Opium Economics in Wa State

This 2007 report from the East-West Center in Washington argues that the United Wa State Party is caught in circumstances that prevent it from eliminating the drug trade:

The UWSP has implemented a ban on opium cultivation to comply with international pressure. It has called for international aid to offset the impact of the ban, but so far not enough assistance has come through

[…]

The drug trade is controlled by powerful ethnic Chinese syndicates that have no interest in conflict resolution and state building. Demonizing and isolating the UWSP will make the organization more dependent on them, and will obstruct reconciliation efforts in Burma.

We find more details on the economic situation at ifeng.com, part of the seni-private Phoenix New Media network based in Shenzhen and Hong Kong:

As the only passage from China to the Indian Ocean by land, Myanmar and China have a long history of economic and trade cooperation. Timber and mineral products are the most important business names imported from Myanmar at the Yunnan port, accounting for more than 80% of the total imports to Myanmar. Among them, the timber and mineral products of the Wa state have become the main export areas of Myanmar.

However, because many Chinese migrant workers were employed by businessmen and illegally left the country to log timber and mine minerals in the Wa state, this caused dissatisfaction with the Myanmar government. Following the protests of the Myanmar government, on March 27, 2006, Yunnan Province suspended the import of Myanmar timber and minerals. A large number of Chinese businessmen who went to invest in the Wa state were in a dilemma, and the Wa state government, which tried to use the export of minerals and timber to ease the pressure of banning species, was also struggling.

The Wa state, which had previously been exporting manganese ore to China, immediately reduced production and sales in large quantities, and local imports in Yunnan decreased by 92.8%. As for the bulk timber import companies, they basically closed down. Many Yunnan timber processing plants that had frequent timber trade with the Wa state before have closed their doors. Meng Jianxin, general manager of Ruili Southwest Development Company, who has long been engaged in timber trade, confirmed in an interview with local media in Yunnan that more than a dozen companies in the United States, Taiwan and Kunming with whom they do business have all withdrawn from Ruili.

Published June 26 2007. Translated from Chinese (Simplified) using Google

Disruptions to Wa State’s trade with China, Taiwan, and America have given the state few options for funding itself. ifeng alleges that the UWSA had once received 80% of its funding from the opium trade; without stable alternative exports they are stuck with their established and lucrative opium industry.

ifeng further says that the Communist Party of Burma had first entered the drug trade in the 1980s as support from the PRC disappeared. Though the CPB may have been forced into the trade, its successors in the UWSA took steps to eliminate the industry. Starting with a declaration in 1990, just after the United Wa State’s founding, the government carried out a years-long campaign to reduce poppy fields and destroy processing facilities. In 1997 the Wa government made a promise to eliminate opium production by 2005.

Then in 2005 the DEA indicted eight UWSA leaders as ‘drug kingpins’. These accusations came in the context of progressive, deliberate reduction of opium production by Wa officials:

Yan Long, an official of the United Nations Anti-Narcotics Commission who has lived in Wa State for more than ten years, said in an interview with the media: “During the past ten years, the area of opium poppy cultivation in Wa State has decreased at a rate of 20%-30% per year. We believe that, The task of eradicating drug sources is entirely possible for this generation of leaders.” Of course, as Yanlong himself realized, achieving this goal requires long-term strong support and help from the international community.

ifeng.com

With sanctions leveled against Wa State in such a crucial year the pressure was on to keep growing opium. These sanctions came in spite of a UN report that Wa had reduced opium production by 20-30% annually for a decade.

Why did Washington attack Wa in 2005? Why did they dismiss the attempts by Khun Sa and UWSA to sell out their crop in exchange for alternative industries? Did Western governments want the poppies to keep blowing?

Despite the prosecutions and sanctions, UWSP has continued to make efforts to root out the drug trade. In 2020 they held the 13th drug handover ceremony in which they surrendered a drug runner and millions of doses of amphetamines.

The ongoing economic challenge for Wa State is the sustainable replacement of opium as a cash crop. Firms from the PRC have established agricultural and industrial projects in Wa since 2010 at the latest. We have found multiple sources critical of these projects as monocrop plantations that serve business interests more than local needs. Beyond these Chinese investments and small UN support, Wa State has few economic prospects that are as reliably profitable as opium.

It is easy to find Western reports which criticise China’s economic relationship with Wa State as exploitative or opportunistic. Yet, the PRC is one of the few industrial powers willing to give Wa the economic base that they require to get out of the opium trade.

There are, of course, confluences of American, Australian, and Kuomintang interests just below the surface of regional politics. That is where an investigator may find the Devil at the Crossroads of the Golden Triangle.