The Explosion of Yaa Baa Production in the Golden Triangle

1For some years now the Golden Triangle, an Asian region traditionally devoted to opium poppy cultivation,1 has begun to see the intensive production of new kinds of illicit drugs — in particular, amphetamine- type stimulants or ATS, including methamphetamine or yaa baa. Amphetamine derivatives have long existed in the region and so are not really “new” drugs.2 What is new about synthetic drugs in mainland Southeast Asia is the magnitude of increase in recent production and consumption levels of these illicit substances.

2From a strictly geo-economic point of view, methamphetamine manufacturing leads to a radically new logic. This is because factors of production are not linked to illegal cultivation practices in a specific agricultural region, as is the case with illicit opium production, since Ephedra growing is not illegal. Localisation factors are even more different since ATS production is mostly conducted as close as possible to consuming areas (be they in North America, Europe, or Asia), something that is of course not possible with heroin consumption which depends heavily upon very localised opium production (in Asia or Latin America). Thus, ATS trafficking patterns, being rather local or sub-regional, differ significantly from those of heroin, which are more global. Consumer markets for synthetic drugs that first became a craze in the West have also emerged along with production areas in the region, where these drugs have become increasingly popular, particularly within the ranks of the younger generation.

3The following discussion illustrates how the Golden Triangle emerged as a major production site, and mainland Southeast Asia as a consumption region, for synthetic drugs. However, these developments signal perhaps not so much a changeover in the regional illicit drug economy as they do a diversification of it.

The Situation in Burma and Thailand

4From the early 1990s, Southeast Asia has seen an explosion in methamphetamine production. Other designer drugs, defined here as substances obtained by manipulating the synthetic variants of a given chemical structure, have no doubt become popular in Thailand.3 But compared to amphetamines, designer drugs are less important and not always clearly identifiable.4 The diversification of illicit drug production and consumption in mainland Southeast Asia poses a key regional problem to the countries involved, one that involves issues of public health and safety and national security.

5Regarding drug consumption in Thailand, opium addicts have shown a tendency to convert to heroin. This is partly due to the poppy eradication policy implemented in the country during the last few decades. By suppressing the traditional channels of opium supplies, authorities have simply shifted the demand to an opium alternative.

6In the early 1980s around 50 per cent of the opium produced in the Golden Triangle was consumed in Asia, while 70 per cent of the remainder, transformed into morphine and heroin, was also consumed there. Figures of this magnitude would considerably limit the volume of drugs that could be exported beyond Asia.5 In the mid-1990s, the Office of Narcotics Control Board calculated that 75 per cent of the opium harvested in the Golden Triangle was being transformed into heroin, thus indicating a marked change in consumption trends.6 Considered piecemeal, however, the figures are contradictory.

7According to the Thailand Development Research Institute (TDRI), an independent Thai research centre, the kingdom had approximately 500,000 heroin addicts in 1980–1. In 1990, habitual heroin users numbered anywhere from 150,000 to 335,000, out of a total population of 495,000 to 747,000 drug addicts.7 For 1993 the same sources mention 214,000 opium and heroin addicts, without differentiating between them. But these figures have given rise to controversy. After calculating the figures by other extrapolation methods, researcher Anchalee Singhanetra-Renard estimated the number of cannabis, opium, and heroin addicts for 1990 to be 400,000.8

8The debates over these competing estimates evoke the difficulties of compiling scientific data on illicit drug use patterns in Thailand (or anywhere else). But one thing is certain: the real problem lies elsewhere. It is indeed methamphetamine that has become the most widely-used drug among Thais — that is, at least up until the recent highly controversial war on drugs waged by Thailand Prime Minister Thaksin Shinawatra in 2003. Methamphetamine use has risen considerably since the beginning of the 1990s, and even more so since 1996. That year saw the surrender of drug kingpin Khun Sa, a subsequent rise in the price of heroin, and the alleged sudden development of illicit activities of the United Wa State Army (UWSA), with some 400 to 600 million pills reportedly being produced within its territory in 2000.

9The Thailand Development Research Institute estimates that in 1993, amphetamine-type stimulants (ATS) addiction affected 257,965 people. Sixty-five per cent of ATS users were identified as farmers and six per cent as truck drivers; most reportedly used the drug to increase individual productivity.9 But by 2000, the Office of Narcotics Control Board estimated that 1.2 million people had become yaa baa addicts, and reported that of the 600,000 adolescents in the country suffering from undetermined sources of addiction,10 260,000 of them regularly consumed metham- phetamine.11 At Bangkok’s Thanyarak Hospital, a specialised treatment centre for addiction, the proportion of heroin addicts had decreased from 78 to 15 per cent of the total institutional population between 1996 and 2000, whereas that of yaa baa users had risen from 12 to 74 per cent for the same period.12

10The use patterns of ATS drugs are very different from those of other illicit drugs. Alongside its recreational use, yaa baa is in fact partially a “labour” drug consumed by individuals everywhere from schools to fields. Alternatively, heroin, used by more marginalised sections of society, is clearly a drug far less “conducive” to work. A study carried out in 2000 by the Thai Farmers Research Centre on a sample group of 728 workers in Bangkok showed that 88 per cent of them regularly resorted to stimulants so they could work more and longer hours. Of the latter, 20 per cent acknowledged using methamphetamine. The UNDCP estimated that in the year 2000, some 200,000 to 300,000 Bangkok workers spent a total of almost one billion baht per year on yaa baa.13

11Opiates and methamphetamine are one and the same in the minds of government officials, who consider them major threats to the country’s internal and external security.14 Hence it is significant that in August 2000 the three intelligence units of the Thai army posted at the frontiers of Burma, Laos and Cambodia15 were ordered to refocus their activities on border security and drug trafficking. Until then, the units had concentrated on obtaining political intelligence.16

12The efforts undertaken in the fight against the two types of drugs should, however, be distinguished. They do not concern the same consumers and hence the same markets. The consumption of opiates, particularly in the Golden Triangle and its immediate periphery, is an old phenomenon. The opiate trade has no doubt evolved according to the demand and the profile of the consumers, but it is more localised than that of ATS such as methamphetamine and ecstasy.

13Across Asia the illicit drug trade has evolved towards greater regional integration. China has large areas, such as Yunnan and Fujian, where Ephedra grows in the wild. Ephedra cultivation is also particularly developed in the Yinchuan plain in the north of Ningxia, as the plant helps to limit the expansion of sand dunes whose encroachment threatens the country’s most fertile land. China has thus become the world’s largest producer of ephedrine.17 Drug traffickers based in Burma have naturally exploited this advantage, at the same time transforming suppliers into clients. In fact, the first regional methamphetamine laboratories were apparently established in the hilly Wa regions southeast of Pangshang around 1993.18

14China, already very concerned by the increase in the trafficking and the consumption of opiates in its territory, threatened in 1997 to put an end to its food exports to Burma via the Wa region if the flood of drugs were not contained. This pronouncement came as a surprise, as it was in fact Beijing that imported Burmese rice, and not the other way around. But despite the recent increase in Burmese methamphetamine production, China’s threat, as of 2004, has still not been carried out and trading still goes on between the UWSA’s Special Region No. 2 and the Chinese province of Yunnan.

15At the end of 1997, the first ecstasy laboratory in China was discovered in the autonomous region of Zhuang Guangxi. This gave Beijing reason to worry, especially because the central state-sponsored production and sale of ephedrine as a pharmaceutical was going on successfully.19 The majority of ATS drug imports to China continue to originate from Burma, particularly from regions controlled by the UWSA. At the same time, suppliers established in Burma are literally flooding Thailand with yaa baa as well as ecstasy, drugs they can produce at three times lower the cost of European manufacturers.20

16According to Thai estimates, 100 million methamphetamine pills were distributed in the Thai Kingdom during 1997 alone, out of which 24 million pills were seized. This already far surpassed the 9 million seized in 1996, when for the first time the drug topped the list of most widely- used narcotics in Thailand, but was still substantially less than the figure of 45 million pills consumed in 1999.

17In Thailand the fight against opium addiction caused many users to resort to heroin, which became more difficult to obtain with the price increases that followed Khun Sa’s surrender.21 In 1996 the shifting patterns in illicit drug use caused an unprecedented rise in the consumption of yaa baa.

18Then, in 1998, some methamphetamine consumers returned to heroin, whose price had again fallen in the wake of the yaa baa craze.22 But overall, the impact was negligible. It is estimated that more than 400 million methamphetamine pills were distributed in Thailand in the year 2000, double the number distributed the previous year. This accounts for a huge share of Burma’s total production potential of 600 million methamphetamine pills for the period under consideration.23

19In 2000, Thai authorities estimated that Wa affiliated with the UWSA possessed around 50 illicit drug laboratories, a large number of them located around Mong Yawn (across the Thai border).24 In March 2001, the 3rd Army, a Thai unit in charge of the country’s northern region, estimated the number of such operations at 87, mainly situated between Pangshang (the UWSA capital, across the Chinese border) and Mong Yawn. Of these, 23 allegedly possessed the chemical production capacity to manufacture methamphetamine, while the others would have been used solely for packing pills.25 Around 15 main routes were also identified that facilitated the export of methamphetamine to Thailand.

20Each packing laboratory is presumed to have at least two machines capable of processing 7 pills per second, that is, more than 25,000 per hour. General Wattanachai Chaimuenwong, Commander of the 3rd Army at the time, estimated that between 800 million and one billion pills were produced in this zone in 2000.26 Moreover, Thai authorities alleged that the UWSA managed ten laboratories around Tachileck and still others around their Sam Sao base, where two million pills per month would have been produced — ecstasy in particular. Khun Sa’s family was also said to own some laboratories in a region southeast of Kengtung controlled by Lin Ming Xian, a.k.a. Sai Leun, of the Eastern Shan State Army (Special Region No. 4). One of Khun Sa’s sons, called Sam Seun in Shan or Pairot Changtrakul in Thai, is speculated to have settled in Tachileck and become particularly involved in the drug economy.

21Khun Sa, his family, and some members of the ex-Mong Tai Army have thus likely continued their activities in the drug trade after Khun Sa’s “retirement”.27 Another son of Khun Sa, Chang Weikang, has also been very active in Shan state, where he is thought to have opened a casino on the Thai border. At the beginning of 2000 the Burmese junta had even asked him to establish a new pro-Rangoon military force that, if necessary, could oppose the UWSA and various Shan armed movements such as the Shan State National Army.28

22On China’s border, Special Region No. 4, the fief of Sai Leun, is supposed to have become one of the main zones of methamphetamine production in Burma, benefiting from its proximity to both Chinese ephedrine and the Thai market.29 But, for Thai authorities, it is still the UWSA that is pinpointed as the main methamphetamine producer. Indeed, in July 1999 again, more than one million pills were seized in Mae Sai, opposite Tachileck, after some individuals who were reportedly from the UWSA had just offered private customers five million pills in exchange for 40 four-wheel drive vehicles.30

23However, other Wa not affiliated with the UWSA are thought to be involved in methamphetamine production as well. In 2000, Ban Homong, the former headquarters of the Mong Tai Army of Khun Sa, was under the authority of Colonel Maha Ja, who plays an active role in the local and regional drug trade. His brother Maha Sang commands 200 men of the Wa National Army (WNA), a force that is believed to ensure the security of both the Wa under his authority and of caravans of drug traffickers in the region. Ban Homong was already on its way to becoming a tourist destination since, as the previous headquarters of the MTA, it was of historical interest. The local hospital was being transformed into a hotel, and an increase in the capacity of the local hydroelectric power station — built on a dam dating from 1992 — was guaranteed when Burma’s Energy Minister General Tin Tut visited there in 2000.

24The Burmese junta reportedly gave its permission to the UWSA to repair the Mong Kyawt–Homong road in 2000 as part of their joint efforts against the Shan State Army (SSA), whose actions hindered drug trafficking. Around 800 soldiers of the UWSA are supposed to have been allocated to safeguard the road renovation work, since its completion could give the UWSA a strategic upper hand over the SSA. It is also thought that the reopening of this route could lead to a concomitant increase in the flow of drugs into Thailand.31

25Burma is without question one of the world’s largest centres of methamphetamine production, a fact Thailand never fails to publicise. However, with reason, Rangoon claims that its neighbour’s territory is not only a major regional consumption centre of ATS (hence stimulating production through demand), but also a privileged trafficking centre of the chemical precursors that allow illicit Burmese laboratories to function in the first place. Various cases point to the role that Thailand plays, directly or indirectly, in the drug industry. For example, in early November 1999 some 500 kg of chemical substances, meant for the production of ten million methamphetamine pills, were seized in a clandestine laboratory in Bangkok.32 Then, in May 2000, according to the Phamuang Task Force of the 3rd Army, 1.2 tons of ephedrine meant for the laboratories allegedly operated by the UWSA were seized in the Thai district of Fang. This amount would have enabled the production of at least 500,000 yaa baa pills. Finally, during the first five months of the year 2000, 22 tons of caffeine were also confiscated in northern Thailand, where no industrial activity could justify such an import. Caffeine has become an important component of yaa baa production,33 and may constitute as much as 70 per cent of the drug’s ingredients.34 The 22 tons that were seized could have enabled the production of almost 400 million pills.

26Since then, transporting caffeine has been subject to strict supervision in six provinces of northern Thailand, namely, Chiang Mai, Chiang Rai, Mae Hong Son, Tak, Nan and Phrae.35 The first seizure of caffeine stock happened in November 1999 on the Thai side of the Tachileck–Mae Sai border and prompted the New Light of Myanmar, the official Burmese press organ, to deem Thailand a transit country for precursors meant for drug production in Burma. But the extent of methamphetamine-related activity going on in Thailand does not end there. From at least 1996 onwards Thailand has also had a few methamphetamine production laboratories on its own territory,36 situated mainly in the provinces of Chiang Mai, Chiang Rai and Mae Hong Son in the northwest of the country.37

27At times the increase in Burmese methamphetamine production has caused the Thai armed forces to consider crossing over into Burmese territory to pursue drug producers and traffickers there. No doubt the Thai army would have undertaken such action if it had allowed them to secure the arrest of Surachai Ngerntongfu, alias “Bang Ron”, a Thai methamphetamine dealer who had reportedly taken refuge in Burma’s UWSA territory after escaping the police in Bangkok during the seizure of 750,000 yaa baa pills at his home in the late 1990s.38

28However, when nine Thai villagers were assassinated at Ban Mae Soon Noi in April 1999 by traffickers who were likely linked to the UWSA, Thai authorities launched a large-scale operation the following July. The mobilisation involved eight hundred men from different branches of the armed forces and the Thai police; the operation itself took place on a 40 km by 3 km strip of the Burma–Thailand border extending from the districts of Mae Ai in Chiang Mai Province, to those of Mae Chan and Mae Fa Luang in Chiang Rai Province. The actions effectively closed off the frontier post of Ban San Ton Du and targeted trafficking of drugs, arms, and Burmese teak wood (Tectona grandis).

29Thailand even obtained the consent of the Burmese government to pursue the traffickers and destroy their laboratories, although Wei Hsueh- kang, the UWSA’s Southern 171st Military Region commander, and therefore a close ally of the junta, continued to have a few mobile produc- tion units in this region around Mong Yawn.39 The methamphetamine traffickers responded by modifying their trafficking routes, following an old road used in the 1960s and 1970s by communist rebels of the Communist Party of Thailand.40

30Again in July 1999, Thai intelligence services suggested that the Burmese junta and the UWSA were negotiating so the latter could make the region between Moulmein and Mae Sot “safe” and thus prevent a resurgence of the Karen National Union resistance. In exchange, the UWSA reportedly obtained permission to develop bus lines there — a privilege that had already been given to Khun Sa — as well as set up methamphetamine laboratories.41 Given all this, the so-called UWSA laboratories would probably have replaced the Democratic Karen Buddhist Army (DKBA) installations that were there before. According to the Thai 3rd Army, about 57 production centres were operating in 1999 under the aegis of the DKBA at Myawaddy, opposite Mae Sot.

31As far as the Karen are concerned, it is actually not the historical separatists of the Karen National Union (KNU) who control the illicit drug trafficking, but rather members of the DKBA, an organisation closely linked to the Burmese junta.42 The DKBA was formed out of a Rangoon-orchestrated split within the Karen National Union, the KNU being the faction that is considered “historical” as it was founded in 1947 to defend the interests of the community. The junta exploited divisions between Karen Christian and Buddhist factions to its advantage. By splitting off from the KNU in December 1994, the Democratic Karen Buddhist Organization and its armed wing, the DKBA, made it possible for the Burmese army to gain control of Manerplaw, the headquarters of the Karen National Union.43

32The Burmese junta itself does not present a picture of perfect unity. The struggle for power between Khin Nyunt and Maung Aye, the Commander-in-Chief of the Burmese military, also revolves around the UWSA. Khin Nyunt signed the 1989 cease-fire with the UWSA and is notoriously close to this organisation, while Maung Aye is alleged to be completely opposed to it.

33In July 1999, when a senior officer of the Office of Narcotics Control Board declared that the Burmese government was “directly involved in the movement of millions of methamphetamine pills” since it supported exports of the UWSA,44 he actually disregarded the role played by the junta in assisting drug traffickers of the DKBA.45 As a matter of fact, the Naresuan Task Force, a part of the Thai 3rd Army, seized 7.7 million and 6 million methamphetamine pills respectively, and 5 kg of heroin in the Tak region (Phop Phra district) after two episodes of armed combat with the men of the DKBA during operations carried out in April 2001.

34In fact, according to General Wattanachai Chaimuenwong of the 3rd Army, the caravans protected by the DKBA show that a strategic reconciliation took place between this Karen faction and members of the UWSA who were involved in producing methamphetamine.46 Some independent reports also mention the existence of methamphetamine laboratories in the DKBA camps situated on the Burmese side of the Moei River, a natural frontier with Thailand.47 Thus, many laboratories are reportedly managed by the DKBA, in addition to those of the UWSA along this tributary of the Salween River, from Shwe Kok-ko (the camp of the 999th brigade of the DKBA led by Commander Chit Thu north of Myawaddy), up to Waley in the south, and finally passing through Palu. On the Thai side of the frontier, the region extending from Tak to Phop Pra and including Mae Sot constitutes a major gateway for methamphetamine trafficking. Moreover, members of the Burmese military intelligence services (MI-15 and MI-25) were reported to be distributing pills throughout the area, particularly in Thai-based Karen refugee camps, at highly competitive prices.

35In May 2000 the Commander-in-Chief of the Thai armed forces General Surayud Chulanond, previously in charge of intelligence services, expressed his frustration at the kingdom’s inability to stem the flood of yaa baa. He also characterised the UWSA as posing the biggest external threat to Thai security. Meanwhile, General Watcharapol Prasarnrajkit, Assistant Commissioner of the Office of Narcotics Control Board, described the production, trafficking, and consumption of illicit drugs as “the most dangerous problem” that ASEAN (Association of Southeast Asian Nations) had to face.

36Thailand is undoubtedly at the forefront of three aspects of the illegal narcotics problem: production, trafficking, and consumption.48 By September 2000, with increased militarisation of the Burmese-Thai border, the situation had become so dire that authorities were seriously considering whether or not to accept American aid to boost efforts to suppress the illegal drug trade. The Director of the National Security Council, Khachadpai Burusapatana, affirmed that corruption and the drug trade were now the main threats to Thai national security, and would be included in the next plan of action for strategic security.49

37In 2000, Thai officials pointed out that Khin Nyunt, the first secretary of the SPDC, was directly involved in the development of the UWSA and its alleged support of the drug trade.50 General Surayud Chulanond was reported to have declared that Khin Nyunt treated the UWSA like “his own army”, revealing the growing frustration of the Thai military.51 However, authorities in Thailand were reported to have also used their own proxies in the fight against drug traffickers. The Thai Deputy Minister of Foreign Affairs conceded that the government supported the sabotage operations in Burma. Thai intelligence sources indicate that the agents were ex-members of an elite British military unit, the Special Air Services (SAS), also known as the Counter-revolutionary Warfare Squadron. Members of this unit were said to have been recruited to train the Karen (probably originating from the Karen National Union) as special agents in the anti-narcotics fight on Burmese territory.

38This discussion raises doubts about Thailand’s passivity in the face of a longstanding inimical power whose “aggression” is deemed to be “narcotic”.52 Bangkok, which organises the major Cobra Gold military manoeuvres every year in collaboration with American troops as part of the broader Baker Torch American training program, has set up a special force in charge of the active fight against Burmese drug trafficking. This unit, named Task Force 399, is based at Mae Rim in Chiang Mai and is made up of one hundred men of special Thai forces and two infantry companies of one hundred men each, to which are attached hundreds of additional agents of the Border Patrol Police (the latter also an American creation). These troops were first assisted by 20 instructors of the U.S. Special Forces, 1st Group,53 which reveals the interest of the U.S. in countering methamphetamine trafficking. Prior to this, U.S. authorities had focussed their international anti-drug strategy only on derivatives of cocaine and opium.54

39Efforts to suppress cross-border drug trafficking between Burma and Thailand are therefore becoming more and more militarised. According to Thai sources, the United Wa State Army recently acquired Chinese HN- 5N surface-to-air missiles (SAM), while Thailand has further equipped its border forces by obtaining two American Black Hawk helicopters. The anti-drug struggle could encompass much larger geopolitical dimensions than what appears at first sight; the presence of Chinese and American weaponry in Burma and Thailand may indeed be seen as part of a larger rivalry between China and the U.S. for regional and global influence. China is actually all the more attentive to this regional conflict because of a stronger American presence near its southern and western, or Central Asian, frontiers.

The Cases of Cambodia and Laos

40Burma and Thailand, while at the centre of drug production, trafficking and consumption, are not the only countries of mainland Southeast Asia affected by the methamphetamine phenomenon. There is much cause for worry elsewhere in the region, particularly Cambodia, where illicit activities tend to escape any control and political instability helps drug production expand.55 Cambodia’s Koh Kong Province, already known for its cannabis cultivation, is likely the site of numerous methamphetamine laboratories, one of which was once thought to be run aboard a boat off the coast of a Cambodian island.56 Methamphetamine production is probably also going on in other parts of Cambodia, particularly around Poipet and Pailin near the Thai border, as well as in the province of the capital, Phnom Penh.57

41In Laos, 150,000 methamphetamine pills were seized in 1997, more than double the 70,000 seized there in 1996. In October 2000 Soubandh Srithirath, the country’s Director of the National Commission for Drug Control and Supervision, denounced ATS trafficking and the country’s burgeoning illicit drug use problems. At the same time, however, he also declared that there were no methamphetamine laboratories in the country.58 This last point is hardly credible. At least five laboratories had been identified in Laos’ Luang Prabang Province in the mid-1990s,59 and Thai reports from July 2001 note the tendency of laboratories allegedly owned by the UWSA to shift from Burma into Laos. Some 16 such “UWSA laboratories” were thought to have been moved from Burma to Laos’ Bokeo province, something that is highly doubtful considering the lack of territorial control by the UWSA in Laos.60

42In 2001 Thai police confirmed that such a shift of “UWSA labora- tories” to Laos had taken place, and reported that many methamphetamine production centres had been set up east of the Mekong River not far from the Burmese frontier. The Laotian province of Bokeo is also important in the manufacture of yaa baa. Official Thai sources attribute this to the involvement of two groups: Thai and Burmese natives on the one hand, and Hmong Laotians affiliated with anti-Vientiane movements who are also associated with national traffickers, on the other.61

43Whether as a result of these trends or simply due to increased trafficking from Burma, quantities of methamphetamine seized in Laos in 2001 had almost doubled in comparison to 2000 figures. However, one needs to acknowledge that laboratories are in fact very mobile and capable of being rapidly transferred from one side to the other of the Burma–Laos border, as demarcated by the Mekong River. Currently the laboratories are particularly numerous on the Burmese side, notably to the northeast of Tachileck in the region of Mong Pa Liao, an area historically reputed for its illicit drug trafficking and smuggling.62

44It has already been noted that methamphetamine production in Burma, Cambodia, Laos and Thailand corresponds to a diversification rather than a changeover in heroin traffickers’ sources of revenue. Although opium production in Burma reportedly decreased in 2002, it is apparent that methamphetamine production is not displacing heroin production; rather, it is likely a matter of new strategic opportunities for drug traffickers in regards to a booming regional market. Methamphetamine production is likely the result of organised criminal rings based in China taking advantage of what they perceive as new market opportunities. Opium poppy growers (even those of the Wa operating in UWSA-held areas) cannot reasonably turn themselves into methamphetamine producers overnight: indeed, poverty-stricken peasants are not profit-seeking chemists. Peasants generally turn to opium production to meet basic subsistence needs such as securing food for their families.

45As for unconfirmed reports about methamphetamine being produced from benzaldehyde in Burmese sugar refineries, they indicate that metham- phetamine production is not supplanting opium production, but rather is being undertaken in addition to it, as an aspect of market diversification. Benzaldehyde is already used legally for the production of ephedrine by the Indian firm Kreb’s Biochem, but when integrated with the sugar refining process, it also enables production of illicit ATS. The same unconfirmed reports suggest that one of the biggest refineries in Burma is conveniently located near the Chinese border in Mongla, the capital of Special Region No. 4, a zone controlled by the Eastern Shan State Army under the notorious drug trafficker Sai Leun.63

46The ease with which synthetic drugs such as ATS are produced raises doubts about the efficacy of development programs, many of which are based on replacing illegal crops with legal alternatives. A substitution procedure is being carried out, but one can guess that “it is not the one that the international agencies had hoped for”.64 Indeed, in Burma, it seems that methamphetamine production has acted to diversify illicit drug manufacturing much more rapidly than any substitution measures achieved by alternative development projects.

Chinese Production

47In the early 1990s China became the main destination for exports of Burmese heroin. Since then, China has also become a significant ATS producer.65 Indeed, contrary to the official line, if drug consumption and addiction have seen a massive increase in the country, this cannot be attributed solely to foreign production. The expansion of indigenous Chinese production of amphetamine and ecstasy during the year 2000 would thus account for a large part of the 26 per cent increase in the number of illicit drug consumers recorded in the country: according to official statistics, there were 180,000 ATS users out of an estimated 860,000 illicit drug consumers.66

48The origins of methamphetamine production in China can be traced back to Japan. By the 1980s, Japanese methamphetamine producers were known to be operating in South Korea. They were forced to close down, however, because of the 1988 Olympic Games in Seoul and the accompanying crackdown on crime in the country. Producers then opted to transfer their operations to Taiwan before that country, in turn, decided in October 1990 to put methamphetamine production and consumption on the top of the list of social problems to be eradicated.

49The Japanese producers therefore moved their activities once again, this time to the Chinese province of Fujian. The province rapidly became a major drug production and consumption centre.67 Indeed, in 1994, 7,357 kg of methamphetamine freshly unloaded from Fujian were intercepted in Taiwan; additionally, 2,600 kg of the drug were seized in Fujian Province in 1995.

Principal Northern Drug Trafficking Routes of Mainland Southeast Asia

50Chinese authorities and the regional press have reported numerous cases of young people from the Special Administrative Region (SAR) of Hong Kong making forays into the Shenzhen Special Economic Zone (SSEZ) to buy ecstasy and methamphetamine. The local market in Shenzhen is particularly profitable since ecstasy pills can be almost three times cheaper there compared to those of the Hong Kong market. The Shenzhen product is also reported to be more potent. These conditions created a golden opportunity for the young aficionados of rave parties organised in Shenzhen, particularly in the Better Ole and The Gate for Exotic Hunting nightclubs that were fashionable in 2000. Many Hong Kong ravers also bring ecstasy pills back home with them so as to finance their weekend activities by selling the drug.

51Between 1998 and 1999 illicit drug seizures in Hong Kong from mainland China increased fourfold, and have continued to increase since then. According to official estimates of the Hong Kong police, the number of adolescents who used illicit drugs there increased by 40 per cent during the first three months of 2000.

52Some 80 per cent of ATS consumers in the SAR still had recourse to heroin in 2000.68 But if we track the composition of intercepted drugs, there is an uneven upward trend. In 1999, the quantity of heroin intercepted had increased slightly compared to the previous year,69 while a full 16 tons of methamphetamine — ten times more than in 1998 — had been seized.70 At the start of 2000, a series of raids in Hong Kong managed to break three previously existing records for drug interception there: 70 kg of heroin were intercepted in March, 18 kg of liquid methamphetamine in April, and 320,000 ecstasy pills in June. In April 2000, Hong Kong authorities intercepted 20 kg of Chinese methamphetamine meant for the Australian market, proving that methamphetamine production in China was not only meant for local consumers. It could also be exported to as far off as Australia and New Zealand, and even to Europe, as evidenced by a 2000 seizure in Switzerland.71

Circuits of Methamphetamine Trafficking in the Golden Triangle

The Laotian Routes

57As we have seen, Thailand is still the hub of drug traffic originating from the Golden Triangle, but other countries of the region — including China, Laos, Vietnam and India — have also become trafficking sites for opiates and ATS. The intensifying fight against trafficking by Thai authorities, illustrated by border controls="true" imposed by the Thai army, the NSC, and recently the ISOC, have forced traffickers to look for new routes.

58While in Laos local opium production is mostly for national consumption, the increasing international trafficking of opiates and ATS through the country is probably a direct consequence of tougher repressive policies in Thailand. Laos shares a 235 km border with Burma, while its borders with Thailand, China, and Vietnam measure 1,754 km, 423 km, and 2,130 km, respectively. The placement of Laos within the region thus facilitates the transit of illicit drugs from Burma to the other three countries.

59But local consumption in Laos also serves as an important outlet for yaa baa produced in the region. Since the late 1990s, Laos has received increasing quantities of Burmese methamphetamine from Thailand, again pointing to the diversification and complexity of drug trafficking circuits.75 On 15 May 2000, Laotian police seized 398,000 methamphetamine pills in a truck in Muang Sing district of Luang Namtha Province. The three Laotians arrested declared they had obtained the stock from Laotian villagers, who in turn had bought it from Thai traffickers in southern Bokeo Province. Those arrested had intended to transport their load to the Laotian capital of Vientiane via the long, rough road that connects the Chiang Khong–Ban Houay Xay river border post to Muang Sing district.76

60The Laotian towns of Muang Sing, on the road that links Burma to the Chinese frontier post of Zaho, and of Boten, on the same frontier to the northeast of Muang Sing, are two key transit points for smuggling and various trafficking activities between the two countries. To outsmart the Thai forces that maintain surveillance of the Thai-Burmese border, traffickers with illegal drug consignments increasingly detour through Laos and enter the Thai kingdom via the border towns of Chiang Khong, Nan, Loei, Pak Chom, Nong Khai, Nakhon Phanom (from Muang Khammouan), Mukdahan (from Savannakhet) and Ubon Ratchathani (from Paksé).

61The Thai press described as follows one of the new drug traffic circuits that supplies yaa baa to the country through its northern frontiers. In June 2000, Thai traffickers were reported to be using the village of Ahi in Laos, 50 km to the northwest of Loei in Tha Li district, as a centre for transit and for stocking methamphetamine and arms destined for Thailand. Ban Khon Ta Pu, also in Laos and previously known for its cannabis plantations, was then an important village in the passage of methamphetamine to Ban Ahi. Drugs and arms traffickers crossed the border by passing over the Huang River before delivering their stocks to warehouses in Ban Ahi. The latter’s prosperity, as measured by such things as well-built houses and pick-up trucks, reflects the profitability of these ventures. A full 80 per cent of the population of Ban Ahi was then thought by Thai authorities to be involved in the trade or use of drugs. As of July 2000, the resulting violence of the illegal drug trade had already left 67 children in the village orphaned.77

Principal Southern Drug Trafficking Routes of Mainland Southeast Asia

Diversity and Complexity of Drug Trafficking Circuits

67Currently, illicit drug circuits and cargo loads are multiplying so rapidly that traffickers now even make regular use of regional airports in Thailand. They also enlist a multitude of frontier-runners known as “mules” by customs and police authorities the world over. Collectively, the runners in Thailand, made up largely of cross-border minorities, are frequently referred to as an “army of ants”. The growth in both transit routes and frontier-runners, each runner carrying anywhere between 30,000 to 50,000 methamphetamine pills, has made it more difficult for authorities to intercept trafficked drugs. Consequently, there has been a drop in the quantities of drugs seized.84

68Movements of refugees and illegal immigrants employed in Thailand further add to the confusion and increase the illicit flow of merchandise, including drugs, wood, precious stones, consumer goods, and livestock. So swamped is the Thai police force that Thai authorities considered partially demilitarising the Laos frontier in order to relocate some troops stationed there along the Burmese border. This incited the displeasure of Laotian authorities in Vientiane, who feared a fresh outbreak of terrorist operations launched by the Laotian opposition from Thai territory. A similar move was observed along the Cambodian border, although the Thai provinces of Chanthaburi and Trat have been able to retain their personnel because they depend on the navy and not the army.85

69To counter the ever-expanding drug traffic, police and army units in charge of the Thai borders have switched from fighting communists to fighting drugs. The Internal Security Operations Command (ISOC) has allied with the 3rd Army and the National Security Council (NSC) in this effort. The ISOC was created under the auspices of the very strict 1952 Anti-Communist Act, before this ruling was done away with on 3 June 2001. Subsequently a People’s and State Security Protection Bill was voted in that defined a new role for the army in managing domestic threats.86 Still, in 2000, the 3rd Army launched its Territorial Defence Training Scheme to prepare 592 villages on the Burmese–Thai border for self- defence. The targeted villages were thought to run a high risk of foreign incursion from armed groups as well as drug traffickers.87

70With the redefined role of the ISOC in anti-drug efforts, and drug traffickers now using what were once routes of communist insurgents, the entire Thai anti-communist military presence dating from the Cold War has finally been called into question. The defence system — inspired by and dating from the Cold War — is increasingly irrelevant in the context of the fight against the current regional threats of drug trafficking and related violence.

71In Thailand, as elsewhere, the increase in the number of illicit drug transit routes has not only happened because traffickers are evading intensified controls. It has also occurred because there are generally more people, and more goods, on the move. For instance, the illegal trade in both licit and illicit goods, which includes cross-border trafficking in methamphetamine, is directly linked to the smuggling of Chinese ephedrine. Ephedrine traffic follows the same routes as those of heroin and opium.

72If various products meant for the Burmese black market illegally cross the Chinese, Laotian and Thai borders, other types of trade also take place along these same routes. Notable here is the trafficking in human beings, particularly women, whose numbers swell the enormous regional prostitution market. Such traffic creates grave social, economic and health problems for all affected countries in the region. Today, 25 to 35 per cent of the total population of female prostitutes in northern Thailand are said to be of Burmese origin.88 The spread of HIV/AIDS and various types of hepatitis in this population has assumed particularly alarming proportions.

73To some extent, the refugee situation in Thailand also contributes to the transit of illicit drugs and other vice trades. In November 1991, about 55,000 Burmese people were living as refugees in 27 Thai camps along the Burmese frontier. It was estimated that 300,000 to 500,000 Burmese were residing illegally throughout Thailand at this time. Seven years later, in 1998, 80,000 to 100,000 refugees were counted in the Thai camps, with about 60,000 Karen in the Tak region, 20,000 Shan around Mae Hong Son, and more than 10,000 Mon in the province of Ratchaburi.

74The armed violence and numerous human rights violations of the Rangoon junta and its army in Shan State have increased an already constant inflow of Burmese refugees into Thailand. During the last few years, more than 300,000 Shan emigrated to flee the population displacement imposed by the junta and, more recently, the UWSA. By 1998, it was estimated that approximately one million Burmese were residing and working illegally in Thailand. Possibly up to a third have been deported since then,89 while, in 2001 alone, approximately 120,000 new refugees were expected to enter Thailand from Burma.90

75Such a large population of refugees and illegal immigrants in the camps favours these groups’ economic exploitation by unscrupulous employers, and enables their participation in an informal economy that is for the most part illegal. Not surprisingly, prostitution, smuggling, and drug trafficking flourish in the buffer zones. If the border not only affords some protection for the refugees who cross it, it can also help enrich those who do not travel “empty-handed”. The flow of illegal immigrants who enter carrying some sort of merchandise or other has become so large that it raises serious questions about the efficiency of border controls.

76But greater vigilance at the border is not necessarily desirable for everyone. Indeed, transgression may actually be “productive”. Because clandestine border crossings are illegal, the increased risk of such actions raises the value of both the people and goods that accomplish it.91 This is especially so when the border crossed separates Burma and Thailand, two territories that are as different as possible from one another.

77A veritable war economy prevails in some peripheral regions of Burma, where Rangoon’s writ and control cannot reach. This obliges the state to transfer authority to local potentates, even if that means condoning their illegal practices or even granting them official legitimacy to reach a cease-fire. In any case, the situation in the country hardly makes it possible for anyone to undertake long-term investment or adopt a strategy of integrated development which could encourage such measures.92 As for the vast Thai consumer market, it represents a pole of attraction for all types of goods produced in or transiting through Burma, among which illicit drugs rank of primary importance. The production and trafficking of drugs occurring on either side of the Burmese–Thai border therefore stems from a definite politico-territorial and economic logic.

The Socio-economic Context of the Frontier

78Prostitution in Siam was placed under Royal monopoly as early as 1680; today, Thailand’s prostitution sector still contributes a significant amount to the national economy. These conditions help explain why the negative effects of prostitution in spreading illicit drugs and sexually transmitted diseases rarely come under attack.

79In Thailand, drug trafficking as well as prostitution can be interpreted as a means by which central Thailand exploits the economic potential of its peripheral mountainous regions. Opiates produced in the mountains are largely marketed to those residing in the plains and cities. These same northern and western regions supply most of the prostitutes to urban- based brothels; for example, many Thai prostitutes come from the northeastern Thai province of Isan.

80Efforts to suppress illegal production and trafficking from the mountainous northern regions of Thailand have in many ways had the opposite effect of what they were intended to do. Policies of opium eradication drove a part of the population to switch from opium to heroin, thus fostering a new addiction. They also disrupted the traditional economy of the hill tribes, whom the Thais generally refer to as Chao khao.93 The latter suffered the full impact of monetisation policies that were imposed on their economy, which were never accompanied by sustainable development measures. Some inhabitants therefore willingly took up the very lucrative business of drug trafficking instead.

81Thailand’s impressive economic growth during the 1970s and 1980s and the accompanying consumer craze spurred the development of illegal drug and sex markets. Subsequently the sudden, dramatic regional crisis of the late 1990s drove an additional part of the population to join the illicit economy as well. The “mountain folk” — whose citizenship and property rights are still not recognised today94 — were least spared by these upheavals because of their economic vulnerability.95 It was comparably easier for them to get involved in the drug economy because they already lived along the Thai–Burmese border. Thus the region’s exclusion from development became an asset under these new conditions, when its inhabitants found themselves at the core of the flourishing illicit border traffic.

Consequences of the Regional Economic Crisis

82Since 1988 a marked increase has been observed in occasional prostitution in Thailand, an activity spurred by consumption-driven economic choices made by a growing proportion of the female population. Similarly, a large number of women from ethnic minorities in these countries are resorting to prostitution as well, a development related to the fall in the value of the Thai baht, the hyper-inflation of the Burmese kyat, and the collapse of the Laotian kip. According to the results of a study quoted by David Feingold, today some 97 per cent of the prostitutes of Mae Sai are believed to have originated from the ethnic minorities of Burma and Thailand.96

83The 1997 economic crisis notwithstanding, Thailand is still undisputedly richer and more stable than its neighbours. The lights of Bangkok and regional capitals continue to attract a growing number of migrants from neighbouring countries who are attempting to escape poverty or repression at home. Rising numbers of illegal immigrants help foster a parallel economy based heavily on prostitution and drug trafficking. Often in conjunction with gambling, these vice trades destabilise society as they fuel corruption. However, the amount of wealth amassed through such corrupt transactions has become too important for public authorities in the country to openly risk staunching its flow.

84Besides enabling the development and reproduction of the system, corruption also ensures that cuts are taken at all stages of illegal trade circuits, a process that translates into an informal value-added tax that fuels the national economy. Those involved in corruption favour drug trafficking and illegitimate drug use because corrupt individuals and groups benefit directly from such illicit activities. According to some experts, police corruption alone exerts such a constraint on the illegal economy that it at once stymies both the suppression of the illegal economy, and its evolution.97

85In 1993, a team of economists from Chulalongkorn University in Bangkok led by Professor Pasuk Pongpaichit estimated that the illegal Thai economy could represent up to 20 per cent of the country’s Gross National Product.98 Trafficking of drugs, arms, and people, diesel smuggling, prostitution, and illegal gambling constituted 8 to 13 per cent of this figure, or 286 to 457 billion baht per year (7.15 to 11.4 billion euros). Gambling topped the list, ahead of prostitution, drug trafficking, and arms.

86The state’s tolerance of such powerful illicit sectors undoubtedly favours the development of drug trafficking. As drug money is laundered, substantial sums can be reinvested in Thailand, thus contributing directly and indirectly to the national economy.

87In any economy where illicit capital makes up a significant share of national product, legal investment practices gain from the presence of such markets. As Feingold points out, this is particularly true in countries where financial resources and credit mechanisms are not sufficiently developed to keep pace with increased investment.99 Hence the Thai economy has long been fuelled by what is generally called “dirty money”, whether in the context of accelerated economic growth (when capital growth fails to keep pace with expanding investment opportunities) or in the context of financial crisis (when the drastic reduction of credit cuts off major sources of financing). But the existence of such a parallel economy does not in itself explain the spectacular development of yaa baa. ATS markets have expanded rapidly thanks to the Golden Triangle’s numerous producers and distribution networks, but also because of the plethora of potential consumers that are spread across Southeast Asia.

88For their part, Burma’s armed groups — encompassing non-state insurgents as well as regular military outfits — at first entered the drug trade to finance arms purchases in the fight for their cause, whether capitalist or communist. But for many of these armed groups, drugs are no longer only the sinews of war; they have also become its stakes.100 The synthetic drug industry has also benefited from a marketing system whose working mechanisms were already in place. In fact, major players in heroin trafficking could easily reposition themselves in this new ATS market, making use of people and methods that were already tried and tested. Notably, the jump in demand for yaa baa corresponded to the sudden increase in the price of heroin following the surrender of Khun Sa in 1996. Methamphetamine’s technically easier and cheaper production techniques, compared to those of heroin, assured correspondingly larger profit margins.

89In the context of the Asian crisis, the financial gains to be made at all stages of drug trafficking have been particularly high. The rise of the yaa baa market has been a very timely one. Methamphetamine consumption is not confined to a few socio-economical niches, as we shall see shortly. It transcends the divisions of Thai society, so much so that one can reasonably conclude the yaa baa economy has, at least for the time being, outstripped that of heroin in Thailand.