ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Myanmar Crisis

Myanmar coup provides drug traffickers with ideal conditions

'Definitely a moment when cartels will look to entrench and expand operations'

Thai narcotics officials arrange bags of methamphetamine pills in Ayutthaya Province in June 2020.   © Reuters

BERLIN -- The United Nations is wary that Myanmar's massive illicit drug trade is receiving a boost from the economic and security crises that have engulfed the nation since the military coup almost four months ago.

"We are concerned that already very high levels of drug production and trafficking will increase," said Jeremy Douglas, regional representative for Southeast Asia and the Pacific at the U.N. Office of Drugs and Crime, or UNODC. Agencies in neighboring countries "are also expecting a jump."

Violence is escalating across Myanmar, and armed groups will likely use drug money to fund their military activities.

The Golden Triangle, comprising Myanmar's Shan State as well as parts of Thailand and Laos, has long been notorious for opium production. But poppy cultivation is on the decline. Instead, there is rising production of synthetic drugs, particularly methamphetamine, which often comes in tablets smaller than aspirin called yaba, "crazy drug" in Thai.

Yaba is especially popular in Thailand and Bangladesh, which receive copious supplies from Myanmar.

According to preliminary data that the UNODC presented at a recent panel and will be published in full next month, opium production has fallen 50% during the past several years. From 2011 to 2020, meanwhile, seizures of meth in East and Southeast Asia increased 640%, with much of the activity concentrated in the Lower Mekong, where the amount seized rose by almost 40% last year.

In total, a record 175 tons of meth were intercepted, up from 140 tons in 2019. While coronavirus restrictions caused some initial disruptions to Latin America's drug trade, Asian traffickers quickly adapted to the new conditions by selling their product online and seeking out consumers in countries like Thailand.

Myanmar became a major synthetic drug producer after China cracked down on its own meth industry in 2013 and 2014. Production had originally shifted to other Asian countries before consolidating in the Golden Triangle. Myanmar is now the main source of meth in nations across the region, including Thailand, Laos, China, Japan, and Australia, according to the UNODC, and could be the world's top supplier.

Myanmar is also reportedly producing fentanyl, the highly potent synthetic opioid that killed record numbers of Americans in 2020. China was once a major fentanyl provider but banned all forms of the substance in 2019 under pressure from the U.S. government. A gigantic drug bust last year suggests some production has moved to Myanmar.

Moreover, Myanmar's cartels have apparently started to produce their own drug precursors, which previously had to be sourced from India or China. By using unregulated ingredients to make restricted precursors, they can bypass the international regulatory regime. The U.N. is currently developing a resolution to stem the flow of nonscheduled chemicals.

Myanmar's narcotics industry has not only thrived during the COVID-19 pandemic but may grow even more when economies reopen and restrictions are lifted, leading to an "uptick in demand for drugs," according to Richard Horsey, senior Myanmar adviser to the International Crisis Group.

It is unclear if drug production and trafficking in Myanmar have increased since the coup. "There have been large seizures recently but they appear more or less routine," Douglas said. "But it is early days, and synthetic drug production is clandestine and can be scaled up without anyone knowing."

Drugs continue to be smuggled out of Myanmar in sizable quantities. There have been two large yaba busts in Thailand this month and one big haul of crystal meth in Australia, while Bangladesh has reported regular interceptions of drugs crossing its border.

But sources of data in Myanmar have gone dark, making it hard to assess the current scale of the drug industry there. The country's police stopped reporting seizures on its Facebook page in early February, and the U.N. is not engaging with the junta.

The conditions are ideal for drug production to accelerate. "The economic turmoil since the coup, coupled with intensified international sanctions led by the U.S., means that opportunities in the legal economy have disappeared for many," and people may be pushed into "illegal economies," said Vanda Felbab-Brown, director of the Initiative on Nonstate Armed Actors at the Brookings Institution.

Myanmar's economy is in free-fall, with a severe banking crisis and a sharp drop in trade and investment as foreign companies leave the country. The World Bank expects Myanmar's GDP to fall by 10% this year, and the U.N. Development Program has warned that almost half of the population could be living in poverty by 2022.

The security situation is also deteriorating. The junta is struggling to maintain control as protesters take up arms and violence rages across the country. The collapse of law and order makes it easier for drug traffickers to operate. "It's definitely a moment when the cartels will look to entrench and expand their operations," Horsey said.

Militias and ethnic armed organizations in Myanmar have long been involved in narcotics and will likely rely on drug revenues to finance their military campaigns as fighting intensifies. "They're looking to strengthen their revenue streams, and that means illicit activities -- and part of that is drugs," Horsey said.

An overstretched military fighting on multiple fronts lacks the resources to combat the illegal drug industry and may try to cut deals with armed groups, allowing them free rein to operate in the illicit economy if they vow not to attack the regime. That occurred after the 1988 uprising. "Again, the military will want to be cutting cease-fire deals," Horsey said. "And it may have to give some concessions to these groups."

There are already signs of this happening. Last year, the Myanmar government started to crack down on the Karen Border Guards Force, which runs a casino city in Shwe Kokko in collaboration with Chinese criminal actors. But, since the coup, the Karen BGF has allied itself with the regime, and Shwe Kokko is back online.

With no end in sight for Myanmar's spiraling crisis, the stage is set for a further expansion of the drugs trade.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more