Golden opportunities in northern Myanmar
By Qin Chaoying, Asia Times, 19 June 2003
The Golden Triangle is a kind of cork on the development of South and East Asia. Strategically located on the borders of China, India and Thailand, it de facto hinders the development of communications and exchanges among these areas. Roads are blocked and normal trade is made impossible, but from here instability spreads all over neighboring areas. Drugs—particularly heroin, opium and methamphetamine—are sold from here to the rest of Asia. Drug money and criminal organizations cast their tentacles from here. Gangs and interest groups spin from here spurring the political divide among these neighboring countries that help the gangs' survival.
In a way, the greatest concrete strategic obstacles to the process of Asian integration are in this single region, northern Myanmar. The solution to its problem is thus crucial for the whole of Asia. The following is a proposal that envisages a strategy to help solve the issue peacefully.
The background and the elements of a solution In the past 10 years, trade in narcotics has increased continuously all over the world. According to some estimates, its global value has risen from US$500 billion in 1993 to about $1 trillion, roughly the amount of the total capital flow of three big strategic industries, namely information, finance and health. Drugs, beside harming people's health and inflicting mounting damage on society, have become a huge onus on global economic activity as they severely affect global economic and financial order.
The Golden Triangle area is notorious for drug production. In order to eradicate this problem, many governments and organizations all over the world, including China, have participated over several years in local anti-drug activities. There is a common understanding on the issue: the substitution of crops is the only strategy to eradicate the problem of drug production in the region.
At present, the number of drug users worldwide exceeds 200 million. The World Health Organization (WHO) estimates that the number of persons using opium, heroin and related drugs is more than 176 million. Around the Golden Triangle, it is estimated that drug addicts in Myanmar number more than 400,000; 500,000 in Thailand; 150,000 in Malaysia; and more than 300,000 in northern Vietnam.
The latest report from the International Criminal Police Organization (Interpol) states that before 1995 heroin produced in the Myanmese part of the Golden Triangle constituted more than 70 percent of world production. Afterward, Myanmar's share of the world drug market was taken over by South American countries, but its volume of production has certainly not decreased. According to data from the United Nations, the poppy-growing area did not experience any change in the period.
In 1995 the China Society for Strategy and Management Research (CSSMR), a Chinese non-governmental organization (NGO), started a program to develop northern Myanmar and eradicate drugs from the area. Since that time, CSSMR has obtained some good results and has gained plenty of experience. This ongoing program has entered a substantive phase. It received authorization to proceed and the support of the central government of Myanmar, plus the approval of the local authorities.
CSSMR's field experience has led it to believe that the substitution of crops is absolutely indispensable for drug control in northern Myanmar and in the Golden Triangle region as a whole, but it does not get to the heart of the problem. It is necessary to change radically the characteristics of the local economy. This, accompanied by a program to help the local people build modern administrative institutions and establish the rule of law, it will eventually lead to the peaceful eradication of poppies and the end of the production of heroin. For this purpose, it is necessary to take into consideration the long-term development of the local economy, which should fit the local natural and cultural environment.
If the only measure adopted is the substitution of crops, this will eventually only lead to a new surge in crops used for the production of drugs.
Based on this evaluation, CSSMR's basic orientation is to establish a non-governmental multilateral international cooperation institution that all countries involved and their armed forces can accept. This should be suited for the complicated situation of the drug-producing region of the Golden Triangle in order to attain a stable foothold in the area and directly mobilize the positive elements of the local nationalities and all concerned sides.
CSSMR believes that even just the beginning of an international effort to solve the problem of drugs in northern Myanmar could usher in a new era of development in Asia. In the late 1980s the peace process in Cambodia—until then a Cold War battlefield and crossroads of the conflicting interests of Thailand, Vietnam and China, with some involvement also by the United States and Japan—boosted regional confidence and trade, which triggered a new wave of investment in the region and laid the foundation for the miracle of economic development in East Asia. As is well known, this lasted until the 1997 financial crisis. As northern Myanmar is wedged among China, India and Southeast Asia, a solution to its problem could ease exchanges between these three continent-size areas and thus boost development in the region and in the world.
Here is the state of the program conducted by CSSMR. 1) The authorities of the eastern Danbang second special zone offered overall cooperation and active participation. 2) The Myanmese government agreed to CSSMR sending personnel to the designated development areas to undertake surveys. 3) The Myanmese government agreed to the use of Chinese planes by CSSMR in the designated area to conduct aerial examination. 4) The Myanmese government welcomes the idea that CSSMR is to coordinate the participation in investment, development and aid of the Chinese and other governments, non-governmental organizations, enterprises and individuals. 5) The investment program, the drug-control programs, the non-profit and development programs for the minority areas in the border regions all are granted preferential treatment and government support. 6) The expert group of CSSMR has obtained good results in its preliminary examination of the natural resources in the Wa area.
In addition, with regard to the crucial aerial surveys, if there is a need for future expansion of the scope of the surveys, this can be discussed; the Myanmese government provides local support and refueling facilities.
The advantages and opportunities inherent in the ongoing program deserve special emphasis: 1) The Wa region shares a common border with China, and people on both sides of the border share the same language and the same cultural traditions, so communication is relatively convenient. 2) CSSMR is an NGO; as such, thanks to a more effective use of international resources, the support of the concerned countries, enterprises and individuals, can play a role of bridge for the peaceful local development. 3) In the period between 1995 and 2001 the CSSMR established a fundamental level of trust with the Myanmese side through effective work on the ground. 4) The elimination of drugs, the development of the economy and the construction of a stable borderland can obtain the support of the Chinese and Myanmese governments and people. 5) The discrepancies in the price of commodities and services between that area and other regions create an opportunity for trade that can be pivotal in developing the local economy. 6) Currently Myanmar is relatively stable within its borders, yet there is a lack of funds and technology, and international sanctions create a great opportunity to get started with the implementation of a drug-substitution program.
Detailing the CSSMR program CSSMR has obtained the authorization to develop the eastern Danbang 2nd special zone, which is a Wa area of 15,000 square kilometers, for the most part consisting of mountains, rivers and highland. The population is about 400,000. Forty percent of the consumption of grains is not locally produced. The area producing opium corresponds to 70 percent of the total output of Myanmar and some 43,000 hectares. The primary production potentials of the area include gold, gems, small-scale mining, as well as grains and timber. There are some small machine-repair shops. The local transportation and communication facilities are backward, the education and sanitation levels very low. The central Myanmese government has invested little in the past 12 years in the Wa area, and basically only in infrastructure, although not enough for development needs. At present the authorities of the Wa area are in fairly good control and have an internal need—as well as the wish - to develop an economic alternative to drugs.
The long-term CSSMR plan for northern Myanmar is divided into three phases: investigating the resources; drawing a plan for opening up and development; and gradually implementing the plan.
First, it is necessary to conduct a full investigation on the conditions for development in northern Myanmar. Then, the second phase should be to try to collect capital and projects on the basis of this investigation. For this purpose a center for the development of the region could be established that would coordinate the efforts of all neighboring countries and the concerned international community. This center should be concerned with the cultural as well as economic development of the region and should draft a ten-year plan that could be subjected to Myanmar's central authorities for approval.
The third phase should focus on the development of the natural resources, infrastructure, crops replacement, cultural and health care and tourism.
The exploitation of natural resources should be conducted with a full environmental awareness in order not to spoil the local environment. The natural resources of northern Myanmar are plentiful, as the region is the richest in the whole of Asia. In Asia there is a huge demand for forestry products, which could be provided by this region. Furthermore there are plenty of precious stones and gold. The local economy could well thrive on forestry, precious metal and stones, and tourism.
In addition to this, there is a need to build up infrastructure: roads, power plants, crop-processing facilities, telecommunication. Beside facilitating exchanges between northern Myanmar and bordering countries, this would improve the quality of jobs available to the local people. This in turn would be extremely helpful to improve the general cultural level and enhance their legal awareness on the harm caused by consumption and trafficking of drugs.
On substitution crops, CSSMR would recommend the plants used in Chinese traditional medicine, particularly suitable for growing in the local climate. These plants would certainly have a market in China and elsewhere.
The most important aspect of this development process is the possibility of creating a sustainable cash flow, which would decrease the reliance on funds from international organizations and governments. At a broader level, it could break the vicious cycle of planting poppies.
The human basis for the development program To eliminate the difficulties of drugs' eradication, it is necessary to heed the mobilization of the positive elements in the local population.
In particular, the armed forces of northern Myanmar possess three important positive elements that can facilitate the anti-drug work supported by international cooperation. As compared with the cartels of Medellin or Cali, Colombia, the advantages are significant: 1) South American drug-trafficking cartels are only profit-minded. The Golden Triangle's armed groups traffic drugs to finance their ultimate political goals of independence or autonomy. 2) The relationship between South American drug-trafficking cartels and drug farmers is purely commercial. Farmers are de facto hired by drug-trafficking cartels. The relationship in the Golden Triangle between drug-trafficking armed groups and poppy farmers is more ethnic—it is that of “chief of a tribe” and “ruler and subjects”. The production of drugs and trafficking is regulated by old tribal rules. 3) South American drug-trafficking groups and drugs are symbiotic. If drug trafficking is eliminated, these groups would also disappear. For this reason they will not disappear without eliminating the demand for drugs. The Golden Triangle nationalist armies existed before their engagement in drug trafficking and there is not a necessary relation between their existence and the eradication of drug trafficking. Actually, under certain conditions they want the elimination of drugs. In fact, Kun Sha, as head of the armed forces of the Shan ethnic group, has already pleaded to the world to help the Shan people lead the war on drugs. From 1973 the Shan started to produce almost every year plans to control and eradicate drug production and trafficking: the “six-year anti-drugs plan”, the “five-to-seven-year poppy-substitution plan”, etc. The so-called “New Heroin Kingdom of Northern Myanmar Wa Liberation Front” in 1994 published a series of resolutions to strengthen drugs control, which stipulated explicitly that drug traffickers would receive five levels of punishment up to the death penalty. The Shan eastern alliance in July 1995 published an “announcement against drugs” forbidding trafficking in its area. The Guogan Democratic Alliance at the end of 1995 drafted an anti-drugs decree “to stop completely all drug activities from January 1, 1996” and “help people develop proper production”, and issued regulations on tax breaks to encourage normal economic activities.
Lately the Golden Triangle has developed two favorable conditions that could be conducive to the fundamental solution of the problem. The first is that a high official of the Myanmese government announced that “public or concealed armies from minority people in the forest areas or other political organizations will be allowed to retain their armed organization within the borders of the country provided they do not disturb again the domestic public order, and cooperate with the government in developing the economy”. This new policy, recognizing the objective reality, was well received by the armed forces of the various ethnic groups, and more than ten organized armed groups have signed a ceasefire agreement with the government. The northern part of Shan state, near the Chinese border, regained peace, and this creates an opportunity for international economic cooperation for eradicating drugs. Second, some armed ethnic groups and autonomous political groups took advantage of this period of peace to start off with economic development, and under strong international (particularly Chinese) pressure certain results in combating drug production have been achieved.
The non-governmental multilateral international approach The principles of non-government multilateral international cooperation are the following. First, avoid the difficulties of penetrating the Golden Triangle experienced by official organizations in the past. Second, establish an organization headed by highly prestigious international figures who would be able to coordinate international organizations and related countries and can be accepted by the ethnic groups of the Golden Triangle and the Myanmese government.
So far the international community has sponsored two methods in the Golden Triangle to crack down on drugs: first, the use of military force to enforce anti-drug policies. This method, although sometimes successful to a degree, was a failure overall. The proof is that heroin production in the area has not diminished, but rather has increased greatly. Another method was implemented in northern Thailand: the crop-substitution plan. This program, with the support of four UN institutions and 15 countries and organizations, obtained very positive results. But there is still a problem: it is impractical to use Thailand's anti-drug experience in the complicated situation of the Golden Triangle. The northern Thailand program is based on assistance given to each household in the mountain region to support drug-crop replacement, and this needs a peaceful environment and local recognition of the legitimacy and authority of the Thai government. By contrast, in northern Myanmar armed forces of the different ethnic groups set up separatist power centers in a vast mountain area, while the Myanmese government lacks sufficient authority. In any case, the result was that the positive achievements of the northern Thailand substitution program created a wave of drugs that almost drowned Myanmar, as the cultivation took deeper roots over the Myanmese border.
It is crucial that the overall plan should be feasible in the local circumstances. The CSSMR thus proposes to start development with the “buyout formula”. This program has the following characteristics. We need to change the main driving force: the elements among the nationalities now producing drugs must be mobilized to oppose drugs. In the past, international organizations and the countries concerned mainly tried to enforce the anti-drug policies in northern Myanmar through the central government and its troops, which didn’t have any real control on the key areas. This led to a situation where international organizations and concerned countries became the target of hostility by the ethnic groups and their armed forces in the Golden Triangle.
The new plan will have to bring to the fore the anti-drug activism of the people. In other words, the local people have to be mobilized to assist and not to oppose the anti-drug efforts. We also need to shift from military means as the main anti drug measure to peaceful, multifaceted economic development. If one relies on the power of the Myanmese government and armed forces to forbid drugs, the result will be an “anti-drug war” that would turn into ethnic massacres between ethnic groups and ethnic oppression. Everybody in the Golden Triangle has seen or heard of the massacres, arsons and plunders of the Myanmese army.
Instead, the method of buying out it is a peaceful economic measure which makes full use of the two advantages of the area, ie its geographical position and its wealth of natural resources.
In the first stage, the central goal of the buyout plan is to enlarge the scale of the local industries and thus establish an exchange with the local people producing drugs. This should create a mechanism of reciprocal interest in the expansion of the new industry and thus progressively bring the people growing drugs within the scope of the normal economy so they would voluntarily give up their illegal business.
Of crucial importance for the success of buyout development plans is the quick formation of key industries, geared for the needs of the domestic and foreign markets. In order to obtain decisive effects in a not too long lapse of time it is necessary to extensively invest in local resources with international support. For instance: to build roads and basic water and electricity facilities, to put in place education facilities, to explore and develop mineral reserves, to create an ecological agricultural production base using modern farming methods.
This is possible only by radically changing the economic environment and the industrial structure centered on the single production of drugs and connecting the area with the rest of the world; and by using such development projects to bring the leaders of the local minorities on our side, ie in support of the international commodity markets. Only at that point will we be in a position to plainly demand the tribal chiefs to quit the production of drugs. In addition, a way out for the old drug smugglers and warlords has to be offered, so that they can be reintegrated in the local society.
The pattern along which at first the buyout industrial development would organize the production of thousands of mountain households can be “company + local base + farm household”. In the plan for the conversion of drug crops implemented in northern Thailand, there was too much dispersion.
The scattered dwellings of farmers and scattered crop transformation can hardly constitute scale benefits and there are neither organizational forces nor a system of guarantees suitable to today's markets and able to help mountain people who have converted their crops to adjust and manage. The result is fluctuating incomes and difficulties in entering the market to the point that part of the farm households go back to drug production. The operating pattern “company + local base + farm household” pursues the combination of industry, agriculture, commerce and science. In the initial phase the local market must open to the world so that profit can be generated for the thousands of households engaged in the conversion of drug plantations. Technical training and technical achievements can be the basic channel for poverty relief and the promotion of wealth. The UN could establish training centers that improve technical knowledge to mountain people, which could learn about the variety of plants that can substitute for poppy crops. This does not deny the importance of official cooperation with the prohibition of drugs and law enforcement operations. On the contrary, the efficacy of official cooperation and the punitive pressure maintained through crackdowns is an essential guarantee for the buyout development. At the same time, the above plan also fills the gap left by the larger international organization.
The drug-producing areas of northern Myanmar have excellent conditions for agricultural production. They are particularly suitable for coffee, tea, cocoa, tobacco, pepper, sugarcane, natural gum, bananas and plants for medicines and spices. These high-return products could include also special kinds of nuts from abroad and products currently developed in Yunnan, an area from which commercial experience can be drawn.
If we take the production of coffee as an example, we would produce up to 3,500 yuan per mu (US$6,340 per hectare), but the production of opium in northern Myanmar locally yields only 1,500 yuan per mu (about $2,720 per hectare). This is to prove that there is a huge economic potential for the substitution of poppies.
Furthermore, the cultivation of grains in northern Myanmar is rather primitive. Rice is planted only once a year. Therefore there is a great potential for the improvement of techniques and higher yields.
The area is ideal for raising cattle, horses and sheep in a similar fashion as in Australia. Australian techniques for raising animals could be used in the area and to set up related industries for the processing of husbandry. There is potential for canned foods, for treatment of wool and of leather. China and Southeast Asia could be potential great markets for these substitution products. All of these should be conducted with full respect for the environment and this could be attained without harming income.
Infrastructure to connect Asia Northern Myanmar is squeezed among the great markets of China, Southeast Asia and South Asia but the local transportation network is very backward, although the geographical conditions are excellent. In a direct line the distance between China and Thailand is only 150 kilometers. Therefore, opening up a road route linking China, India and Thailand is crucial. To do this it is necessary to open up the river communication system of the Mekong and build a highway between Yunnan and Thailand crossing the Jindong area in Myanmar and connecting it with India.
In this situation implementing hydro-power projects could solve local power deficits and create ideal conditions for substitution crops. There are many rivers in northern Myanmar with a lot of water and there is a great potential for hydro-power plants of large, medium and small size. Besides, water can also be used to power grain and lumber mills. Electric power produced in the area of northern Myanmar through hydro-power plants can also be sold to neighboring countries and the profits could be used locally. China and Thailand could be the first clients of this electricity.
Opening up the mining industry could provide the first substantial seed money for further development. In northern Myanmar gemstones, gold, manganese, antimony have already been discovered. Local Chinese government is at the moment cooperating with the eastern alliance of Shan in exploiting local manganese mines and these Shan are at the moment leaning less on drug productions. International companies could be also drawn to the areas for the exploitation of local resources.
The international tourist industry could have the double benefit of bringing in necessary cash and exposing the local people to the world. Northern Myanmar is near the famous tourist attractions of northern Thailand, drawing more than a million tourists a year. Here there are plenty of historical relics, natural scenery and extraordinary local customs. Furthermore, tourism could also develop in neighboring Laos, starting a regional economic process.