"Illicit drug production in Shan State has become so large and profitable that it dwarfs the area’s formal economy and is hindering efforts to end ethnic conflicts, warns International Crisis Group. In a report that focuses heavily on Shan State’s emergence as a global production centre of crystal methamphetamine, or “ice”, ICG says the drugs trade is both partly a symptom of the state’s conflicts and an obstacle to sustainably ending them. It says “good infrastructure, proximity to precursor supplies from China and safe haven provided by pro-government militias and in rebel-held enclaves” had enabled the state to become a major global source of high purity crystal meth. The 36-page report, Fire and Ice: Conflict and Drugs in Myanmar’s Shan State, was released by the Brussels-based think tank on January 8. It says the drug trade in Shan State is at the centre of its political economy, which “greatly complicates efforts to resolve the area’s ethnic conflicts and undermines the prospects for better governance and inclusive economic growth in the state”. The drug trade in Shan State generates revenues for armed groups of all stripes, including militias aligned with the Tatmadaw. “Myanmar’s military, which has ultimate authority over militias and paramilitaries and profits from their activities, can only justify the existence of such groups in the context of the broader ethnic conflict of the state – so the military also has less incentive to end that conflict,” the report says. It says drug production in Shan State has had three main phases: opium and heroin from the 1950s to 1990s (when Myanmar was the largest opium producer before it was replaced by Afghanistan), followed by methamphetamines, also known as yaba, and then highly-addictive crystal meth since the early 2010s..."