Opium

   Burma's most profitable cash crop. Opium and its derivatives, especially heroin, generate hundreds of millions of dollars in revenue annually. Raw opium latex is extracted from the pods of the opium poppy (Papaver somniferum), which is cultivated in remote, hilly parts of Shan and Kachin States. Because of soil and climatic conditions, the most productive areas are the Wa District and Kokang, both located along the border with China east of the Salween (Thanlwin) River, though areas close to the border with Thailand also account for significant production. For generations, local farmers have found that growing opium is more profitable than other crops, although their income is small compared to the profits made by middlemen and the leaders of drug-financed armed groups, such as the former "kings of the Golden Triangle," Lo Hsing-han and Khun Sa. After the People's Republic of China forcefully ended opium production and consumption inside its borders, the Golden Triangle-consisting of eastern Burma, northern Thailand, and Laos-supplied international demand for illicit opiates. The demand for heroin increased during the Vietnam War, when it was used widely by U.S. troops stationed in Southeast Asia. Drug trafficking routes connected growing and refining areas in Shan and Kachin States with international markets by way of Thailand, but in the 1990s traffickers opened new routes through China's Yunnan Province-creating a Chinese drug-abuse problem comparable to that of the period before 1949. Injection of heroin has contributed to a massive AIDS epidemic, both in Burma and neighboring countries.

   At the beginning of the 21st century, Burma vies with Afghanistan for the dubious distinction of being the world's largest producer and exporter of opiates (in other parts of the Golden Triangle, poppy cultivation has been largely suppressed in northern Thailand, and most Laotian opium is grown for local use). Production increased during the early and mid-1990s, in part because cease-fires gave armed groups, such as the United Wa State Army (UWSA), greater freedom to expand poppy cultivation; according to the U.S. Department of State, production reached a high of 2,560 metric tons of opium in 1996, compared to 1,100 metric tons in 1986. However, a steady decrease in production has occurred since 1996, falling to 865 metric tons in 2001. Acreage under poppy cultivation has also decreased substantially. The State Peace and Development Council (SPDC) claims that the decline shows the effectiveness of its drug eradication policies. In Kokang, the SPDC authorities have been able to carry out drug-eradication programs, especially following a mid1990s power struggle among leaders of the Myanmar National Democratic Alliance Army/Party that gravely weakened this armed group. The UWSA, however, is much stronger, and has succeeded in keeping central government officials out of its territories. Nevertheless, the UWSA leadership promised to end poppy cultivation by 2005. The SPDC pledges to eradicate opium production nationwide by 2014.

   Although there is no hard evidence that top leaders of the SPDC are directly involved in the drug economy, drug exports generate huge profits that have been "laundered" through the regular economy. Many "new capitalists" in Rangoon (Yangon) have close ties to drug-producing areas, including the retired Lo Hsing-han and his son, Stephen Law. Among foreign countries, especially the United States, there is sharp disagreement over whether the military regime is sincerely committed to drug eradication. Another problem is that neither the government nor the ethnic armed groups have seriously addressed the problem of the massive outflow of Burma-produced amphetamines into Thailand.

   See also Drug Economy.