BURMA'S LARGEST REBEL ARMY BATTLES INCREASE IN OPIUM PRODUCTION

Loi Tai Leng, Burma -- The frontline of Burma's largest rebel army is
a lonely hilltop ringed by a land mine-littered jungle, mountains
controlled by the Burmese military and a patchwork of poppy fields
visible through a rusting pair of Soviet binoculars.

"It's opium," said Nan Daw, a captain in the Shan State Army South.
"I know because I have patrolled there."

Burma's southern Shan state, a historically independent area, is a
nest of battlefields, rebel cease-fire zones and territory controlled
by the Burmese military. The Shan, the nation's largest ethnic
minority with about 6 million people, have been engaged in an
intermittent guerrilla war of independence since the military junta
took power in a coup in 1962.

The rebel front also runs through the heart of the Golden Triangle,
the patch of land between Thailand, Burma and Laos that just 10 years
ago produced a third of the world's highest-grade opium.

It is the former domain of Khun Sa, the infamous Shan warlord and
narcotics kingpin who once led an army of 20,000 men. He died in
October of unknown causes in the nation's largest city, Rangoon.
Experts say Sa's retirement in 1996 helped slash the triangle's
production to 5 percent of world supply. The global leader is now
Afghanistan, which provides about 92 percent of the world's opium.

But leaders of the Shan State Army South - a northern Shan army
signed a cease-fire agreement with the government - claim opium
production is increasing in areas controlled by the Burmese military.
According to a recent U.N. report, opium production jumped almost 50
percent in 2007 from the previous year, with about 92 percent of
Burma's opium crop grown in Shan state.

"Everybody is involved in this trade in one way or another," said
Xavier Bouan, a U.N. illicit-crop monitor based in Rangoon.
"Insurgents, militia, government, cease-fire groups; for all of them,
in a region where the economy is slowing down, it's one of the only
ways to survive and get cash," he said.

The Burmese army periodically undertakes scorched-earth offensives,
destroys Shan villages, and forces farmers to do hard labor for no
compensation. Because many army battalions are forced to fend for
themselves in finding food and supplies, crop theft and forced labor
is not uncommon in the nation's restive areas.

Some observers see army participation in the opium business as
another way to earn money to purchase supplies. And military officers
are known to encourage farmers to grow opium, manufacture
methamphetamine and cut down teak forests, according to drug experts
and human rights activists.

Nang Tun, a 36-year-old mother of two, fled her village of Nong Leng
in June after Burmese soldiers forced half the village's 40 families
to grow opium poppies. She and her children now live in Loi Tai Leng,
the fortified headquarters of the Shan army along the border with Thailand.

The Burmese army "destroyed the fields of anyone who refused," she said.

At harvest time, she said, soldiers took half the crop while taxing
villagers on the other half. She fled after soldiers stole crops,
beat villagers and arrested her husband. "I don't know why" they
arrested him, she said. "I know nothing about him now."

Nang Tun and her children are among 350 displaced families under
rebel protection. They account for just a handful of the 163,000
villagers displaced by the Burmese military throughout Shan state,
according to the Shan Human Rights Foundation in Chiang Mai,
Thailand. Some live in camps rampant with disease, while others are
in Thailand illegally looking for work and a better life.

The Shan State Army South is one of the last ethnic groups in Burma
to maintain an army, along with the Karen and the Karenni peoples.
Rebel leader Col. Yawd Serk, who fought in Khun Sa's militia, says he
commands 10,000 soldiers, but the real figure may be far less.

Serk says his army has no connection to drug traffickers and survives
by charging taxes on regional trade of gems and timber. Some
analysts, however, speculate that the cash-strapped Shan army may
also be taxing the opium trade, a charge Serk vehemently denies. In
fact, the Shan leader said, his army destroys opium storehouses and
heroin refineries when it finds them.

"Opium is a big problem affecting the Shan," Serk said, in reference
to the growing addiction rate among Shan residents.

Serk says he is also worried about a rising methamphetamine industry,
which has sparked State Department concerns that the Golden Triangle
could soon become the Ice Triangle. As opium has declined, production
and distribution of methamphetamine have increased, most drug experts agree.

But the rebel officer concedes that his army can crack down on drugs
only in the shrinking pockets of territory it controls between
outposts of the Burmese military and its militia allies, the United
Wa State Army in the northern part of Shan state that signed a
cease-fire pact with the junta. The U.S. State Department has called
the United Wa State Army the world's "most heavily armed narco-traffickers."

As for the troops under his command, Serk says he applies a
zero-tolerance policy. "If anyone in the Shan State Army gets
involved in drugs, we cut their neck immediately," he said. "How can
we have hope if the young are on drugs?"

Serk is also angry at foreign governments, including the United
States, for funding anti-drug programs in Burma. He says the junta
has duped the West into thinking they are serious about narcotics eradication.

"The government takes the drug money from the U.S. and puts it in
their pockets," he said. "If they want to solve the Golden Triangle
drug problem, they can't support the Burmese government. If they
support the government, they support the drugs."

Susan Pittman, spokeswoman for the State Department's Bureau of
Narcotics and Law Enforcement, said Washington ceased all direct
anti-narcotic assistance to the Burmese government after 3,000 monks
and students were killed in pro-democracy protests in 1988. But she
concedes that the United States may be indirectly funding eradication
programs through the U.N. anti-drug program.

Pittman also says the State Department has no direct evidence that
the Burmese military is accountable for the increase in opium
production, but she concedes the junta "has failed demonstrably in
fulfilling its anti-narcotic commitments."

Whoever is to blame, the biggest losers are the Shan residents who
refuse to be part of the drug trade.

"I see opium fields in Burmese areas," said Shan State Army Sgt. Nan
Tha. "And I see empty villages where people have already fled."