WASHINGTON - Myanmar's Shan State is the epicentre of the global methamphetamine supply and the export of the illegal drug is about to get even easier, warns a new report from the Brussels-based International Crisis Group (ICG).
Shan State, a centre of conflict and illicit drug production since 1950, is controlled partly by Myanmar’s army, the Tatmadaw, and partly by multiple armed militias, some with the patronage of the Tatmadaw.
"Good infrastructure, proximity to precursor supplies from China and safe haven provided by pro-government militias and in rebel-held enclaves have also made it a major global source of high purity crystal meth," says the 36-page report titled Fire And Ice: Conflict And Drugs In Myanmar's Shan State.
"Production takes place in safe havens held by militias and other paramilitary units allied with the Myanmar military, as well as in enclaves controlled by non-state armed groups," the report says.
The report is only the latest in a string of studies and warnings in recent years, over the proliferation of meth from Shan State, whose drug industry has seen only growth.
There have been record seizures of meth in the last two years beyond the immediate region - 1.2 tonnes in Western Australia; 0.9 tonnes in Melbourne; 1.6 tonnes in Indonesia; 1.2 tonnes in Malaysia.
Regional narcotics experts estimate seizure rates at below 10 per cent of total trade, suggesting a total annual production significantly in excess of 250 tonnes, the ICG says. In the Mekong sub region, the total value of the trade is estimated at over US$ 40 billion a year.
"These record seizures... are… evidence of the scale of the problem rather than of any genuine success in addressing it," the report says. "Despite massive seizures, prices of crystal meth have remained stable, a clear indication that they are a small proportion of total volumes."
And the industry will in the foreseeable future gain momentum on the back of the recently inked multi-billion dollar China-Myanmar Economic corridor (CMEC), which will lead to better roads plus a new high-speed rail from Kunming in Yunnan, to Kyaukpyu on the Rakhine State seaboard - essentially linking southern China to the Bay of Bengal.
"In the recent history of the Golden Triangle, increased trade and improved infrastructure have expanded rather than narrowed opportunities for illicit profiteering," the report says. "People in northern Shan State with detailed knowledge of the drug trade suggest that is likely to be the case in that area with CMEC."
The trade in ice, along with amphetamine tablets and heroin, has become so large and profitable that it dwarfs the formal economy of Shan State and fuels criminality and corruption and hinders efforts to end the state's long-running ethnic conflicts, the report says.
In January 2018, for instance, Myanmar police raided an abandoned house in northern Shan state, seizing meth pills, heroin and caffeine powder worth an estimated US$54 million at domestic prices.
The site was not far from the main road to the Chinese border at Muse - a major overland trade route. That the place was "abandoned" strongly suggests those using it were tipped off, the ICG says. Perhaps not coincidentally, the militia which controls the area has maintained a ceasefire with the Tatmadaw for nearly 28 years. There were no consequences to the militia over the discovery of the drugs.
The status of militia and border guard forces aligned with the Tatmadaw gives them considerable impunity, and gives the Tatmadaw a degree of deniability.
Myanmar's President U Wun Myint, soon after taking office in March 2018, chaired a meeting of the country's Anti-Corruption commission but the commission does not have the authority to investigate the Tatmadaw. The army remains the only real power in Myanmar when it comes to security issues.
The authorities in other countries in the region are, however, often part of the corruption chain. China, where most chemicals needed to manufacture meth come from, has "almost never intercepted shipments crossing its border with Myanmar" the report says.
What is to be done?
"The government should redouble its drug control and anti-corruption efforts, focusing on major players in the drug trade," the ICG says. "Education and harm reduction should replace criminal penalties for low-level offenders. The military should reform - and ultimately disband - militias and other pro-government paramilitary forces and pursue a comprehensive peace settlement for the state."
But these are easier said than done.
With the trade so gigantic, there is little incentive not to make and sell drugs, analysts say.
"The recommendation calling for the Tatmadaw to reform relations with militias and border guard forces, and eventually seeing them disbanded, is pretty ambitious," Mr Jeremy Douglas, Bangkok-based regional representative of the United Nations Office on Drugs and Crime, said in an e-mail to The Straits Times.
"For related reforms to be successful, they would need to be accompanied by incentives significant enough that groups would cease involvement in the illicit economy," he said.
"Not to sound too pessimistic, but I can't imagine reforms working otherwise," he said, adding : "I can't think of what could be offered in the near term that would replace such massive revenue streams."