Hand in Glove

The Burma Army and the drug trade in Shan State

Dedicated to Janta Nanta, who died on 4 August 2005

Contents

Foreword 5

1. Military collusion in the drug trade 7 - Rain leaking from the roof 7 - Military expansion and "self reliance" 9

2. Opium trends 11- Poppy upsurge since 2004 12- Bumper 2005-2006 crop 13- Selective slashing 21- Opium output decreasing or increasing? 21

3. Churning out the pills 23- Factories 23- The precursors 28- Brands 28

4. Shipping out 31

5. Militia on the rise 35- New faces 39

6. Crackdown charades 49

7. Drug use in Shan State 55- Rehabilitation efforts 58

8. Conclusion 60

AppendixBurma Army units reported to be involved in the drug trade 62

Foreword

There is no denying that snooping around the (drug)business can be a life-shortening venture.

Chao Tzang Yawnghwe (1939-2004),Shan scholar leadingJournal of Contemporary Asia Vol 23 No 3 (1993)

In a way, this report starts off from where our last reportShow Business: Rangoon's War on Drugs in Shan State(2003) left off.

It describes the unimaginable extent of corruption in Burma, and the live-off-the-land policyof Burmese military units that has forced local authorities to turn a blind eye to drug activities.It also exposes how cultivation of opium poppies has increased, and gives insight into theproduction and trade of methamphetamines, better known as yaba in Thailand and yama inShan State.

The major difference is that whereas Show Business focused mostly on opium and itsderivative heroin, Hand in Glove puts the spotlight more on yaba. It also highlights thegrowing role of pro-Rangoon militia in the drug trade, as the regime has begun openlyfavouring them over the ceasefire groups.

It has been a time-consuming study, hampered by S.H.A.N.'s standing obligation to providethe latest information to its readers on the daily political, military, human rights, environmentaland general situation in Shan State.

It must also be recognized that despite two years' research, S.H.A.N. has yet to receiveanswers to many questions regarding the drug issue in Burma. However, S.H.A.N. believesthat the report will shed light on some key questions, namely whether or not the generalsare party to the drug problem in Burma and whether a drug-free Asean can be achieved by2015.

We take this opportunity to thank those who supported this project and urge all interestedagencies to render assistance for similar efforts to establish the facts about this complexissue at the grassroots level. We sincerely believe that this is the only way to find a solutionto the drug problem in Burma.

Shan Herald Agency for News (S.H.A.N.)P.O. Box 15Nonghoi P.O.Chiangmai 50007Thailand

6

Factory

Wei's Farm

SPDC Battalions

I

E

E

Hongpang farm (600 acre )

LIB 331

LIB 359

fish & lotus ponds

to K

engtung

Tach

ilek a

irport

Lao Zhang's compound

(MAS office)

place

Akha market

Lawnzai village

(former Hongpang Co.)

Long distance bus station

Rice warehouse

turtle,Sai M

ya's farm

UWSA

former MI-24

Xin Hong (UWSA)

Town

entrance

checkpointmiddle school

Nawkham's

chicken farm

Maekhao temple

Wanmai temple

N

Wei's

Wei's yaba factories in eastern part of Tachilek (2002-2004)

CHAPTER ONE

Miltary collusion in the drug trade

I was in Mongton andMonghsat for two weeks.U Wei Hsuehkang andU Bao Youri fromthe Wa groupsthere are real friends.

Maj-Gen Thein Sein, Com-mander of the BurmaArmy's Triangle RegionCommand, speaking toMongla leaders, 9 May2001. (Publicly the militaryhas always denied Wei'spresence in Burma.)

Bao Youri

Maj-Gen Thein Sein

Rain leaking from the roof(A Shan expression denoting high-level corrup-tion)

In the northern part of Tachilek, oppositeThailand's Maesai, is a chicken farm ownedby a Wa officer named Sai Mya. The farm,about 10 acres in size, is surrounded by a12-foot high concrete wall. Until September

2005, it was an open secret in theneighborhood that the farm was a front forthe production of yaba (methamphetamine),the drug consumed by millions of Thaiaddicts across the border. (See map p. 6)

(Sai Mya's workshop moved to the tortoise farmof Hongpang next door following a joint 3-nationoperation that nabbed Ta Pan, a Wa commander,in September 2005)

8

The location of the factory,wedged between the com-mand posts of SPDC LightInfantry Battalions 331 and359, explained why the Waofficer had no reason to fear.The land, or rather the rightto use it, was sold to Sai Myaby none other than Maj-GenThein Sein, then Com-mander of the Triangle Re-gion Command, based inKengtung, 160km away inthe north. He had confiscatedthe land, formerly paddyfields, from local farmers.“When it was taken from us,the regional commander toldus he would build a tax-free market for thelocal people,” said a resident of the neigh-borhood. “The market was never built.”

In return for the land, Thein Sein received45 assorted motor vehicles, both for him-self and for use asgifts to his superiorsin Rangoon. TheinSein, who presidedover eastern ShanState from 1996-2001, later became Sec-retary-1 of the ruling military council (replac-ing the disgraced General Khin Nyunt), Ad-jutant General of the Army and Chairman ofthe National Convention Convening Com-mission (NCCC).

The behaviour of Maj-Gen Thein Sein, whois now a lieutenant general, caused no stiramong the local community. The pattern ofcorruption had already been well-estab-lished by his predecessor, Col Kyaw Win,who headed the eastern Shan State com-mand in Kengtung from 1991-1995. KyawWin (now Lt-Gen Kyaw Win, currently over-seeing three regional commands that makeup Shan State and Kayah State), was well

known for his close ties to the UWSA, withwhom he cooperated in several businessventures, including trafficking Chinese mi-grants through Burma into Thailand. Localmilitia leaders still talk of collecting opiumtaxes for him. He was notorious for order-

ing the demolition ofthe historicalKengtung Palace in1991.

Past and present regional commanders inother areas have similar reputations for in-volvement in the drug trade. A prominentexample is Lt-Gen Myint Hlaing, formerCommander of northern Shan State'sLashio-based Northeastern Region Com-mand, and a protege of Vice Senior Gen-eral Maung Aye. While it would be next toimpossible to catch him red-handed withdrugs, his henchmen are all known drug op-erators, including: Bo Mon, leader of theManpang militia; Than Win who fronts as ateakwood merchant; Kyaw Myint, Panhsaymilitia leader, who owns key ferry crossingsacross the Mao-Shweli, the river betweenChina and Burma; and So So-Pyay PyaySai Tun Aye, whose Yue Liangdao (Moon-

Kengtung Palace

Lt-Gen Myint Hlaing'shenchmen are all known

drug operators

9

shine Island) on the Mao is still in operation despite the Chi-nese ban on cross-border gambling since December 2004.“It is not unlike Afghanistan where most government alliesagainst rebels are found to be drug bosses,” commented aninformed local, during an interview last year.

The corruption is not limited to the regional commands. Aformer Burma Army officer from the War Office who retiredin 2003 to become a businessman told S.H.A.N. that he usedto sign shipping orders in Rangoon, getting 50,000 kyat ($50)- 300,000 kyat ($300) each time. Curious, he took a look atthe freight on a truck and found a pile of yaba. When hereported this to his boss, a former general, he was told: “Thisis the way of life from the top down through the whole coun-try. How do you think our Senior General Than Shwe, withhis monthly pay of 150,000 kyat ($150), is able to maintainhis lavish lifestyle?” (His current pay, since April 2006, is K1.2 million or around $ 1,000.)

Military expansion and"self-reliance"

Military involvement in the drug trade appears to haveworsened since 1996, when the rapidly expanding BurmaArmy instituted a self-support system for each unit and itsfamilies, involving collective livestock farming and paddyfields, not unlike Israel's kibbutzism, where all members liveand fight together and share all the work and income. Theprogram has involved systematic confiscation of land fromlocal communities. According to the border-basedNationalities Youth Forum, each battalion has had toconfiscate 280 acres of land for buildings plus 2 acres foreach army member with a family.

The Burma Army has expanded from 168 Infantry Battalionsin 1988, when the regime was still fighting against Chinese-backed insurgencies, to 528 in May 2005, without takinginto account more than 200 tank, armored and other supportbattalions, according to the documentation and researchdepartment of a dissident group. Shan State, the biggest

Col Kyaw Win

How can you solve theproblem in Burma andother Asian countrieswhich are plagued withcorruption, lack of lawenforcement, generalinefficiency and long-borders?

Jean-Luc Lemahieu,UNODC Burmarepresentative,Irrawaddy, Bangkok Post,27 November 2005

“It is not unlike Afghanistan where mostgovernment allies against rebels are found to be

drug bosses”

10

In 1988, most soldiers carried G-3, G-4 automaticrifles. Soldiers aged under 18 were not frequentlyseen.

Soldiers in Monghsat, 2002, carrying Burma Army-made MA-1, MA-2rifles. Some of the soldiers are clearly underage.

state in Burma, alone boasts more than 120infantry battalions, a threefold increase from1988. (In contrast, the British had only 15infantry battalions in the whole of Burma,with 2 in Shan State.)

Curiously, the junta's expansion policycomes at a time when China has twicedownsized its military by a total of 1.5 millionsince the mid 1980s, according to China'sNational Defense in 2004, a publication bythe State Council Information Office, andhas decided to scale back by a further200,000 troops by the end of 2005 tomaintain its size at 2.3 million. “The currentrestructuring, while cutting down thenumbers aims at optimal force structures,smoother internal relations and betterquality,” states the article. Burma's out-of-proportion military expansion, on the otherhand, is having predictable results: poorlydisciplined troops, more human rightsabuses, and increased corruption.

The fact that Burma's militaryunits have been expected torely on themselves (andunfor tunate local popu-lations) for their survival, hasinevitably led them tobecome progressively moreinvolved in the money-making enterprises of localinfluential groups, includingdrug production. This in turnhas fostered the pattern ofcover-ups and cooked-upreporting that has charac-terized drug suppressionefforts in Burma. q

The central government can live by foreigninvestments and loans but the local militaryand police units can only survive by theirwits.

A militia member in Tachilek to S.H.A.N.,20 February 2006

Pressured by its neighbors, especiallyChina, Rangoon launched a much-publicized poppy eradication campaign innorthern Shan State in the 2001-2002 poppyseason. That year, and in the twosubsequent seasons, fields were

CHAPTER TWO

Opium trends

destroyed, villagers found growing poppywere arrested en masse, and some of themkilled.

While the drive resulted in a sharp upsurgein opium prices — from 300,000 kyat ($300)per viss (1.6 kg) in 2003 to 1,000,000 kyat($1,000) by the end of 2004 – it wasdefinitely not a thoroughgoing affair. Areasunder the control of the pro-Rangoon militiagroups were left strictly alone. Moreover,both southern and eastern Shan State wereleft almost untouched during the wholecampaign.

12

Poppy upsurge since2004

During the 2004-2005 season, poppyacreage increased sharply, especially in theWa region bordering China, where Wachairman Bao Youxiang had promised zeroproduction beginning 26 June 2005. Sourceswitnessed poppies being grown on thelargest scale ever. “Chairman Bao told usthis was our last date with opium,” said oneof the farmers interviewed by S.H.A.N.during late 2004. “He said if there were anymore poppy fields in the coming season, hewas going to chop his head off and send itto Beijing.”

poppy flowers again,” commented abusinessman in Muse, opposite Ruili, inearly 2005.

In the south, even an official police reporton 18 July 2005 acknowledged that poppycultivation in Hopong, Panglawng and

The season also coincidedwith the ouster of Gen KhinNyunt, Burma’s #3 man,from office in October 2004.Following this, the crack-down on drugs was for allpractical purposes eclipsedby another crackdown onthe deposed leader’s follo-wers and influence. As aresult, “every township I’vebeen to in northern ShanState — Namkham, Muse,Kutkhai, Hsenwi andTangyan — is blooming with

Bao Youxiang

Think Piece

Only 24% of the world’s pain relief needsare being met, while 77% of the world’smorphine and codeine are consumed by just7 developed nations. But such drugs arealmost unavailable in Afghanistan, theworld’s biggest opium producer.(The Economist, 8 October 2005)

Worldwide, more opium is produced legallythan illegally for use in pharmaceuticals. Itis produced in the following countries:q Australiaq Britainq Franceq Hungaryq Indiaq Spainq Turkey(Irrawaddy, October 2005)

Ceasefire PNO leader Aung Kham Hti and Gen Khin Nyunt in 2001

Thecrackdown

on drugs waseclipsed by

that onKhin Nyunt'sfollowers and

influence

13

Faikhun (Pekhon) under the control of thePa-O National Organization, a ceasefiregroup, had increased during the season.

Across the Salween, along the Thai border,the Burma Army was praised by poppygrowers for consideration shown by itstroops during the 2004-2005 poppy season.“The Burmese soldiers who come to gathervegetables for their pots are veryunderstanding,” recounted a female hiredlaborer from Nawng Aw, oppositeMaehongson. “They take care to avoidstepping on the poppy plants, unlike someShan State Army soldiers who pass throughthe fields during their patrols.” Opium tax forthe Army, according to her, was for the mostpart collected by the local pro-governmentmilitia force of Yang Erh, whose base is eastof Nawng Aw.

Unfortunately for the farmers, thousands ofacres of poppy fields in the lowlands werelaid waste by an unexpected droughttowards the end of 2004. Only fields at highaltitudes, where the needed moisture comesfrom mountain dew, escaped the adverseweather. Various sources therefore reported

a drop in opium output during the season,which had nothing to do with the campaignby the State Peace and DevelopmentCouncil, the ruling body of the Burmesegenerals.

Out of season poppy fields in May.They thrive on mountain dew. (Courtesy: FBR) 28/5/2004

Bumper 2005-2006 crop

Farmers and traders alike agree that “thegods have been kind to them,” with regard

to the 2005-2006 opium-growing season.

Up in the Wa areas in thenor theast, poppy fieldsremain, although well out ofsight “to save Chairman Baofrom losing his head,” as aWa officer put it. Some Wafarmers, however, did notwant to take any chances,and moved into areascontrolled by Burma Armyunits like Mawfa, Markmangtownship, southwest ofPanghsang, to continuegrowing their poppies.

Lao Wu, 60,an ex-MongTai Armyman, cuttinga poppy podin his field onthe border injoint BurmaArmy-Wacontrolledarea in 2003-2004 season.

(S.H.A.N.)

14

Up north on the western part of the Salween,fields continue to flourish:

o In Namkham, where the pro-militaryPanhsay militia leader Kyaw Myintworks closelywith local Bur-mese comman-ders

o In Kutkhai,where theceasefire group KachinDefense Army (KDA)is supreme (“Almost apro-regime militia, evenif it is still officially aceasefire group,” saysa Kutkhai local)

o In Mantong and Nam-hsan, where anotherceasefire group, thePalaung State Libera-tion Army had “ex-changed arms forpeace,” a euphemismfor surrender, on 29April, 2005, to theBurma Army.

o In Tangyan, where thelocal military and policehave destroyed somepoppy fields, but notthose of the Lahufarmers. A Shan traderexplains, “The Lahu enjoy privilegesabove Shans and Palaungs, becauseunlike the latter who abhor the draft, theformer are more willing to serve eitherin the military or militia services.”(See map p. 15)

Down south, the Pa-O and Shan farmers inHsihseng and Hopong townships areengaging in double, some of them eventriple, croppings. Many are also reported tobe growing poppies in their lowland paddy

fields following the annual rice harvest inOctober. “The locals there, especially thePa-Os, have also learned to reduce the bulkof the opium resin (by 90%) by cooking itinto morphine, recounted a migrant laborer

in Thailand whorecently returnedfrom the area. "It iseasier for the ownereither to store ortransport the fruit of

his toil in a reduced form.”(See map p. 16)

Flourishing fields havealso been repor ted inother southern Shantownships like Mongpan,Monghsu, Mongnai,Namzang and Kunhing.Farmers in Kunhing’sWanlao village tract pay10% tax for every viss(1.6 kg) to the localmilitary units: LIB (LightInfantry Battalion) 246 andLIB 524. “The militaryreceives its tax in cash,”said a local trader, inDecember 2005. “Theprice of opium there is500,000 kyat ($420) perviss. But some villagesare said to have paid them

a lump sum, 1.5 million ($1,250) kyat pervillage.”

In eastern Shan State, high yields havebeen reported especially in Mongton,Monghsat and Mongpiang townships,opposite Maehongson, Chiangmai andChiangrai provinces. “On the hillssurrounding the (Thai-initiated) Yawngkhadrug-free project, poppy fields can be seenfrom our side of the border,” said a Thaimilitary officer in late 2005. (See map p. 17)

Down south, farmers are engagingin double, some of them even triple,

croppings.

KDA Chairman Mahtunaw

15

16

Markieng

Nayai

KACHIN

CHINA

LAOS

THAILAND

SHAN STATE

BURMA

Pharlai

Hopong

Namsi

Yawnghwe

Namkok

Nawngwawn

WanyenKatku

Nampan

Kalaw

Aungpan

Kyon

Pangtara

Ywangan

SarmkaPanglawng

Nawngtaya

Hsikip

HsihsengLoiput

Nawnghtao

Loikaw

Mongpai

PhaikhunKandulong

Zalawng

Mawkmai Wanhat

Mongnai

HaihpakMongzit

Mongpawn

Loilem

Panglong

Nawngleng

Laikha

Mo

ng

kun

g

MongNawng

Namzang

Homong

SNPLO

KyawktalongPNO

Tounggyi

Honam

Nam Ta

ng

Salween River

Inla

y la

ke

Haiwo

To L

awkz

awk

Nam

Paw

n Langkho

Ceasefire PNO controled areaCeasefire SNPLO controled areaSSA-S controled areaEx-MTA Nayai & Markieng local militia control areaOpium growing areaFormer refineriesCurrent refineries Ceasefire & militia headquartersOccasional drug routesBurma Army units

Opium growing areas and drug refineries in South-western Shan State in late 2005

17

Mong Hsat

UWSA

Militia

SPDC

Poppy Field

SPDC

Mong Kok

Nam Kok

Nam

Ko

k

Mong Loong

Nam

Hok

Wan HoongUWSA MR 171 HQ

Lahu Militia(Ja Ngoi group)

Lahu Militia(Yi Shay group)

Mong ToomSPDC

SPDC

Mong Karn Nam Poong

Tachilek

Hin Teak (Thoed Thai)T H A I L A N D

Na Yao

Yawng Kha drug-free project

Poppy fields around Yawng Kha drug-free project (2004-2005)

Bunako

18

Even garlic that fetches money in a shorter timethan rice is no match for opium poppies.New technology in the form of insecticide isapplied in poppy cultivation.

Modern education as trumpeted by Rangoonin action.

Imagine the future of children brought up amongpoppy fields. Year in and year out their lives arewasted among the fields.

Shan-Kayah (Karenni) border during the 2005-2006 poppy season

(November 2005-March 2006)

Photo credit: Karenni Anti Drug Action Committee (KADAC)

Even PaO villages inside controlled areas ofceasefire groups are being forcibly relocated.

IDPs struggle to survive by growing poppies andharvesting them, a period of 3-4 months, beforemoving on.

Fields that used to grow rice are now plantingpoppies.

19

20

21

Selective slashingRangoon has reportedly authorized opiumdestruction campaigns since December2005, but local commanders and officialshave shown only lukewarm enthusiasm toeradicate opium, to say the least. “Whenthey are on a destruction mission, mostconsult with the local headmen about whichfields they should choose to destroy,”explained a shop-keeper in Mongton,opposite Chiangmai. “Then what they do isto slash them down, take pho-tographs andsubmit a glossy report to their authorities.”

All sources claim that the reports of poppyfields destroyed given by Rangoon are“absolutely unreliable.” “In Mongkerng(southern Shan State), the farmers lostabout 100 viss (160 kg) when their fieldswere slashed (in March 2006), but theycould still harvest more than 1,000 viss,”said a native of the township. “But the policereported that all the fields had been wipedout.”

A source in Mongton concurred. “On 21January, 2006, the local police were orderedto destroy the poppy fields in Hopang(southeast of Mongton), but what theydestroyed was a field of rather poor yield.They didn’t touch any fields not suggestedby the village headman.”

The typical Burma Army attitude towardsdrugs can be explained by a conversationwhich took place in March this year betweena Light Infantry Battalion (LIB) 518 columncommander and a village tract headman inMongkerng township, which went somethinglike this:

Commander: So you want democracy,don’t you?

Headman: Certainly, sir.

Commander: But I’d say you’ve alreadygot it.

Headman: Could you elaborate, sir?Commander: Sure. Just take a few

examples.Which country exceptBurma allows you todrive unlicensedmotorcycles?And which country exceptBurma allows you to growpoppies freely?That’s democracy

Opium in Shan Statedecreasing orincreasing?

“When I was young, there were only a fewacres of poppy fields in my village and fewpeople were addicted to drugs. But later on,more families rapidly expanded their opiumfields as they wanted to make more money.

“In growing opium, farmers aren’t the groupwho get the most profits but they can makea little money in the same way as farmerswho grow paddy and corn for theirlivelihood.”

Gyung Mang, 28 year old Kachin from Lashio,Mizzima News, 2 December 2005

To the people at the ground level, i.e. thegrowers and the dealers, opium productionis on the rise.

But to those at the satellite level, i.e. the drugexperts, it is definitely on the decline.

The former tells the latter: You don’t growpoppies, how could you know production isdown?

22

The latter retorts: You don’t see the wholepicture like I do, how could you knowproduction is up?

Regrettably, the only people who arequalified to arbitrate in this matter are big-time dealers, like Wei Hsuehkang, whocannot afford to lose by miscalculation.However, their assessments may mattervery little to those in the United States andThailand whose shared objective is to catchthem and bring them to justice.

It is interesting to consider the estimates in1988 of one of the big-time dealers, KhunSeng aka Chang Pingyun, uncle to KhunSa, once dubbed Lord of the Golden Triangle.According to him, total annual opiumproduction in Shan State was as follows:

1970’s - 120-180 tons1980’s - 160-230 tons

This was at a time the UN was providingthe following estimates:

1977 - 800 tons1987 - 997 tons

However, in 1996, both KhunSa and Khun Seng decidedto make their peace withRangoon and have since“gone into retirement,”thereby leaving S.H.A.N. inthe lurch for fur therinformation on drugs.Unfortunately, S.H.A.N. hasnot been able to turn to thenext “druglord” WeiHsuehkang for advice, as hehas little interest in sharingsuch information with newsagencies. But Khun Seng’s

original data is telling: opium figures betweenthose upstairs and downstairs are worldsapart.

In recent years, while the UN has continuedto claim significant decreases in opiumcultivation in Burma, various factors appearto indicate the exact opposite. These factorsare as follows:u Increased poverty has led many former

rice farmers, tea planters and cheroot-leaf growers of Shan State to forsaketheir long-standing livelihoods in orderto plant poppies;

u Areas in Shan State where poppy-growing was formerly unheard of arenow reported to be growing poppies, e.g.Wanheng-Napoy in Laikha township inthe latest 2005-2006 season;

u Military and police units are becomingincreasingly dependent on local peoplefor food and money;

uuuuu There are increasing reports of poppyfields outside Shan State as each yeargoes by: first Kachin, then Kayah, Chinand Arakan states and Sagaing,Mandalay and Magwe divisions.

Khun Seng and Khun Sa

The factories

The smallest laboratory is about 8 x 8 square ft. The biggest, according to a Wa officer whodeserted in 2004, was the Wa factory located at Loi Kawngzerk, a hill two miles west of theUWSA headquarters of Panghsang. Around the hill was a high concrete wall. Inside thewall, the hill had been dug out to make a 40 x 100 square meter cavern containing fourmachines, two of which were able to turn out 72 pills per minute each and up to 7-7.5 millionper day. (See map p. 24)

CHAPTER THREE

Churning out the pills

If you talk about ATS (Amphetamine Type Stimulants), you need five ingredients: chemicalprecursors, an undisturbed place to produce it, expertise, markets and transportationroutes. (Burma) offers one of those, the undisturbed place.

Jean-Luc Lemahieu,former head of UNODC Rangoon,Bangkok Post, 27 November 2005

24

Methamphetamine labs near Panghsang(2003-2004)

Wa Territory Shan State

China

Loi KawngzerkLoi Parnghperng

yaba drug labs

Wan Nalawd

Mong Nga

Nam Nga River

to Mong Lem

Wan Kao Kawnghoong

to T

angy

an

to M

ong Mau

UWSA capital(Panghsang)

Nam Lwe

Nam

Kha

to Mong Paw

k

Pang Yang - Kartmaw

Nam

Pan

g

Nam K

ha

Home-made production andsome portraits of consuming

One type of “mortar” and “pestle”for compressing yaba

Making it easy

1. Stir the prepared mixture in a shallow tray,using heat from boiled water vapor.

2. The heat must be just enough for the waterto bubble mildly(fuel can be gas, charcoal or wood ).

3. Stir until the mixture melts;add color and scent

4. Normal length of time for the process;40 minutes

5. Set the tray down from the fire

6. Start making it into pills

One tray can hold about 1 kg of yabapowder. 1 kg of yaba powder can becompressed into 5,000-20,000 pills.One would need, at that period, 1998-2000, about $ 2,000-2,500 capital.Beginning 1998, the United Wa StateArmy began to manufacture differentbrands. WY, WY two brothers, WY 4brothers, 999, M99, One Dragon, TwoDragons, in Hotao, Nawnghpai andMonghpen, where Bao Youhua wassupreme.

The Monghpen product was the mostpopular. The product was mostly in pill-form but sometimes in capsule-form.

leng

th 4

"-5"

Prepared yaba powder is let in here

Stopperwith brand

Steel basin

Steel mortar order-made incities like Mandalay

bamboo sieve

26

u 200 pills make 1 bagu 5 bags make 1 rollu 2 rolls make 1 packetu 50 packets make 1 backpack

“The counter dial gives an alarm every 200pills,” said an insider source atHopang-Hoyawd in MongtonTownship, opposite Chiangmai’sFang district. “You then pour theminto a bag and add 1-2 absorbentpills.”

The factory, one of two in thearea, is run by Ta Roong,Commander of the UWSA’s214th Brigade. His chemist isYang Chen aka Kyaw Myint, 54,who has a home in Tachilek’s SansaiQuarter and gets a10% cut from theproceeds. Internal

security is provided by the UWSA, externalby the local Burmese troops.

The list below includes only the knownfactories in Shan State. It is estimated that

more than twice this number exist.

Thai authorities openly state theirfrustration at the existence of

factories on the Burmese sideof the border. In the BangkokPost on January 8, 2006, PolLt-Gen Krisana Pol-anand,chief of Thailand’s drugenforcement agency, wasquoted as saying that three

major production plants werestill operating deep inside Burma

and many others along Burma’snorthern border withChina.

Townships # Who

1. Namkham 2 Panhsay Kyaw Myint/Yang Mouliang2. Kukhai 10 Kachin Defense Army3. Kunlong 1 U Haw Special Police, Holi Tract4. Tangyan 3 Manpang militia, Mongha militia, First Brigade of

Shan State Army-North5. Monghsu 1 Yangju of Loi Hsophsur6. Namzang 2 SNPLO (Shan Nationalities People’s Liberation

Organization), Kao Shan – Chou Sang (Nayai)7. Homong 2 Mahaja8. Mongton 3 UWSA (United Wa State Army)/Kokang9. Monghsat 2 UWSA/Lahu militia10. Tachilek 3 UWSA/Lahu militia11. Mongpiang 1 UWSA12. Mongyawng 2 UWSA13. Panghsang 2 UWSA (ordered to move south in May 2005)14. Mawkmai 2 SNPLO15. Kokang 1 MNDAA (Myanmar National Democratic Alliance Army)

Maha Ja, leader of Homong militia force andowner of SSS Company

Known methamphetamine factories in Shan State

27

Mongyawn-basedIndependent Regiment

2518, UWSA

Bao Youxiang 10 years agoin Panghsang.

Some locals claimed insidethe high walled compoundwas a drug factory.

Peng Jiafu,vice chairman, MNDAA

28

The precursors

Until China and Thailand toughened up their borders a fewyears ago, most of the raw materials and productionequipment came from these two countries:

u Ephedrine (Ma Huang Hsu) from Chinau Caffeine from Thailandu Compressors from both

Today, the borders are tighter, but according to reportsreceived late last year some precursors were still comingfrom China through the garbage trucks that unloaded theirunwanted refuse on the Burmese side of the border andothers through Laos, with which Burma shares a 235-kmborder.

The bulk of the precursor chemicals at present are comingfrom India, including Jianfeng (scent or color) andcompressors (the number of slots varying from 1, 4, 6, 12,28, 32, 39 to 72).

Shipping these items also does not seem to be much of aproblem, with assistance from local army units. On 19 March2004, two 39-slot compressors coming from Panghsang,the Wa capital, were relayed from Mongpiang to Mongton onthe Thai border by a Captain Zaw Win from Mongpiang-basedSPDC Infantry Battalion 43 to Yang Shaoching aka ChaoChing, a lieutenant of Wei Hsuehkang.

Despite such ill-hidden collusion with the Burmese military,Wa leaders have continued to deny outright their involvementin the yaba trade. “We don’t have the chemicals and theexpertise,” Wa leader Bao Youxiang said in the Bangkok Post,27 December 2003.

Brands

There have been many brands of pills in Shan State, rightfrom the beginning (Khun Sa’s Homong alone had Star I,99, and in 1994-95). The most well-known is WY.However, an outsider can make mistakes even with the WYbrand not only because there are so many imitations butalso because there are in fact two WYs:

All you need is to get thestarting materials and thenurban laboratories can beestablished anywhere inthe world, small or bigfactories.

Akira Fujino,head of Bangkok-basedUN Office on Drugs andCrimes, Reuters, 12September 2005

29

u WY (notice a Y with a vertical stem)which is the more high-powered, (itsephedrine - caffeine ratio is 1:5)

u Wy (the y with a tilting stem) which ismilder, (ratio 1:4)

Apart from the WYs, there are numerousother brands, including 888, R2, OK, Gold,Tiger, Heart, Chicken World (of Kokang),Skull-Tomb-Hoe (Kachin Defense Army),Dragon, Horseshoe, Horsehead, Flowerand Hare. As the WY is the most copiedbrand, its original producers have had tokeep manufacturing new mixtures in orderto stay ahead and keep their customerssatisfied. New mixed brands have included:

u Two BrothersWY mixed with Wy (100 pills each perbag) from 1997-2000

u Four BrothersWY (long stem Y) and Wy (long stem y)mixed with WY (short stem Y) and Wy(short stem y) from 1999-2006

u Tiger short tail-dimple (currently beingsold)The ephedrine-caffeine ratio is 1:4. Thestraight Y is short-stemmed (shorttailed) with one side of the pill sunken(dimpled). The current price is 20 baht($0.5) wholesale (500,000 pillsupwards) for export. It is not seen in thelocal market. It is said to bemanufactured in Mongyawn, the mainbase of the UWSA’s 2518thIndependent Regiment.

u Tiger long tail-R20 (also currently sold)R20 pills come together with the originalstraight long tail WY, 20 pills per bag.They are reportedly produced at Nalawdnear Panghsang for long-standingcustomers. Wholesale prices rangebetween 2 Yuan - 2.5 Yuan per pill ($0.25- 0.30) at Panghsang and 14.5 - 15 baht($0.35 - 0.37) in Tachilek. The retail priceis 25 baht ($0.6).

Asked why they were called Tigers, onesource claimed that the name had beencoined by someone with a sense of humor.“Those who deal in them are able to becomeowners of Toyota Tigers,” he explained.

The new brand

This new brand, with the letter W on one sideand 99 on the reverse side, is smaller thanother brands, but twice as potent, accordingto the sources. It was first introduced at thedrug market in Nakawngmu, Mongtontownship, opposite Chiangmai in May. Thepromotional price was 500 Kyat ($ 0.5)

Exporting drugs to Thailand is fine, but selling them here(in Burma) will get your throat cut.

Maj Gen Maung Bo,Commander of Eastern Region Command (1997-2001),Quoted by a ceasefire officer in 1999, S.H.A.N.

Drugs, both yaba and heroin, are reported to be leavingBurma along the following routes:

u China (sharing a 2,192 km border with Burma)Along the porous land border and across the Mekong

u India (sharing a 1,331 km border with Burma)

Through Tamu and Homalin in Sagaing Division

CHAPTER FOUR

Shipping out

Maj Gen Maung Bo

32

u Bangladesh(sharing a 256 km border with Burma)

According to local news sources, the tradein WY yaba and consumption of the drug isincreasing in Arakan state’s Maungdaw

u Thailand (sharing a 2,496 km borderwith Burma)

It is well-known that direct border crossingsare extremely dangerous (so dangerous thatcarriers are getting 3.5 baht per pill insteadof the usual 1 baht per pill), although enteringthrough the Thai province of Maehongsonappears to be safer than through theprovinces of Chiangmai and Chiangrai.Therefore, according to smugglers, only anestimated 20% of the product in easternShan State goes directly across the borderby land or water. The bulk, about 50%, goesthrough Laos, with which Burma shares a224 km border. The rest (about 30%) isconsumed by locals.

However, the direct border crossing routesappeared to regain popularity during theJanuary-April 2006 political crisis in Thailand,where police were assigned to focus theirattention on more seriousinternal security matters. “IfI were a drug merchant, thiswould be the right time forsmuggling,” Pittaya Jinawat,head of Thailand's northerndrug enforcement agency,stated in the Bangkok Post,23 April 2006.

Further north, on the Sino-Burma border, the drugsituation had deteriorated sosignificantly that China cameclose to calling a spade aspade in 2005, according toChinese-Shans in Yunnan.

Border Gateway # 2 Ziegao-White Elephant Market (Muse)

“In the past, drugs were always 'coming fromthe Golden Triangle,' never from 'Burma',”said a Shan businessman close to Chinesedrug enforcement authorities. “Now they arecoming 'across the border'.”

Smugglers use various kinds oftransportation:

u Motor vehicles - these are the fastestbut least preferred means, due to thehigh expense of paying off the frequentBurma Army checkpoints. However,recent reports from Tachilek indicatethat many post-Khin Nyunt officials aresuch incompetent examiners thatsmugglers do not even have to bribethem.

A resident of Tachilek who used to be a UDCondor 6-wheel truck driver for the Wa'sHongpang company recounted how he andother fellow drivers were left at WeiHsuehkang's Marco Polo Department storein Wan Hong, Monghsat township, oneevening in 2002 while the trucks assignedto them were driven away by the companystaff members to a warehouse 5 miles

33

southeast. Later, the trucks returned, and they were told bythe manager U Chong Tay, 48, “Your job is to drive, not to beconcerned with what's in the truck.” The convoy, led by anadvance car, then drove all night and the next day toPanghsang with several stops at Burma Army checkpoints,but without a single mishap.

To reduce expenses, one favorite practice is to seek paidservices of SPDC military officers. “The NW and SW numberplates (used by Wa) also help,” one insider explained.

u Backpackers - At least until 2004, this method was usedby the UWSA to the east of the Salween River and otherceasefire groups to the west. Rucksacks, eachcontaining 100,000-120,000 pills, were carried by hiredhands and escorted by armed fighters who hiked acrossthe hills to the Thai border.

One smuggler who had just trekked out from central ShanState in 2004 told S.H.A.N. that he had received 15 Kyat perpill, altogether about $1,500 - $1,800.

u Boats - “With trucks you have to pay the Army by thetrip,” an ex-Mong Tai Army militia member explained inearly 2006. “But with boats, you only need to pay themby the month.”

To avoid detection, thesensitive cargo is some-times suspended from thebilge of the boat if the wateris deep enough.

There are also several waysof camouflaging the goods toget them across the border:

u Commonly usedmethods, but still serviceableif you're lucky, include hidingthem in one's stomach,private par ts, shoes,coconuts, chocolate boxes

and fruit cans (Wei Hsuehkang has a cannery inMonghsat, opposite Chiangmai's Mae Ai district).

It is common Knowledge thatboats plying the Mekongare being used to move drugs

34

u Other methods include hiding them in the insides of livestock such as pigs, chicken,tortoise, fish and cattle. One of the cattle drovers coming from Kayah state toMaehongson admitted that plastic bags of yaba were fed to selected cows or buffaloesbefore crossing the border and slaughtered to retrieve them afterwards.

u Some other tactics revealed in the $10 million Hall of Opium museum at the GoldenTriangle in Chiangrai include:

q Amulets made of yaba instead of the usual clayq Shirts soaked in heroin solutionq Plaster arm castsq Trucks with false bottoms.

The dry months from November to the end of April are easiest for smugglers to travel.However, according to some smugglers, the rainy season also has advantages as securityalong the border is slacker.

Hall of Opium museum in Chiangsaen, Chiangrai.

Everyone with a gun in hand is involvedA Palaung leader,

Bangkok Post, 30 Nov 2003

Among the Burma Army, none has beenmore notorious for involvement in the drugtrade than Myint Aung, who rose tobecome the commander of theSoutheastern Region Commanduntil he was ordered by Rangoonto “retire” in 2001. As commanderof Infantry Battalion 65 inMongton, opposite Chiangmai inthe late 80's and early 90's, andlater as the area commander, hisbattalion oversaw all the drugactivities in the area, where most ofthe drug factories were located at thattime. He was succeeded by Lt-Cols MyintSway and Hla Myint as commanders ofIB 65. In S.H.A.N.'s repor t “ShowBusiness”, Myint Sway and Hla Myintwere reported as presiding over drug

CHAPTER FIVE

Militia on the rise

meetings with the Wa, a precedent whichhad been set by Myint Aung.

A strikingly handsome man, he once told abusinessman from Thailand that he hadchosen a military career in the interests of

the entertainment society. "Most ofthe male entertainers would have

starved to death, had Ibecome an actor," he saidjokingly.

Above, Myint Aung, as commander of Infantry Battalion 65 in Mongton, Shan State (1991)

Below, Myint Aung, as area operations commander in Mongton (1996) with Liu Weiming,who was captrued in 1997 by Thai and American authorities

36

Thanks to his close links to UWSA druglord Wei Hsuehkang,Myint Aung became one of the richest Burmese generals.This cozy relationship evolved during the era of Gen KhinNyunt, from 1989-2004, when ceasefire groups receivedsignificant privileges. Their vehicles were rarely stopped; ifstopped, rarely searched; if searched, rarely taken intocustody; and if taken into custody, soon released.

General Maung Aye

Bangkok Post

Golden opportunityLocal people interpretedKhin Nyunt's waving of handsas a green light to drugs aslong as he was in power.

Now under Deputy Senior General Maung Aye, Burma's #2man, the rules appear to be changing, and the pro-Rangoonmilitias are now being favoured over the ceasefire groups.

“Militias have been formed under our supervision,” Col WinMaung, SPDC area commander of Mongton, was quotedas telling Ja Pikoi, leader of the Hwe Aw militia, on 4November 2005. “You have been loyal to us as our eyesand ears. Our superiors have therefore directed me to informyou that henceforth you no longer need to play second fiddleto the Wa and other ceasefire groups. Consider yourselfsuperior to them and if there is any encroachment by theWa in your assigned area without your permission you canshoot first and question them later. We will be ready to cometo your rescue anytime you find yourself the worse for it.”

This policy change, although only pronounced recently, hadbeen put into practice much earlier, with various eventsduring 2005 signaling increased pressure on the ceasefiregroups.

u In April-May 2005, 2 ceasefire groups (the Palaung StateLiberation Army and the Shan Staten National Army)were forced to surrender in exchange for militia statusplus business privileges.

37

“Ceasefire groups are merelyenemies who have taken a break in

the fighting against us.”SPDC Col. Win Naing Nov. 2005

u In August 2005, Ta Way, a WeiHsuehkang associate, was arrested inconnection with the closure of theMyanmar Universal Bank, believed tobe affiliated with the UWSA.

u In September 2005, Ta Pan, Com-mander of the UWSA's 2518th Indepen-dent Regiment, was arrested for invol-vement in the haul of 496 kg of heroin inMongpiang.

u The UWSA company Hongpang wasalso forced to change its name toXinghong andlater severalothers.

Some predicted thatthese events spelledthe beginning of the end of the UWSA. Whilethis may be true, there are other indicationsthat Rangoon is not in a hurry to see thedemise of the Wa:

u The arrests of Wa personnel on drugscharges in August and September 2005were treated only as individual casesand not as connected to the UWSA.

u Moreover, the Wa company Hongpangwas not closed but instructed only toadopt a new name or separate namesfor its subsidiary firms, which it did.

The reason for Rangoon's leniency with theWa, observers say, is two-fold:

u Rangoon wants to be sure that Beijing,long considered the Wa's patron, backsevery Burmese move against the Wa

u The Wa have their uses against theShan resis-tance forces. Together withthe Burma army, they had already foughta month-long campaign against the anti-Rangoon Shan State Army 'South' inMarch-April 2005. As explained inOctober 2005 by a highly-placed sourcewho had recently returned to easternShan State from Rangoon: “The regime

needs the Wa to bringthe Shans into line. Itspolicy is to leave theWa alone as long asBurma's neighborslet them be… But in

the meantime, that doesn't mean thatindividual mem-bers can consi-derthemselves immune from pro-secution.”

However, in the long run, it is a safer bet foranyone wishing to deal in drugs to work withthe pro-Rangoon militia than with a ceasefiregroup. Because, as stated by manyBurmese commanders, and reiterated bySPDC Col. Win Maung in November 2005:“Ceasefire groups are merely enemies whohave taken a break in the fighting againstus.”

From mid March to late April 2005,heavy fighting between SSA-S andWei's Military Region 171 took placein Loi Taileng HQ resulting in heavycasualties, some 700 on the Wa sideand 70 on the Shan side.

New faces

New drug gangs, new production bases, new trafficking routesand new kinds of drugs have entered the fray.

Chartichai Sudhiklom,Deputy Secretary General,Office of Narcotics Control Board,Bangkok Post,6 November 2005

During the past 3 years, big fish like Wei Hsuehkang, who has a price on his head (by theUnited States), seem to have taken a back seat. Others hitherto unknown, particularlyleaders of pro-Rangoon militia, have instead been entering international drugbusters’ reports.They include:

40

u Sai Htun Aye So-so Pyay Pyay, (also spelt Sai Tun Aye)about 40, owner of the So-so Pyay Pyay Hotel (thereason for his sobriquet) in Mandalay and the MoonshineIsland Casino (Yue Liangdao) on the Mao-Shweli riveron the Sino-Burma border. He is a close associate of Lt-Gen Myint Hlaing, formerly commander of theNortheastern Region Command headquartered inLashio, northern Shan State. He is reportedly on China’swanted list, but is still going free.

A small time dealer until 2000, his meteoric rise begansoon after the Mongkoe incident (24 October - 24November 2000), where he had reportedly provided theBurma Army force under Brig-Gen (rank at that time)Myint Hlaing with vital insider information, therebyenabling the Burmese commander to subdue both thewarring factions of Mongkoe Defense Army (MDA)which until then had been enjoying a ceasefire statuswith Rangoon.

Apart from Yue Liangdao, he has rented another 3-acreisland on the Mao-Shweli border from Sai Yi Nawngkhamat 60,000 Yuan ($7,500) a month to operate the Xingangcasino. He also collects kickbacks from each gamblingestablishment every ten days for the local governmentagencies: police, Special Branch, Drug Suppression,township administration and district administration as wellas the regional command.

Sai Htun Aye

Yue Liangdao Casino

Brig-Gen Myint Hlaing

41

On 28 March 2005, the Chinese authorities barredgamblers from crossing over to his Moonshine Islandcasino. On 16 June, 2005, Chinese and Burmeseauthorities conducted a joint raid on the casino, seizing3 assorted weapons and an unspecified amount of drugson the premises. Sai Htun Aye, who was taken intocustody, was released two days later on the orders ofMyint Hlaing. “He was privately advised later to movehis drug operations to India, and leave China alone,” saysa close associate. However, he is reportedly stilloperating on the Shan-China border.

He donated 36 million Kyat ($30,000) for the new YanDaing Aung pagoda in Lashio consecrated by PM SoeWin on 21 March 2006, which was peanuts comparedto the 600 million Kyat ($600,000) he spent building amodern stadium in Muse, inaugurated by Prime MinisterKhin Nyunt in 2004.

u Sai Yi aka Sai Yi Nawngkham, 49, came to the attentionof the media when the New Light of Myanmar reportedthat an “U Sai Yi” had led 119 Shan fighters “to exchangearms for peace,” a junta euphemism meaning surrender,on 24 July 2005. If Rangoon was aiming to obscurereports of how another Sai Yi, the famous leader of theShan State National Army (SSNA), had returned to thearmed struggle after his far-flung units were forced to

Yan Daing Aung pagoda in Lashio

Pho

to: M

yanm

a A

lin

Birds of a feather

Myint Lwin, Kokang Chinesedruglord from Tamoeng-ngen mi-litia group in Kutkhaitownship,who attends the junta-organizedNational Convention as a nationalraces delegate.

He is a partner to Ma Guowen,leader of Mongha militia group inMongyai township and Zhou Sangand Li Kai, leaders of Nayai militiagroup in Namzang township. Bothgroups are originally from KhunSa's defunct Mong Tai Army.

Passage to China

Many ferry crossings on the Mao-Ruili river that serves as a boundarybetween China and Burma are guarded by Kyaw Myint's Panhsaymilitia force, close to former regional commander Myint Hlaing, thattaxes the wayfarers and traffics in drugs.

42

surrender in April and May 2005, it was not to bedisappointed. Even some widely-read exiled media beganto report that Col Sai Yi had broken up with the anti-Rangoon Shan State Army-South (which he had joinedafter refusing to surrender) and gone back to his juntamasters.

The man who had caused the confusion is a Shan bornin Chinese territory. He had worked with the ceasefiregroup Shan State Army “North” but later left it to becamea business partner of Sai Tun Aye and Bo Mon, theManpang militia leader.

At the time of his “surrender,” Sai Yi (note: Sai Yi or Sai Yeeis a common name in Shan, meaning Second Son.) was onthe run on charges of involvement in a murder plot, filedby a rival business group. The surrender in July clearedwhatever legal actions he was facing.

u Bo Mon aka U Sai Mon, about 60, former associate ofKhun Sa and leader of the Manpang militia force inTangyan. Reports of his refineries and involvement inthe Burma-India cross-border drug trade have frequentlybeen received by S.H.A.N. He has recently beenappointed as chief representative of all the militia forcesin northern Shan State. His group has also beenparticipating in the National Convention. Bo Mon aka U Sai Mon

Although a militia force is supposed not to exceed 30 instrength, he has more than 2,000 men. His operationalarea extends to the Salween in the east, the Lashio-Mongyaw-Mongkyet road in the north, Nampawng in thewest and the Mongyai-Tangyan-Mongkeng road in thesouth.

He is known to be beholden to his former boss KhunSa, 72, who is living under protective custody inRangoon. “I have come this far due to his patronage,” hetold his friends in December 2005. Obtaining permissionto call on the aging Khun Sa, who is reportedly in poorhealth, is not an easy task, but it has never been aproblem for Bo Mon. On being promoted from his postas Northeastern Regional Commander, Lt-Gen MyintHlaing reportedly entrusted Bo Mon with the care of hisward Sai Tun Aye So-so Pyay Pyay.

Bo Mon's breast patch says:“Manpang Local Poeple's MilitiaForce.”

43

Bo Mon also appears to enjoy license to kill in his domain.On 14 November 2005, Hsang Pan, 55, a villager of HpaHpeung, Wan Mark Tract, Lashio township, was arrestedby Bo Mon’s men on an unfounded charge of havingunauthorized weapons in possession. His home wasransacked but nothing was found. Hsang Pan wasnevertheless shot to death on 9 January 2006.

In April 2006, the SPDC conferred upon Bo Mon theOutstanding Social Services Prize (First Class), followinghis “success” in banning poppy cultivation in hisoperational area during the 2005-2006 poppy season.(The other Shan who had received the prize is Sai Leunaka Lin Mingxian of Mongla who declared his domaindrug free in 1997. However, poppies are still beingreported in his area.)

u Yishay, about 55, aka Chaiwat Pornsakulpaisarn, whois wanted in Thailand and has gone underground sincecrackdowns in January 2006. He surrendered with KhunSa in 1996 and then became the leader of the Nampongmilitia force in Tachilek township. A native of Kengtung,he was granted Thai citizenship after he joined theShanland United Army (SUA) led by Khun Sa around1980 (Thai policy favors hilltribes over Shans).

In 2003, his homes in Chiangmai and Chiangrai wereraided by Thai authorities and he has not been heard ofentering the kingdom since.

Yishay

Maj-Gen Ko KoIn early 2006, he went underground after his long-timecolleague and business partner Naw Kham’s home inTachilek was raided by Burmese authorities, believed tobe under pressure by China, on 10 January. Both of themwere reported to be close to Maj-Gen Ko Ko, Commanderof the Pegu-based Southern Region Command, who hadpreviously served in eastern Shan State. Yishay hadknown Ko Ko, then a colonel, since 1999, when he wasoverseeing battalions in Tachilek. Col Ko Ko reportedlyreceived 30,000 baht monthly as well as other gifts fromYishay throughout his posting there, until 2001. BothYishay and his colleague Naw Kham received all thehelp they needed when they expanded business to Pegudivision, when Maj-Gen Ko Ko became commanderthere.

44

It is interesting to contrast Maj-Gen Ko Ko with hiscolleague Lt-Col Aye Zaw, who was commander of LIB331 and Chairman of the Township Border Committee atTachilek from 1995 to 2001. Lt-Col Aye Zaw was knownto be a plain, fighting man who earned the respect of hissoldiers and Thai counterparts, but was unable topresent gifts to his superiors, and was bypassed by hisjuniors in promotions. He was so disheartened hebecame a monk in Toungoo.

Meanwhile, reliable reports say Yishay has been invitedto return to Nampong and resume his militia duties, ashe had always been favored by local Burma Army forcesas an active participant in the junta’s operations againstthe Shan State Army. However, at the time of this report,he has yet to accept Rangoon’s offer. His Nampongmilitia is being run by one of his relatives in his absence.

u Ta Roong, about 52, Commander of the UWSA’s 214th

Brigade, with headquarters at Hopang-Hoyawd, Mongtontownship, opposite Chiangmai. He has a home in SansaiLue quarter of Tachilek. He has at least 3 refineries underhis protection. His 214th Brigade has recently changedto 414th Brigade.

u Ja Eu, 56, leader of the Yanshin militia force in Tachilek.He is said to be close to local Burmese commanders.One of his associates, Long Lieo, 40, of Markka HokhamQuarter, Tachilek, was grabbed by Laotian authorities in2004 on drug charges. He was reportedly bailed out bythe Military Intelligence Service of Gen Khin Nyunt afterpaying a heavy 3 million baht ($75,000) “fine.” His factorywas at Monghi village, Mongkoe tract, Tachilek,according to the latest report in January.

u Naw Kham.The raid by Burmese authorities on 10 January 2006 athis home in Tachilek netted 150 assorted weapons, 2compressors and “countless numbers” of meth-amphetamines. “The amount, if sold, could have boughtup the whole town,” according to local militia sources.

Naw Kham 46, a former supply officer during Khun Sa’sMong Tai Army days, surrendered in 1996 and had beenliving in Tachilek as Hawngleuk militia leader until theJanuary crackdown. Rangoon’s information minister, on

Lt-Col Aye Zaw

45

26 April, said Naw Kham had been an aide to ColYawdserk of the Shan State Army - South but was leftbehind after Yawdserk returned to the armed struggle.However, local sources say Naw Kham had beenserving under Col Hsulai, who had commanded the MongTai Army forces in eastern Shan State before theirsurrender.

To date, he is still on the run. According to unconfirmedreports, he could be in the Southern Region Commandarea of Burma, where he has already acquired a newidentity and a new ID card, arranged by his long-timefriend Maj-Gen Ko Ko, the Southern Region Commander.

u Panhsay Kyaw Myint, about 50, leader of the Panhsaymilitia force in Namkham township. He is close to localSPDC commanders including Lt-Gen Myint Hlaing. Hefinances poppy cultivators in his area and owns a refinery.He is often included in other news agencies’ reports.Also known by his Chinese name Li Yongqiang, he andhis younger brother Kyaw Htwe aka Li Yongpin, 34, whoalso doubles as his chief lieutenant, live in KhamhpawngQuarter, Namkham. His business fronts include:

q A cigarette company under a Chinese franchise atNaloi, west of Namkham

q A licensed pork and beef business supplying Museand Namkham townships

q A gas station in Muse’s Zawnzaw Quarterq Yongyang Casino on the Mao-Shweli River near

Muse

In addition, His 300-strongPanhsay militia force andsubsidiary units control mostof the river crossings on theMao. His direct contact at theregional command is SPDCnortheastern region deputycommander Brig-Gen HlaMyint.

Last March, when aninformant reportedly told alocal SPDC drug enforce-ment official, “Arrest KyawMyint and Kyaw Htwe, and

Entrance to Yongyang Casino

46

most if not all drug activities in the north will be undercontrol,” the official was quoted as replying, “You thinkwe don’t know? The fact is that national security sayswe need them and their services.”

Local sources say that his services were indeedinvaluable at the start of this year during the BurmaArmy’s pursuit and final capture on New Years’ Day ofLt-Col Khun Kyaw, an SSA commander who was tryingto establish a base on the Sino-Burma border.

The group is also represented at the NationalConvention, in the National Races category.

u Panhsay Maung Win, 40, Kyaw Myint’s associate, is theowner of the Two Golden Horses dry cell company in

Lt-Col Khun Kyaw

Hsan Hsailue quarter (eastern of Tachilek)

Yishay's assistant Jimmy's residence

UWSA's 9 storey Mekong hotel

Nampoong local militia leader, Yishay's residence

Thazin 1 lane

Thazin 2 lane

Khwanyo 2 lane

Kywanyo 1 lane Mya Shweyi Inn

Hsan Hsai high school

Sai Noan's residence

Sai Noan's warehouse

Hsaimong Monastery

N

Shwe Yegan Trading Co., Ltd.(Nestle's agent)owned by Sai Noan

Lashio, where he has ahome at Quarter #3. Hehad donated 6 millionkyat ($6,000) for themi l i t a ry -superv isedconstruction of YanDaing Aung Pagoda inLashio.

u Ja Seu-bo, 52, leader ofthe Nampan militia forcein Monghpyak township,eastern Shan State, anda native of Mongyangnear the Chinese border.He has his refineriesnear Kainao and Ngaherin Nampan tract,Monghpyak. He has foryears been the chiefrepresentative of pro-junta militia forces.

u Sai Noan, 37, who livesin Tachilek, has been aNestle agent for years.He reportedly transportsice and yaba, stuffingthem inside Nestle cans.

47

He owns the Shwe Yegan (GoldenLake) Hotel in Tachilek’s Markkahokhamquarter plus the Shwe Yegan (GoldenLake) Import-Export Trading Co.Ltd nextdoor to his house on the Main Road inHsanhsai Lue Quarter, of Tachilek.

u He Zengtien, better known as HsiaoHaw, 45, is the son-in-law of BaoYouxiang. A native of Longlin in Yunnanprovince’s Dehong prefecture, hemoved to Ta Moengngen in Kutkhaitownship, north of Lashio, during hisadolescence. He is the principalshareholder in Mong Mau Co., one ofsome 30 subsidiaries of the now defunctHongpang Co. He is said to be handlingmoney-laundering operations both forBao and Wei, and working closely withthe Jadeland Co. of the Kachins.

u Than Win, 45, an ethnic Chinese nativeof Tangyan, together with Bo Mon, is oneof the moneymakers for former SPDCNortheastern Regional Commander Lt-General Myint Hlaing and SPDC ColKhin Maung Myint, commander of theTangyan area. While engaging in thelogging business has earned even GenHso Ten, a Shan ceasefire leader, a longjail sentence, logging trucks owned byThan Win and his partners have neverbeen stopped at Burma’s numerouscheckpoints. He came to S.H.A.N.’sattention after he gave a brand new$80,000 Land Cruiser as a weddingpresent to Lt Col Myint Hlaing’s daughterin January 2006.

u Li Zichang, a native of Mongkoe, Musedistrict, used to be the headmaster of aChinese language school at HweMonglong near Mongkoe. A formerbusiness associate of Li Nimin and LiZenqi, who were executed by the BurmaArmy during the Mongkoe mutiny (24

October - 24 November 2000), he hasa grand mansion in Lashio, which he hasrented to Save the Children and UNDP.He himself lives in Mandalay most of thetime. His new business associate is MaGuowen, leader of the Mongha militiaforce in Tangyang township.

u Khin Maung Yin aka Lao Zhong, a formersix-wheel trucker, rose to become oneof Lt-Gen Myint Hlaing’s bankers. He issaid to be richer than another of Lt GenMyint Hlaing’s favorites, Sai Htun AyeSo-so Pyay Pyay. He is owner of a hoteland the Bei Shide discotheque in Ruili,and is currently building a housing estatethere.

Police inspector Win Naing, an ethnicFujien Chinese, who has recently beentransferred to Tachilek, is his brother-in-law.

u Myint Swe, over 50, is an ethnicChinese native of Nam Hpakka, Kutkhaitownship. He has homes in severalplaces: Nam Hpakka, Muse, Kutkhai,Panghsai and Mandalay. He joined theKachin Defense Army, formerly theKachin Independence Army’s 4thBrigade, after its ceasefire pact withRangoon, and now enjoys the rank oflieutenant colonel there. He is known asanother bankroller for Lt Gen MyintHlaing.

u Zhou Sang, a former member of KhunSa’s Mong Tai Army, is the boss of theNayai “New Life Development Project”and Htoo Hsan Purchase and Sales Co.Ltd. in Mongnai in southern Shan Statewith a branch in Muse. He is associatedwith Taklay, leader of the ceasefiregroup Shan Nationalities People’sLiberation Organization (SNPLO),through his long-time partner Kao

48

Former militia leaderSai Pan Mawng imprisonedin Kengtung on drugs chargessince early 2006, but saidreceiving special priviledgesin prison.

Taklay

Logo of Nayai RegionalDevelopment andNew Life Group

Shang’s marriage to the latter’s daughterNaw Nyunt May. Sources maintain he hasat least two refineries under his protectionnear his base.

u Ja Ngoi, 45, and his sidekick Ai Long, both militia leadersof Punako village, Mongtoom tract, Monghsat township,came to the attention of narcotics officials across theborder when Maejok, a village used as a staging postby drug smugglers before slipping into Thailand, wasraided by a Shan State Army unit in February 2002. Thewhole shootout was recorded by Thailand’s Channel 7and the coverage earned it an award.

Focus was on him again when his militia force wasambushed by the SSA on 21 April 2006, while reportedlyattempting to transfer 200 kg of heroin coming from itsrefinery at Ah Mae, near Punako.

Ja Ngoi has for years been said to be operating 3factories (two heroin and one yaba) in his domain rightunder the nose of 2 SPDC Light Infantry Battalions, the553rd and 554th, in the area.

He is said to be richer than Yishay, militia leader of theneighboring village of Nampong, who is still at largefollowing a major drug crackdown in January 2006 whichalso bagged other militia leaders like Marku and Sai PanMawng. However, the much publicized campaign nevertouched him.

On 13 November 2003, Bao Youhua,youngest brother of Wa supremo BaoYouxiang, arrived in Tachilek, oppositeMaesai, and put up at his place atHawngleuk, which he had purchased froma local druglord shot down by rivals in 1997.The establishment, known by its neighborsas “Fish Pond”, includes a 400 x 500 meterfish pond, 2 casino halls, 1 karaoke parlorand a motel. The compound is 800 meterswide and 1,200 meters long with a 2.5 meter-high concrete wall. (See map p. 50)

CHAPTER SIX

Crackdown charades

Political offenses like listening to the BBC are ten times more serious than a drug offense.

A military intelligence officer,addressing village headmen in Monghpyak,June 2003

Until 18 February 2004, when he went backto Panghsang, Bao Youhua reportedly usedthis location to detain 113 yaba dealers (87male and 26 female) who had failed to paytheir debts. Survivors revealed that someof them had been snatched by members ofMilitary Intelligence #24, its office a little overone kilometer down the road, and handedover to Bao.

On 24 September 2004, Tin Tun Aung ofWan Kungjawng, Quarter#1 in Kengtung

50

Ipp

pppppp

pp

HA

pppppppppppppp

pp

pppp

pppppp

ppE

r pppp

pppppppppppp

paddy field

to Kengtung

to Tachilek

Tabin Shwehtee

Burma Army Units

Hongpang (UWSA)later Xinhong

Buddhist temple

Compound of

Bao Youhua's residenceMAS office (former MI-24)

LIB 359 HQ

Tachilek airfield runway

Middle school

Hawngluek village

Hawngluek village

pond

bungalow

gas station

Hawngluek checkpoint

war

ehou

se

Bao Youhua's "Fish Pond" detention center, east of Tachilek (2003-2004)

Detention Center

51

was arrested after he and his friend hadstabbed a Shan named Sai Zoe to death,after taking yaba. Both were bailed out bypolice officer Myo Myint, brother-in-law toTin Tun Aung, the next morning. All sourcesswore the yaba in Tin Tun Aung’s possessionwere given to him by Myo Myint for sale.

another source on the China-Burma in April2006.

In Muse, opposite Ruili, there are twocategories of drug busts: overt and covert,say sources. “When it is overt, you cansafely bet at least one-quarter of the lootwill not be reported,” said a busi-nessman.“But if it is covert, the higher authorities cancount themselves lucky it they ever receivea report.”

Enforcers from other units are sometimesemployed to make seizures. “The trick isnot to let the local officials learn about theoperation in advance,” said a source whoclaimed he no longer dealt in drugs.“Otherwise, raids almost invariably end upjust with token hauls, as most of the drugshave already disappeared, together with thesuspects.”

With such lax law enforcement, Muse’sHomon, Tawyawd and Zietawng quartersare thriving retail markets for all kinds ofdrugs. Local law-enforcers only appearoccasionally, to collect fees. To respond tothe growing drug problem. NGOs like Care

Tawyawd Quarter in Muse, another free retail market for drugs

The vicious circleof selling,

being arrested,bribing,

being released andgoing back to

selling has onlybecome worse

not better

At Namzang village, 12 miles from Muse and7 miles from Namkham along the Sino-Burma border, a number of ethnic Chineseresidents are reportedly making a living byselling drugs, both heroin and yaba. “Manyof them get arrested afterbeing informed on by us,only to be released afterpaying hefty fines. They gostraight back to sellingdrugs,” said a frustratedvillager. “The drugs seizedby the police are then turnedover to friendly dealers forsale.”

The vicious circle of selling,being arrested, bribing, beingreleased and going back toselling has only becomeworse not better, stated

52

Myanmar and Marla have come to carry outharm reduction programs.

Not suprisingly, almost all cases handled bylocal lawyers concern drugs. Two lawyersfrom Muse gave the following estimates ofdefendants in such cases:

u Bosses (mostly ethnic Chinese) 5%u Carriers and middlemen (mostly

Kachins) 25%u Retailers and users (mostly Shans and

Burmans) 70%

There are 4 known Burmese distributors (3women and 1 man) living in Ziegang, Ruili,who enjoy close relations with the localChinese police through their legal brokers,who are also Burmese but speak fluentChinese. The job of these brokers is three-fold:· Timely information to distributors about

official surprise crackdowns, andinformation about rival drug operators forthe local officials to deal with;

· To help those facing drug charges: in thelocal parlance, “easing their load when itis heavy, and relieving them of the loadwhen it is light;”

· To collect kickbacks for the police fromthe distributors.

On the Burmese side, the said people are alsoreported to be working closely with policeofficers like Ms May Ni Oo, human traffickingaffairs; and Inspector Hla Kyi, anti-narcotics.“We don’t know how well the call forTripartite Dialogue (by the Opposition) isfaring with generals,” quipped a localbusinessman. “But it appears to be workingadmirably between drug operators, Burmesecops and Chinese cops.”

Cross-border cooperation

Empty plastic pots and packagesused to contain heroin are familiar sightsin the Chinese border town of Ruili.

Freedom in most cases depends on money,good connections and well-connectedlawyers.

In 2003, Yang Shao-ching aka Chao ching,a lieutenant of Wei Hsuehkang, summed upthe situation this way: “The government’spolicy is to crack down on all small fish inorder to boost their credibility. But they willcontinue to protect the big fish so they cankeep supporting the military.”

53

The rare occasions on which “big fish” are netted appear tobe only at the behest of neighbouring countries. This includesthe sensational seizure on 10 September 2005 by theBurmese authorities of 496 kg of heroin in Mongpiang froma UWSA commander Ta Pan, 40, who was also a nephewof Bao Youxiang. According to a highly placed source whohad returned from Rangoon, the operation had beenlaunched only due to pressure from China.

Similarly, recent crackdowns in Tachilek between December2005 and February 2006, which netted an unprecedented12 million speed pills, were explained as the result of doublepressure from China and Thailand.

Meanwhile, even “small fish” may now find it easier to getaway with drug dealing. According to a Burmese police reporton 3 March 2006, the principal assignments of the policeforce have become riot control and security, i.e. suppressionof the opposition rather than preventing and solving crimes.

the principalassignments of thepolice force havebecome uppressionof the oppositionrather thanpreventing andsolving crimes.

CHAPTER SEVEN

Drug use in Shan State

Yaba (“crazy pill”) is known in Shan State as Yama (“horsepill”), which was its original name in Thailand before beingchanged to yaba in 1996. The name Yama is also easier forShans, who don’t have the b consonant, unlike their cousinsin Thailand.

The quote about “horses riding human beings” by an elderin Muse, opposite Yunnan’s Ruili, appears to sum up thecurrent situation in Shan State which was “invaded” by yabain force in 1996, following the surrender of the Mong Tai Armyof Khun Sa, whose out-of-work chemists were then snapped

up by other drug entrepre-neurs.

In Muse, where income ishigher than in the hinterland,the use of heroin, khakhu (amixture of opium and mincedpoppy pod shreds or hpaknawk loi, an edible creeper,or jiqijin, a kind of herb) andyaba appear to be almost ona par. Only people with lowerincomes (an estimated 40%of drug users) tend to takeyaba, while those with higherincomes (about 30%) in

In the past, human beingsrode horses. Butnowadays, horses areriding human beings.

A respected elder in Muse,interviewed by S.H.A.N.in 2002

“This opium we're smoking is not produced in Kokang. It is smuggledin from outside,” said the owner of an opium den in Laokai,the capital of Kokang in late June 2004.

56

heroin and the wealthiest (30%) in khakhu,which is smoked through a pipe.

In the gemland of Monghsu, where most ofthe people have a low income, the use ofyaba amongdrug takers isestimated bysources at80%, khakhu10% andheroin 10%. Of the yaba users, at least 10%are said to be state service personnel. Drugson sale include those seized elsewhere byofficials, according to a dealer fromMonghsu, who revealed that such drugswere cheaper and safer to buy.

Back in Muse, it is not unusual to seestudents wearing green longyis, thestandard school uniforms, stopping to buy1-2 pills before continuing on their way toschool. Increased lawlessness after KhinNyunt’s ouster has apparently increased theavailability of drugs. “Life is easier for bothpeddlers and users now that Khin Nyunt’sgone,” said a shopkeeper.

Drugs can also be conveniently purchasedat gambling dens (sponsored by localauthorities) and at the offices of the ceasefireand militia groups. “The price outside is 700kyat ($0.7),” said a source who took aS.H.A.N. reporter to one such office in Muselast year. “Here it is 1,000 kyat ($1), but it is

less risky. Nobody’s going to bother us.”

The use of yaba by Burma Army soldiershas been reported by the London Telegraphas recently as March 5, 2006. One of the

e a r l i e s trepor ts byS.H.A.N. onthis subjectwas on 29April 2001 at

the height of the Battle of Pakhee, foughtbetween troops of the Burma Army and theShan State Army opposite Chiangmai’sFang district.

Civilian porters who fled into Fang toldS.H.A.N. that they witnessed soldiers fromLight Infantry Battalion 519 taking turns todrink what they were told was holy waterfrom barrels just before they set off to attackPakhee. “We saw some soldiers still on ashooting spree after their return fromattacks,” said one Shan porter. “Theyseemed to be acting uncontrollably.”

An SSA commander interviewed recentlyby S.H.A.N. confirmed this trend. “We arefinding more and more dead soldiers withyaba in their possession,” he said.

As in neighbouring Thailand, drugs are alsoavailable in prisons. “The only thing neededis money,” revealed a former inmate inLashio who was released last year.

Drugs can also be conveniently purchasedat gambling dens and at the offices of the

ceasefire and militia groups.

57

How methamphetamines are usually taken in Shan State

Ancient style raw opium smokingfor poor people in rural areas.

New style khakhu (Mixture of opiumsmoked with bamboo water pot) for middleclass people such as traders, truck driv-ers, gamblers, including local authorities.

58

The first major state-spon-sored treatment center fordrug addicts in Musetownship, northern ShanState, which was due to becompleted by the end of2004, is still less than halffinished. At Nam Oom, 15miles south of Muse, there isa signboard, growing in-creasingly unintelligible astime passes, directing tra-velers to the rehabilitationcenter 5 miles off the road. Itis a 50-acre affair com-prising 18 buildings con-tracted out to Mandalay-based AK Construction Co.

The reason for the delay in completion istwo-fold:

u The original allocation agreed for eachbuilding was K 9 million ($9,000) butonly K 7.2 million ($7,200) turned up.

u The company has disbursed only partof the expenditure. “The rest is stillupstairs, we don’t know where,”complained a local police source.

The United Nations Office on Drugs andCrimes (UNODC), according to an officialsource, had long since transferred the fundsto the Home Ministry.

Beginning in 1997, villages in Namkham andMuse townships initiated a self-reliancerehabilitation program for addicted localyouth with assistance from the Shan State

Rehabilitation efforts

The regime’s ongoing political repression has limited international support of all kinds,including support for Burma’s law enforcement efforts.

International Narcotics Control Strategy report 2006

Peace Council, a joint set-up of the twoceasefire groups SSA-North and SSNA. Allof the rehabilitation sites have been orderedclosed except for a few, which were takenover by the local Union Solidarity andDevelopment Association, a pro-militaryquasi-political organization established byRangoon in 1993. The USDA has onlymaintained the rehabilitation center for showoccasionally summoning addicts when high-ranking officials come to visit.

Elsewhere, state-sponsored rehabilitationprograms also appear to be show cases,particularly in the area between China andthe Mao River known as “19 villages” wherepro-junta toughs led by the tract headmanChit Ngwe, 50, roam. His priority, villagerssay, is not rehabilitation of addicts butsqueezing them and small pushers for

Self-help treatment program in Kunhai village, Namkham township,closed by Burmese authorities in early 2005

59

money. He and his friends are assisted and protected in this daily chore by Burmese policeofficer Han Moe Oo.

Treatment centers that also survived include those in areas under the control of ceasefiregroups that are reputedly “tough on drug abuse but soft on the drug trade,” as abusinesswoman in Muse put it. However, when the Shan State National Army’s 11th Brigadein Zay Oo, Hsenwi township, was forced to surrender in April, 2006, its rehab center wasalso ordered to close shop. As a result, drug use once again resumed as before. “TheBurma Army could have allowed us to carry on,” a bitter villager said. “Now, the addictsthink they have nothing to fear and they are right, because we can’t do anything aboutthem.”

Unable to rely on junta officials to address the growing drug scourge, the local people haveturned to less risky therapy: forming football teams.

In Muse, there are more than ten soccer teams with names like: Htoong Mao Hang Li(Beautiful Mao Valley), Mawk Kawn Kham (Golden Cherry), Kiap Kham (Gold Bran), HsaiNam Sawng Ke (Two Rivers), Fang Mao Khieo (Green Shores of Mao), Ngwe Zinyaw(Green Gulls) and Arun Oo (Dawn). They have about the same number of teams in nearbyNamkham. Football matches are organized on a weekly basis, with the local “World Cup”taking place during the rainy season.

“We know it won’t solve the problem,” says a local. “But at least it will draw some of ourchildren away from drugs. Anything’s better than nothing.”

Sai Chit Ngwe, a local boss wholives off the 19 villages on theSino-Shan State border

Union Solidary and Devolopment Association (USDA)

60

u The regime’s principal focus iscontrolling the Opposition, not thewelfare of the people, and thereforedefinitely not drugs.

Thus, the regime has deliberately turneda blind eye to drug production activitiesof the ceasefire groups, in exchange forthese groups’ submission to the statusquo.

“They could have resolved theirdifferences with both the democratic andethnic opposition at the same time, andthere wouldn’t have been any reason togive a free hand to the ceasefire groupsto produce drugs to suppor tthemselves,” reasoned a veteranpolitician in southern Shan State. “Butsince they were determined to hang onto power at all costs, even at theexpense of the people, it becamenecessary for them to makeconcessions to the armed groups.”

u Pro-regime individuals andmovements are granted immunity.

Yishay, the militia leader in Tachileksuspected of treason, was in Januaryput on the run. But Ja-ngoi of Napuko,Monghsat township, another militialeader reportedly richer than Yishay,and just as involved in the drug trade,has gone unscathed due to hiscontinuing loyalty to the Burma Army.

u Non-stop expansion of the Army andthe policy of self-reliance for militaryunits are fostering involvement indrugs

Conclusion

As seen in previous pages, there is strong evidence not only implicating high-level BurmaArmy officers in Burma’s drug trade, but also showing that the continuing drug problem in thecountry is the direct result of their policies. These can be summed up as follows.

While the Burma Army has more thantripled the number of its battalionsnationwide since 1988, the enforcementof self-reliance policies among Burma’smilitary units during the past decade hasmeant that the survival of each unit hastaken precedence over law enforce-ment.

On 8 September 2003, a captain fromKunhing-based Infantry Battalion 246told the people. “We have been forcedto support ourselves and our ownfamilies. But if all of you grow poppies,we will be able to tax you for our ownupkeep. At the same time, your own lifewill be easier.”

u Rampant corruption

According to Berlin-based TransparencyInternational, Burma is second worst inits world corruption list.

This is not surprising, according toNarinjara, a news agency workingclandestinely in western Burma. Quotingmilitary sources, it reported on 13 April2006 “It is not military or organizationalskills which will bring an officerpromotion, but his ability to bring in funds.Many senior officers are thereforeconcentrating on making money ratherthan attending to their military duties.”

Scores of reports received by S.H.A.N.throughout the years show Burma Armyunits giving protection to drug refineriesand transpor tation for precursorchemicals and drugs.

61

All in all, the hound appears to be runningwith the hare. “Nothing has changed (withregard to drug production),” said an informedsource, “except the prices.”

In other words Rangoon or, if we may,“Naypyidaw” (the new capital) should not beshifting responsibility for the drug trade ontoothers. “There’s a Shan saying: water rises,ships high,” said an informed Shan traderon the northern Shan border in May 2005.“The Burmese generals are like the waterwhile the drug traders are like ships.”

The ordinary people of Shan State shouldtherefore not be blamed for doubting whetherthe year 2015 will indeed bring a Drug Free

Asean, if things continue the same way theyhave since 1962.

Solutions to the drug problem formulatedand tried thus far smack of putting out thesmoke instead of the fire, according to thelate Shan scholar Chao Tzang Yawnghwe.

Like him, S.H.A.N. will not attempt to presenta solution to the issue. However, it is hopedthat the facts presented in this report willlead to a better understanding of the currentstate of affairs, and will contribute to arethinking of the problem and its attendantills, which are literally destroying Shan Stateand the rest of Burma.

62

Northeastern Region Command,Northern Shan StateInfantry Battalions (IB)

22 (Kyaukme)33 (Tangyan)41 (Lashio)45 (Mongyu)68 (Mongyaw)69 (Loitao-Mongpa)123 (Hohpied-Tamongnge)125 Kongjen (Kawng Zarng in Shan)127 Kunlong128 Pasingjaw129 Chinshwehaw130 Namtu136 Mongpat-Tangyan143 Hopang145 Hopang239 Laokai240 Mongyaw-Mongkiet241 Tarknai-Kutkhai242 Mongzi-Monghawm290 Mongzi-Kutkhai

Light Infantry Battalions (LIB)

312 Kunlong322 Laokai323 Hsenwi326 Tangyan507 Panghoong-Lashio523 Tangyan567 Namzalarb568 Namzalarb

28 Battalions

Burma Army units reported to be involved in the drug trade

There are 128 IBs (Infantry Battalions) and LIBs (Light Infantry Battalions) in Shan State,according to an inventory compiled by an exiled research group, roughly a quarter of thetotal of infantry battalions in Burma. The majority of them, if not all, are reportedly, involvedin all forms of the drug trade, from growing and transportation to taxing and sales. Forexample, IB 130, based in Namtu is responsible for the policing of Panhsay, Mantong,Mongyen and Mongwi where an increasing number of fields were reported during the lastseason.

Eastern Region Command, SouthernShan StateInfantry Battalions (IB)

9 Loilem12 Loilem64 Laikha66 Namzang99 Langkher102 Pekon246 Kunhing247 Mongnawng248 Mongnawng249 Panglawng286 Mongnawng287 Wanzing294 Mongpan295 Mongpan296 Takaw

Light Infantry Bat (LIB)

332 Mongpan336 Pekon421 Pekon422 Pekon423 Hsihseng424 Hsihseng425 Banyen426 Banyen511 Panglawng512 Panglawng513 Panglong514 Mongkerng515 Laikha

Appendix

63

Present Burma Army units in Shan State

Infantry Battalions and Light Infantry Battalions

516 Namzang517 Mongpawn518 Mongnai520 Mongpan524 Kunhing569 Kengtawng574 Kengtawng575 Mongpan576 Kengtawng577 Mongpan578 Langkher598 Mongpan

41 Battalions

Triangle Region Command,Eastern Shan State Infantry Battalions

43 Mongpiang49 Monghsat65 Mongton221 Monghpyak225 Mongton227 Mongkhark277 Mongton278 Monghsat

Light Infantry Battalions (LIB)

316 Talerh329 Monghpyak330 Monghpyak331 Monghsat334 Mongyawng335 Monghpyak359 Tachilek360 Mongpiang

519 Mongton526 Tachilek527 Monghsat528 Mongpiang529 Tachilek553 Mongtoom554 Mongtoom24 battalions

Grand total 93 battalionsDo not enter reports so far 35 battalions

Apart from infantry battalions, involvementsupport units like the Artillery, Engineers,Supply and Transport is also reported fromtime to time. For example, the 902nd FieldEngineering Battalion and the 626th Supplyand Transport Unit in Lashio. Sources werestill unable to confirm the involvement ofother Shan State-based units, as this reportwent into print.

Opium growing and trading- permission to villagers to grow opium- provide poppy seeds to farmers- provide loans to opium farmers- collection of tax from opium farmers- order militia to collect opium tax for battalion- authorize militia as official drug buying agents- ensure opium is sold to drug dealers authorized by local battalion- threaten fine if farmers do not sell to authorized buyers

Production of drugs- transport methamphetamine powder to refinery- storage of precursor chemicals at battalion command post- force villagers to build barracks for sol-diers where drug factory will be set up- force villagers to provide thatch for refinery- provide security for drug refineries- collect tax from refineries- authorize drug producers to move drug plants- release drug producers after receiving pay-offs

Storage, trafficking and sales of drugs- arrange meetings of drug dealers at battalion command post- permission to drug operators to deal in drugs- permission to militia drug agents to travel without checks- force civilian trucks to transport heroin to command post warehouse- storage of heroin at battalion warehouse- storage of methamphetamine pills at army outpost, also at battalion command post- provide security for shipments of drugs, in exchange for shares in income fromsales- transport methamphetamine pills to Thai dealers at Thai-Burma border- sell methamphetamine pills to dealers from Thailand- transport Thai drug agents to Thai-Burma border- permission to Burma Army veterans to sell methamphetamine pills for income- cover up news of drug bust (to protect drug smugglers)