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Tuesday, 6 June, 2000, 12:30 GMT 13:30 UK
Burma's powerful drug industry
north Burma
Opium production is rife in idyllic northern Burma
By Kieran Cooke

In the global drugs production league, Burma has long been one of the world's top producers of opium, the base ingredient for heroin.

US drug enforcement agencies estimate opium production in Burma last year to have been about 1,200 tons. Only Afghanistan produced more of the drug.

It's estimated that less than 1% of Burma's annual opium production is intercepted by the authorities - the rest is smuggled out through China or Thailand onto the world market.

Earlier this year a group of Western journalists was ferried by the Burmese military to the hills in the north of the country, close to the border with China.

Click here to see a map of the area

Here they watched soldiers and local tribespeople destroy fields of opium-producing poppies. In all more than 200 acres of poppy crop - worth, when processed, hundreds of thousands of dollars - was cut down and burned.

Officials want to eradicate the heroin trade by 2005

Burma's military regime and local chiefs had a clear message for the outside world: Burma was determined to eradicate opium production.

The government in Rangoon, trying hard to improve its international image, said that by 2005 no more opium would be produced within the country's borders.

Officials implicated

The international drug enforcement agencies are not celebrating yet.

Though UN drug experts say Burma does seem intent on cutting back on its opium production, over the years there have been persistent reports that senior officials of the military regime are involved in the drugs trade, and that funds from the drugs business still find their way into government coffers.

Government forces cannot destroy every Opium crop

The other critical factor is that the government in Rangoon is both militarily and financially unable to tackle the power of the country's drug barons.

Opium production takes place mainly in the hilly country near Burma's border with China.

It is a beautiful, remote region of mist-shrouded peaks and jungle valleys. For years Rangoon has been fighting a series of seccessionist battles in these territories.

Rangoon is virtually powerless to tackle the region's drug trade

Chronically overstretched and underarmed, the Burmese military has sought to either play one insurgent group off against another or do
peacemaking deals with various rebel factions.

Among a series of such deals agreed in the late 1980's, Rangoon granted autonomy to the Wa - an insurgent rebel group living in the opium growing area near the Chinese border.

'A state within a state'

Since that time the Wa, led by remnants of Burma's old communist party and known for its ferocity in combat, has built a formidable state within a state, complete with its own army, on the profits of the drugs trade.

Rangoon, extremely reluctant to provoke any conflict with the Wa, is virtually powerless to tackle the region's drug trade.

The whole local economy revolves around the drugs trade

The Wa, led by a number of powerful and ruthless families with worldwide contacts, have been able to build up a highly-organised and sophisticated drugs business.

They have even spent millions of dollars employing engineers and technicians from Thailand and elsewhere to build modern townships on their territory.

Like any global corporation, the Wa use their enormous financial clout to invest in ever more advanced technical equipment and change their marketing strategies.

Drug producers diversify

In recent years, as worldwide pressure to erradicate opium production has grown, the Wa have invested heavily in the production of methamphetamines or speed.

Thailand is facing an epidemic of Burmese produced methamphetamines - know locally as "Yaba" or "The mad drug"

Laboratories in Wa territory now turn out hundreds of thousands of these tablets each day. Drug officials say much of the raw material is purchased in China.

A single methamphetamine tablet costs about 8 US cents to produce in Burma - by the time it reaches Bangkok it sells for more than US$3.

Thai officials say the country is now facing an epidemic of the drug - in Thai called Yaba or the mad drug - and have called on Rangoon to take urgent action.

So far there is little sign that the Wa are curbing their activities. Western drug officials say the whole local economy in the Wa controlled region now revolves round the drug trade.

They point out that poor farmers need help to turn to other crops besides the opium poppy, yet western governments are reluctant to give Burma any aid.

The west is also deeply opposed to giving Rangoon military help. Without it, it seems likely the Wa and others will continue to make millions from their lethal trade.

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