Tackling the illegal drug trafficking problem in Myanmar is a major challenge for the country’s authorities. With this in mind, Mizzima TV editor Myo Thant sat down recently with International Crisis Group adviser Richard Horsey to talk about the drug trade and possible solutions.
How big a problem is illegal drug production and trafficking in Myanmar?
This is a very serious issue for Myanmar. Myanmar is currently the second largest producer of opium and heroin in the world and by far the largest in the region and in the world of methamphetamine drugs as well, Ice and yaba.
The nature of the drug problem has changed from a largely opium based trade to the production of meths. Opium poppy farmers could be encouraged to grow other crops. But how do you tackle meths production?
It is a very different issue addressing opium and heroin and addressing methamphetamines. Part of the problem with opium and heroin is a poverty problem, you have a lot of poor farmers in remote conflict-affected areas for whom growing opium poppy is one of the few options for their lives. And so ending production is partly about providing other livelihoods to those farmers. Whereas meth is a very different issue. Meth is not a poverty problem. Meth is a greed problem. Meth is produced in laboratories by a small number of people and controlled by very wealthy criminal gangs. So addressing meth production is really is a criminal justice approach on the ground but it has to be combined, of course, with efforts to address demand for the drug in the markets which are using it.
How do you view the Myanmar government’s strategy to tackle the drug trade?
The Myanmar police, customs and other authorities do regularly make seizures of drugs and every year they show these with burning ceremonies. It is estimated that about 15 percent, one five percent of heroin is intercepted by the police, but for methamphetamine it is probably lower than that, five to ten percent. So seizures alone will never be enough to address the problem, it will only capture a small amount of the trade, unless it is combined with efforts to really go after the drug kings, the transnational criminal organizations and the key players within Myanmar who are organizing this trade. Unless those people are identified and arrested, you won’t stop this production happening in Myanmar.
Has the government the will to change their strategy?
The first point to make for meth, which is the big growing problem for Myanmar, Myanmar does not produce any of the precursor chemicals, the chemicals that are needed to manufacture this. Most of these are coming from China; a few from other neighbouring countries of Myanmar. So there is also a responsibility of Myanmar’s neighbours to better control the flow of those precursor chemicals across the border into Myanmar. It is not just a Myanmar border control problem, it is also a China border control problem. And China, for example, has not been very effective at stopping the flow of those chemicals. It does not make regular seizures of illicit chemicals coming across the border, in fact, there has never been a major seizure of precursor chemicals by the Chinese border authorities as those chemicals cross the border.
They do seize chemicals within China and Myanmar seizes chemicals within Myanmar but at the point of crossing there has never been a major seizure. That’s a big gap in law enforcement of this issue. So that is the first step, the precursor chemicals. But then the environment is Shan State is one where it is very difficult for the state to control. These criminal organizations that are involved in the production of these drugs choose locations for production which are difficult to reach, which are protected in some way by militia, by non-state army group, or by a general climate of impunity by paying people off so that they are not disturbed.
So that is a problem of the armed conflict in Myanmar, it is also a problem of corruption. We know that these are very difficult issues for countries to address, and that is especially true given the scale of the problem. It is a multi-billion dollar industry. It is probably far larger in value than the entire legal economy of Shan State. So this is not a small problem it is a very large problem.
What substitution measures can be taken?
So the first thing to say that this is a manufacturing business and like all businesses they need stability. It requires multi-million dollar investments by these criminal gangs into illicit laboratories with very sophisticated laboratory equipment and chemists and so on. It is a big investment in a factory. And if you are a company investing in a factory, you want stability and that you don’t invest in areas where there is live armed conflict going on. You need to be sure of security and you can produce the product. So these drug labs are being set up not in places where there is active conflict but in places that are relatively stable. So the problem is linked to the armed conflict in the sense that if there was no conflict, if the ethnic issue in Myanmar was resolved, if there was a political solution to ethnic grievance, you would have a very different situation in Shan State, one where the normal police and state institutions would be there and there would not be the same amount of impunity.
But it is not the armed conflict itself that is producing this. It is the general lack of law and order in these areas and the largest players are not the ethnic armed groups that are fighting the government, it is not the T’ang or those other groups that are currently fighting. It is places like Wa, like some of the militia areas where actually there is relative peace and stability.
Who is largely responsible for the trade, ethnic groups or army controlled militias?
The first thing is most of the money in this trade is made outside Myanmar. If we look at the total value of the trade, the United Nations Drugs and Crime Office valued the methamphetamine trade in the region at $60 billion. That is an enormous sum of money. That is the street value in the final destination markets. So if we look at the price of a kilogramme of crystal methamphetamine, this Ice, which is produced in Shan State for export, it is not really consumed in Myanmar, it is worth about two thousand or three thousand dollars for one kilo when it leaves the factory. By the time it gets to Yangon it worth fifteen thousand dollars but by the time it arrives on the streets of Australia is might be worth eight hundred thousand dollars for that one kilo. So you can see the value increases rapidly the closer you get to the destination market.
So most of the money is being made outside of Myanmar. But the money that is being made inside Myanmar it is being laundered through casinos, it is being laundered through businesses, real estate market and other things and part of it is being spent on securing the areas for further production. And that means for militias, buying more weapons.
Where does the money go?
The first thing to be clear is this is a criminal enterprise and the people who are responsible for the drug trade are local criminal organizations and transnational criminal organizations. The role of the government and military is to have policies to address this. Now are the policies perfect? I think we can say they are not because they are not having a significant impact on the production, there are certainly more the government and military can do to ensure that these parts of the country are not a safe haven for drug production but there are enormous challenges.
For example, there are some parts of Shan State that are not under the control of the government or the military – where the government and military cannot go – and so they have a very limited ability to control what is happening there. There are other parts of Shan State which are accessible and where drugs are being produced and one has to look at issues around corruption and law enforcement, rule of law as a way to address that.
What can we say about possible involvement of members of the Myanmar government or military in the drug trade?
So as I said earlier, drug production doesn’t thrive in places where there are active conflict but it does thrive in places where there are non-state groups that can provide protection to drug producing facilities. What this means is ceasefires will not dent the drug trade, they may even increase the drug trade depending on who the ceasefire is with and where. But a political resolution to the conflict will change the governance landscape in Shan State, it will bring all parts of the state within the control of the state, and ultimately that is what is necessary to address the drug trade. But that political solution to the 70-year conflict, that is still a long way off, not around the corner. So there are many policies that are needed in the meantime to address this issue.
How much does an ethnic peace process factor in to making serious inroads to the drug problem?
Myanmar has two drug problems in a sense. It has a drug production problem and it has a drug use problem. And these are very different kinds of problems. The drug production problem can be partly addressed through law enforcement measures. It is production for export but it is also production for yaba tablets for local consumption. So when we look at the local drug use, this is the same challenge that many other countries face. And many other countries have a lot of experience as does Myanmar about how to deal with drug use problems. And I think what has been learned over the last decades is the criminal justice approaches to drug use are usually ineffective. Putting people in prison for small quantities of drugs for personal use is generally not a good way to stop the drug use problem, it can actually make it worse.
You need a medical approach. You need to treat it as a medical and a societal problem, not as purely a legal problem. And we know drug use in Myanmar, like many other countries, is very widespread. You can’t put ten percent of the youth in prison and expect you are going to solve the problem that way. What you end up doing is destroying people’s livelihoods, destroying their education, destroying their hope for the future and that is not a way that you are going to solve the problem.
But for the big production, for the criminal gangs, who are involved in the big scale production, certainly you need a law enforcement approach primarily for that.
This is not just a problem for Myanmar. Are surrounding countries doing enough to tackle the drug problem?
So the chemicals that are used to produce meth, these are pharmaceutical and chemical products that are also used legitimately for producing medicines and other things, but many of these are controlled substances, that means you need specific licenses to buy and sell them and that they can’t be transported freely without the right licenses and so on.
The majority of precursors come in from China. Why has China not done more to prevent this? Why have we not seen more arrests on the China-Myanmar border?
So, what China needs to do is be more effective at cracking down on the illicit sale of these chemicals from its factories in China across the border to Myanmar that’s a regulatory issue but it’s also a border control issue. I think much more could be done there and I know Myanmar is requesting to do more in that respect.
What is China’s relationship with the drug trafficking groups? Does China in anyway gain from allowing this drug trade to continue?
The organisations that are involved globally and regionally in this trade that is the top-level organisation that are putting together the supplies of chemicals, the production, the sales and delivery to destination markets are very large, very profitable criminal enterprises and they operate across boundaries they are trans-national criminal organisations. For example some of the chemists operating labs in Shan State come from Taiwan, as we know many of the chemicals come from mainland China the profits are laundered through regional financial centres – Hong Kong, Singapore, other places where there is a well-developed banking industry so this is truly a regional problem is not any one country’s individual problem.
It has to be addressed as a regional problem. It needs co-ordination and cooperation between law enforcement, financial crime specialists, government policy makers, and that cooperation we are seeing is not as effective as it needs to be. There’s a lot of cooperation for example on infrastructure, construction there a lot of regional players getting together to plan infrastructure but there is not the same level of attention and cooperation being given to address the negative consequences of some of those infrastructure projects the freer flow of illicit goods and we are not just talking about drugs here we are talking about illegal wildlife, trafficked people, we are talking about logs, gold and jade all of these commodities are flowing in often illicit ways along these new roads and railways and infrastructure routes. And there needs to be a lot more attention paid to addressing the negative aspects of them.
What forces are at work when we look at this precursor flow from China? How much does Beijing have the ability to control this or how much is this problem of local corruption on the China-Myanmar border?
I think this an important point. You know the finger is pointed at Myanmar as the main source of production but we have to look at the whole picture here. There are the precursor chemicals none of which are made in Myanmar. There is the problem of regional corruption and border control with the flow of those chemicals but also, we have to look at the final markets. The reason that these drugs are being produced in Shan State is that there is a demand for them. It is not that the production in Shan State is somehow creating a demand in other markets.
There is a demand for crystal meth in Australia, New Zealand, Japan, South Korea, other places. There is a demand for Yaba in Myanmar, Thailand, the Mekong countries, Bangladesh, it is this demand that is being met by these criminal enterprises at the moment they have chosen Shan State as an ideal manufacturing base but if Shan State were shut down, they would move their manufacturing base elsewhere. So, this not purely a problem of Myanmar, you can’t only point the finger at Myanmar there’s much more that Myanmar needs to do there’s much more also other countries can do as well to tackle illicit financial flows, money laundering, pre-cursor supplies and corruption and border control. Because without those corrupt officials of neighbouring countries on borders you would not be able to have these flows of precursors in and finished produced drugs flowing out.
China claims to support the Myanmar peace process yet drug trade money supports the ethnic armed groups who are fighting the Tatmadaw. Given China’s unwillingness to seriously clamp down on the drug trade, is China being an honest interlocutor in the peace process?
Well bi-lateral relations with any country are always complex. I don’t think anyone believes China can magically create peace in Myanmar nor can China magically solve the drug problem in Myanmar. But certainly, as a neighbour and friend of Myanmar there are many thing China can do to help on the peace process but also there are many things China can do to help with the drug problem and as you say there are some links between these two issues. So, I think it is important to look at what can be done to support Myanmar.
Looking at Myanmar’s other large neighbour, India, how do you view Delhi’s efforts to block the transport of illegal drugs into its territory?
So apart from China, India is the other large global manufacturer of pharmaceutical products it has a large pharmaceutical industry and is also a neighbouring country of Myanmar. So, there is also an issue of illicit precursor drugs crossing the India-Myanmar border. For the production in Shan State, the vast majority of the meth being produced in Myanmar is in Shan State, most of those precursors are coming from China only a very small amount is coming from India and the reason for that is the India-Myanmar border is a remote border, the infrastructure is not as good and the distance you would have to travel across Myanmar to Shan State is much further, much riskier, more costly, more difficult but you do have a small production of Yaba pills on the Indian border and there are precursor chemicals coming in from India.
The other major issue to the west of Myanmar is the Yaba trade to Bangladesh. Bangladesh is the largest growing market in the world for Yaba, prices are still relatively high so there’s a lot money to be made from trafficking Yaba from Shan State where it is produced to Bangladesh. If you look at the seizures the Myanmar Police make on Yaba, Shan State is the highest as you would expect this is where most of the Yaba is being produced, the second highest is Rakhine State. That is because of the huge trade in Yaba currently through Rakhine State to Bangladesh.
So the methamphetamines in Bangladesh are coming from Myanmar?
There’s large market, a large part of the production of Yaba is going to Bangladesh it’s a very large country and it’s a growing market so that’s one of the large markets for Yaba from Myanmar yes.
If we look at the Myanmar drugs problem, how does it compare to the Afghan drug problem?
So, although Myanmar is the second largest producer of heroin in the world, it’s far lower than Afghanistan which is by far the largest producer. There are two reasons for this. One is that the environment in Afghanistan, the conflict there has made it relatively easy to grow opium poppy and produce heroin. The second is the change in the regional drug market. The demand is much higher now for amphetamines than it is for heroin the drug of choice in South-East Asia, East-Asia and the Pacific is amphetamine either Yaba pills or Crystal Meth, heroin is used much less in the region so there is much less demand for it. That is one of the reasons.
So, the scale of the opium and heroin produced in Shan State is maybe five or ten billion dollars a year compared to sixty billion for amphetamine, so it much lower order issue, If you look at Afghanistan, if you look at Myanmar, very similar contexts have allowed the Heroin to grow. Firstly, both have very similar geography, geography that the opium poppy likes to grow in but they also have long standing conflicts, insecurity, remote areas that are not fully in control of the central government which have allowed this issue to come up. Myanmar has been quite effective over the last twenty years in addressing opium production much less so than Afghanistan. One of the things about opium is that it is easy to spot using satellites and planes you know where the opium fields are, they have a particular colour signature so from remote sensing you can know where and how many acres are being planted. It’s much harder to know where meth labs are located, you can’t see them from the sky.
If we look at the world picture, just how far do Myanmar-produced illegal drugs travel? Myanmar-produced heroin may reach the streets of New York, for example, but what about meths tablets?
It’s certainly a concern for Myanmar, it’s not good for the image of Myanmar that it is the highest global producer of amphetamines in the world that’s clearly a reputational problem for Myanmar. At the moment the amphetamines produced in Myanmar are going to the Asia-Pacific, partly that’s because there are other producers in Europe and the Americas who are producing for those regions but also it is a question of global drug choices, the drug of choice in the Americas at the moment is synthetic opioids not so much amphetamine.
The drug of choice in the Asia-Pacific region is amphetamine so that is where the Shan State production is going, so we are not seeing much in the drugs from Shan State going to Europe or the Americas, that used to be case when the heroin production was at its peak at the time of the drug warlord Khun Sa. Bags of WO globe branded golden triangle heroin from Shan State were certainly reaching the streets of the US and Europe and it became a significant geo-political issue for those countries. Right now that is not the case these drugs are going to Australia, New Zealand, to Japan, South Korean as well as the ASEAN region but not very much beyond that.
Is there anything else you would like to add?
There are a number of reasons why, if you are a farmer in a remote conflict affected area opium poppy is attractive to you, you know it is illegal you know there are risks. But here are several reasons why it is attractive. First is the purchaser will come to you, you don’t need to travel to the market, you don’t have to travel long distance to sell your cabbages, sell your peanuts, they will come to you and buy it from you. So that’s much safer when you are in a conflict affected area and travel is expensive and risky. The second is you can keep your wealth with you, your annual production of opium resin may be a ball, if the fighting comes to your village you can pick up this ball and run with it – the wealth is transportable. If you grow peanuts or cabbages you cannot take your entire crop and run with it, so there are reasons why if you are a farmer in these areas it makes total sense to grow this crop.
What is needed is a change in the context that makes it much more appealing to grow coffee or other crops that’s a question of profitability but it is also a question of dealing with the conflict, because the fact is that opium growing farmers are not rich, the money they make from selling opium is not a lot, if not much more than growing cabbages and peanuts, it’s just safer for them.
That’s the reality, so these are poor people they are not people making large amounts of money. So, you don’t have to give them a crop that will make them extremely rich, you just have to change the security environment, the incentives and give them alternatives. And that has worked quite well in some areas, but as the conflict has moved to different parts of Shan, and Kayah, and Kachin State it’s created problems for farmers and they have resorted to growing opium.