Drug Economy

   After 1949, when the People's Republic of China began suppressing the cultivation and sale of opium within its borders, Burma emerged as one of the world's largest exporters of opiates (opium and heroin) to neighboring countries and world markets. Although Burma's opium exports are now (2005) surpassed by those of Afghanistan, the country remains a major exporter of amphetamines, especially to Thailand, where the drugs, known as yaa baa ("crazy medicine"), have become a huge social problem affecting people of all classes. The development of the drug economy can be explained in terms of the conjunction of four factors: physical, social, political-military, and international. The physical factor is the presence of extensive upland areas, largely coterminous with the colonial-era Frontier Areas, where soils are poor, water is often insufficient, and agricultural yields are low. For farmers to generate income to survive, the most suitable crop is opium poppies (papaver somniferum), which require little care and can be grown in mountainous fields. The social factor is that the upland area peoples, members of ethnic minorities such as the Was, Kokang Chinese, Shans, Kachins, and Akhas, have been isolated from the lowland areas of Burma Proper not only physically (by lack of good roads and other infrastructure) but also culturally, remaining mostly outside the Buddhist Burmese mainstream. The political-military factor is the emergence of communist, ethnic nationalist, and warlord groups, which have alternately fought and coexisted with the central government in Rangoon (Yangon) since the 1950s and have taxed or controlled the drug trade as their major source of revenue. Finally, the international factor is both the existence of well-developed drug-trading networks connecting Burma's upland areas with markets outside the country and strong demand for opiates and other narcotics in markets as distant as North America and Australia.

   The State Peace and Development Council has committed itself to drug eradication by the year 2014, but many observers are skeptical because drug-generated funds, in "laundered" form, are a large and probably indispensable component of Burma's present economy. For example, hundreds of millions of dollars in such funds have been invested in real estate in Rangoon and Mandalay. Moreover, opiumsuppression schemes-especially in Kokang-have had negative consequences for cultivators, who have no alternate crops and have been suddenly deprived of income, leading to widespread malnutrition. As the experience of Thailand shows, effective drug suppression requires time, investment (especially in infrastructure and substitute crops), and patience.

   See also Bao Youxiang; Border Area Development; Cease-Fire Groups; Cease-Fires; Communist Party of Burma; Ka Kwe Ye; Khun Sa; Kuomintang (Guomindang); Lo Hsing-Han; Mong Tai Army; Myanmar National Democratic Alliance Army /Party; National Democratic Alliance Army-Eastern Shan State; New Democratic Army; Pheung Kya-Shin; United Wa State Army.