WHERE OPIUM REIGNED, BURMESE CLAIM INROADS

LASHIO, Burma -- In the remote valleys and rugged mountains here in
northeastern Burma, opium offers more than a narcotic high. For years, it
has provided a livelihood for hill tribes who inhabit the northern expanse
of the Golden Triangle, the lush, lawless area of Southeast Asia that is
the source of much of the world's heroin.

Opium finances daily needs, from rice and cooking oil to assault rifles.
The rifles are used to wage rebellion and to defend the mule caravans
transporting the sticky, pungent opium to be refined into heroin for
American and European drug habits.

Burma produced an estimated 2,600 tons of opium last year, enough to make
more than 200 tons of heroin -- at least 60 percent of the world total. But
the drug trade is changing along Burma's porous frontiers with Thailand,
China and Laos, and one of the most startling shifts may be in the attitude
of the military junta that seized power in this country in 1988. For years
the junta tolerated opium trafficking as the price of its cease-fires with
insurgent ethnic groups. Now it says that it wants to eradicate all opium
within five years. To show what it has accomplished, it recently allowed
three American reporters into an opium-growing region usually closed to
visitors.

Some diplomats in Yangon, the capital, view the eradication claim
skeptically because land devoted to opium cultivation has doubled under the
junta's rule, and the country's mismanaged economy has grown to rely on
laundered drug profits.

The government says it has eradicated 41,000 acres of poppies, one-tenth of
the land under opium cultivation in Burma. "The crop eradication areas are
only small parts of the areas they do control," a Western diplomat said.
'They are window dressing."

Col. Gyaw Thien, the chief of Burma's counter-narcotics program, disagreed,
declaring that the government was being asked to solve a century-old
problem in two weeks without any help. "It's quite unfair," he said. "We
are making much more effective interdictions and seizures than we have in
the past." Last year, police and army units reported seizing 1.5 tons of
heroin, compared with about half a ton in 1996, though their record
seizures amount to less than 1 percent of Burma's output. "This drug
problem is not only the problem of the United States," Gyaw Thien said.
"It's our problem too. We know that we cannot fight this alone."

The junta's new policy puts Washington in a quandary because the United
States cut off counter-narcotics aid to Burma after the coup in 1988.
Restoring such aid could undercut other American economic sanctions and
lend legitimacy to a dictatorship that stands accused of widespread abuse
of human rights.

"We think we can get rid of 60 percent of the heroin going into the U.S. in
12 months' time if the U.S. cooperates with us," said Hla Min, the deputy
director of the Office of Strategic Studies, a planning branch of military
intelligence.

A Western diplomat who watched the shift concluded: "What this government
wants to do is perpetuate itself in power. They know it's got a bad image.
They looked at drugs and found this is the one asset they have. They'd like
to use whatever they've done to improve their image and try to get
sanctions lifted." The State Department acknowledges in its latest drug
control report that it has no evidence that Burma's government is
trafficking in drugs on an institutional level.

"However," the report said, "there are persistent and reliable reports that
officials, particularly army personnel posted in outlying areas, are
involved in the drug business."

The government denies this, citing the arrest of 11 army officers last
April for colluding with a heroin refining operation in northern Shan
state. The senior officer, a lieutenant colonel, was sent to prison for 25
years. It also deported Li Yunchun, a fugitive trafficker indicted in New
York, to Thailand, which handed him over to the United States. But new
traffickers, notably the Wa, a fierce hill people whose ancestors hunted
heads, have wrested control of the lucrative heroin business from remnants
of renegade Chinese Nationalist soldiers and rebel militias. Nearly a
million Wa straddle the border between China and Burma. Their insurgent
army has diversified from heroin into methamphetamines, powerful synthetic
stimulants that have saturated Thailand and since turned up in Japan,
Taiwan and Malaysia, Burmese and Western officials say. A Burmese
counter-narcotics official said that the Wa now make more money from
methamphetamines than from heroin and refine both drugs themselves using
chemicals smuggled in primarily from China.

Because of aggressive interdiction by the Thai police, the old trafficking
routes through the Golden Triangle are shifting from Thailand and into
China, or less often Laos and even northeastern India. Some heroin still
moves by truck down from the Shan highlands market town of Lashio, through
lowland Mandalay to the port of Yangon, as Rangoon is now called.
Eradicating opium could help the military government's strategy of subduing
ethnic insurgents who traffic in opium to finance their wars of
independence. government troops cannot enter most Wa-controlled territory
without a battle.

With an army estimated at 15,000 to 20,000 men, the Wa have grown so
strong, acquiring surface-to-air missiles and modern communications
equipment, that government troops complain about feeling outgunned. Last
summer, a 30-man government patrol was wiped out when it ran into a Wa mule
caravan smuggling methamphetamine to Thailand.

"The Burmese would like nothing better than to do away with the drug
trade," another diplomat in Yangon said, "because it would take guns out of
the hands of these armies."

The government's creation of a handful of opium-free zones has upset local
farmers. "What we're talking about is really changing their life style,"
said Jorgen Kristensen, an official with the U.N. Drug Control Program,
which has introduced alternative development projects. "Poppy cultivation
is ingrained in their culture."

At Nam Tit, a Wa town about a half-hour's walk from the Chinese border, Zi
Zi Fa, a farmer in patched shirt and shorts, said that his grandfather and
father grew opium poppies. He earned about $650 for his own annual crop of
12 1/2 pounds of opium, which he did not need to take to market. "When I
was growing poppies," he said, "the buyer came to me."

Since the government told him to grow soybeans instead, Zi said, he earns
one-tenth of what opium paid, not enough to feed 10 family members. "The
family is barely surviving," he said, echoing a complaint expressed by
opium farmers in Afghanistan and coca farmers in Colombia and Peru. "If we
did not grow poppies, our income would not last more than one or two
months," he said. 'In the high mountains, rice doesn't grow, and it's too
cold. The corn is fit only for the pigs."

In the nearby border town of Chin Shwe Haw, Kyan Ti Jy, a farmer from the
ethnic Chinese Kokang minority, said, "We earned more money growing
poppies, but our leader said to stop growing opium." Kyan obediently
planted lichee trees and sugar cane. Now, he complained, "nobody's buying
sugar because there's no mill." Construction on a sugar refinery is not
expected before September. With their incomes slashed by more than half,
"the farmers are not very happy," said a local official, Kyan Tin Wan.

"But the government is giving out rubber plants and lichee trees almost
free of charge, and free fertilizer," he said.

It will take at least three years for the lichee trees to bear fruit. In
the meantime, Kyan Tin Wan said, "large families who cannot stand it are
going out of designated opium-free areas to where the government cannot
touch them." The official conceded that even farmers who gave up opium as a
crop "still might be growing a little bit here and there for medicinal
purposes." At his base in Lauk Kai, the Kokang political leader, Peng
Jiasheng, said it was hard for his people to stop growing opium.

"We admit there is poppy growing in this area to a certain extent, but not
the way we've been portrayed," he said. "It's not that the leaders are
buying opium and taking it down to the Golden Triangle. We're not involved
in that." Before the Kokang concluded a cease-fire with the Burmese
government in 1989, Peng trafficked in opium himself.

"When we were insurgents, we needed to expand our army and we needed
weapons and food," he said. "For that we needed to grow more poppies."

His troops did not cultivate opium, Peng said, but levied a 40 percent tax
on what local farmers produced.

"Seventy percent of the people in this area were supporting us financially
for the insurgency," he explained. "But now there's no more fighting and
our troops are drastically reduced."

At the height of the rebellion, he said, the Kokang and Wa could field
60,000 soldiers between them. Now, he insisted, his troops have dwindled to
500.

"Today it's peaceful, so we don't need to grow poppies," the Kokang leader
said, waving a hand adorned with a heavy gold bracelet and gold rings. "If
my people can have their stomachs full and something appropriate to wear,
they are happy enough. They don't need anything more."

Taking the profit out of opium may be the toughest challenge because when
the leader of a drug operation quits, contenders jockey to replace him. For
years, Khun Sa and his narco-army dominated the heroin trade under the
guise of fighting for Shan self-determination. After some of his troops
mutinied, Khun Sa negotiated his surrender in January 1996 and lives
comfortably, but in poor health, under government observation in Yangon.

"We were fighting him for years," Hla Min of the Office of Strategic
Studies said, justifying the government's accommodation with Khun Sa. "We
were not gaining much ground because he was well equipped, well dug-in, and
the terrain was terrible. We were sacrificing too many casualties."

"Khun Sa is a walking encyclopedia regarding the drug issue," Colonel Hla
Min said. "Everything he knows, we know. But this is a multibillion-dollar
business." The vacuum left by Khun Sa was soon filled by Wei Hsueh-kang, a
Wa commander who is said to have 7,000 troops protecting his heroin and
methamphetamine operation.

"All information is that he's getting larger by the day," said a Western
official who follows narcotics matters.

For all the heroin they export to the United States and Europe, such
leaders do not tolerate its use in their own ranks. Khun Sa detoxified
errant soldiers in cages exposed to the blistering sun or in soggy holes in
the ground. While older Kokang people may use opium as medicine, Peng said,
heroin "is not medicine, so there's no excuse."

"Trading in heroin is a serious offense," he said. "We shoot the person."