BURMA'S POWERFUL DRUG INDUSTRY

Opium Production Is Rife In Idyllic Northern Burma

In the global drugs production league, Burma has long been one of the
world's top producers of opium, the base ingredient for heroin.

US drug enforcement agencies estimate opium production in Burma last
year to have been about 1,200 tons. Only Afghanistan produced more of
the drug.

It's estimated that less than 1% of Burma's annual opium production is
intercepted by the authorities - the rest is smuggled out through
China or Thailand onto the world market.

Earlier this year a group of Western journalists was ferried by the
Burmese military to the hills in the north of the country, close to
the border with China.

[Click Here To See A Map Of The Area]

Here they watched soldiers and local tribespeople destroy fields of
opium-producing poppies. In all more than 200 acres of poppy crop -
worth, when processed, hundreds of thousands of dollars - was cut down
and burned.

Burma's military regime and local chiefs had a clear message for the
outside world: Burma was determined to eradicate opium production.

The government in Rangoon, trying hard to improve its international
image, said that by 2005 no more opium would be produced within the
country's borders.

Officials Implicated

The international drug enforcement agencies are not celebrating yet.

Though UN drug experts say Burma does seem intent on cutting back on
its opium production, over the years there have been persistent
reports that senior officials of the military regime are involved in
the drugs trade, and that funds from the drugs business still find
their way into government coffers.

The other critical factor is that the government in Rangoon is both
militarily and financially unable to tackle the power of the country's
drug barons.

Opium production takes place mainly in the hilly country near Burma's
border with China.

It is a beautiful, remote region of mist-shrouded peaks and jungle
valleys. For years Rangoon has been fighting a series of seccessionist
battles in these territories.

Chronically overstretched and underarmed, the Burmese military has
sought to either play one insurgent group off against another or do
peacemaking deals with various rebel factions.

Among a series of such deals agreed in the late 1980's, Rangoon
granted autonomy to the Wa - an insurgent rebel group living in the
opium growing area near the Chinese border.

'A State Within A State'

Since that time the Wa, led by remnants of Burma's old communist party
and known for its ferocity in combat, has built a formidable state
within a state, complete with its own army, on the profits of the
drugs trade.

Rangoon, extremely reluctant to provoke any conflict with the Wa, is
virtually powerless to tackle the region's drug trade.

The Wa, led by a number of powerful and ruthless families with
worldwide contacts, have been able to build up a highly-organised and
sophisticated drugs business.

They have even spent millions of dollars employing engineers and
technicians from Thailand and elsewhere to build modern townships on
their territory.

Like any global corporation, the Wa use their enormous financial clout
to invest in ever more advanced technical equipment and change their
marketing strategies.

Drug Producers Diversify

In recent years, as worldwide pressure to erradicate opium production
has grown, the Wa have invested heavily in the production of
methamphetamines or speed.

Laboratories in Wa territory now turn out hundreds of thousands of
these tablets each day. Drug officials say much of the raw material is
purchased in China.

A single methamphetamine tablet costs about 8 US cents to produce in
Burma - by the time it reaches Bangkok it sells for more than US$3.

Thai officials say the country is now facing an epidemic of the drug -
in Thai called Yaba or the mad drug - and have called on Rangoon to
take urgent action.

So far there is little sign that the Wa are curbing their activities.
Western drug officials say the whole local economy in the Wa
controlled region now revolves round the drug trade.

They point out that poor farmers need help to turn to other crops
besides the opium poppy, yet western governments are reluctant to give
Burma any aid.

The west is also deeply opposed to giving Rangoon military help.
Without it, it seems likely the Wa and others will continue to make
millions from their lethal trade.