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Khun Sa's Surrender, A Narco-Dictat

Subject: Khun Sa's Surrender, A Narco-Dictatorship in Progress From Burma Debate, March/April 1996

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Burma Debate
March/April 1996

A Narco-Dictatorship in PRogress
Indifference Confirmed
by Francois Casanier

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A Narco - Dictatorship in Progress
By Francois Casanier

The peaceful entry of Burmese troops
into Ho Mong and other strongholds of
Khun Sa's private Mon Tai Army (MTA)
during the first days of January 1996 was
an exceptional public demonstration of
the failure of the international
community's "War on Drugs." 

Four months later, the assessment is
even less encouraging. More than
amnestied or rehabilitated, Khun Sa has
been publicly honored and dignified by
the powerful generals leading Burma's
military regime, the State Law & Order
Restoration Council (SLORC).
Furthermore, this red carpet treatment
gratifying the most wanted heroin
smuggler in the world has escaped
criticism from any regional or
international body. Instead, proceeding
even further down the road toward
normalization of relations with SLORC,
the Director General of the United
Nations Drug Control Programme
(UNDCP), Giorgio Giacomelli, visited
Rangoon in February to salute a newly
created drug - repression organization. 

What would have been the reactions of
the international community and the
world media if Pablo Escobar had been
nominated honorary mayor of Medellin
instead of being shot by elite Colombian
troops assisted by U.S. Drug
Enforcement Agents? 

Khun Sa's honoring provides a rare
opportunity to spotlight both SLORC's
true approach to heroin economics with
its three tiers of implication, and the "turn
- a - blind - eye" attitude of the rest of the
world -- not only governments and the
business community, but the media and
human rights groups as well. 

It is apparent that strict confidentiality
and quick execution were key to
SLORC's successful handling of Khun
Sa, every move obviously thought out in
detail. For example, by selecting January
1 as the surrender date it was hoped that
U.S satellite and field agent observations
around the Salween River would not be
too carefully scrutinized. If Burmese
helicopter and truck movements had
been studied by the Americans while
they were occurring, as they would be
during a period of normal activity, various
"negative" reactions could have been
anticipated by SLORC -- ranging from
early and strong U.S pressure to get
Khun Sa extradited, to the rebellion of
numerous local MTA commanding
officers refusing to surrender to what
they consider a perfidy of their fight for
an independent Shan state. 

The surprise effect of New Year's Day
served its purpose: the first significant
U.S. reaction came only on January 5,
with the release of a statement in
Bangkok from Assistant Secretary of
State for East Asian and Pacific Affairs,
Winston Lord, who underlined that the
non -  extradition of Khun Sa to the
United States would constitute a major 
setback in counter - narcotics efforts.
The vigorous condemnation of SLORC's
lenient attitude toward the most wanted
and best known figure of the heroin trade
contained in later reactions was not
followed by any threat of sanctions, nor
was it perceived by the business
community as a discouragement for
investment or tourism in Burma. 

In Rangoon, it is no secret that Khun
Sa's easy reintegration into the SLORC
system can be considered nothing other
than the brilliant achievement of a
strategy initiated in 1989 by the cease-fire agreement signed between Lt. Gen.
Khin Nyunt, SLORC Secretary #l and
head of the Directorate of Defense
Services Intelligence, and the Wa

In 1989, less than one year after SLORC
reasserted with extreme brutality the
military's grip on Rangoon, the Burma
Communist Party (BCP) imploded, its
rank and file expelling the old Burmese
leadership to China, and forming a new
party, the United Wa State Party (UWSP)
whose armed branch, the United Wa
State Army (UWSA) requisitioned most
of the BCP's uniforms, arms, ammunition
and soldiers. The UWSP leadership
quickly signed a cease-fire agreement
with Rangoon, providing the Wa
economic and military autonomy, thus
protecting its commerce in opium and its
derivatives. In exchange, the Wa
recognized Rangoon's theoretical
sovereignty over what they call the Wa
State, located northeast of Shan State
along the border of China's Yunnan
province.  The UWSP agreed not to
enter into any alliance with rebel groups
or members of the democratic movement
opposed to SLORC.

The negotiating talents of General Khin
Nyunt were also successfully applied to
the cease - fire agreement signed in
1993 with an older guerilla movement,
the Kachin Independence Organization
(KIO), which inhabits territory traditionally
known for poppy cultivation.

Within only seven years and for the first
time since independence, the authority in
power in Rangoon had permanent and
open access to all the borders of Burma,
with no armed group seriously contesting
its supremacy.  During this same period,
opium output and heroin exports have

These cease - fire agreements have
served as a real catalyst in the rapid
transformation of the relationship
between the Burmese Army and guerilla
movements engaged in the drug
business: Partnership has replaced
armed confrontation; huge portions of
territory in Shan State (in the northeast),
previously battle fields between the
guerrillas and Rangoon, have been
turned into poppy fields to such an extent
that American and French satellite
surveys have detected an explosion of
poppy cultivation, especially in areas
directly controlled by Rangoon. 

It has been reported by eyewitnesses
that SLORC officers posted in eastern
Shan State have visited rural villages,
encouraging farmers to plant poppies,
explaining that it is the only real means
for them to pay the taxes that would be
collected after the year's harvest. (The
level of taxation is so high that only
opium production can provide the
required payment).  In some cases, in
isolated hamlets located far from
traditional poppy growing areas, the
military delivers the poppy seed and
provides technical assistance during the
harvest. Forced labor in Burma is not
confined to public works, railway
construction or porters for the army.
There is also a forced narco-agriculture.
In this part of the country, all levels of the
opium - heroin trade are directly
controlled by special units
of the Burmese army.

Official public statements condemning
states for their drug involvement are
extremely rare, but Mr. Robert Gelbard,
U.S. Assistant Secretary of State for
International Narcotics and Law
Enforcement Affairs, said in Bangkok on
June 7,1995, that "significant" poppy
growing is developing in areas controlled
by the Burmese government. This reality
was also recognized by the U.S
Department of State's Bureau of
Narcotics & Law Enforcement Affairs in
its International Narcotics Control
Strategy Report of March 1995: "Burma
remains the undisputed leader in world
illicit opium output, providing over 50
percent of known global illicit
production... and the government of
Myanmar continues to treat
counternarcotics efforts as a matter of
secondary importance." 

Such was the Burmese drug - landscape
before the Khun Sa agreement. This last
move completes the picture: The
methodical installation of a military -
narco dictatorship. 

A second level of the military - narco web
was observed at the beginning of the
nineties. Relatively primitive, it was
based on the recycling of hard
currencies: Thai Baht and U.S Dollars.
The Thai border town of Mae Sai is
linked by a bridge to her Burmese
sistertown, Tachilek, on the opposite
bank of the river. Dozens of bank
accounts opened in the local banks were
regularly and systematically funded in
cash, with huge amounts of money being
transferred to anonymous bank accounts
in Bangkok and Singapore every week. 

Tachilek is somewhat unique in Burma: it
has the only airport that can be reached
by foot from another country with a
sophisticated economy. Every flight from
Rangoon or Mandalay carried its lot of
Burmese of officers who were bringing
parcels of bank notes over the bridge,
linking Tachilek to the international
banking network. The majority of this
money came from the heroin trade.
Commissions, protection, transportation
costs, fees -- all means of pumping
money from the only locally profitable
cashcrop were progressively set up by
the Directorate of Defense Services
Intelligence along with a dozen or so
former high ranking field officers, each
continuing to maintain his respective

A third tier was recently discovered in
Taiwan at the end of March 1996.
According to a dispatch from China
News, Chang Lien Hsing, a cousin of the
opium war lord Khun Sa (whose Chinese
name is Chang Chi Fu) was arrested for
drug trafficking on March 25. The arrest
took place near the Keeling train station
immediately after Myo Lwin Myint, a
crewman from a Burmese cargo ship,
was handed US$3,000 by Chang for
bringing heroin to Taiwan. Chang Lien
Hsing had been in Taiwan as an
overseas - Chinese student for years. 

This is a very interesting piece of
information, which demonstrates that
collaboration between SLORC and Khun
Sa did not start on January 1. It is well
known that SLORC's intelligence
apparatus strictly controls the activities of
Burmese seamen. In 1992 for example,
SLORC's agents were able to kidnap,
without opposition, a group of Burmese
crewmen at Singapore's International
Airport who were trying to escape their
slave - like conditions on board a
Burmese cargo ship. So, it is highly
unlikely that this exchange in Taiwan
could have taken place without SLORC's

The third level of the SLORC - Khun Sa
heroin connection, should be considered
as a sector of a wider web, linking other
well - known heroin operators to
Burmese Intelligence. In its International
Narcotics Control Strategy Report of
March 1996, the U.S. Department of
State declared: "Leaders of these drug -
trafficking armies have benefitted
immensely from their good relationships
with the Rangoon regime; their
businesses -- legitimate and illegitimate -- have prospered. The top traffickers of
these ethnic groups are: U Sai Lin (aka,
Lin Ming Shing) of the Eastern Shan
State Army (ESSA); Yang Mao Liang,
Peng Chia Seng and Liu Go Shi of the
Myanmar National Democratic Alliance
Army (MNDAA - Kokang Chinese); Pao
Yu Chiang, Li Tzu Ju, and Wei Hsueh
Kang of the United Wa State Army
(UWSA) and U Mahtu Naw of the Kachin
Defense Army (KDA). The SLORC has
given significant political legitimacy and
now refers to them as  leaders of national
races.'  Several major traffickers now
participate in the government's national
constitutional convention in the guise of
ethnic leaders." 

It is often said that "small streams create
large rivers." This saying is brilliantly
demonstrated in SLORC's ability to
channel Burmese heroin revenue into
secret funds and private pockets. It is by
the grace of these funds that SLORC has
been able to re - equip and expand
threefold its army since 1989, unofficially
spending upwards of $2 billion with an
official currency balance of not more than
$250 million. (Off the record, World Bank
experts will not deny the validity of this

Between the private pockets of high
ranking SLORC generals and their
relatives on the one hand, and SLORC's
defense spending on the other, it is
practically impossible to determine where
narco - dollars go. For instance, attempts
to research the ownership of the new
private airline, Air Mandalay, has met
with little success. Based in Singapore,
the new holding received loans from a
French bank to operate a few French -
and- Italian -made ATR aircraft. This
commercial operation is considered to be
a state secret in France and in
Singapore, which allows the amount of
the loan and the identities of the true
shareholders of the Singaporean holding
company to be concealed. 

This lack of transparency is paradoxical
in a country like Singapore, which claims
to apply very strict anti - drug policies,
with systematic death penalties for small
traffickers. It is also curious that
Singaporean monetary authorities
haven't uncovered a single case of
money - laundering in the numerous
financial and commercial operations
between the two countries, despite the
fact that the Far Eastern Economic
Review, as far back as 1992,
demonstrated that the only substantial
source of hard currency for Burma was
from the export of heroin. 

Official sources consider Singapore to be
Burma's largest single foreign investor.
The question Singapore refuses to ask
is: What portion of Burma's capital
comes from the hard labor of poor
peasants forced to plant poppy seeds? --
a question that should apply to all those
doing business with this regime. 

(This announcement of prominent drug
lord, law Sit Hans son's marriage to a
Singaporean businesswoman recently
appeared in the Burmese - language
newspaper, Kyemon.)


The fourth son of U Law Sit Han and
Daw Kyat Phone Shin 
(No. 20-23, Masoeyein Kyaung Street,
Mayangone Township, Rangoon)

Maung Tun Myint Naing 
alias Steven Law 
Managing Director Asia World Company


The third daughter of Mr. Ng Ah Koon
and Madam Hong Or Tew Chua
(17D Jansen Road, Singapore)
Ms. Ng Sor Hong alias Cecilia Ng
S.H. Ng Trading (Singapore)

Would like to extend their heartfelt
thanks to Lt. General Kyaw Ba,
Minister of Hotels and Tourism (Ministry
of Hotels & Tourism) and wife for their
ministers, esteemed guests, family and
friends for honouring them with their
presence at their wedding reception held
at the Inya Lake Hotel on March 16,1996

Parents and relatives of both families
Steven Law - Cecilia Ng

(For the past five years, Francois
Casanier has served as a research
analyst for the Observatoire Geopolitique
des Drogues (The Geopolitical
Drugwatch) where he has focused on the
evolution of the production and
exportation of Burmese heroin.  Prior to
that, he worked as a journalist for twelve
years at the Agence France Presse.)