Drugs flow where the rivers meet: Myanmar’s drug economy before and after the coup

My hoe goes into the ground five times:

The first time is to feed the army,

The second time, to feed the militias,

The third one, to feed the rebels,

The fourth one, to make the village wealthy,

And only the fifth one is for my family.[1]

Introduction

According to a well-known myth in Myanmar, one of the 37 deities and spirits (nat) of a widely worshipped pre-Buddhist cult died from an opium overdose in the 16th century (Temple 1906). This story indicates how deeply rooted the use of opium has been in the country and that it can be traced back centuries. Today, more than 500 years later, “Myanmar is the world’s second-largest producer of illicit opium/heroin and one of the major global producers of methamphetamines” (Thomson and Meehan 2021). “[A]dd the two together and Myanmar’s the largest narcotic state in the world” (Thornton 2012).

Here, opium was initially consumed only by local lower classes, and its production was strictly confined to a limited area. Poppy cultivation increased over time and, influenced by traditional, geographical, and political factors, took on various shapes over the years. As will be outlined, the international community has also played an important role in the development of the region’s drug economy. For this reason, what was initially only a limited activity slowly evolved until it became one of the main components of the country’s socio-economic fabric. Since there was already an opium market, Myanmar was in a good position to start experimenting with the production and trade of newer and more appealing drugs: In the past decade, the country has seen an increase in the production of methamphetamines. One of the most popular is the so-called yaba (“crazy drug” in its Thai name), “a tablet form of methamphetamine, and a very powerful stimulant” (UNODC 2008) because of the presence of caffeine in the formula.

The military coup of February 2021 had a strong impact on the country’s social, economic, and political features, and its effect on the ever-flourishing drug trade has piqued the interest of various scholars and researchers. Many have attempted to understand how the coup has impacted and will impact the phenomenon and how this underground economy’s scope and characteristics have changed in light of the country’s new political landscape.

This paper contributes to the literature on the topic by describing Myanmar’s drug economy before and after the coup. The first and second sections identify the when and the why of drug production by underlining the main factors that have contributed to the country becoming one of the global hotspots of drug production and trade. The third part focuses on how this phenomenon’s scope and characteristics appear to have changed since the recent coup. Before delving into the details, it is important to lay out two main starting points:

  • Data on the matter is hard to retrieve, and it is difficult to reach an objective and fair conclusion. This is true in particular for the production of methamphetamines, which, unlike opium, are produced “with readily available chemicals often in small laboratories […]. This makes an assessment of volume, location, extent, and evolution of production” (Kramer 2015) an even bigger challenge.
  • The situation is continuously evolving, and, for this reason, the scarce available data is not reliable enough to make consistent predictions for the future.

 

Drugs in Myanmar: When?

Arab traders brought opium to the shores of Myanmar at the beginning of the 16th century. However, historical texts and records do not (or only partially) refer to opium cultivation and usage in Myanmar before the 19th century (TNI 2021). Until the 1800s, opium consumption had been a phenomenon mostly affecting the lower classes and “kept under control by the societal fabric and Buddhist morality” (UNODCCP 2001). Under British colonial rule, opium cultivation was a limited activity, restricted only to certain local leaders: Those living in the Shan State and other northeastern regions were “exempted [from restrictions],” and “opium cultivation remained largely legal” (TNI 2021). The Shan State currently accounts for almost 90% of opium production (Meehan 2021), with approximately 190,000 households farming between Shan and Kachin (TNI 2020). In addition, the majority of synthetic drug labs are believed to be located in Shan’s mountainous areas.

The production and use of opium started to increase at the same pace as the “development of the international opium trade” (TNI 2020). In fact, the first steady introduction of poppy in Myanmar’s agriculture goes back to the late 19th century, when “hill tribes in southern China introduced the poppy plant to the Golden Triangle, a very remote area which included the Shan State in the northeastern part of Burma” (Othman 2004). However, it is only after World War II that the large-scale flow of drugs started within and from the region. In 1949, Mao banned opium production in China; thus, poppy cultivation shifted from the Chinese Yunnan Province to Myanmar’s Shan State (TNI 2021): “the remnants of the KMT who found their way to the Shan Hills of Burma became active in the illicit drug trade as a way to finance their costly struggle against the communists back in mainland China” (Othman 2004).

In 1962, the Tatmadaw took power in Myanmar through a coup d’état, introducing a new ideology, the “Burmese way to Socialism” (မြန်မာ့နည်းမြန်မာ့ဟန် ဆိုရှယ်လစ်စနစ်, in Burmese), which would steer the country in subsequent years. In this context, “opium – and increasingly heroin – became the medium of exchange” for people, since “more than 80 percent of all consumer goods available in Myanmar were smuggled in from neighboring countries” (Lintner 2021). In 1974, “in the attempt to curb the growing numbers of opium production, the Tatmadaw enacted the “New Narcotics and Dangerous Drugs Law” (TNI 2021). The activity of the Central Committee for Drug Abuse Control (CCDAC), which oversaw the drafting and application of the new law, facilitated involvement by the United Nations: In the mid-1970s, the CCDAC established “an agreement with the UN and the adoption of a five-year work plan from 1976 to 1981, [which] cost USD 6.5 million” and “was largely paid for by the government of Norway” (Thomson and Meehan 2021). However, it slowly became “clear that controlling drug production and use in Burma was challenging” (Thomson and Meehan). The international community’s intervention in Myanmar’s drug issue was difficult back then and continues to pose a challenge: As pointed out by Thomson and Meehan, “the most influential actors shaping the drug economy [in Myanmar] are the hardest for international actors to interact with and influence” (Thomson and Meehan).

The New Narcotics and Dangerous Drugs Law, as well as the joint effort with the UN, were short-lived, and opium production, boosted by the high rate of consumption by the US soldiers fighting in nearby Vietnam, kept rising into the late 1970s (Hill and Weier 2017). By the mid-1980s, Myanmar was the world’s largest producer of opium and retained this primacy until the mid-1990s, when it reached a peak of production between 1993 and 1996 (TNI 2021).

In the late 1990s, various factors (mainly the shifts in the global heroin trade) contributed to a gradual decline in drug production in the country. The period between 2006 and 2013 saw a mild resurgence marked by the appearance of a drug-related phenomenon: the spread of HIV and AIDS in Myanmar, which still represents a huge problem for the country (Kramer 2015). In 2014, production started to fall again. In 2020, “the area under opium poppy cultivation in Myanmar was estimated at 29,500 [hectares],” and since 2019, it “has decreased by about 11% or 3,600 hectares, which is a continuation of the downward trend that had started in 2014” (UNODC Regional Office for South-East Asia and the Pacific 2021a).

Nevertheless, a fall in opium production does not mean a collapse of the drug economy. On the contrary, the slow decline of opium cultivation and the loss of profit in heroin coincided with a sharp rise in methamphetamines and the production of other synthetic drugs, substances that can be produced and smuggled way easier than opium. Throughout the 2010s, “seizures of meth in East and South-East Asia increased 640%, with much of the activity concentrated in the Lower Mekong” (Stone 2021). According to the United Nations Office on Drugs and Crime (UNODC), “Myanmar is now the main source of meth in nations across the region” and “could be the world’s top supplier” (Stone). The office’s most recent report, dated February 2021, “confirms that production and demand for opium has further declined as the region’s synthetic drug market continues to expand and diversify” (UNODC Regional Office for South-East Asia and the Pacific 2021a).

Drugs in Myanmar: Why?

Following this short description of how drug production in Myanmar has evolved over the years, it is important to understand the drivers behind this massive drug trade in the area. Drawing on Othman’s research and a policy paper published by the Transnational Institute in 2021, I identify six different factors contributing to Myanmar becoming a hotspot of drug production.

First, tradition and culture. In Myanmar, there are “very strong cultural identities held by the minority groups […], based partly on geographical location of their respective home areas” (Othman 2004), which have led to a lack of “unity necessary to tackle the country’s serious social problems,” like drug addiction, and “leav[e] the way open to military dictatorships as seeming to be perhaps the only viable form of government” (Othman). Moreover, precisely because opium has been cultivated and consumed in Myanmar for centuries, its use is socially accepted as a way of life, and part of the consumption is historically linked to medicinal use.

Second, geography and climate: As part of the Golden Triangle, the northeastern part of Myanmar possesses favorable natural conditions for the cultivation of opium: The confluence of the Mekong and Ruak rivers makes the land fertile and optimal for growing poppies. The geographical factor applies to the production of both meth and synthetic drugs. The mountainous and wild hinterland, where most of the meth labs are believed to be located, is not accessible by car and provides the ideal environment for unhindered drug production. Moreover, the areas where opium and meth are mainly produced – Shan State, above all – are border regions, extremely close to the frontiers of both Thailand and China, where the demand for opium before and meth now is very high. Finally, “a lot of regions in the North lack effective governance” (Reed 2021), which creates a context that encourages illicit trade and is only bound to worsen after the February 2021 coup.

This last element leads to the third factor: the form of government. Since the end of colonial rule, Myanmar has largely been a military state, “providing conditions in which information is easily kept from the people” (Othman 2004). As highlighted in an article from the Financial Times, “the narcotics business flourishes in places where the state is weak, corruption is common, and officials can be bribed,” and Myanmar, now more than ever before, is “one such place” (Reed 2021).

The fourth factor is the economy. As noted before, Myanmar’s ruling powers have implemented a set of economic policies over the years that, for various reasons, have led to an “underground economy.” This economy, which we can call a black or grey market, often represents the “only way for most citizens to obtain goods from outside their region or from outside the country” (Othman 2004).

Fifth is the influence of the international community. In the mid-20th century, “France’s intelligence agency – Direction de Documentation Exterieur et de Contre-Espionage (SPDEC) and the US Central Intelligence Agency (CIA) [were] also believed to have helped foster the growth of the Golden Triangle’s illicit drug production, by supporting the area’s independent warlords as a buffer against the extension of communism in the region” (Othman). Many countries have supported production as buyers. The demand for drugs – opium before and meth now – is strong throughout Myanmar’s surrounding region, from Thailand to New Zealand, and from the Philippines to South Korea. In addition, for a long time before the emergence of drug markets in South America and the Middle East, Myanmar had been a very important supplier of drugs for the US and Europe as well.

Sixth, and particularly in the case of opium, access to land and credit. To put it simply, opium production and selling have represented a major source of income for many families: Poppies grow easily, and their cultivation requires less effort than with other products. Many Myanmar families still depend on poppy farming for survival and, although declining, opium farming is still one of the most profitable markets in Myanmar. In an article from the Thai newspaper Manager Daily 360 Degree (ผู้จัดการายวัน 360 องศา in Thai), an opium farmer argues he is aware of the illegality of what he is doing but also stresses he has no other choice because it is very difficult to “feed his family’s stomachs” with other plants (Manager Online 2019).

In the next and final section, I will describe the evolution of the drug economy after the February 2021 coup d’état and expected future developments in the drug market.

Drug economy after the coup

Poverty in Myanmar is large “but shallow, with the median income only 25% above the poverty line.” Therefore, “small improvements can […] bring a large number of people out of poverty, but already small shocks can also bring an even larger number of people into poverty” (Schmitt-Degenhardt 2013). The United Nations Development Program expects an economic downturn resulting from the pandemic and the coup d’état, which could “leave nearly half of the population of Myanmar, some 25 million people, in poverty” (Zsombor 2021) very soon. In such circumstances, people turn to the drug economy, which may be illegal but offers certain revenue: in other words, a shift from a licit to an illicit means of income in response to the economic slowdown. In this context, the region’s criminal syndicates have naturally been adapting and capitalizing (UNODC Regional Office for South-East Asia and the Pacific 2021b). As shown in the first section, opium production – albeit still ongoing – has been declining since 2014, while the methamphetamine market is growing. The production of synthetic drugs reached a record level in 2020 since the health crisis resulting from the pandemic led to a supply glut (Strangio 2021) coinciding with higher levels of production. However, this scenario might change in the future: in May 2021, the UNODC warned that opium production “may rise again if the economic crunch brought on by COVID-19 and [the] February 1 coup persists, with fallout for much of the region”(Zsombor 2021).

Unfortunately, data cannot be easily retrieved, which means it is “hard to assess the current scale of the drug industry” (Stone 2021). Myanmar’s “police stopped reporting seizures on its Facebook page in early February [2021], and the UN is not engaging with the junta” (Stone 2021). Moreover, the outburst of the COVID-19 pandemic makes it even harder to retrieve clean and precise data.

To provide as clear an outline of the available data as possible, I gathered information from online newspapers from both the West and Myanmar’s neighboring countries (e.g., China, Thailand, and Laos). I selected the most relevant articles, reports, and analyses, including valuable interviews with police officials, front-line workers, and narcotraffic analysts, to get a general picture of the levels of the drug trade after the coup. The starting point is that in the past year there has been a “surge […] in drug trafficking through and out Myanmar,” (Reed 2021) and it has most likely been fueled by the coup. Richard Horsey, a senior Myanmar adviser to the International Crisis Group, states that “the military coup has been a win-win for the drug cartels” (Duangdee 2021). This is because “crime syndicates in Myanmar are likely using the military takeover to their advantage to strengthen their positions and increase synthetic drug production” (Thaiger 2021).

Using the terms “缅甸” miandian, “Myanmar,” and “毒品” dupin, “drug”, a search on 百度咨询 Baidu zixun (the section of China’s most popular research engine (Baidu) dedicated to the latest news) brings us to a series of articles on Myanmar’s drugs trade rise and smuggling in the borders. The article “缅甸毒贩活动愈发频繁,缉毒警接连查获上亿毒品,” roughly translated to “Drug smugglers in Myanmar are becoming more and more common, and anti-drug police have seized hundreds of millions of drugs one after another,” provides numbers and figures on recent seizures of cargo coming from Myanmar, demonstrating that they are on the rise, and the number of drug shipments is very alarming (NetEase 2022b). The article “缅甸军事政变后缅北毒品越发泛滥,” translated to “After the military coup in Myanmar, drugs are rampant in northern Myanmar,” claims that Myanmar police are concerned about general safety in the region but do not have the resources to keep track of illicit drug trafficking (NetEase 2022a). Moreover, the article asserts that more and more women and children have been involved in drug production and consumption in the area since early 2021.

Thailand has also detected “a spike in methamphetamine trafficking across the Mekong River following the military coup” (Thaiger 2021). In the Bangkok Post,[2] one of the largest Thai newspapers available in English, many articles published in 2021 highlighted the surge in drug production in the region. There is evidence that the illicit operations of local producers across the borders have not been hindered by COVID-19 or the post-coup unrest in Myanmar (Post Reporters 2021) – in fact, quite the contrary. The emphasis is generally on the fact that crime groups have expanded their activity in the Upper Mekong and the Shan State of Myanmar. The content of these articles becomes even more relevant if compared with the narrative used to describe seizures in the same months the year before (i.e., before the coup). The articles from 2020 focus mainly on seizures in Thailand, with Myanmar being quoted as the main producer in the region but with no emphasis on any increase in production. The articles also quote different anti-traffic operations by the main countries involved in drug trafficking in the region, like “Operation Golden Triangle 1511” and the “Safe Mekong Operation”: In most cases, Myanmar’s active involvement in the operations is highlighted. There is no mention of such operations in the articles published in 2021. One of the articles even refers to the suppression of drug production in Myanmar in 2020, which resulted in massive production in Thailand: “since early this year [2020], ice [crystal meth] trafficking has largely been frozen due to heavy suppression by the Myanmar government and restrictions imposed to contain the spread of COVID-19” (Laohong 2020).

Another important indicator of increasing drug trafficking is the rise in the number of seizures reported in the newspapers of nearby Laos, probably also a result of a route change: Thai authorities estimate “that around three-quarters of illegal drugs entering their territory are now routed through Laos” (Martin 2021). A massive seizure was reported in Laos in late October 2021, which local police considered the “largest single drug bust ever” (Reuters 2021). Jeremy Douglas, the regional representative for South-East Asia and the Pacific at the UNODC, comments on the episode underlining that “the spike in volume of drugs seized in Laos was due to a shifting of smuggling routes inside Myanmar, as a result of unrest in border areas since a coup in February” (Reuters). Myanmar is “flooding neighboring countries with narcotics and carving out new channels to reach old markets” (Duangdee 2021). Furthermore, “the price of methamphetamine has dropped to a low of 50 baht (around USD 1.60)” (Thaiger 2021). The fact that prices are “stable or down in the region, and production is up, […] suggests that the seizures are not reducing supply” (Reed 2021).

Logistic factors have certainly contributed to a smoother process of drug trading: Before the coup, the “government had scanning machines for trucks,” but now, “the machines are still running but you can bypass the checks: you can pay bribes” (Reed 2021). According to law enforcement and front-line workers active in the border area, Myanmar’s “post-coup civil conflict and cash crunch has weakened drug enforcement capacity inside Myanmar and given traffickers free rein” (Reed). In fact, “what the coup has done is completely distract the police from their anti-drug activities” and “created a perfect storm for these criminal organizations, who thrive in the gaps where justice authorities can’t easily get” (Lintner 2021). Similarly, U Tin Maung Teng, the chairman of the Myanmar Anti-Narcotic Association in Kyaukme, claims that since the coup, the drug issue has become more pervasive. He states that, before the turmoil in the country, the police had been in charge of ensuring general safety, while now it cannot have a comprehensive view of drug illicit traffic and consumption (NetEase 2022a). This line of thought is supported by Dan Seng Lawn, executive director of the Kachinland Research Center, who argues that “police forces distracted by an increasingly armed resistance to the ruling junta are likely to spend less time on stopping the flow of drugs” (Zsombor 2021).

Thus, the coup seems to have had an impact on the flow of drugs. Several elements triggered by the military coup have contributed to exacerbating an already high level of drug production in Myanmar: The instability within the country has fueled the drug economy with more freedom for drug syndicates and cartels, scarcer law application, and laxer police enforcement. All of this adds to the already volatile situation created by the pandemic.

However, the data and interpretations need to be taken with a grain of salt. Some analysts have a different view of how the available information should be interpreted. A sharp commentary written by Swedish journalist Bertil Lintner and published in The Irrawaddy claims that the conclusions drawn by some international agencies – namely that the production of illicit narcotic drugs in the region is booming – are speculative: “there can be many reasons for the increase in drug busts, and that […] does not necessarily mean that production is skyrocketing” (Lintner 2022). He cites the pandemic outburst: COVID-19 “has prompted border security forces in, for instance, Thailand and Laos, to step up surveillance of all movements across their respective borders.” He also mentions logistics factors: “new couriers have been recruited, and they are taking risks that more experienced smugglers would not.” On top of that, the number of seizures and the quantity of seized drugs “always fluctuate regardless of the level of production” (Lintner).

Conclusion

This research represents an attempt to handle the data and information available today and provide a rough picture of the drug economy in Myanmar and how it has changed over the past year – specifically, since the February 2021 coup.

The analysis of articles from eight Asian and four Western newspapers and journals shows that Myanmar’s neighboring countries have recently experienced a rise in the number of drugs seized, and the overall opinion of people directly involved in monitoring the drug trade is that the flow of drugs has increased since the coup. Owing to governance changes and more controls at Thailand’s borders in the months following the coup, there has been a change of route through Laos that makes the trade easier and faster. Moreover, police enforcement in the area has been loosened: Most officials are now involved in monitoring and supervising the riots. Finally, the law is seldom applied in the border areas since February 2021: for instance, scanning machines are not functioning, and functionaries can easily be bribed.

Even before the coup, the bans and policies to contain drug production had failed to limit the demand, which, conversely, has always remained high: the direct consequence was a rise in prices for opium/heroin before, and meth more recently, and the cultivation of poppy and production of meth in locations with laxer controls. The current situation has exacerbated existing trends: “the continuing conflict in the country, and the policy of the Tatmadaw to prioritize security over drugs – causing it to support and create militias that are heavily involved in the drug trade – also contributed to the new increase” (Kramer 2015). This does not come as a surprise since, throughout Myanmar’s contemporary history, “the explicit involvement of Tatmadaw units and commanders in the drug trade has also been documented. […] the fact that local Tatmadaw units have to be largely self-reliant (i.e., find their own food and other supplies and enjoy less logistical support from the army headquarters) fuels corruption and their participation in the drug trade” (Kramer).

It is important to stress that the high profit of illicit drug retail makes the drug economy very hard to eradicate, regardless of the country of interest. In the case of Myanmar, various factors influence the proliferation of drug production and have made it very robust over time. For instance, the consumption of opium blends with tradition (i.e., it is rooted in society, its use is socially accepted as a way of life, and a part of the consumption is historically linked to medicinal use). In addition, the Tatmadaw, along with the country’s most powerful people, is deeply involved in the market, and, as it is really difficult to monitor drug trade, it is also hard to prevent its production, both from within and from the outside. Moreover, as stressed by an article in the Myanmar Times, there is an important link between the evolution of the drug market and Myanmar’s recent economic development (intended in a broader sense): “economic development may have brought roads and bridges, but little has changed in terms of governance in these areas. Coupled with access to markets, this is a perfect environment for transnational organized crime” (Hofmann 2020).

David Mathieson, an independent analyst, sums up the current fight against Myanmar’s drug economy as follows: “the military pretends to get serious about drug eradication and the West pretends to believe them” (Al Arabiya News 2022). Mathieson highlights how lightly the fight is pursued both within and outside the country. While Myanmar authorities torched tons of narcotics in June “as part of eradication efforts for World Drug Day,” the United Nations warned “that production of methamphetamine in the region is hitting record levels.” Some scholars believe that these bonfires “are part of a long-running game of smoke and mirrors played by a junta government not serious about tackling the problem” (Al Arabiya News).

In conclusion, it is important to stress that in a scenario like the current one, where the status of things is in constant flux, the available data is definitely not consistent enough to make predictions or even assess the real extent of the situation. As stressed by some other analysts like Lintner, the recent drug busts could be influenced by many factors, and the correlation between the growth in the number of drug seizures and the post-coup scenario might be mere speculation. Nevertheless, according to Jeremy Douglas from the United Nations Office on Drugs and Crime, “if past actions are an indicator of what’s coming, then we’re likely to see another increase in synthetic drug production” (Thai PBS World 2021). In fact, “in the late 1980s as well as in Myanmar today, the military (or Tatmadaw) and the police could hardly be described as anti-drug crusaders” (Lintner 2021). The recent developments discussed in this paper “suggest that illegal narcotics will remain a crucial part of the country’s political economy, and play an outsized role in whatever constellation of power emerges from the current crisis” (Strangio 2021).


References

— (2021), “New regime, same old drug myths in Myanmar,” The Irrawaddy, 7 September, Available online at: https://www.irrawaddy.com/opinion/guest-column/new-regime-same-old-drug-myths-in-myanmar.html.

— (2022b), “缅甸毒贩活动愈发频繁,缉毒警接连查获上亿毒品,”, 15 January, Available online at: https://www.163.com/dy/article/GTNG2LGI0534MHMX.html.

— (2020), “A Day in the Life of a Woman Opium Poppy Farmer in Myanmar,” Transnational Institute Commentary, 15 July. Available online at: https://www.tni.org/en/article/a-day-in-the-life-of-a-woman-opium-poppy-farmer-in-myanmar.

— (2021b), “COVID restrictions fail to slow the expansion of synthetic drug production and trafficking in East and South-East Asia,” News, 10 June. Available online at: https://www.unodc.org/roseap/en/2021/06/regional-synthetic-drugs-report-launch/story.html.


[1] Popular saying in Myanmar, from “The Business of Drugs”, interview with Kunai Jaiyen, founder of the Shan State Herald by Amaryllis Hope Fox, former CIA (Central Intelligence Agency) officer.

[2] All the articles quoted in this paragraph have been retrieved from the Bangkok Post using the key words “Myanmar” and “meth” in the search box, and then costuming the search, by specifying the time window: March 1st to December 31st, 2020, and March 1st to December 31st, 2021. The search resulted in a total of 48 articles.


 

Published in:

  • Events & Training Programs

Copyright © 2023. Torino World Affairs Institute All rights reserved