The mainstream discourse on the political economy of drugs has emphasised the negative correlation between drug production and state capacity, with the presence of a thriving drugs trade seen as both a sign and a cause of weak states. Through an analysis of the drugs trade in Burma this study argues that such an approach is deeply flawed. Focusing on the period since the 1988 protests it argues that the illicit nature of the drugs trade has provided the state with an array of incentives (legal impunity, protection, money laundering) and threats (of prosecution) with which to co-opt and coerce insurgent groups over which it has otherwise commanded little authority. Although the state's involvement in the drugs trade was initially driven by an expedient desire to co-opt insurgent groups following the 1988 protests, this study also argues that over time it has provided an arena in which more immanent and largely unanticipated processes of state formation, namely the centralisation of the means of violence and extraction, have gradually been built. Rather than being a sign of corruption-induced state incapacity, the state's involvement in the drugs trade has thus become a central arena through which state power has been constructed and reproduced.
1 For an analysis of the unintended negative consequences of counter-narcotics strategies, see Jelsma, Martin and Kramer, Tom, ‘Downward spiral: Banning opium in Afghanistan and Burma’, in Drugs and conflict, debate papers, no. 12, ed. Aronson, David and Dove, Fiona (Amsterdam: Transnational Institute, 2005), pp. 3–23; McCoy, Alfred, ‘The stimulus of prohibition: A critical history of the global narcotics trade’, in Dangerous harvest: Drug plants and the transformation of indigenous landscapes, ed. Steinberg, Michael, Hobbs, Joseph and Mathewson, Kent (Oxford: Oxford University Press, 2004); and Tullis, LaMond, Unintended consequences: Illegal drugs and drug policies in nine countries (London: Lyne Rienner Publishers, 1995).
2 Goodhand, Jonathan, ‘Corrupting or consolidating the peace? The drugs economy and post-conflict peacebuilding in Afghanistan’, International Peacekeeping, 15, 3 (2008): 405–23, here 413.
3 Ballentine, Karen and Sherman, Jake, ‘Introduction’, in The political economy of armed conflict: Beyond greed and grievance, ed. Ballentine, Karen and Sherman, Jake (London: Lynne Reinner Publishers, 2003), p. 1; see also, Collier, Paul, ‘Doing well out of war: An economic perspective’, in Greed and grievance: Economic agendas in civil wars, ed. Berdal, Mats and Malone, David (London: Lynne Reinner Publishers, 2000), pp. 91–112; and Keen, David, ‘The economic functions of violence in civil wars’, Adelphi Paper, 320 (Oxford: IISS/Oxford University Press, 1998).
4 Collier, Paul and Hoeffler, Anke, ‘On the economic causes of war’, Oxford Economic Papers, 50, 4 (1998): 563–73.
5 Ballentine, Karen and Nitzschke, Heiko, ‘Introduction’, in Profiting from peace: Managing the resource dimensions of civil war, ed. Ballentine, Karen and Nitzschke, Heiko (London: Lynne Reinner Publishers, 2005), p. 1.
6 See, for example, Keen, David, Complex emergencies (Cambridge: Polity Press, 2007), pp. 26–7; and Cornell, Svante, ‘The interaction of narcotics and conflict’, Journal of Peace Research, 42, 6 (2005): 751–60.
7 Heyman, Josiah and Smart, Alan, ‘States and illegal practices: An overview’, in States and illegal practices, ed. Heyman, Josiah (Oxford: Berg, 1999), p. 19.
8 Goodhand, ‘Corrupting or consolidating the peace?’, p. 413.
9 Waal, Alex De, ‘Mission without end? Peacekeeping in the African political marketplace’, International Affairs, 85, 1 (2009): 99–113.
10 North, Douglass C., Wallis, John J., Webb, Steven B. and Weingast, Barry R., ‘Limited access orders in the developing world: A new approach to the problems of development’, World Bank Policy Research Working Paper, 4359 (2007). Refer to http://ssrn.com/abstract=1015978 (last accessed on 29 June 2011).
11 Ibid., p. 8.
12 Snyder, Richard, ‘Does lootable wealth breed disorder?: A political economy of extraction framework’, Comparative Political Studies, 39, 8 (2006): 943–68.
13 Goodhand, Jonathan, ‘Bandits, borderlands and opium wars: Afghan statebuilding viewed from the margins’, DIIS Working Paper, 26 (Copenhagen; Danish Institute for International Studies, 2009), p. 7.
14 Tilly, Charles, Coercion, capital, and European states, AD 990–1992 (Oxford: Blackwell Publishers, 1990). It should be noted that Tilly's work was confined to European state formation and the author himself has questioned the wider applicability of his conclusions.
15 Gallant, Thomas, ‘Brigandage, piracy, capitalism, and state-formation: Transnational crime from a historical world-systems perspective’, in States and illegal practices, ed. Heyman, Josiah (Oxford: Berg, 1999).
16 Lintner, Bertil, Burma in revolt: Opium and insurgency since 1948 (Thailand: Silkworm Books, 1999), pp. 128–62; McCoy, Alfred, The politics of heroin: CIA complicity in the global drug trade (Chicago: Lawrence Hill & Co., 1991), p. 173. McCoy provides a magisterial account of the CIA's clandestine involvement with the drugs trade throughout the Golden Triangle and beyond.
17 Cited in Bertil Lintner, ‘The Golden Triangle opium trade: An overview’, Asia Pacific Media Services (Mar. 2000): 7–8, http://www.asiapacificms.com/papers/pdf/gt_opium_trade.pdf (last accessed on 11 Aug. 2011).
18 Ibid., p. 8.
19 McCoy, Alfred, ‘Requiem for a drug lord: State and commodity in the career of Khun Sa’, in States and illegal practices, ed. Heyman, Josiah (Oxford: Berg, 1999), pp. 136–8.
20 The CPB, founded in 1939, was one of the first political parties to go underground (in 1948) in opposition to the Burmese government. Throughout its history it remained deeply committed to Maoist principles and the party received financial and military support from China during from the mid-1960s until Mao's death. Following Mao's death China's patronage dwindled. See Lintner, Bertil, The rise and fall of the Communist Party of Burma (London: Cornell University Press, 1990).
21 Lintner, ‘The Golden Triangle opium trade’, p. 17.
22 Ibid., p. 15.
23 Chin, Ko-lin, The Golden Triangle: Inside Southeast Asia's drug trade (Ithaca and London: Cornell University Press, 2009), pp. 88–9.
24 ALTSEAN-Burma, ATS: A need for speed (Bangkok: ALTSEAN-Burma, 2006); Kramer, Tom, Jelsma, Martin and Blickman, Tom, Withdrawal symptoms in the Golden Triangle: A drugs market in disarray (Amsterdam: Transnational Institute, 2009), pp. 52–66; Chin, The Golden Triangle, pp. 129–31.
25 United Nations Office on Drugs and Crime (UNODC), Myanmar: Situation assessment on amphetamine-type stimulants (UNODC, Dec. 2010), p. 2.
26 Chin, The Golden Triangle, p. 242. In many hill areas rice harvests provide food for only 4–8 months of the year and opium is grown as a cash crop allowing families to buy imported Thai or Chinese rice for the rest of the year. The fact that alternative development strategies followed rather than pre-empted the opium bans greatly increased food insecurity.
27 UNODC, Opium poppy cultivation in South-East Asia – Lao PDR, Myanmar (UNODC, Dec. 2010), p. 11.
28 Lintner, Bertil and Black, Michael, Merchants of madness: The methamphetamine explosion in the Golden Triangle (Chiang Mai: Silkworm Books, 2009), p. 93.
29 Goodhand, ‘Bandits, borderlands and opium wars’, p. 9.
30 Smith, Martin, Burma: Insurgency and the politics of ethnicity (London: Zed Books, 1991), p. 39.
31 Ibid., p. 42.
32 However, it must be noted that even before Aung San's death there were clear signs that relations between Rangoon and the ethnic minority regions were already strained and the Panglong Conference, designed to allay the fears of ethnic minority groups, contained no Karen, Karenni, Arakanese or Mon delegates.
33 Scott, James C., ‘Stilled to silence at 500 metres: Making sense of historical change in Southeast Asia’, IIAS Newsletter, 49 (2008): 12.
34 James C. Scott, ‘Hill and valley in Southeast Asia … or why the state is the enemy of people who move around … or … why civilizations can't climb hills’, paper presented at Symposium on Development and the Nation State (Washington University, St Louis, 2000), p. 19.
35 Callahan, Mary, ‘Political authority in Burma's ethnic minority states: Devolution, occupation, and coexistence’, in Policy Studies 31 (Southeast Asia) (Washington, DC: East-West Center; Singapore: ISEAS, 2007), p. 17.
36 Although initially a vociferous critic of the Burmese government in the aftermath of the 1988 protests, the Indian government has also gradually sought to improve its political and economic ties with the SPDC, hopeful that greater cross-border trade will stimulate economic development in its landlocked north-eastern territories and lured by the promise of joint co-operation against India's own insurgency groups, located on the India–Burma border. India's attitude was therefore not decisive in the late 1980s but has become increasingly important over the past 20 years. See Egreteau, Renaud, Wooing the generals: India's new Burma policy (Delhi: Authorspress, 2003).
37 Renard, Ronald, The Burmese connection: Illegal drugs and the making of the Golden Triangle (London: Rienner Publishers, 1996), p. 108.
38 Grundy-Warr, Carl and Wong, Elaine, ‘Geopolitics of drugs and cross-border relations: Burma–Thailand’, International Boundary and Security Bulletin, 9, 1 (2001): 108–21, here 108 and 116.
39 It is difficult to ascertain precise details regarding the ceasefire agreements since they were oral agreements that have never been written down. However, it is widely believed that they are underwritten by the points outlined here.
40 Callahan, ‘Political authority in Burma's ethnic minority states’, p. xiv.
41 Ibid., p. 24.
42 Kramer, Tom, ‘The United Wa State Party: Narco-army or ethnic nationalist party’, in Policy Studies 38 (Southeast Asia) (Washington, DC: East-West Center; Singapore: ISEAS, 2007), p. 54.
43 ALTSEAN-Burma, ATS: A need for speed, p. 114; Lintner, ‘The Golden Triangle opium trade’, p. 187.
44 Shan Herald Agency for News (SHAN), Showbusiness: Rangoon's ‘war on drugs’ in Shan state (Chang Mai: SHAN, 2005), p. 54.
45 Lintner, Bertil, ‘The politics of the drug trade in Burma’, Indian Ocean Centre for Peace Studies, The University of Western Australia, Occasional Paper, 33 (1993), p. 31; Lintner and Black, Merchants of madness, pp. 150–1.
46 Lintner, Bertil, ‘Drugs and economic growth: Ethnicity and exports’, in Burma: Prospects for a democratic future, ed. Rotberg, Robert (Washington, DC: The World Peace Foundation, 1988), p. 175.
47 ALTSEAN-Burma, Special report: Ready, aim, sanction (Bangkok: ALTSEAN-Burma, 2003), p. 87. The Government-controlled UMEH has developed an increasingly pervasive control over the Burmese Economy with all major foreign investors having to enter into joint ventures with UMEH. The report also found that ‘private companies can only export under the authorization of Union of Myanmar Economic Holdings Ltd (UMEH) or Myanmar Agriculture Produce Trading (MAPT), which receive an 11% commission on transactions’ (Ibid., p. 80).
48 Snyder, ‘Does lootable wealth breed disorder?’, p. 961.
49 Lintner, ‘The Golden Triangle opium trade’, pp. 18–19.
50 Evidence of this attitude was shown most clearly by an SPDC Colonel, Win Maung, in 2005, who is quoted in a 2006 report by the Shan Herald Agency for News as stating that ‘ceasefire groups are merely enemies who have taken a break in the fighting against us’. Cited in Shan Herald Agency for News (SHAN), Hand in glove: The Burma Army and the drug trade in Shan State (Chang Mai: SHAN, 2006), p. 37.
51 Constitution of the Republic of the Union of Myanmar, ch. VII, Clause 338.
52 Euro Burma Office (EBO), ‘The Kokang clashes – what next?’, EBO Analysis Paper No. 1 (2009): 1–7.
53 SHAN, Hand in glove, pp. 35–48; Palaung Women's Organisation (PWO), Poisoned hills: Opium cultivation surges under government control in Burma (Mae Sot: PWO, 2010), pp. 9–10.
54 PWO, Poisoned hills, p. 10.
55 Fah, Hseng Khio, ‘Burma's druglords become lawmakers’, Shan Herald Agency for News (10 Nov. 2010).
56 Snyder, ‘Does lootable wealth breed disorder?’, p. 961.
57 US Embassy (Rangoon), Foreign economic trends report: Burma (Rangoon: US Embassy, 1996), pp. 92–3; Lintner, ‘Drugs and economic growth’, pp. 187–8.
58 Kudo, Toshihiro, ‘Myanmar's economic relations with China: Who benefits and who pays?’, in Dictatorship, disorder and decline in Myanmar, ed. Skidmore, Monique and Wilson, Trevor (Canberra: Australian National University Press, 2008), pp. 96–7.
59 Sean Tunnell, ‘Myanmar's economy in 2006’, in Skidmore and Wilson, Dictatorship, disorder and decline in Myanmar, p. 113.
60 Lubeigt, Guy, ‘Industrial zones in Burma and Burmese labour in Thailand’, in Myanmar: The state, community and the environment, ed. Skidmore, Monique and Wilson, Trevor (Canberra: Australian National University E Press and Asia Pacific Press, 2007), pp. 162–7.
61 Snyder, ‘Does lootable wealth breed disorder?’, p. 959.
62 Leander, Anna, ‘Wars and the un-making of states: Taking Tilly seriously in the contemporary world’, in Contemporary security analysis and Copenhagen peace research, ed. Guzzini, Stefano and Jung, Dietrich (London: Routledge, 2004), p. 69.
63 McCoy, ‘Requiem for a drug lord’, pp. 136–8.
64 UNODC, Drug-free ASEAN 2015: Status and recommendations, United Nations Office on Drugs and Crime Regional Centre for East Asia and the Pacific, publication no. 01/2008, pp. 12, 63.
65 Van der Veen, Hans, ‘The war on drugs in the creation of the new world (dis)order’, in Shadow globalization, ethnic conflicts and new wars: A political economy of intra-state war, ed. Jung, Dietrich (London: Routledge, 2002), p. 104.
66 Goodhand, ‘Corrupting or consolidating the peace?’, p. 405.
67 Callahan, ‘Political authority in Burma's ethnic minority states’, p. 4.
68 Goodhand, ‘Corrupting or consolidating the peace?’, p. 418.
69 Sherman, ‘Burma: Lessons from the cease-fires’, p. 247.
70 See, for example, International Crisis Group, ‘Myanmar's post-election landscape’, ICG Asia Briefing, no. 118 (Brussels: International Crisis Group, 2011).
Patrick Meehan is a Researcher at the School of Oriental and African Studies, University of London. Correspondence in connection with this paper should be addressed to: email@example.com. The author would like to thank Dr Jonathan Goodhand (Reader in Conflict and Development Studies, School of Oriental and African Studies).
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