BURMESE DRUGS FUEL REGIONAL STRIFE

Under A Cloud Of Drug Suspicion, Burma Accused Thailand Of Supporting
'Terrorist' Groups On Friday.

CHIANG MAI, THAILAND - Burma wants to show the world how hard it's fighting
to win the drug war. So last month, it ferried a group of Rangoon-based
diplomats by helicopter into Panghsang, a remote town in the Wa Hills along
the Chinese frontier, according to a detailed government statement.

Burmese military officials led the diplomats on a tour of crop-substitution
programs run by the Burmese government and a briefing by Pauk Yu Chan, whom
the Burmese refer to as the "Wa National Race Leader."

Mr. Pauk told the diplomats about his organization's commitment to ending
the cultivation of the opium poppy in one of its traditional strongholds,
and detailed the financial aid the Burmese government is providing to fight
drugs.

But to outsiders, his comments were more than just a little surreal. Pauk is
no average politician. He's a senior military leader of the United Wa State
Army (UWSA), a 20,000-member fighting force that the US Drug Enforcement
Agency (DEA) calls "the dominant heroin trafficking group in Southeast Asia,
and perhaps the world."

As the world's eyes skip past Burma and fix on Kashmir, close ties between
Burma's leaders and its alleged drug lords continue to cast a shadow of
instability over Southeast Asia. Diplomats, analysts, and political
opponents of Burma's military junta - which prefers that the country be
called Myanmar - say the drug trade is helping to prop up the regime and
fuel simmering insurgencies.

There have been recent reminders of the dangers of the situation. This
month, the junta, which calls itself the State Peace and Development Council
(SPDC), stepped up attacks on ethnic Shan rebels, who have been fighting for
autonomy from central government control since 1949.

The fighting has, at times, spilled across the sensitive border with
Thailand, which is angered by the flood of drugs that enter from Burma.
Mortars fired by Burmese government troops battling rebels have landed near
Thai villages and official border crossings have been closed. The Thai Army
has shelled land near Burmese towns in retaliation.

The cross-border tension is due to two factors - Thai anger at the drugs it
claims the UWSA pumps into Thailand, and Burmese claims of Thai support for
two ethnic rebel groups - particularly the Shan State Army.

On Friday, a Burmese government statement accused Thailand of "breeding,
training, and supporting these terrorist groups."

In the midst of the fighting has been the UWSA, which the DEA says controls
most of the key smuggling routes into Thailand. The UWSA was once a rebel
group, but it signed a cease-fire with the government in 1989 that allowed
it to stay armed if it promised to help the SPDC fight the Shan.

Diplomats say a tacit part of that agreement has been permission to tax the
opium trade and run the smuggling routes, a charge the SPDC denies.

"The lure of the drug trade has been used by the SPDC to corrupt some rebel
groups," says Aung Naing Oo, an exiled Burmese politician.

"We were allowed to control the opium trade when we were running the show,
and that's the UWSA's deal now," says a former aid to Khun Sa, whom the DEA
considered to be the top opium warlord in the Golden Triangle until he
retired in 1996. "After the UWSA, it will probably be someone else."

Intelligence officials on the border allege the recent fighting is
intertwined with the UWSA's desire to control smuggling routes. The group
has been working to shore up its presence close to the border for the past
two years.

Heroin comes out of Burma by two main routes: through Thailand's Chiang Mai
Province or through China's Yunnan Province. The heroin then works its way
down to ports and to the rest of the world. The DEA estimates that about 20
percent of all Golden Triangle heroin makes its way to US markets.

The US pledged $1 million to a UN effort to get farmers to grow substitute
crops in Wa areas last year, and DEA agents have maintained contact with the
junta, hoping policies will change.

But human rights activists allege the SPDC's policies drive farmers away
from legitimate crops. In fact, shortly before the diplomats arrived in
Panghsang, the UWSA and the Burmese government wrapped up a resettlement
program of 150,000 ethnic Wa from the Chinese border area to southern Shan
State, near Thailand.

The Lahu National Development Organization, a human rights group that has
interviewed the resettled Wa, says the migration was largely forced. They
also say 40,000 ethnic Shan were pushed off their land to make way for the
Wa settlers.

While the reasons for the resettlement aren't known, most analysts believe
the largely Wa UWSA wanted a more compliant civilian population along the
key drug routes into Thailand.

"How are substitution programs going to work when opium is being grown by
people who have been driven away from legitimate crops by the regime?" asks
a Western aid worker on the border.

Burmese officials declined to comment for this story. Last week, government
spokesman Hla Min, said in a statement that the country is committed "to
eradicating the production of opium and heroin in our country."

The US State Department disagrees, saying in a statement there are "reliable
reports that Burmese government and military officials in outlying areas are
either directly involved in drug production ... or provide protection to
those who are."

Those struggling for a democratic Burma worry that resettlement programs
like the one involving the Wa, and the government policy of allowing opium
armies to flourish, are undermining the hopes for a stable Burma when and if
a democratic transition takes place.

"The Burmese government says it is keeping order," says Khuensai Jaiyen, who
runs the Shan Herald News Agency, a news service run by exiles living in
Thailand. "In fact, they are creating disorder."