How Myanmar’s coup fuelled a rise in the illegal drugs trade

In a pre-dawn operation on August 13th, Thai police seized 1,000kg of crystal methamphetamine, commonly known as “ice”, alongside a highway in Hat Yai province in the south of the country. The seizure – with a street value of 300m Thai baht (€7.7 million) – was one of several in recent weeks in Thailand and across southeast Asia that officials and analysts who track drug trafficking and addiction in the region are watching with growing alarm.

They say the narcotics originate from neighbouring Myanmar, which has spun into political chaos and civil conflict since February’s military coup toppled Aung San Suu Kyi.

Inside Myanmar, almost all the drugs come from one place: Shan state in the Golden Triangle region, south of China, where Myanmar meets Thailand and Laos. Long known for its heroin production, the region has over the past decade also become the world’s largest producer of synthetic drugs, with a volume that officials say at least matches and probably exceeds that of Mexico, the world’s other main producer.

The methamphetamine seized in Hat Yai – as in most other drug raids over the past month – was found wrapped in tea packets with Chinese branding, a signature of the Shan state meth trade, law enforcement officials in Thailand, Malaysia, and elsewhere in the region say. Ice and the methamphetamine tablets Thais call yaba – translated as “crazy pills” – have also been seized by police in recent weeks in the Philippines, Laos, across the sea in Singapore, and in Myanmar itself.

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“The seizures really took off in May and June, which is coincidentally when we also started receiving reports of huge seizures in Myanmar,” says Jeremy Douglas, the UN drug agency UNODC’s regional representative in southeast Asia.

“The harm being done to the people in the region is incalculable,” he adds. “Methamphetamine is a highly addictive and destructive drug, and once enmeshed in society it will not go away.”

Interviews with narcotics and conflict analysts, police officials, residents of the Myanmar-Thai border region, and people who work with addicts reveal a surge this year in drug trafficking through and out of Myanmar – already a large industry before General Min Aung Hlaing seized power on February 1st. They say the country’s post-coup civil conflict and cash crunch has weakened drug enforcement capacity inside Myanmar, and given traffickers free rein.

“I think the coup has created a perfect storm for these transnational criminal organisations, who thrive in the gaps where justice authorities can’t easily get,” says Richard Horsey, Myanmar adviser to the International Crisis Group, who has researched Shan state’s narcotics trade. “What the coup has done is completely distract the police from their anti-drug activities, and created huge uncertainty in drug-producing areas about what the future will be – and when they are uncertain, they want money in the bank.”

Myanmar’s ‘spillover’ threat

Southeast Asia continues to struggle with the Covid-19 pandemic, which has crippled the region’s trade and tourism-dependent economies and frayed the social fabric, in addition to causing thousands of deaths.

Any spike in narcotics trafficking will only add to those problems and bolster the view being voiced by some international officials that Myanmar’s post-coup disorder is more than just a human rights or a diplomatic crisis, and that it poses a “spillover” threat to the security of countries in the region and beyond.

“The real tragedy is that you have a military regime that doesn’t have the same concerns about its own reputation and that lacks accountability,” says a western diplomat based in the region. “It’s more concerned about revenue, power, and control. The lack of effective governance in the Shan state, and increasingly other parts of Myanmar, will continue to enable drug trafficking and all kinds of other illicit activities.”

Thai law enforcement officials say the drugs being trafficked from Myanmar to Thailand, including crystal methamphetamine, meth pills, and heroin, are mostly destined for other countries, among them Australia, New Zealand, South Korea, Russia, Japan, the UK and the US.

They say the trade has flourished despite restrictions on movement imposed to contain the pandemic, with drug dealers turning to online messaging and payment apps to order and pay for narcotics trafficked into neighbouring countries such as Thailand and from there the rest of the world.

“In 2021, demand for ice in foreign countries has increased,” Somsak Thepsuthin, Thailand’s justice minister said at a press conference on the problem in June.

Seizures – a rough proxy analysts and enforcement officials rely on to estimate production – have been at their highest in years in southeast Asia in 2021. The UNODC has documented 87 “major” seizures in the region already this year – involving at least 1m methamphetamine tablets or more than 100kg of crystal meth, ketamine, or heroin – nearly two-thirds of which have happened since June. In Thailand alone, seizures of meth totalled 25.8 tonnes in the year to June, a jump of 73 per cent on the first half of 2020, according to the UN drug agency.

Despite this, street prices have fallen in Thailand, say narcotics officials. Some analysts believe this reflects a glut in production and, possibly, an opportunistic move by Shan state producers and traffickers to carve out new markets by hooking in first-time users with cheaper prices.

“Seizures in the region and Myanmar are up significantly, and last year was already a record year,” says Horsey. “Prices are stable or down in the region, and production is up, which suggests that the seizures are not reducing supply.”

Under the radar

The Golden Triangle, where the Ruak river runs between Thailand and Myanmar and meets the Mekong, has long been notorious for its porous borders and thriving trade in contraband. Until recently, it was the world’s biggest heroin-producing region.

Afghanistan has eclipsed it in recent years, but according to the UN, Myanmar remains the world’s second-largest producer of the drug. Heroin has also figured in some of southeast Asia’s police narcotics seizures traced back to Myanmar in recent weeks.

But it is methamphetamine production and trade that has emerged over the past decade as the biggest industry in Shan, which sits astride Myanmar’s main overland trade route to China. In a 2019 report, the Crisis Group said drug production and profits “dwarf the formal sector of Shan state and are at the centre of its political economy”, and estimated the total value of the Mekong drug trade at more than $40 billion (€34 billion) per year and rising.

The narcotics business flourishes in places where the state is weak, corruption is common, and officials can be bribed. Myanmar, during the last years of the former military regime, then a decade of unruly democratic transition that came to an abrupt halt with the coup, was one such place.

During Suu Kyi’s sole term in office in 2016-21 the drugs trade was one of several factors – alongside entrenched armed conflicts, human trafficking, and vulnerability to climate change – that prompted analysts to describe Myanmar as a fragile, or even failing state.

Unlike heroin, whose main input, poppies, can be tracked and measured from the air, synthetic drugs fly under the radar, as they are produced entirely in clandestine labs. Ice requires some investment in the form of equipment, precursor chemicals – whose trade is regulated – and chemists. But the manufacture of yaba pills is an artisanal industry that requires little more than a pill press as the ICG pointed out in its report.

Shan, like Myanmar’s other peripheral ethnic minority states, bristles with militia groups, some of which have carved out territorial enclaves where they exercise autonomy; some, too are allied with the military. A few have allowed drug operations on their territory, and used the trade to help fund their own organisations, others profit indirectly by “taxing” vehicles transiting their territory, including those carrying drugs or precursor chemicals.

Thai officials have identified the self-governing territory inhabited by the Northern Wa minority, which sits between Shan state and China, as one of the primary locations of drug labs. In a research paper published in January, Janes, the defence intelligence analysts, said gangs in Wa had earned “vast profits” from the territory’s involvement in the production and trafficking of narcotics, funnelling some of the profits back into mainstream businesses that add up to revenue “estimated in the hundreds of millions of dollars”.

International criminal syndicates, including figures based in Hong Kong and Macau, dominate the trafficking out of Myanmar, say narcotics trade analysts. The UN’s Douglas believes Myanmar’s synthetic drug production could surpass Mexico’s, given that similar amounts are now being seized there and on the US-Mexico border, where enforcement capacity is “vastly superior”.

As production ramped up in recent years, yaba, with its low price and abundant supply, has become a popular street drug in Myanmar and nearby countries, including Thailand and Bangladesh. The more recent seizures suggest that producers are moving into crystal meth, which delivers a more potent high, is more addictive, and commands a higher price.

In Vietnam, methamphetamine has supplanted heroin as the main drug abused by addicts, according to the head of one leading charity. “Nowadays, when you talk about drugs, you talk about synthetic drugs or methamphetamine,” says Khuat Thi Hai Oanh, director of SCDI, a non-governmental group that works with addicts in Vietnam. “Because it’s a stimulant, people can become psychotic and violent, which doesn’t happen with a heroin user.”

In Singapore, where Chinese tea packets figured in at least one recent drug seizure, police say methamphetamine abusers accounted for 70 per cent of the 1,151 new users arrested in 2020.

“The recent growth in methamphetamine production in southeast Asia is worrying, and the increased trafficking activities in the region will have adverse downstream implications for Singapore’s drug situation,” says the Singapore police.

In Thailand, the number of people being treated for addiction to yaba pills has doubled to about 200,000 since 2006, according to Rasmon Kalayasiri, director of the Centre for Addiction Studies at Bangkok’s Chulalongkorn University medical school. “Ice has become more popular recently,” she adds. The number of people being treated for addiction to ice is smaller than for yaba, but almost tripled to 16,000 a year between 2016 and 2019

Supply outstripping demand

In 2018, Suu Kyi’s government announced its first national drug control policy, a move meant to bring the country in line with international best practice in areas such as addiction treatment.

Since the military seized power in February, drugs analysts and people inside Myanmar say, that despite recent seizures in the country interdiction measures have deteriorated, as some police were redeployed from drug-producing and trafficking areas to central Myanmar, where the mass resistance movement opposed to the coup is concentrated.

Myanmar’s military junta spokesman did not respond to a request for comment for this article.

“Drug production is growing quicker than demand,” says one resident of Tachileik, Myanmar’s main Golden Triangle border town, with a detailed knowledge of the drugs trade in the area, adding that methamphetamine production had risen and prices of the drug had fallen, since the coup.

“The Suu Kyi government had scanning machines for trucks,” says the person, who asked to remain anonymous for fear of angering the regime. Since the coup, he adds: “The machines are still running but you can bypass the checks: you can pay bribes.”

A second person with direct knowledge of narcotics smuggling in Karen state to the south of Shan, which also serves as a transit point for drugs, says: “Since the coup, there have been more drug transports, and they have 100 per cent safety because they don’t need to be afraid.”

While Thailand has tightened border controls this year in response to the pandemic, drugs now move more freely inside Myanmar, and traffickers have rerouted their transports elsewhere, including to ports in the country’s south. “It’s harder to transport drugs through Thailand now [since the coup], but the transportation in Myanmar is almost 100 per cent easier because no one will arrest them,” says the person in Karen state.

Trade routes

The reports of increased drug seizures, falling prices, and the Myanmar military’s alleged tolerance of trafficking are difficult to confirm independently for an illegal industry and in a country in worsening civil unrest and a pandemic, which is closed to foreign journalists and researchers.

However, they align with observations by officials who track the trade in neighbouring countries. In his press briefing in June, Somsak, the Thai minister, said the country was seeing an increase in shipments of both ice and heroin produced in Myanmar. He added that narcotics were being trafficked from the Golden Triangle westward to Bangladesh; eastward to Chiang Rai and Chiang Mai in Thailand’s north, and south through Myanmar to its ports.

Some drugs were also making their way through Laos to Vietnam and from Vietnamese ports to other countries, he added.

According to Thailand’s Office of the Narcotics Control Board (ONCB), which tracks street prices for drugs, the retail price per gramme of crystal meth has fallen by as much as half this year to between 500-1,000 Thai baht – as little as $15, from 1,000-2,000 a year ago. The price of a yaba pill has fallen to between 50 and 100 baht in 2021 from 100 a year ago.

“I speak to young drug dealers, and they tell me that methamphetamine is cheaper, there are more customers, and there are more sellers too,” says Watcharapong Phumchuen, head of the Northern Substance Abuse Center at Chiang Mai University. “We can safely say that there are more drugs and drug addicts in the north and north-east of Thailand now.”

Improvements in technology are making production and trafficking of yaba and ice easier, he says, adding that the political upheaval in Myanmar was fuelling the trade. “Five years ago, there wasn’t as much as now,” he says. “Since the coup, it’s moneymaking time for Myanmar officials on the borders – and especially from June onward, people have been attempting to bring drugs in.”– Copyright The Financial Times Limited 2021