Myanmar is the world's second largest producer of illicit opium, after Afghanistan[1] and has been a significant cog in the transnational drug trade since World War II.[2][3] According to the UNODC it is estimated that in 2005 there wеrе 430 square kilometres (167 sq mi) of opium cultivation in Myanmar.[4]
The surrender of drug warlord Khun Sa's Mong Tai Army in January 1996 was hailed by Yangon as a major counter-narcotics success. Lack of government will and agility to take on major narcotrafficking groups and lack of serious commitment against money laundering continues to hinder the overall anti-drug effort. Most of the tribespeople growing the opium poppy in Myanmar and in the Thai highlands are living below the poverty line.
In 1996, the United States Embassy in Rangoon released a "Country Commercial Guide", which states "Exports of opiates alone appear to be worth about as much as all legal exports." It goes on to say that investments in infrastructure and HOTELS ARE coming from major opiate-growing and opiate-exporting organizations and from those with close ties to these organizations.[5]
A four-year investigation concluded that Myanmar Oil and Gas Enterprise (MOGE) was "the main channel for laundering the revenues of heroin produced and exported under the control of the Myanmar Army." In a business deal signed with the French oil giant Total in 1992, and later joined by Unocal, MOGE received a payment of $15 million. "Despite the fact that MOGE has no assets besides the limited installments of its foreign partners and makes no profit, and that the Myanmar state never had the capacity to allocate any currency credit to MOGE, the Singapore bank accounts of this company have seen the transfer of hundreds of millions of US dollars," reports François Casanier. According to a confidential MOGE file reviewed by the investigators, funds exceeding $60 million and originating from Myanmar's most renowned drug lord, Khun Sa, were channeled through the company. "Drug money is irrigating every economic activity in Myanmar, and big foreign partners are also seen by the SLORC as big shields for money laundering."[5] Banks in Rangoon offered money laundering for a 40% commission.[6]
The main player in the country's drug market is the United Wa State Army, ethnic fighters who control areas along the country's eastern border with Thailand, part of the infamous Golden Triangle. The UWSA, an ally of Myanmar's ruling military junta, was once the militant arm of the Beijing-backed Burmese Communist Party.
Poppy cultivation in the country decreased more than 80 percent from 1998 to 2006 following an eradication campaign in the Golden Triangle. Officials with the United Nations Office of Drugs and Crime say opium poppy farming is now expanding. The number of hectares used to grow the crops increased 29% in 2007. A United Nations report cites corruption, poverty and a lack of government control as causes for the jump.[7]