DRUG LORDS BUY INTO MYANMAR'S ECONO

[darnott@xxxxxxxxxxx]

Business Day (South Africa)

May 02, 2001

DRUG LORDS BUY INTO MYANMAR'S ECONOMY

BYLINE: William Barnes and Financial Times

DATELINE: BANGKOK


The ethnic Wa hill tribe in Burma once dubbed the worlds biggest gang of 
armed drug traffickers have taken over a bank and a domestic airline, 
underlining the importance of drug money in a troubled
economy.

The United Wa State Army has taken control of the ailing Myanmar Mayflower 
Bank in Rangoon and its 21 nationwide branches.

The groups other interests include a third of the countrys only GSM phone 
project, lucrative gem mining concessions and, reputedly, nightclubs in the 
capital.

The Wa chief, Pao Yu Chang, has also recently taken direct personal control 
of the unprofitable Yangon Airways.

Drug traffickers have taken over more and more of the legitimate economy, 
and are getting more brazen about it, over the past couple of years, said a 
drug analyst.

The Wa were the footsoldiers for the Communist party of Burma until they 
overthrew their ethnic Chinese Communist masters in 1989. Fearing that the 
thousands of tough fighters headhunters a couple
of generations ago would link up with rebel groups on the Thai border, the 
military government quickly agreed to a dozen ceasefire deals, with the Wa 
and others, that allowed them a free hand to do business
which in the Shan state often means drugs.

The regime also permitted retired former drug warlords, such as Lo 
Hsing-han and Khun Sa, to, at the very least, plough their drug profits 
into a variety of businesses.

The Burmese military claims that alone it does not have the strength to 
suppress big traffickers such as the Wa .

The US state departments latest narcotics review says that drug profits 
formed the seed capital for many otherwise legitimate enterprises 
especially in transport, banking, hotels, real estate and airlines.