Transnational Crime Durgs and Security in Eas Asia

Transnational Crime, Drugs, and Security in East Asia
Author(s): Alan Dupont

Source: Asian Survey, Vol. 39, No. 3 (May - Jun., 1999), pp. 433-455
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TRANSNATIONAL CRIME, DRUGS,
AND SECURITY IN EAST ASIA
Alan Dupont
Hardly a day passes without some reference in the elec-
tronic and print media to illicit drug trafficking and its nefarious consequen-
ces. Unfortunately, many of these accounts play fast and loose with the facts,
relying on sensationalist or exaggerated reporting to create the impression of
a looming disaster when the evidence presented is less than compelling.1
Skeptics rightly point out that crime and illicit drugs have been associated
with the dark side of human nature for millennia. There are lingering suspi-
cions that Western defense and security communities are playing up the
threat of narcotics trafficking and transnational organized crime in their
search for a post-cold war raison d'etre. However, despite the tendency of
the popular press to exaggerate the impact and scope of drug-related crime, a
number of scholarly and authoritative studies published over the past decade
have argued persuasively that narcotics trafficking is a serious social, polit-
ical, and security issue for the international community.2
Alan Dupont is Director of the Asia-Pacific Security Program, Strate-
gic and Defence Studies Centre, Research School of Pacific and Asian Studies, Australian Na-
tional University, Canberra. The author is grateful to Desmond Ball for his comments on an
earlier draft and to analysts from the Australian Office of Strategic Crime Assessments for their
helpful suggestions and constructive criticisms.
?
1999 by The Regents of the University of California
1. A notable example of the genre is the book written by the journalist Claire Sterling entitled
Crime Without Frontiers: The Worldwide Expansion of Organised Crime and the Pax
Mafiosa
(New London: Little, Brown, and Company, 1994).
2. For a representative selection, see Michael Dziedzic, "The Transnational Drug Trade and
Regional Security," Survival 31:6 (November-December 1989); Masayuki Tamura, "The Ya-
kuza and Amphetamine Abuse in Japan," Drugs, Law and the State, eds. Harold H. Traver and
Mark S. Gaylord (Hong Kong: Hong Kong University Press, 1992); Ivelaw L. Griffith, "From
Cold War Geopolitics to Post-Cold War Geonarcotics," International Journal 99 (Winter
1993-94); Rensselaer W. Lee III and Scott B. MacDonald, "Drugs in the East," Foreign Policy,
no. 105 (Winter 1996-97); and Peter Chalk, "Low Intensity Conflict in Southeast Asia: Piracy,
Drug Trafficking and Political Terrorism," Conflict
Studies 305/306 (January and February
1998).
433
434 ASIAN SURVEY, VOL. XXXIX, NO. 3, MAY/JUNE 1999
In 1997, Giorgio Giacomelli, the executive director of the U.N.'s Interna-
tional Drug Control Program, issued this sober warning: "All over the world
individuals and societies face an illicit drug problem whose scale was
unimaginable a generation ago. [A]s drug abuse affects more and more coun-
tries, the power of international drug trafficking organizations threatens to
corrupt and destabilize the institutions of government."3 Underlying Gia-
comelli's concerns are U.N. estimates that between 3.3% and 4.1% of the
world's six billion people are regular users of illicit drugs. The annual profits
from narcotics trafficking are around US$400 billion, or 8% of international
trade.4 Figures must be treated with caution given the difficulty of calculat-
ing the value of an industry that is inherently nontransparent. But they do
lend credence to claims that a culture of drug taking has entrenched itself
globally, enriching and empowering today's drug lords to a degree that is
historically unprecedented.
Latin America is the region most closely associated in the public mind
with the illicit drug trade, and for good reason. But can the same be said of
East Asia's drug traffickers? This is not an easy question to answer. Far less
is known about the dynamics of the illicit drug trade in East Asia even though
it is home to the infamous Golden Triangle area of Thailand, Burma, and
Laos that is the world's largest producer of heroin. Aside from a handful of
studies focusing on the narco-politics of the Golden Triangle, there has been
surprisingly little analysis of the wider dimensions of the contemporary drug
trade in East Asia and its impact on the security of the region.5 Yet, East
Asia would appear to have many of the underlying conditions that transna-
tional criminal groups have exploited in Latin America to reap rich financial
and political rewards. The region primarily comprises populous, developing
states that are prone to systemic corruption, do not give a high priority to the
rule of law, and are characterized by weak prudential and banking systems.
This article explores the dynamics and security implications of narcotics
trafficking in East Asia and the relationship between drugs and transnational
crime. The principal conclusion reached is that the illicit drug trade is emerg-
ing as a significant long-term security issue for the region. Narcotics traffick-
ing has grown enormously in sophistication and volume in conjunction with
the spread of Asian organized crime in the decade since the end of the cold
war, and it will continue to do so in the absence of effective national and
regional countermeasures. While the production and consumption of narcotic
substances has a long history in East Asia, there are several disturbing new
3. Giorgio Giacomelli, foreword to United Nations International Drug Control Programme,
World Drug Report (Oxford: Oxford University Press, 1997), p. 7.
4. World Drug Report, p. 31. These figures are for 1996.
5. The classic account of the Golden Triangle's drug politics is Bertil Lintner, Burma in Re-
volt: Opium and Insurgency Since 1948 (Boulder, Colo.: Westview Press, 1994).
ALAN DUPONT 435
developments that have forced narcotics trafficking onto the regional security
agenda for the first time.6 Once primarily a producer of heroin, East Asia has
become a major heroin consumer and an emerging market for a new class of
designer drugs such as ice and ecstasy. Drug dependency in states with no
recent history of drug addiction such as China and Vietnam is rising at an
alarming rate. Drug money is distorting regional economies and exacerbating
corruption and political instability. Narcotics trafficking is now big business
in East Asia. It is one enterprise that shows little sign of being adversely
affected by East Asia's economic crisis.
Before proceeding, a brief explanation of the link between transnational
crime and security is warranted. It is important to recognize that there is no
consensus about the precise meaning of the term "transnational crime," nor is
there agreement about the organizational and social dynamics that drive crim-
inal groups and govern their activities.7 There is also considerable debate
and contention about the scope and object of security. Should security con-
tinue to be defined primarily in terms of the nation state or broadened to
include people as well as states, as proponents of the notion of human secur-
ity maintain? And in what sense has transnational crime gravitated from be-
ing a law and order issue to one of international security? For the purposes of
this study, security will be defined primarily in conventional, state centric
terms.8 While transnational crime encompasses a multitude of different orga-
nizational forms and activities, the type of criminal activity most likely to
pose a threat to national security is not random or transient. Invariably, it is
directed by groups with a recognizable structure, leadership, and established
6. At the Sixth Steering Committee of the second-track Council for Security Cooperation in
the Asia Pacific (CSCAP), a decision was taken in Canberra on December 10, 1996, to establish
a Study Group on Transnational Crime to consider the security implications for the region of
transnational crime, including drug trafficking. The Study Group was elevated to the status of a
full Working Group in December 1997.
7. The search for definition and meaning invariably reflects the perspective and the biases of
the investigator. Social scientists regard crime primarily as a social phenomenon, economists
emphasize organizational imperatives and structures, while anthropologists are inclined to view
crime through a cultural lens. See Jay S. Albanese, "Models of Organized Crime," in Handbook
of Organized Crime in the United States, eds. R. J. Kelly, K. L. Chin, and R. Schatzberg
(Westport, Conn.: Greenwood Press, 1994), p. 78.
8. This is not to argue that transnational crime only affects the security of the state. However,
a full exposition of the links between transnational crime and broader notions of security is
outside the scope of this article. For a more comprehensive analysis of the conceptual and defi-
nitional issues, see Alan Dupont, "New Dimensions of Security," in The New Security Agenda in
the
Asia-Pacific Region, ed. Denny Roy (Hampshire, England: Macmillan Press, 1997), pp.
31-50; and Phil Williams, "Transnational Criminal Organizations: Strategic Alliances," Wash-
ington Quarterly 18:10 (Winter 1995), pp. 57-71.
modus operandi, frequently involving transnational cooperation or collabora-
tion.9
The argument that transnational crime has become a serious international
security issue rests on four propositions. The first is that transnational crimi-
nal activities can pose a direct threat to the political sovereignty of the state
because they have the capacity to undermine and subvert the authority and
legitimacy of governments. In their search for illicit profits, criminals implic-
itly and explicitly challenge the monopoly over taxation and violence tradi-
tionally enjoyed by the state10 and work at cross purposes to the aim of good
government, which is to protect the rights, property, welfare, and security of
its citizens. Fears about the criminal erosion of political sovereignty are
echoed in a second and related concern about economic security. Developing
states or so-called economies in transition are most at risk because individu-
als and elites become habituated to working outside the regulatory environ-
ment and the rule of law, weakening state capacity.1" Third, the growth in
the coercive power of organized crime, if unchecked, has international secur-
ity implications because large-scale criminal enterprise can subvert the norms
and institutions that underpin global order and the society of states. Fourth,
transnational crime has an important military and strategic dimension, which
can take a number of different forms. Revolutionary political movements and
insurgent groups sometimes turn to crime to finance their operations. In the
process, their original political goals and motivations become subordinated to
their illicit money making activities. Crime's intrusion into the strategic do-
main is blurring the distinction between military and law enforcement issues
and changing the way security is conceived.12 Criminal activities, particu-
larly those conducted on a large scale and involving significant international
cooperation, have moved along the threat continuum toward the traditional
concerns of the national security apparatus.13
The Global Narcotics Trade
The extent to which the illicit drug trade has begun to impinge on the security
concerns of East Asian states cannot be grasped without an understanding of
9. R. T. Naylor, "From Cold War to Crime War: The Search for a New 'National Security'
Threat," Transnational Organized Crime 1:4 (Winter 1995), p. 43.
10. Phil Williams, "The Geopolitics of Transnational Organized Crime" (paper presented at
the seminar on "Global Security Beyond 2000," University of Pittsburgh, Pennsylvania, Novem-
ber 1995), p. 13.
11. Samuel D. Porteous, "The Threat from Transnational Crime: An Intelligence Perspec-
tive," Commentary 70 (Winter 1996), p. 4.
12. On this point, see Graham Turbiville, "Operations Other than War: Organised Crime Di-
mension," Military Review 74:1 (January 1994), p. 36.
13. John Ciccarelli, "Crime as a Security Threat in the 21st Century," Journal of the Austra-
lian Naval Institute (November/December 1996), pp. 43-44.
ALAN DUPONT 437
TABLE 1 Global Illicit Production of Opiates and Cocaine
1990 1991 1992 1993 1994 1995 1996 1997
Opiates
Cultivation in
hectares 267,754 286,368 265,216 289,355 283,049 266,478 271,999 265,741
Production in tons 3,830 4,314 4,140 4,693 5,519 4,486 4,389 4,861
Cocaine
Cultivation in
hectares 288,400 234,700 190,600 203,900 189,600 194,000 178,300 179,200
Production in tons
(coca leaf) 363,981 386,228 377,114 368,833 315,420 322,042 311,420 302,523
SOURCE: U.N. General Assembly, Special Session on the World Drug Problem, New York,
June 8-10, 1998, on the Internet at <http://www.un.org/ga/20special/presskit/pubinfo/info2.
htm>. This material also includes consumption figures.
its global dynamics and characteristics. The international drug trade is cen-
tered on four main types of drugs. The most widely abused and heavily traf-
ficked by volume is cannabis, which is consumed by at least 140 million
people worldwide. Around 500,000 tons of cannabis were produced in 1997,
including cannabis produced domestically in countries such as the U.S., Can-
ada, and Australia. Cannabis is far less potent than cocaine, heroin, or am-
phetamine-type stimulants (ATS), which if taken on a regular basis are habit
forming and can have serious social and health consequences.14
The global consumption of cocaine, heroin, and ATS has grown dramati-
cally over the past two decades (see Table 1 and the U.N. website in footnote
15). During the 1980s, cocaine production doubled and heroin production
tripled, creating 13 million cocaine addicts and 8 million heroin addicts glob-
ally. For example, of 1,000 tons of cocaine produced in 1996, 98% came
from Peru, Bolivia, and Colombia, most of it destined for the North American
market. Heroin production was estimated to be 330 tons, with 90% being
grown in the Golden Triangle and the Golden Crescent (Afghanistan, Iran,
and Pakistan) regions and intended for a global market. Seizures by the au-
thorities typically account for only about 10% of annual production.15
14. The trade in illicit drugs has traditionally focused on cannabis, cocaine, and heroin but is
increasingly shifting to synthetic stimulants often grouped as ATS. Australian Illicit Drug Re-
port 1996-97 (Canberra: Australian Bureau of Criminal Intelligence, December 1997), p. 51;
and World Drug Report, p. 39.
15. These statistics are drawn from the United Nations, General Assembly, Special Session on
the World Drug Problem, New York, June 8-10, 1998, on the Internet at <http://www.un.org/
ga/20special/presskit/pubinfo/info2.htm>; and World Drug Report, pp. 18, 24-28.
TABLE 2 Global Seizures of Amphetamine-Type Stimulants, 1990-1996
1990 1991 1992 1993 1994 1995 1996
In kilograms 1,380 3,457 3,383 5,124 5,517 5,474 14,566
Index 1985 = 100 39 99 96 146 157 156 415
SOURCE: Ibid.
NOTE: Data exclude ecstasy. There are no official estimates of the extent of clandestine ATS
manufacture. The proliferation of illicit laboratories suggests a strong increase over the past two
decades. Between 1980 and 1994, the number of laboratories detected manufacturing ATS
increased more than six fold. Over this period, ATS accounted on average for 38% of all detec-
tions of illicit laboratories at the global level.
While opium cultivation and heroin production has stabilized during the
1990s, the use and abuse of ATS have soared, especially in North America,
Europe, and East Asia. In the absence of definitive production data, one way
to obtain a rough estimate of ATS production is through seizure rates. Global
seizures of ATS increased slowly from 281 kilograms in 1976 to 1.4 tons in
1990. Thereafter, the annual growth rate of seizures (excluding ecstasy) av-
eraged 48% (see Table 2 and U.N. website in footnote 15), which far ex-
ceeded that of any other drug type. In 1996 seizures reached 14.6 tons and
there were an estimated 30 million users. The abuse of ATS globally now
exceeds that of heroin and cocaine combined.16
Burma: The Heart of the Golden Triangle
While Colombia and other Latin American states dominate the cocaine trade,
Asia is the leading producer of heroin-an analgesic, narcotic, and poten-
tially addictive drug refined from the cultivation of the immature fruit of the
opium poppy, papaver somniferum. The Golden Triangle region of Burma,
Thailand, and Laos accounts for 65% of all opium produced illicitly and sus-
tains a heroin industry conservatively estimated to be worth at least US$160
billion annually. To put this figure in context, US$160 billion is roughly four
times the value of the international arms trade.17
Opium has a long tradition in East Asia, having been first introduced into
the region by Arab traders plying their wares in the eighth century and later
16. U.N., General Assembly, Special Session.
17. In 1996, the arms trade was valued at US$39.9 billion. See International Institute for
Strategic Studies, The Military Balance (London: Oxford University Press, International Institute
for Strategic Studies, 1997-98), p. 264.
ALAN DUPONT 439
spread by Portuguese merchants from India in the sixteenth century.18 Origi-
nally grown in the Chinese provinces of Sichuan, Yunnan, and Guanxi, the
opium poppy was carried into northern Thailand, Laos, and Burma by migrat-
ing hill tribes for whom opium smoking had become an accepted part of
tribal culture. Although the narcotic derivative of the opium poppy was in
common use throughout East Asia as a therapeutic drug and for the treatment
of a wide range of ailments, drug consumption seldom led to widespread
abuse or addiction until the British actively promoted opium use in China at
the end of the eighteenth century. 19 Defeated in the so-called Opium Wars of
1839 and 1856, the ruling Qing Dynasty was forced to sign a trade agreement
with the British that legalized the cultivation and import of opium. A quarter
of a century later, the British forerunners of today's narco traffickers had
made opium the world's largest cash crop, creating in the process 15 million
opium addicts in China alone.20 Pharmacological advances enhanced the po-
tency of opium and aided its spread. In 1898, the German pharmaceutical
company Bayer introduced a new analgesic derivative from the opium poppy
that was ten times more effective than morphine. It was called heroin.21
Climate, history, and politics have conspired to make the hills of Burma's
Shan State the world's preeminent opium-growing region. Isolated from the
more densely populated and relatively fertile lowlands of central and south-
ern Burma, the tribal people of the Shan State have found the opium poppy
well suited to the cooler climate and poorer soils of the rugged hills that
border on China's Yunnan Province and extend into Thailand and Laos.
Although cultivated by the highland tribes for most of this century, opium
production accelerated in the 1970s under the aegis of separatist militia who
used the proceeds from heroin to fund their political and military struggles.
Today, the Shan hills provide a sanctuary for a disparate collection of narco
insurgent groups that cultivate the opium poppy and transform its narcotic
by-product into the immensely profitable heroin. Relatively distant from the
traditional locus of state power in Rangoon, and in a country beset with a
myriad of insurgencies rooted in the political alienation and economic
marginalization of the hill tribes, the drug lords of northeastern Burma have
been able to exercise almost absolute power over their narco fiefdoms and
18. Alfred W. McCoy, "Heroin as a Global Commodity: A History of Southeast Asia's
Opium Trade," in War on Drugs: Studies in the Failure of U.S. Narcotics Policy, ed. Alfred W.
McCoy and Alan A. Block (Boulder, Colo.: Westview Press, 1992), p. 240.
19. Barbara Remberg, "Stimulant Abuse: From Amphetamine to Ecstasy," in World Drug
Report, p. 35; Alison Jamieson, "Global Drug Trafficking,"
Conflict
Studies 234 (September
1990), pp. 1-2; and Peter Chalk, "Low Intensity Conflict," pp. 8-9.
20. Gerald L. Posner, Warlords of Crime: Chinese Secret Societies-The New Mafia (New
York: Penguin Books, 1990), pp. 62-63.
21. Jamieson, "Global Drug Trafficking," p. 2.
establish the operational security critical to the success of their illicit activi-
ties. Without this favorable confluence of climate, geography, political cir-
cumstances, and extraordinary profits, it is doubtful whether drug trafficking
would have been able to entrench itself in Burma to the extent that it has.
The Shan hills of northeastern Burma are the epicenter of regional opium
cultivation, producing around 90% of all heroin exported from the Golden
Triangle. The estimated 197 tons of heroin produced in 1997 from the
Golden Triangle was enough to "satisfy the U.S. heroin market many times
over."22 Opium cultivation in northeastern Burma expanded considerably in
the late 1980s and early 1990s before stabilizing in the middle of the decade.
In 1988-the year that the Ne Win government collapsed and was replaced
by the military-dominated government named the State Law and Order Res-
toration Council (SLORC, now known as the State Peace and Development
Council or SPDC)-Burma produced 1,280 tons of opium.23 Eight years
later, in 1996, opium production had more than doubled to 2,560 (see Table
3) out of the more than 4,000 tons produced globally-enough to make 250
tons of refined heroin.24
The narcotics trade is unusually profitable because the average markup for
illicit drugs from source to market is extremely high in absolute terms and
relative to most other commodities. In 1992, a single kilogram of heroin that
fetched between US$1,200 and US$1,400 immediately after being processed
in Burma's jungle laboratories typically would double in price by the time the
narcotic reached its first transshipment point in the Thai city of Chiang Mai,
triple again in Bangkok, and eventually sell for between US$20,000 to
US$60,000 in New York.25 Profits can be even higher still, depending on
demand, availability, purity, and exchange rate fluctuations. In 1997, a 700-
gram brick of heroin cost a wholesaler in Australia around US$53,000. When
adulterated with other chemicals and sold in small .02 gram bags, each bag
22. U.S. Department of State, Bureau for International Narcotics and Law Enforcement Af-
fairs, International Narcotics Control Strategy Report, 1997, Washington, D.C., March 1998, on
the Internet at <http:/www.state.gov/www/global/narcotics
law/1997Lnarc-report/index.html>.
The president is required by U.S. law to identify and notify those countries that have been deter-
mined to be major illicit drug producers, transit countries, or both. Burma was one of four states
denied certification in 1998.
23. "No End to Burma Heroin Flow," Australian, June 11, 1997.
24. U.S. Department of State, Bureau for International Narcotics and Law Enforcement Af-
fairs, International Narcotics Control Strategy Report, 1997, Washington, D.C., March 1998, on
the Internet at <http:/www.state.gov/www/global/narcotics law/1997Lnarcjreport/index.html>.
25. Edward J. Kelly, "Cooperative Efforts in Combating Drug Trafficking," in Enterprise
Crime: Asian and Global Perspectives, eds. Ann Lodl and Zhang Longguan (Chicago: Office of
International Criminal Justice with Shanghai Bureau of Justice and East China Institute of Poli-
tics and Law, University of Illinois, 1992), p. 151.
ALAN DUPONT 441
TABLE 3 Estimated Potential Illicit Opiate Net Production, Southeast Asia,
1987-1997 (in tons)
Country 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997
Burma 835 1,280 2,430 2,255 2,350 2,280 2,575 2,030 2,340 2,560 2,365
China
- - - - - - - -
25 19
Laos 225 255 380 275 265 230 180 85 180 200 210
Thailand 24 25 50 40 35 24 42 17 25 30 25
Vietnam
- - - - - ? _ _ 45
Total 1,084 1,560 2,860 2,570 2,650 2,534 2,797 2,132 2,570 2,809 2,645
SOURCE: U.S. Department of State, Bureau for International Narcotics and Law Enforcement
Affairs, International Narcotics Control Strategy Report, 1997 (Washington, D.C., March 1998
and DOS website in footnote 22).
NOTE: Figures for Vietnam represent production of opium gum; all other figures represent
opium production. The 9% drop in production in 1997 in Burma was principally due to unfavor-
able conditions during the growing season.
would retail for about US$22, which meant that one kilogram of heroin on
the streets of Sydney was worth more than US$750,000.26
Opium cultivation in the Golden Triangle was first exploited for criminal
purposes by remnants of the Kuomintang (KMT) forces who sought sanctu-
ary in Burma from pursuing communist armies in January 1950.27 Many of
these KMT soldiers were natives of China's Yunnan Province and ethnically
related to the various tribal groups who inhabit the Shan State. These KMT
irregulars turned to heroin production and smuggling, initially as a means of
survival but increasingly in order to enrich themselves. During the suc-
ceeding decades, they formed political and business associations with Chi-
nese Triad gangs in Hong Kong, Macau, Thailand, Malaysia, Taiwan, and
China itself. The Triads provided the crucial distribution and financial net-
works for heroin trafficking by the irregulars. The irregulars also established
important links with Burma's minority tribal groups, who were engaged in a
drawn out and increasingly bloody struggle for independence from the ethni-
cally distinct lowland Burmese who held the reins of power in Rangoon.
Over time the highland Shans and related ethnic Chinese tribal groups formed
their own armies, funding their political activities and military operations
26. Bertil Lintner, "The Dream Merchants," Far Eastern Economic Review (FEER), April 16,
1998, p. 27.
27. Lintner, Burma in Revolt, p. 92. Opium had been cultivated in the Shan State well before
the KMT arrived. In 1936, for example, the region is recorded as having produced eight tons of
raw opium, while Laos and northern Vietnam produced 7.5 tons in 1940. McCoy, "Heroin as a
Global Commodity," p. 255. McCoy provides one of the best historical analyses of the develop-
ment of the opium trade in Southeast Asia and China.
from the heroin trade that grew steadily in profitability and sophistication as
demand from the affluent West for the drug continued to rise. Opium cultiva-
tion was far more lucrative than any of the alternative cash crops and was the
only way in which the hill tribes could finance their costly armed struggle
against the numerically stronger Burmese Army.
Two men, both ethnic Chinese, dominated the heroin trade in the 1970s
and 1980s. The first of these was Luo Xinghan (Lo Hsing Han), head of the
once powerful Kokang Self-Defense Forces. He achieved considerable noto-
riety in the mid-1970s as Burma's so-called "Opium King" before he was
caught and jailed by the Burmese government. At the height of his influence,
Luo succeeded in weaving together a complex web of informal understand-
ings and tactical alliances with other local drug traffickers, international her-
oin distributors, foreign intelligence services, and the Burmese military.
Luo's tactics were emulated by others, among them the head of the Shan
United Army (SUA), Chang Qifu, better known as Khun Sa. Khun Sa as-
sumed Luo's mantle as Burma's preeminent narcotics trafficker and estab-
lished his suzerainty over an extensive drug empire that he protected with a
formidable and well-equipped army. In an industry not noted for the longev-
ity of its leadership, Khun Sa's tenure as the Golden Triangle's most power-
ful drug baron was due largely to the protection he received from high-level
patrons in Burma's army and Thailand's political and military establish-
ment.28 He also benefited financially and politically from his membership in
the Hung Pang Triad, which has close links to a major Sino-Thai business
organization, the Yunnanese Association. Khun Sa adroitly exploited kinship
ties in China and with Chinese businesspersons throughout Southeast Asia to
establish a heroin distribution network that spanned the globe.29
Burma's unsavory reputation as a narco state is also attributable to the
internecine conflict between the Burmese government and the now defunct
Burmese Communist Party (BCP), which for three decades conducted a vio-
lent armed struggle against the central government from its base in the Shan
State before eventually disbanding in 1989. The BCP eschewed the drug
trade in its formative years but turned to trafficking in the 1970s to finance its
war against Ne Win's government. At the height of its involvement in the
drug trade, the BCP was a major player in Golden Triangle heroin distribu-
tion. Ironically, far from heralding a decline in Golden Triangle heroin pro-
duction the demise of the BCP actually stimulated it. In 1988, Burma pro-
duced 68 tons of heroin from 103,200 hectares of opium production. In
28. Harold 'Tex' Lierly, "The Golden Triangle" (paper presented at the Multinational Asian
Organised Crime Conference, sponsored by the Australian Federal Police and the National
Crime Authority, November 1994, Sydney, Australia), p. 1.
29. Edward J. Kelly, Jr., "The Southeast Asian Heroin Situation 1991" (paper presented at the
Multinational Asian Organised Crime Conference), p. 6.
ALAN DUPONT 443
FIGURE 1 Burma Harvestable Opium Cultivation, 1990-1997
1 70,000-
165,000-m
160,000-eCa
=
155,000
150,000
145,000
135,000
SOURCE: Ibid from Table 3.
NOTE: Serious drought was responsible for low crop yields in 1994.
1991, two years after the BCP's surrender, production had nearly tripled to
181.5 tons of heroin from 161,012 (potential) hectares (see Figure 1).30
The Growth of Burma's Heroin Trade
Why has Burmese heroin production remained at such high levels throughout
the 1990s? Part of the explanation can be found in the splintering of the BCP
into its constituent tribal and ethnic elements after the surrender of its
predominantly Burmese leadership. Fearful that these groups might form al-
liances with disaffected urban youth alienated by the army's crushing of the
1988 pro-democracy movement, Rangoon negotiated a series of understand-
ings with the successor groups to the BCP.31 In exchange for promises not to
attack government troops or move into government-controlled areas, the Bur-
mese military government gave the former insurgents virtual freedom to en-
gage in "private" business activities, a euphemism for narcotics
trafficking.
A second reason for the rise in Burmese heroin production is that influen-
tial members of the SPDC have been co-opted by the drug lords in much the
30. Bertil Lintner, "The Drug Trade in Southeast Asia," Jane's Intelligence Review, Special
Report No. 5, April 1995, p. 8.
31. The BCP split into four main groups. The largest was the United Wa State Army
(UWSA), which numbered about 8,000-10,000 armed men at the time of the break up. The
others were the Myanmar National Democratic Alliance Army (MNDAA), more commonly
known as the Eastern Shan State Army (ESSA); the National Democratic Alliance Army
(NDAA); and the New Democratic Army (NDA). Ibid., pp. 6-7.
same way as the Colombian and Bolivian governments have been penetrated
by the cocaine cartels. Although Ne Win often tolerated poppy cultivation
and the associated drug trade in his attempts to divide and conquer the war-
ring highland ethnic groups, during his long period in office periodic govern-
ment military forays into the Kachin and Shan States circumscribed the
activities of the drug lords. Ne Win's military successors initially continued
the fight and seemed to have broken the back of Burma's narco insurgency
when Khun Sa and his forces surrendered in 1996. However, there is growing
evidence that Burma's military regime, far from prosecuting the war against
drugs, has effectively become part of the nation's drug problem.
In 1997, a U.S. State Department report criticized the SPDC for lacking the
resources, the ability, or the will to take serious action against ethnic drug
trafficking groups. The same report asserted that 15% of foreign investment
in Burma was directed through a company known as Asia World that was
owned by relatives of Luo Xinghan. It has been alleged that this company is
Burma's "fastest growing and most diversified conglomerate."32 U.S. con-
cerns about Rangoon's tolerance of drug trafficking came to a head at the
ASEAN Post Ministerial Meeting in August 1997, when Secretary of State
Madeleine Albright castigated the SPDC for permitting drug traffickers to
hold prominent political and business positions. Albright alleged that "drug
traffickers who once spent their days leading mule trains down jungle tracks
are now leading lights in Burma's new market economy and leading figures
in its new political order."33
The SPDC has denied allegations of complicity in the drug trade, pointing
to the 3,000 casualties the army has suffered since 1988 in the war against
drug insurgents.34 Many independent observers believe that the Burmese are
serious about fighting the drug trade but essentially are out-resourced by the
drug lords who have formidable financial and military assets at their disposal.
Others disagree, arguing that regular, organized drug movements in Burma's
northern border areas would be impossible without the cooperation of the
Burmese Army.35 While the jury is still out on allegations that the SPDC is
directly implicated in the drug trade, there is little doubt that the government
has permitted and even encouraged known drug traffickers like Khun Sa and
the family of Luo Xinghan to establish themselves as leading business figures.
Some Burmese Army units also appear to be involved in the heroin and am-
32. Bertil Lintner, "Safe at Home: Drug Lords Are Keeping Their Cash in The Country,"
FEER, August 14, 1997, p. 18; and Anthony Davis and Bruce Hawke, "Burma: The Country that
Won't Kick the Habit," Jane's Intelligence Review, March 1998, p. 29.
33. "U.S. Blasts Burma on Opium Bigwigs," Australian, July 29, 1997.
34. "No End to Burma Heroin Flow," ibid., June 11, 1997.
35. Desmond Ball, "Burma and Drugs: The Regime's Complicity in the Global Drug Trade,"
Asia-Pacific, no. 14 (forthcoming in 1999).
ALAN DUPONT 445
phetamine trades, and there are growing suspicions that the government has
financed much of its arms build up over the past decade from taxes levied on
heroin refineries. Economists could not explain US$400 million in foreign
financial inflows in the 1995-96 fiscal year, up massively from the previous
year's US$79 million. Another US$200 million in defense expenditures by
Burma could not be accounted for by official trade. The US$600 million was
almost certainly part of the US$700 million to US$1 billion that flows into
the Burmese economy from the heroin trade, which equates to the value of all
Burma's legal exports.36
Burma is clearly the most egregious example of a drug-tainted regime in
East Asia. The growing evidence of collusion between the SPDC and well-
known drug traffickers such as Khun Sa does not augur well for the integrity
of Burma's political system or international efforts to stem the flow of drugs
into the region and beyond. Burma's economic interests and security are also
unlikely to be advanced by the operations of the country's drug barons. Any
short-term financial benefits that may accrue from the inflow of drug money
are likely to be outweighed in the longer term by structural distortions in the
Burmese economy, the diversion of capital to nonproductive enterprises, and
increasing levels of corruption.
A Growing Regional Security Issue
But is Burma merely an isolated, albeit serious, case of an embryonic narco
state largely quarantined from the economic life and the security concerns of
the wider East Asian region by virtue of its geographical and political isola-
tion? The evidence suggests otherwise. Not only is Burma central to a
global heroin industry, but other East Asian states also are rapidly being in-
corporated into a growing, region-wide market and distribution network for
illegal narcotics dominated by Asian criminal organizations.
China is emblematic of this emerging East Asian drug security problem.
In 1949, there were estimated to be 20 million drug addicts in China. The
opium trade was ruthlessly stamped out by the communists37 to such an ex-
tent that in the mid-1960s China proudly proclaimed itself to be a country
36. Bruce Hawke, "Burma's Military Implicated," Pointer (London), October 1998, p. 10;
and William Barnes, "Junta in League with Drug Barons," South China Morning Post, October
3, 1998, p. 9. The only other items that could possibly account for a discrepancy of this size
would be foreign exchange generated by smuggling jade and precious stones. This is extremely
unlikely, however, because most of the jade and stones produced in Burma is now sold on the
domestic market, and there has been no major price rise that might account for an increase in
foreign exchange of this order. This point is argued persuasively by Bertil Lintner in "Safe at
Home." See also Lintner, "Narcopolitics in Burma," Current History 95:605 (December 1996),
pp. 432-37.
37. Shi Huanzhang, "China's Approach to Drug Offences," in Enterprise Crime, p. 69.
without narcotics. However, drug trafficking and opium addiction has
reemerged as a serious issue since the watershed 1979 modernization cam-
paign began to transform the political and social climate in China. Initially,
the drug problem was confined to the provinces adjacent to the Golden Trian-
gle and China's Xinjiang Province in the far west of the country. The latter is
the natural point of entry for Central Asian drugs. As China's modernization
gathered steam, high-grade heroin began to make its appearance throughout
the country especially in the larger cities like Beijing and Shanghai as well as
Fujian Province. By the mid-1990s, the drug problem had become serious
enough to attract the attention of senior Party officials in Beijing. A nation-
wide, anti-drug campaign was launched in April 1997, and in May of that
year, Ruan Zhengyi, the deputy director of China's Public Security Bureau,
acknowledged that "the problem of drugs has returned to China with a ven-
geance."38
Initially, the narcotics trade in the People's Republic was mainly the pre-
serve of ethnic Chinese criminal organizations located outside China. They
included Sino-Burman growers and refiners, Triad groups in Taiwan and Ma-
cao, Sino-Thai distributors and brokers, and Chinese-American importers and
wholesalers. Increasingly, however, China's drug problems are homegrown.
Hong Kong Triads have extended their operations into southeastern China,
while non-Triad mainland gangs are also involved in the trade, operating in-
dependently or in conjunction with overseas criminal organizations and con-
tributing to the regionalization of the problem. These local gangs are loosely
structured and difficult to monitor and prosecute because of their transient
nature and the secrecy in which they operate.39 There is evidence to suggest
that mainland Chinese crime groups are internationalizing their own opera-
tions by moving into neighboring countries. In Russia, for example, ethnic
Chinese gangs have established a significant presence in Vladivostok, Khaba-
rovsk, and other cities in the Russian Far East.40
In the Philippines, the rising level of drug dependence and the power of
local drug lords have become a major social, political, and security issue. A
1997 study conducted by the Philippine National Police Narcotics Group paint-
ed a grim picture of the corrosive effects of drugs on the social and political
fabric of the nation. The Philippines has 1.7 million drug users; the annual
38. Thomas Fuller and Dan Eaton, "Even the Heroin Trade Has Been Affected by Globaliza-
tion," Asia Times, May 27, 1997.
39. For a revealing insight into the organizational structure and modus operandi of so-called
"group crime" in China, see Xu Qing Zhang, "Enterprise Crime and Public Order," in Enterprise
Crime, pp. 12-13.
40. Mark Galeotti, "Cross-Border Crime and the Former Soviet Union," Boundary and Terri-
tory Briefing (Durham, U.K.: University of Durham, Department of Geography, International
Boundaries Research Unit, 1995), p. 15.
ALAN DUPONT 447
turnover of the illegal drug trade in the Philippines was estimated to be
US$9.5 billion (251 billion pesos) in 1997, a figure representing more than
half that year's national budget. Over 80% of this money is derived from the
crystalline stimulant methamphetamine hydrochloride, known locally as sha-
bu and abroad as ice. It is manufactured from stimulants brought in from
China and Taiwan. The Philippines also produces a substantial quantity of
cannabis and other banned drugs locally, valued at US$1.8 billion (46.5 bil-
lion pesos) in 1997, and has become a major transshipment point for heroin
destined for the West Coast of the U.S. and Europe.41
The Philippines does not, as yet, have a significant domestic heroin prob-
lem. In 1997, former President Ramos declared drug addiction to be "a threat
to national security," while a senior Philippine senator, Ernesto Herrera,
warned that without resolute action the Philippines could be transformed into
a narco state. According to Herrera, "Drug money is corrupting and co-
opting elements in immigration, customs, the police, and the military. It has
even penetrated the ranks of court officers and some well-placed public offi-
cials."42 Allegations of connections between drug dealers and members of
the Filipino political elite have become a contentious domestic issue, which
spilled over into the 1998 presidential campaign. In late 1997, the soon-to-
be-elected vice-president, Gloria Macapagal-Arroyo, was forced to defend her-
self against politically inspired allegations by her opponents that she had ties
to local drug lords.43 Furthermore, some two-dozen Manila policemen were
under surveillance in 1997 because of their close association with known
drug dealers.44
In virtually every country in the region, corrupt government officials and
members of the security forces have been recruited by organized crime. In
some cases, corruption has reached into the heart of the state organizations
responsible for countering drug trafficking. A last-minute confession by a
convicted Lao drug courier in July 1996 led to the arrest and conviction of a
number of senior Vietnamese police officers who were found guilty of
complicity in the largest and most serious case of drug smuggling ever
discovered in Vietnam. Among the 34 charged with drug-related offenses, 12
were police officers and another four were members of the border police
tasked with responsibility for guarding Vietnam's northwestern border with
41. Cecilia Quiambao, "Dirty Harry vs. RP Drug Dealers," Jakarta Post, July 28, 1997. West
African groups increasingly are involved in the transshipment of heroin through the Philippines
to the U.S.
42. "RP Senator Warns of Narco-State," Jakarta Post, August 11, 1997.
43. The allegation was made by an admitted drug trafficker and has not been substantiated.
Rigoberto Tiglao, "Explosive Mix," FEER, August 14, 1997, p. 16.
44. Cecilia Quiambao, "Dirty Harry vs. RP Drug Dealers."
Laos.45 In Indonesia a police captain admitted to being part of a local drug
syndicate after having been found with 360 ecstasy tablets in his pos-
session.46
While North Korea is not known to have a domestic drug problem, the
regime of Kim Jong Ii has distinguished itself in East Asia by being the only
government directly implicated in narcotics trafficking. In January 1995, two
North Koreans, one of them in possession of a North Korean diplomatic pass-
port, were arrested by Chinese police in Shanghai attempting to sell six
kilograms of opium. In February 1998, Interpol confirmed that two diplo-
mats from the North Korean Embassy in Mexico had been arrested at Mos-
cow s international airport for trying to smuggle 35 kilograms of cocaine
through Russia.47 Two months later, another North Korean apprehended by
Russian authorities for trying to pass off counterfeit U.S. dollars turned out to
be Kil Jae Gyong, the vice-director of the International Department of North
Korea's Worker's Party and a senior aide to Kim Jong 11.48 North Koreans
have also been involved in some curious criminal alliances. In June 1994, the
Russian police announced its largest drug seizure to that time-$2.5 million
worth of factory-produced heroin from capitalist Taiwan that was smuggled
by North Koreans into Russia's Far Eastern Maritime District.49
Why Has Drug Trafficking Entrenched
Itself in East Asia?
The rise in illicit drug production and trafficking in East Asia stems from a
complex amalgam of domestic and international causes. In North Korea, the
disintegrating economy and increasingly dysfunctional state apparatus have
forced North Korean diplomats to supplement their embassy finances by en-
gaging in a range of well-documented, government-sponsored criminal activ-
ities. In Burma, the diversification of heroin producers into amphetamine
production can be seen as a logical extension of existing narcotics trafficking
by ethnic Chinese drug lords responding to changing demand.
More generally, the spread of illicit drugs has been facilitated by East
Asia's long period of sustained economic growth and the establishment of
45. Andy Soloman, "Drugs Scandal Puts Vietnam on Trial," Asia Times, April 11, 1997.
46. "Police Captain Nabbed for Involvement in Drug Syndicates," Jakarta Post, June 14,
1997.
47. "Interpol: Korean Diplomats Smuggled Cocaine," Reuters, February 18, 1998.
48. "Kim Jong Il's Slush Fund Manager Caught Using Fake Notes in Russia," Korea Times,
May 11, 1998, on the Internet at
<http://www.nautilus.org/napsnet/recent-daily-reports/
05_98_reports/mayl l.html>.
49. Kim Song-Yong, "North Korean Threats of Opium Smuggling and Terrorism Are In-
creasing" (in Korean), Choson Ilbo, September 16, 1996; and Galeotti, "Cross-Border Crime," p.
15.
ALAN DUPONT 449
world-class regional communication and transportation networks. New road,
river, and air routes have benefited the drug traffickers, allowing them to
move their illicit contraband to international markets with relative ease while
preserving the anonymity of the transactions and the identity of the middle-
men who play a vital role in laundering drug profits and linking the producers
with their distributors and final markets. Regional growth triangles, or what
Robert Scalapino calls "natural economic territories,"50 have helped to accel-
erate cross-border trade and reduce the border restrictions and choke points
that once circumscribed the free flow of drugs between East Asian states.
The area encompassing the Golden Triangle has been subsumed within a
wider economic development quadrangle that links Burma, Thailand, and
Laos with southern China, creating new market opportunities and distribution
routes for the opium warlords of Burma and their Triad associates operating
out of such regional hubs as Hong Kong and Bangkok. These two cities have
effectively become the corporate headquarters and key distribution centers
for the traffickers who control East Asia's drug trade.51
Ironically, the economic downturn in East Asia has provided a further
boost to the drug trade and organized crime. With unemployment escalating,
impoverished and unemployed workers see narcotics trafficking as an eco-
nomic lifeline. For heroin producers and wholesalers, profits are soaring be-
cause the narcotic is usually paid for in Thai baht and then sold overseas in
U.S. dollars or other hard currencies.52 The Thai baht has almost halved in
value against the U.S. dollar since the economic crisis began in mid-1997;
this represents a considerable windfall profit for the narco bosses at the top of
the pyramid. Conversely, the decline in the budgets of East Asian govern-
ments has reduced the amount of money available for drug interdiction,
opium poppy replacement crops, and cooperative regional responses.53
The sophistication and reach of today's Asian drug traffickers are substan-
tially greater than during the cold war period. Originally compartmentalized
by geography and function, the trafficking of narcotics in East Asia is now
more commonly distinguished by strategic alliances and integrated networks
that enable organized criminal groups to span East Asia into the global mar-
ket. One writer has concluded that these networks represent a kind of crimi-
nal imperium, "an underground empire as ruthlessly acquisitive and exploit-
50. Robert Scalapino, Asia: The Past Fifty Years and the Next Fifty Years (Commemorative
Address on the Silver Anniversary of the Centre for Strategic and International Studies, Jakarta,
September 1996), p. 7.
51. Phil Williams and C. Florez, "Transnational Criminal Organizations and Drug Traffick-
ing," Bulletin on Narcotics 96:2 (1994), p. 16.
52. Bertil Lintner, "The Dream Merchants," FEER, April 16, 1998, p. 26.
53. Craig Skehan, "Drug Dealers Recruit Foreign Chemists," Sydney Morning Herald, Febru-
ary 27, 1998.
ative as any 19th century imperial kingdom." It maintains its own armies,
diplomats, intelligence services, banks, merchant fleets, and airlines, and
seeks "to extend its dominance by any means, from clandestine subversion to
open warfare."54
Phil Williams has argued that the illicit drug trade and the relationship
between drug traffickers and their criminal associates is better understood in
more prosaic terms. "They are essentially alliances of convenience based on
strictly economic considerations rather than [being] part of a global criminal
conspiracy."55 These alliances may be tactical or strategic in nature, or be-
tween small as well as large transnational criminal organizations. This is
especially the case in East Asia where drug traffickers tend to be more
loosely configured and less hierarchically organized than, for example, the
Colombian cartels or the Sicilian Cosa Nostra. The popular Western image
of an inscrutable oriental crime mandarin orchestrating the activities of a
monolithic crime cartel is at variance with the reality of the illicit drug trade
in East Asia. This trade is characterized by diverse organizations ranging
from highly organized transnational criminal groups to traditional tribal pro-
ducers, small-scale family business operations, and ephemeral, entrepre-
neurial marriages of convenience between individuals and groups. For exam-
ple, opium grown by groups in Burma will be processed and refined into
heroin in their well-equipped and staffed laboratories along the Chinese and
Thai borders. The heroin is then passed onto Chinese and Thai ethnic crimi-
nal networks for transshipment by heroin brokers in Bangkok, Hong Kong,
Ho Chi Minh City, Manila, and Taipei.56
Increasingly, growers are integrating forward into processing and distribu-
tion, extending the geographical spread of their operations by taking advan-
tage of new heroin distribution routes opening up in southern China, Laos,
Cambodia, and Vietnam.57 The majority of heroin produced in the Golden
Triangle once was moved almost exclusively overland through Thailand to
Bangkok and then by sea from Thailand to Hong Kong, or else from Burma
across the southern Chinese provinces of Yunnan and Guangxi to Guang-
dong, Hong Kong, and Macao.58 But there are now multiple land, sea, and
54. James Mills, The Underground Empire (New York: Doubleday, 1986), p. 3.
55. Williams, "Transnational Criminal Organizations," p. 67.
56. Richard Shaffer, "The International Characteristics of AOC Groups which Distinguish
Them from Other Criminal Groups" (paper presented at the Multinational Asian Organised
Crime Conference), p. 10.
57. Zainuddin Bin Abdul Bahari, "Non-Conventional Threats to Security in the Region-
Narcotics" (paper presented at the eighth Asia-Pacific Roundtable, ISIS, Malaysia, Kuala
Lumpur, June 1994), p. 2.
58. David Hodson, "Drug Trafficking and Abuse in Hong Kong: A Situation Report," in
Enterprise Crime, p. 90. See also Ian Dobinson, "Pinning a Tail on the Dragon: The Chinese
and the International Heroin Trade," Crime and Delinquency 39:3 (July 1993), p. 375.
ALAN DUPONT 451
air routes throughout the region. Burmese heroin is frequently moved from
the Shan hills of Burma, through Mandalay, and then to Rangoon, Moulmein,
or other seaports for shipment to Singapore and Malaysia.59 Some also trav-
els westward across the Bangladeshi border to developing markets in India
and Bangladesh. Drug running into Taiwan is more complex. Sometimes
heroin is hidden inside fishing trawlers that ply between Fujian Province and
ports along Taiwan' s west coast. At other times, drugs are carried in
container ships sailing between Bangkok to the port of Kaohsiung and
Taipei.60
Laos, which traditionally has been a major producer of opium (the third
largest after Burma and Afghanistan), is rapidly becoming a major distribu-
tion route with a significant proportion of the drugs making their way across
the border to the Vietnamese coastal city of Da Nang for shipment to the U.S.
and Australia.61 Ho Chi Minh City has become an important new hub for
heroin distribution, some of which is finding its way down the Malay Penin-
sula into Malaysia and Singapore. While Singapore's tough anti-drug laws
have circumscribed drug use in the city state, traffickers are exploiting Singa-
pore's well-developed financial and shipping infrastructure for the transit of
narcotics and the laundering of drug profits.62 From Singapore and Malaysia,
drugs are moved by boat or air to Brunei, the Philippines, Indonesia, and
eventually Australia and New Zealand.63
East Asia as a Major Drug Market
One other notable development is the region's metamorphosis from being
primarily a producer of drugs for consumers in the West to the world's big-
gest market for illegal drugs. Long the primary producer of heroin, two-
thirds of the world's heroin users are now in Asia.64 Until the late 1980s,
virtually all the heroin from the Golden Triangle went to the U.S. or other
non-Asian markets, but today much of it is destined for East Asia. In a wor-
rying new trend, with potentially serious long-term security and health conse-
quences for the region, the number of addicts is continuing to rise steeply.
Thailand is estimated to have 500,000 heroin addicts, which is more on a per
59. Burma section in International Narcotics Control Strategy Report, 1997.
60. Lintner, "The Dream Merchants," p. 27.
61. The first documented case of Burmese heroin turning up in Laos occurred in August 1991.
Lintner, "The Drug Trade in Southeast Asia," pp. 17-18. See also Simpson, "Worldwide
Networking," p. 11.
62. Singapore section in International Narcotics Control Strategy Report, 1997.
63. Yaman Mohamed Ismail Mohamed, "Supply and Trade in Narcotics: Checking Sources
and Distribution-The Malaysian Experience" (paper presented at the Ninth Asia Pacific Round-
table, Kuala Lumpur, June 1995), pp. 4, 14.
64. This is according to the U.N. See "Ecstasy Abuse 'a Global Epidemic'," Jakarta Post,
June 27, 1997.
capita basis than the U.S., while Burma has between 400,000 and 500,000.65
Narco traffickers respect neither borders nor cultural or religious divides.
Relatively developed Muslim Malaysia has around 160,000 addicts, while
still impoverished communist Vietnam has at least 200,000.66 Vietnamese
police officials estimate that up to 15 tons of heroin are entering Vietnam
every year, an increasing percentage of which is finding its way onto the
domestic market. In the first quarter of 1998, 1.5 tons of heroin were seized
in China, a 58.6% increase on the same period in 1997. The National Narcot-
ics Control Commission (NNCC) reported that there were 540,000 registered
addicts in China at the end of 1997, 65% of them under 25.67 These figures
are extremely conservative and almost certainly understate the real level of
dependency.
There has been an even more dramatic rise in the production and consump-
tion of ATS, which seem likely to replace heroin as the future drugs of choice
in the region. Some authorities believe that the rise in ATS production may
prove to be one of the most important transformations in the history of the
narcotics trade. Thailand is the nation most seriously affected by the wave of
stimulants now flooding into East Asia. Known locally as ya ba ("madness
medicine") and much cheaper than heroin, such stimulants have been readily
available in the country for less than a decade but already Thailand has more
ya ba users than heroin addicts.68 The country is estimated to have imported
between 60 and 80 million amphetamine tablets in 1997, mainly from labora-
tories in the Golden Triangle and Cambodia.69
There are two main reasons for the popularity of ATS in East Asia. Mod-
ernization and rapid economic growth have stimulated the demand for such
drugs because of their performance enhancing characteristics, which tempo-
rarily increase well-being and productivity. It is no coincidence that the first
serious users of ATS in Thailand were long-distance truck and bus drivers.
In the early 1990s, students and factory workers began to emulate the habits
of these drivers, spreading the drug culture more widely into areas of the
65. These estimates are cited in the Burma and Thailand sections of the International Narcot-
ics Control Strategy Report, 1997. If other drugs such as opium, marijuana, and stimulants are
added, the number of Thai addicts rises to 1.27 million.
66. Thomas Fuller and Dan Eaton, "Even the Heroin Trade Has Been Affected by Globaliza-
tion," Asia Times, May 27, 1997; Yaman, "Supply and Trade in Narcotics," p. 2; and Andy
Soloman, "Drugs Scandal Puts Vietnam on Trial," Asia Times, April 11, 1997. These figures
almost certainly understate the true dimensions of drug addiction in the region. In Malaysia, for
example, some experts believe that the level of drug addiction is four to five times the official
figure. See "Ten Deadly Years of Dadah: Why Kuala Lumpur Hasn't Won the War on Narcot-
ics," Asiaweek, June 8, 1994, p. 29.
67. Yang Chunya, "Anti-Drug Education Called For," China Daily, June 6, 1998.
68. Lintner, "Speed Demons," FEER, May 8, 1997, p. 28.
69. "Slump Accelerates Speed Trade," Sydney Morning Herald, December 2, 1997.
ALAN DUPONT 453
community not previously affected. Following a trend first noticed in Europe
and North America, designer drugs have become an accepted part of the East
Asian disco and party scene, which has contributed to their rapid spread
among young, urban users. As demand for the new class of drugs grew,
heroin producers in the Golden Triangle began to switch some of their pro-
duction to ATS. The first ATS laboratories were established only in the early
1990s but they have since proliferated at an alarming rate, particularly along
Burma's border with China. Hundreds of chemists have been recruited from
Europe to staff these new laboratories and others have sprung up in Vietnam
and the Philippines.70
A second reason for the spread of ATS is that they are attractive to produ-
cers as well as consumers, although for different reasons. Even though the
profit margins are less than for comparable amounts of heroin, since stimu-
lants are sold locally and in volume, they produce a quick return on invest-
ment and the manufacturing process is more flexible. The laboratories used
for manufacturing ATS are smaller, more mobile, and therefore more difficult
to detect than those required for refining heroin. While a major part of the
heroin market is geographically distant from the Golden Triangle, necessitat-
ing the maintenance of a lengthy and expensive distribution network, the
ATS markets increasingly are in East Asia. Most amphetamines are destined
for ASEAN countries, with Cambodia and Indonesia emerging as significant
new markets for ecstasy; the drugs are also well entrenched in China, Tai-
wan, Japan, and South Korea.
Drugs and Security
Combating the illicit production and distribution of narcotics has been tradi-
tionally regarded as principally a matter for law enforcement agencies. This
is demonstrably no longer the case. The globalization of criminal activities
and the ability of narcotics trafficking to undermine the political and eco-
nomic sovereignty of states have already made the illicit drug trade a signifi-
cant security issue for many states and a primary strategic concern for the
most seriously affected.
The indifference of East Asian governments to drug trafficking and pro-
duction is beginning to change as they contemplate the security implications
of their recently acquired status as consumer states. No longer can it be ar-
gued that drugs are someone else's problem or the consequence of societal
failure in the West. All nations and regions are vulnerable and East Asia
particularly so because it still comprises overwhelmingly developing states
that have fewer resources at their disposal to fight the drug problem, espe-
70. Craig Skehan, "Drug Dealers Recruit Foreign Chemists," and Australian Illicit Drug Re-
port 1996-97, p. 54.
cially during periods of political turmoil and economic recession. If a new,
predominantly Asian drug aristocracy entrenches itself throughout the region,
the drug problem of one state will become the problem of all. This is perhaps
the central message for East Asia's governments.
It is important, however, not to overestimate the threat or misconstrue the
nature of the forces that are driving the illicit drug trade in East Asia. With
the possible exception of Burma, the situation in East Asia cannot yet be
compared with Latin America. The deleterious effects are distributed un-
evenly and not all have implications for security. Nevertheless, drug traffick-
ing in East Asia does pose a palpable and growing threat to the political
stability, social fabric, and economic well-being of the region. The security
effects are felt most acutely at the national and subnational level, but the
burgeoning trade in illicit drugs has the capacity to complicate relations be-
tween states. The intensive cultivation and widespread availability of tradi-
tional plant-based narcotics such as heroin, as well as synthetic ATS, are very
much a global phenomenon as is the associated rise in the power, wealth, and
reach of organized criminal groups.
While the symbiotic relationship between drugs and organized crime is not
new, the scale and corrosive nature of the contemporary drug trade are great-
er than anything previously experienced by the states of East Asia. There is
no one dominant criminal syndicate. If there were, the task of combating
illicit drugs would be much easier than it has proved to be. Rather, regional
governments are faced with a multiplicity of criminal groups. The shifting
alliances between these groups are tactical rather than strategic in nature,
forming and dissipating in response to changing market conditions in much
the same way as legitimate business enterprises adapt to new commercial
realities. In East Asia, the locus of the trade has become more diffuse. As in
other afflicted areas of the world, large-scale drug trafficking is circumscrib-
ing the capacity of states to govern, corrupting the political process, distorting
economic and development priorities, and imposing enormous social and
health costs on the region.
In the most seriously affected states such as Burma, national sovereignty is
directly challenged by the activities of drug traffickers, who both operate with
relative impunity in areas that are effectively outside the control of the gov-
ernment and may employ significant military force to protect and maintain
their business interests. Burma's sovereignty arguably is as much under
threat from the anti-state imperatives of criminals trafficking in heroin and
ATS as it has been from ethnic separatists or insurgents. What's more, these
groups are often indistinguishable from one another for all practical purposes.
In other parts of the region-particularly southern China, Laos, Vietnam, and
Thailand-drug traffickers pose a less severe but still significant threat to the
state. Their activities and operations frequently violate the sanctity of the
ALAN DUPONT 455
region's borders and weaken the authority of national governments, espe-
cially when carried out with the connivance of officials responsible for secur-
ity and customs.
For all these reasons, East Asian states need to devote greater resources
and policy attention to a problem that is likely to get much worse before it
gets any better. The escalation in narcotics trafficking is only one of the
many criminal enterprises that are challenging East Asian states' traditional
monopoly of power and taxation. It is arguably the most pressing and vexa-
tious of an emerging set of transnational security issues, none of which can
be adequately addressed without substantial regional cooperation. The estab-
lishment of such second-track forums as the Council for Security Coopera-
tion in the Asia Pacific Working Group on Transnational Crime is a step in
the right direction, but the problem of illegal drugs is of sufficient importance
to warrant more direct involvement by Asian governments. While much can
be achieved through unilateral action and bilateral cooperation, developing a
comprehensive and effective regional response should be a priority task for
East Asia's premier multilateral security organization, the ASEAN Regional
Forum.

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Transnational Crime, Drugs, and Security in East Asia

Author(s): Alan Dupont

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