution became Down south, in traditional a few years now, as the au- operative in March 2011, the poppy-growing areas on the thorities were handling these Namtu-based Burma Army Pangpi-Kungmao mountain cases “in their own way.” Infantry Battalion 130 was range in Mongpan-Langkherh busy collecting opium taxes townships, the harvest was On 8 January 2011, two drug in January 2011. “Farmers much better, yielding over peddlers, one a woman, like us who could pay went 1,000 viss (1.6 tons) to last were detained by Nam- free,” said one. “But those year's 600 viss (960 kg). kham’s Manhio sub-township who could not were arrested.” Burma Army Infantry Battal- police at Nawng Ma casino. ion 294 was given K3.4 mil- They were released after they Another Burma Army unit, lion (US$4,000). “Not one paid Y26,800 ($3,350). In- Namtu-based Light Infantry field was destroyed here,” a deed, one drug addict told Battalion 324, had demanded village headman boasted. SDW, “We (addicts) are 3 million Kyat (USD 3,480). not afraid of the police, “It got K1.5 million (USD These are random examples only of the wind (that might 1,740) and left happily, but of how the poppy farmers blow away the fire used to warned it would return after and the Army, which has been light our smoke).” harvest in March,” said a lo- forced to pursue a self-reli- cal to SDW. ance policy, are undergoing Further back in 2008, the a mutually dependent exist- townspeople of Kehsi, Shan During January, Col Khaing ence. State south, lodged a com- Zaw, Commander of the plaint to the township police Tangyan area, assigned one If this is what is happening on chief about shops selling of his units to destroy poppy the ground, it is only a little drugs to their children. He fields in Nammuhsay tract. different “upstairs”: handed out K 30,000 to the While the unit was on its way, chief complainant, saying: Lao Terng, liaison officer to On 23 March 2011, the “Use this to buy yaba and Manpang People’s Militia, led Irrawaddy reported sales of action will be taken against by Bo Mon, arrived with K3 government properties in the seller at once.” By no co- million (USD 3,480). The re- Rangoon with no questions incidence, the townspeople sult was that the poppy de- asked about where the were unable to find any shop struction unit was re-directed money had come from. Ac- selling yaba that day and the to Nawng Pha and Wiang cording to the report, several money had to be returned to Mai village tracts, where it businesspeople and officials the police chief. The next day, simply slashed down a few described the transactions everything returned to “busi- acres of harvested poppy as “money laundering.” ness as usual”.

15 Naw Kham: Who is he serving?

Since then ships entering Naw Kham is wanted by Chi- and departing from the nese, Thai and Laotian au- Golden Triangle, where thorities. He is also wanted Burma, Laos and Thailand by the meet, have never felt safe. (SSA) and the United Wa State Army (UWSA). But no- q On 4 April 2011, 13 Chi- body has been able to catch nese working at the him so far. Kings Romans casino at Tonpheung in Laos, opposite Not even the Burma Army, Thailand's Chiang Saen, which had no trouble chas- were kidnapped in a daylight ing out the SSA and the raid. They were released af- UWSA from the area, has Naw Kham ter the casino owner Zhao managed to arrest Naw Wei reportedly paid 25 million Kham. It has reportedly Once an obscure supply of- baht (US$ 833,000). launched at least three cam- ficer in the Mong Tai Army paigns against the fugitive, (MTA) of the late Khun Sa, he q A month later, on 17 May, whose strength is nothing shot to notoriety on 25 Feb- another Chinese cargo compared to the Shan and ruary 2008, when gunmen ship Hong Xing was fired on Wa armies, all coming to believed to be under his con- by gunmen in two speed- naught. trol shot up a Chinese patrol boats, presumably for not boat on the , wound- stopping and paying protec- Many businesspeople claim ing three Chinese officers. tion money, prompting China Naw Kham has an inside to lodge a complaint with the track with the Kengtung- Joint Committee on Coordi- based Triangle Region Com- nation of Commercial Navi- mand, paying up to 8 million gation (JCCCN). baht (USD 266,000) a month. Naw Kham himself is said to Protection fees must be paid be close to General Ko Ko, to Naw Kham on all contra- current Home Minister and band, including illicit drugs, formerly a commander of the going to Laos from Burma Tachilek area, where he knew across the Golden Triangle, Naw Kham as a Burma Army- or else goods risk confisca- run local militia leader. tion. Even paying protection money is sometimes not a A recent Thai news report by foolproof guarantee that ASTV Manager Online on 12 one’s goods will not be June 2011 also speculated seized, as can be testified by that Naw Kham must have Zhao Wei several drug traders. links to state personnel in

16 The Golden Triangle today : Where Naw Kham reigns

17 Burma. They wondered why make way for the casino and in Mongla for more than 10 state personnel just “watch its surrounding business years. Naw Kham’s squeez- and do nothing” while complex. ing of Zhao Wei thus hurts “Golden Triangle Godfather both the Wa and Mongla. Naw Kham and his gang” or- Naw Kham himself has been der cargo ships on the often quoted saying that he Evidence that control of the Mekong to lift tarpaulin cov- keeps only 30% of his earn- Golden Triangle is high on ers of cargo so they can see ings for himself. The rest Naypyidaw's agenda is that what they are carrying. Non- goes to pay his men, local junta chief Than Shwe flew compliance is met with swift networks, and the Burma to the Laotian capital reprisals: either shooting or Army. Vientiane in October 2010, boarding the ship. ostensibly to conclude a pact One thing is clear: Naypyitaw to jointly cooperate against Others also point out that is out to close Hsop Lwe, the human and drug trafficking most of the village heads on outlet of the Wa and their ally on the Mekong. both sides of the Mekong are Mongla to the Mekong. It is on his payroll. His targeting also pursuing a relentless While available facts may not of the Kings Romans casino policy of cutting down the be conclusive, they point to and its boats plying the wa- two's revenues. The two are an obvious question: Is Naw ters of the Mekong has also known to be business part- Kham working for Naypyi- won support among local Lao ners with Kings Romans ca- taw? people, who were forcibly re- sino owner Zhao Wei, who located from their lands to has been operating a casino

Killing on the Mekong

Weeks after 11 crewmen and 2 women were found shot and knifed to death on two cargo ships on 5 October 2011 at the Golden Triangle near Thailand’s Chiang Saen, both officials and locals have been wondering who did it and why. One of the myster- ies is that though the killers had taken their time to butcher their victims, first blindfold- ing and handcuffing them, they didn’t have time to carry off the 920,000 speed pills which were left behind on the boats.

Obviously, almost all fingers have pointed to Naw Kham, who for four years has been the area’s undisputed godfather, collecting protection money from both legal and ille- gal trade in that part of the Mekong.

Conflicting reports, meanwhile, have also implicated Thai and Burmese authorities. “Maybe Naw Kham wasn’t the one who was responsible for the killings”, said an informed Thai businessman in Chiang Saen. “But he's saying nothing, except that it wasn’t him who did it. Because if he’s captured, he may not be able to escape from other charges, which are equally serious if not more so.”

18 Druglords in Parliament During the November elections, the following candidates, all from the proxy Union Solidarity and Development Party (USDP), popularly known as the lion party, were elected to the three assemblies: National Assembly, 1 People’s Assembly, 2 State Assembly, 4

As put succintly by a busi- nessman in northern Shan State during the election: “The Army gets (drug) taxes (and) The Lion gets votes”.

Liu Guoxi Approximate age : 75 Liu Guoxi Assembly : National Assembly Party : Union Solidarity and Development Party Constituency : 11 (Kokang)

According to Bertil Lintner, expert on Burma and Burmese drug issues, Liu had been the key operator in the Kokang drug enterprise. His refinery is said to be in Kunggyan town- ship.

One redeeming fact about Liu is that he has been looking after Olive Yang aka Yang Jinxui, 84, the first druglord on rather the druglady of Burma, after she was abandoned by her "wife", former movie star Wa Wa Win Shwe. Olive Yang aka Yang Jinxui

19 Ho Xiaochang Other name(s) : U Haw, Haw Laosang Race/religion : Kokang/Buddhist Age : 67 Place of Birth : Yinsing village, Laogai township Present Occupation : Agriculture / Animal husbandry Parents : Ho Xiaotaw, Chaw May Marital status : Married to Xiao Zay, with 4 sons

Ho Xiaochang Permanent address : Hokho (Tada Oo) village, Kunlong Party : Union Solidarity and Development Party Constituency : People’s Assembly, Kunlong township Other details : Had served as Deputy Commander of Kunlong Special Combat Police Force, now retired

In our 2003 report Show Business, we had reported how Haw Laosang had liaised directly with General Than Shwe to free one of his subordinates jailed for killing a Burmese officer in Tachilek (see extract below).

A small Kokang drug boss - A lesson in impunity

Mi Hsiao-ang, not yet 40, is an officer in the Special Combat Police Force of Kunlong led by Haw Laosang… (formerly) stationed at Hawngleuk, Tachilek Township.

Early in 2002, he shot dead a Burmese lieutenant from the Border Disciplinary Company in Tachilek for attempting to search his car. A few days later he surrendered himself and went to jail for 4 months plus 3 days. (…)

His freedom was gained after Haw Laosang together with Peng Jiasheng obtained audi- ences with SPDC Chairman Senior General Than Shwe and SPDC Secretary-1 and Head of Military Intelligence General Khin Nyunt.

He is now back in Kunlong and pursuing his businesses “as usual”, according to an inside source. (Show Business, 2003, page 52)

20 T. Hkun Myat Other name : Jeffrey Race/Religion : Kachin/Christian Age : 60 Place of Birth :Quarter # 4, Kutkhai Education : BA (Law) L.L.B Occupation : Director, Office of Attorney General (Retired) Marital status : Married, 3 children Party : Union Solidarity and Development Party T. Hkun Myat Constituency : People’s Assembly, Kutkhai township

Said to be a very approachable and likeable person. “Hard to believe he’s involved in drugs, if we didn’t know his subor- dinates,” reported a researcher. One of them is Aesop, a Shan Muslim, who operates a refinery in the nearby town- ship of Namtu. The group is also involved in protection and transportation of drug shipments passing through the area.

From 1990-2010, he was director at the Attorney General’s Office and also served as commander of the Kutkhai local combat police force. He has received several medals and awards from the military government. He is currently chair- man of the House Bill Committee.

Kyaw Myint Name : Kyaw Myint aka Win Maung, Li Yongqiang Age : 51 Ethnicity : Lisu (Chinese) Place of Birth : Panghsay village, Namkham township Education : Grade 10 Occupation : Trader (company owner) leader, Pang-hsay People’s Militia Marital Status : Married with 4 children

Kyaw Myint Party : Union Solidarity Development Party Constituency : Shan State Assembly Constituency #2, Namkham township 21 Other particulars - In addition, His 300-strong On 22 April 2007, his men Panhsay militia force and were caught with 60 viss (96 1979 : Panhsay Counter In- subsidiary units control most kg) of opium at Namphaka surgency militia of the river crossings on the and were disarmed and de- 1981-88 : Chairman, Mao. tained, but less than two Panghsay tract weeks later all were released In March 2006, when an in- following a meeting with Maj 1991-today : 1. Chairman, formant reportedly told a lo- Gen Aung Than Tut, then Kholong Lisu Cultural Soci- cal SPDC drug enforcement Commander of the Lashio- ety 2. Leader, Panhsay official, “Arrest Kyaw Myint based Northeastern Region People’s Militia and Kyaw Htwe, and most if Command. 1991 : Medal for heroism not all drug activities in the north will be under control,” On the election day, 7 No- 1993 : Attended National Con- the official was quoted as re- vember 2010, his rival can- vention Chairman, Anti- plying, “You think we don’t didate Sai Zaw La was enjoy- Drugs Committee know? The fact is that na- ing a comfortable lead, more tional security says we need than 8,000 votes to his 3,600, Panhsay Kyaw Myint is close them and their services.” despite votes from freshly to local SPDC commanders naturalized people from including Lt-Gen Myint Local sources say that his across the border, double Hlaing, currently Agriculture services were indeed invalu- and triple balloting by some Minister in the new govern- able at the start of 2006 dur- voters and K10,000 (US$ ment He finances poppy cul- . ing the Burma Army’s pursuit 12.5) gifts to those who voted tivators in his area and owns and final capture on New for him. However, on the next a refinery. His younger Year’s Day of Lt-Col Khun day, Sai Zaw La was told he brother Kyaw Htwe aka Li Kyaw, an SSA commander had been beaten by more Yongpin, also doubles as his who was trying to establish than 650 votes, his 9,775 chief lieutenant. Kyaw a base on the Sino-Burma against Kyaw Myint's 10,434. Myint’s business fronts in- border. clude: A cigarette company un- der a Chinese franchise at Naloi, west of Nam- kham A licensed pork and beef business supplying Muse and Namkham town- ships A gas station in Muse’s Zawnzaw Quarter Yongyang Casino on the Mao- near Muse Entrance to Yongyang Casino owned by Panhsay Kyaw Myint

22 Keng Mai Age : 41 Ethnicity : Kachin Place of Birth : Mai Phang village, Mong Paw Tract, Muse township Education : Grade 10 Occupation : Leader, Mong Paw People’s Militia Marital Status : Married with 3 children Party : Union Solidarity and Development Party

Keng Mai Constituency : State Assembly Constituency #2, Muse township

He was said to have become involved in the drug business when his elder brother Mamon was still working with Mong Hsala, leader of the now defunct Mongkoe Defense Army (MDA).

During the election campaign, he reportedly told the villag- ers at one rally, “If you vote for me, I’ll be elected. But if you don’t vote for me, I’ll still be elected.”

Bai Xuoqian aka Pei Hsauk Chen Age : 62 Ethnicity : Kokang Place of Birth : Liet Sein Htang village, Hong Ai tract, Konggyan township Education : Grade 9 (Chinese Kokang school) Occupation : Hotel owner Marital Status : Married with 2 children Party : Union Solidarity Development Party Photo : Reuters Bai Xuoqian Constituency : Shan State Assembly, Constituency #1, Laogai township Particulars- 1989 : Deputy to Peng Jiasheng, Special Region #1 2009 : Chairman, Provisional Kokang Leading Committee

23 Bai used to be a vice chair- to the ceasefire groups. It nearby Da Xuetang. It was his man of the Myanmar National was his collaboration with the rivalry with Peng, especially Democratic Alliance Army Burma Army that had brought Peng's eldest son, in the drug (MNDAA), simply known as down Kokang in a mere three trade that had culminated in the Kokang Army, under days of fighting in August, the breakup of the MNDAA, Peng Jiasheng. Bai had 2009. according to several sided with Naypyitaw, when sources. the Border Guard Force Bai owns a casino in Laogai (BGF) program was offered and reportedly a refinery in

Myint Lwin aka Wang Guoda Age : 68 Ethnicity : Chinese Religion : Buddhist Place of Birth : Ta Moe Nye (Ta Moeng Ngen) Kutkhai town- ship Education : Grade 10 (Burmese school) Grade 12 (Chi- nese school) Occupation : President, Ta Moe Nye Chantha Trading Co.Ltd Marital Status : Married with 4 children Myint Lwin Party : Union Solidarity Development Party Constituency : Shan State Assembly Constituency #2, Kutkhai township

Other particulars - 1962-1988 : Secretary, Ta Moe Nye Security and Administrative Committee; Chairman, Judiciary; Leader, People’s Militia Force 1980-1993 : Leader, Field Mule Transport Corps, Light Infantry Division # 88 Kengtung Front 1980- to date : People’s Militia Supervisory Committee Chairman 1990 : Leading total eradication of poppy cultivation Myint Lwin attended the junta-organized National Convention as a national races delegate.

He is a partner to Ma Guo-wen, leader of the Mongha militia group in Mongyai township and Zhou Sang and Li Kai, leaders of the Nayai militia group in Namzang township. Both groups are originally from Khun Sa’s defunct Mong Tai Army and are heavily involved in drug pro- duction and trade.

24 Restless neighbors

Throughout the past two China also pressured the policy on Burma in the past years, the role of China, United Wa State Army used to be based more on dubbed “the black hole for (UWSA) and National Demo- the regime’s human rights heroin” by a French expert, cratic Alliance Army (NDAA) and democratic reforms than has become more promi- whose base areas adjoin its its performance against nent: province to crack drugs. down on the drug trade in Thai security reported in their capitals, Panghsang As for Thailand, it has made 2009 that China was supply- (Pang Kham) and Mongla a number of spectacular sei- ing satellite photos to the respectively, from August to zures during the past year, Burmese authorities of October 2010. “At Weluwan such as the haul in Phrae on poppy fields in Markmang, monastery, there were about 18 February 2011 of 95kg of one of the most isolated 50 trucks seized from the heroin. However, arrest of 75 townships in Shan State drug dealers,” a source re- Iranians with 164kg of “Ice” East. Last year, it was again ported during the campaign. (crystal methamphetamine), furnishing more satellite im- “Hundreds were also de- as reported on 31 December ages of poppy fields in tained and jailed.” 2010, and seizure of a meth Monghsu and Kehsi town- lab in Bangkok on 9 May 2011 ships. China’s impatience with also mean that producers in Burma’s lukewarm approach Burma are facing serious Still, the Chinese were unable to the drug issue became competition. to pressure the local military clear when Meng Sutie, di- and police forces into de- rector of the Yunnan Public Despite apparent success, stroying the fields most of the Security Bureau, reported in Col Peeranate Kettem, Chief time, according to locals. March 2011 that “Opiates of Staff of the Pha Mueng “They said they needed to and synthetic stimulants Force, that oversees security wait for reinforcements and alike are produced both in along the borders of Chiang- also information from the tar- areas controlled by the mai and Chiangrai provinces, geted area, when actually Burmese government in estimated that less than 30% they were waiting for the har- Myanmar’s capital Naypyi- of the drugs smuggled into vest to be completed before taw, as well as in areas ad- the kingdom was intercepted, they went into action,” re- ministered by breakaway eth- reported IRIN News on 11 ported a local businessman. nic groups,” according to go- April 2011. “This happened in Kehsi, for .com. instance, especially in the One of the officers explained Mongnawng-Wanzing area, The United States has also to SDW on condition of ano- where the local powers are become more explicit in its nymity: the (Burma Army-run) Lahu criticism of Burmese rulers militia unit and the Burma on the drug front, although Army battalion in Wanzing.” most of Washington’s drug To page 26

25 Loan wolves There are two kinds of opium at reduced prices. But in with the creditor, either 50:50 farmers who borrow funds: Shan State East no reports or financier 75: farmer 25, of farmers being forced to with the financier responsible Those who don't have sell at reduced prices have for tax to the local authorities. capital to start and maintain been received so far, prob- a field ably due to high demand and Latest reports also indicate proximity to foreign investors. that at least in some areas Those who want to ex- more and more farmers are pand but don't have enough Even if prices are not forcibly becoming wage earners capital reduced, many farmers are (daily or monthly) rather than forbidden from selling their working on their own fields. Most of them have to repay crop to outsiders, and must With the pawliangs (finan- in kind and not in cash. How- sell only to the local militia or ciers) in Kutkhai-Hsenwi ar- ever, some are allowed to the financier. eas under militia leader repay in cash in accordance Mahtu Naw, paying 4,000 kyat with current prices. In Shan Apart from repayment of the ($5) per day with 3 meals, the State North and Shan State initial loan, farmers must still pay is not bad at all. South, there are reports of split their remaining opium farmers being forced to sell

From page 25 In any case, the Army’s Army troops and their mili- border security budget has tias. The Thai government’s been cut for almost a decade anti-drug campaign is waged Meanwhile, Kaladan and mainly in cities where the One reason for this is Narinjara News, based on the majority of the voters are, Bangkok is not anxious to western Burma border, and and not on the sparsely popu- look for trouble with Naypyi- Norway-based Democratic lated border taw, with which it had already Voice of Burma have reported experienced military confron- that Bangladesh has be- More troops from the tations in 2001-2002 when come another major gateway north are being deployed in Thai forces ran into drug for drug shipments from the volatile deep south caravans escorted by Burma Burma.

“Many new faces have popped up in the drug trade. Around 100 individuals are being monitored.”

Pornthep Eampraphai, Director, Office of Narcotics Control Board, Northern Region, Bangkok Post, 30 January 2011

26 Crop substitution for whom? Crop substitution projects base, there are rubber, in Mongyang, Pang Htolin, are being implemented on a mango, pineapple and sug- Manpiang and Mankard, in far larger scale in ceasefire arcane plantations. (This Tangyan and Mongyai town- areas than in Burma Army group minus the 1st Brigade ships, under its supervision. controlled areas. became a Burma Army mili- tia in April 2010) The same goes for Than Win In the Wa territory, close to aka Chen Shan of Tangyan, the Sino-Burma border, tea, Tellingly, in militia-Burma a known drug entrepreneur, mango, orange, plum, coffee Army controlled areas, most who has a 1,000 acre rubber and especially rubber planta- of the “crop substitution” plantation in Kholek- tions are being grown exten- project sites are where there Nampeuk, south of Tangyan. sively. It is the same along is no opium cultivation. For the Thai-Burma border, example, 2 miles north of For most villagers, there are where longans and other Mongyai, there is a billboard few benefits from such cash crops formerly grown saying, “U Ai Phone’s Opium projects. Their lands are were cut down in 2001 to Substitution Crop project seized for free and sold back make way for the rubber plan- site.” There had been no to private firms and wealthy tations. Almost all are fi- poppy cultivation in this loca- businessmen, forcing them nanced by Chinese compa- tion before. to move out and/or hire them- nies, with the arrangement selves out as wage labour. In that at harvest time the com- Generally speaking, the mili- townships like Namkham panies will get 40% and the tia groups mostly plant rub- and Namhsan, which for cen- planters 60% of the profits. ber (long term) and corn turies relied on tea planta- “May there be no war,” one (short term), while private tions, the tea prices have Wa officer told SDW. “And firms emphasize planting of fallen, and there are no agen- we’ll be in the money in a few lychees, dragon fruit, pine- cies, either private or junta- years’ time.” apple, Japanese sesame, sponsored, helping them out. peanuts and bee-orange, Most of these plantations be- which have quicker returns. long to four categories of people, in descending order: For example, Hong Pang leaders, departments/ units, Company has planted or- village communities and in- chards of dragon fruit (known dividual villagers. in Thailand as “Kaew Mangkorn”), orange, lime, Outside Wa territory, there pineapple and corn in Ze-en, are also alternative crop Nanang, Kangmong, and projects run by the Wa’s Kunghsa near Lashio. Hong Pang Company. An exception is Asia World For Hseng Keow, Hsipaw Company, owned by former township, formerly the Shan king of opium Lo Hsing Han, State Army (SSA) North which has more rubber fields Lo Hsing Han, Asia World owner

27 Rising drug use

Our researchers give slightly Kachin State is undergoing a personnel such as soldiers, different answers about heroin epidemic.) police and narcotics police. which kind of drugs are the During Shan festivals sol- most used. One reason for heroin being diers and police on security #3 in the north and south is duty are often seen asking for Shan State North that it is more of an export yaba to keep themselves #1. Yaba and/or ice commodity and as such is awake all night. #2. Khakhu difficult to find in a roadside #3. Heroin shop like yaba. The other rea- The age group that mostly son is that people do not like uses drugs is 20-40. But it is Shan State South the after effects of feeling also not unusual to find a #1. Yaba “sleepy and lazy,” and its nine-year-old using drugs. #2. Opium and/or khakhu compulsively addictive prop- Among students, it is during #3. Heroin erties. examinations they are most found taking yaba, because Shan State East Drug users are mostly found they need to stay awake to #1. Yaba and/or ice in the money-making indus- go over their lessons. #2. Heroin tries, such as in logging, gold #3. Opium and/or khakhu and gem worksites, and The price for yaba is mostly along smuggling routes of 1,500 to 3,000 kyat (USD 1.7 But one thing is the same: contraband goods and tim- to 3.4) per tablet, depending yaba is the most used ber. on the brand and also the drug. (This is markedly dif- availability. However, in ferent from reports by the More and more drug users Lashio, the retail price for low Kachin News Group that say are also found among junta quality yaba is K 2,500 (USD 2.9), and high-quality K 3,500 (USD 4), while for wholesale, the former is between K 800- 1,500 (USD 0.9-1.7), and high quality is K 1,500 (USD 1.7).

In Tachilek, close to the Thai border, the prices are roughly as follows: 100 baht (USD 3.3) per pill, 200 baht (USD 6.6) for 3 pills and 500 baht (USD 16.6) for 7 pills, says a student.

Yaba

28 How drugs are taken

Opium It is put on foil with a coin as south in Shan State East, in an additional pad, lighted and January 2011 the cost was B Most elderly people smoke it smoked through the nostrils. 250,000-560,000 (USD through a water pipe. As for Less commonly, it is dis- 8,300-18,600). others, there are those who solved in water and injected, just swallow it or smoke it because one gets high Ice (pure ephedrine) started after inserting it in a cigarette. quicker and the effect lasts being used 3-5 years ago. longer. Apart from being smoking, it It is also used for medicinal can also be dissolved in juice purposes. People believe One can also use sub- and drunk (it dissolves even swallowing it can cure/ease stances together, such as quicker than sugar). The be- dysentery, and smoking it yaba mixed with heroin and lief is that if a woman who can cure/ease coughing. smoked together through a has just given birth smokes water pipe or cigarette. it, she will mend quickly. Khakhu Other fringe benefits include: Khakhu is cooked opium There are some users who the scent doesn't travel far mixed with minced dried ba- say that if one wants to sleep and the user does not go as nana leaves or Phak Nawk after using yaba, one must berserk as those using yaba. creeper leaves, which is smoke heroin to make one wrapped up in foil. It is sleepy. Others use Phense- In Tachilek, opposite Maesai, smoked through a water dyl or China-made Totusou. almost all casinos and gam- pipe. Phak Nawk, known as Or else a spoonful of salt dis- bling dens have facilities for Bua Bok (land lotus) by Thais, solved in a half or full glass the customers. At the nine- is dried, pressed and sold by of water can help one sleep, storey Mae Khao casino, one a Chinese businessman in says one user. short smoke costs B 1,500- Shan State South, at 2,000 (USD 50-66). K30,000-35,000 per viss ATS (USD 34-40). How to consume yaba “Yaba is for lo-so, Ice for Yaba or Ice hi-so”, has become a com- It can either be swallowed in mon saying during the past pill-form or in powder-form. It is, like Khakhu, wrapped up few years. Lo-so and hi-so Some believe it can counter in foil, which is pierced before are Thai slang terms mean- the effect of a stroke attack. being put on the mouth of the ing “low-society” and “high- pipe, and smoked. society.” It can also be dissolved in “energy drinks” such as M- Heroin Around Lashio, high quality 100 and Red Bull and drunk. It is more commonly smoked ice costs K 25 million (USD As for smoking it, besides and less commonly injected, 29,000) per kg and low qual- being heated and smoked because of the danger of HIV/ ity ice around K 17-18 million through water (as described AIDS and overdosing. (USD 19,700-20,900). Down in Hand in Glove, 2007), it

29 can be put on foil, lighted and site Shan State North; India’s Y 85,000-90,000 inhaled directly. One user Moreh through Tamu; and (USD 98-104) spoke of using a rolled 20 from Thailand’s Maehong- for medium quality baht banknote to inhale it. son, Chiangmai and Chiang- Y 100,000 (USD 116) for rai. As for mechanical appli- high-quality pills (which How to make yaba ances, they can be ordered can be dissolved in wa- and made inside Burma, the ter and injected, mostly The ingredients include: reporters assured SDW. for export) “Ma Huanghsu” (natural (Raw materials from India, ephedrine) or Ice (or even are favored by the chemist Shan State South pseudo ephedrine which is a more than those coming K 5-10 million component of cold tablet from China these days, (USD 5,800-11,600) brands such as Sulidine) wrote one report). for low-quality pills Caffeine K 100 million From 1 kg of ephedrine, (USD 116,000) Dye 30,000 (high quality) to for high-quality 50,000 (low quality) ya ba pills Scent (India's Monkey can be made, using different brand is quite common) Shan State East rate of capital: Glue B 1 million (USD 33,000) Shan State North for 35,000 pills of high- Precursors can be imported quality (using the formula Y 70,000-80,000 from China’s , Wanding, Ice 1 kg: Caffeine 4 kg) (USD 81-93) Nansan and Mengding oppo- for low-quality pills Popular brands include: Y1, Y2, Tiger, Pink R, Green R, 38 and Dimple

Some chemists working with the militias in the east appear to be facing problems ex- tracting pseudo-ephedrine from the cold relief tablets purchased from Thailand, according to users. “Instead of becoming wakeful after taking them, users say they become sleepy,” a business- man coming to Maesai told SDW recently (in June 2011).

Illustration from Hand in Glove, published by SHAN, 2007.

30 Taking action against offenders

The Wa appear to be the Visiting inmates there costs Selling drugs : 15-40 years most draconian in dealing K 2,500. If you want to talk for with drug cases. Users are an hour, you pay another K However, no one is jailed for imprisoned, though not ex- 2,500. growing poppies these days, ecuted as rumored by some. wrote a researcher. All they Several growers were ex- In Shan State East, those have to do is to pay tax to the ecuted to serve as examples sentenced to less than 10 local militias, most of whom and more than ten were jailed years are kept at local pris- are working closely with the after the 2005 zero produc- ons, while those with heavier local military. tion announcement. Over sentences are sent to 100 growers fled across the Kengtung. As for having drugs in pos- Salween or to the nearby session, well-known drug Markmang township, where All in all, wrote one re- dealer Panhsay Kyaw Htwe poppy cultivation is tolerated searcher, 60% of all those himself was arrested in 2007, by the Burma Army. serving their terms have but was released after “ne- been involved in drugs, of gotiations” with his brother During 2010, due to Chinese whom 70% are “small fish” Kyaw Myint, who is now an pressure hundreds were ar- sellers. Very few are big fish. “elected” lawmaker and cur- rested both in Wa and rently head of the drug sup- Mongla and locked up in The following are the stan- pression committee in Nam- crowded jails. “Believe me, dard jail terms for drug of- kham township. you wouldn’t like it there at fences in Shan State North: all,” said an official source Drugs are also being sold to who declined to elaborate. Growing poppies : 10-20 users in paddy fields in years Namkham, as reported by The Shan State Army (SSA) both SDW and the Palaung North’s treatment of drug Using drugs : 7-12 years Women’s Organization. The convicts appear to be better, vendors pay K 10,000 per with prisoners enjoying more Having drugs in posses- day or more to the police. space. sion : 5-12 years

As for jails under the military government, one in Lashio “For a state to maintain stability and extend control, it must according to Shan Drug resort to buying loyalty (with money, economic opportuni- Watch, October 2010, is ties or political concessions), with the most durable basis quite severe. However, ac- for stability being a complete ‘buy-in’ of potential opposi- cording to another re- tion.” searcher, it is not so bad, compared to other jails. The A. De Waal, ‘Mission with end? Peacekeeping in the African area is 2,500ft x 1,800ft for political marketplace’, International Affairs about 1,500 inmates, two- thirds of whom are drug cases. 31 } (The Burmese military regime) seems likely to continue its Janus- faced approach, portraying itself to the west as committed to tackling drugs whilst at the same time continuing to use the drug trade as an arena through which to construct and consolidate state power. ~

Patrick Meehan (forthcoming), Drugs, insurgency and state building in Burma: Why the drug trade is central to Burma’s changing political order, Journal of South east Asian Stud- ies, 2011

June 2007 June 2009 October 2010

Previous SHAN publications on the drug trade in Shan State available at www.shanland.org