Jacob Baynham / SF Chronicle Foreign Service – 2008-01-17 22:55:37

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/01/15/MNT3U393N.DTL

LOI TAI LENG, Burma (January 15, 2008) — The frontline of Burma’s largest rebel army is a lonely hilltop ringed by a land mine-littered jungle, mountains controlled by the Burmese military and a patchwork of poppy fields visible through a rusting pair of Soviet binoculars.

“It’s opium,” said Nan Daw, a captain in the Shan State Army South. “I know because I have patrolled there.”

Burma’s southern Shan state, a historically independent area, is a nest of battlefields, rebel cease-fire zones and territory controlled by the Burmese military. The Shan, the nation’s largest ethnic minority with about 6 million people, have been engaged in an intermittent guerrilla war of independence since the military junta took power in a coup in 1962.

The rebel front also runs through the heart of the Golden Triangle, the patch of land between Thailand, Burma and Laos that just 10 years ago produced a third of the world’s highest-grade opium.

It is the former domain of Khun Sa, the infamous Shan warlord and narcotics kingpin who once led an army of 20,000 men. He died in October of unknown causes in the nation’s largest city, Rangoon. Experts say Sa’s retirement in 1996 helped slash the triangle’s production to 5 percent of world supply. The global leader is now Afghanistan, which provides about 92 percent of the world’s opium.

But leaders of the Shan State Army South – a northern Shan army signed a cease-fire agreement with the government – claim opium production is increasing in areas controlled by the Burmese military. According to a recent U.N. report, opium production jumped almost 50 percent in 2007 from the previous year, with about 92 percent of Burma’s opium crop grown in Shan state.

“Everybody is involved in this trade in one way or another,” said Xavier Bouan, a U.N. illicit-crop monitor based in Rangoon. “Insurgents, militia, government, cease-fire groups; for all of them, in a region where the economy is slowing down, it’s one of the only ways to survive and get cash,” he said.

The Burmese army periodically undertakes scorched-earth offensives, destroys Shan villages, and forces farmers to do hard labor for no compensation. Because many army battalions are forced to fend for themselves in finding food and supplies, crop theft and forced labor is not uncommon in the nation’s restive areas.

Some observers see army participation in the opium business as another way to earn money to purchase supplies. And military officers are known to encourage farmers to grow opium, manufacture methamphetamine and cut down teak forests, according to drug experts and human rights activists.

Nang Tun, a 36-year-old mother of two, fled her village of Nong Leng in June after Burmese soldiers forced half the village’s 40 families to grow opium poppies. She and her children now live in Loi Tai Leng, the fortified headquarters of the Shan army along the border with Thailand.

The Burmese army “destroyed the fields of anyone who refused,” she said.

At harvest time, she said, soldiers took half the crop while taxing villagers on the other half. She fled after soldiers stole crops, beat villagers and arrested her husband. “I don’t know why” they arrested him, she said. “I know nothing about him now.”

Nang Tun and her children are among 350 displaced families under rebel protection. They account for just a handful of the 163,000 villagers displaced by the Burmese military throughout Shan state, according to the Shan Human Rights Foundation in Chiang Mai, Thailand. Some live in camps rampant with disease, while others are in Thailand illegally looking for work and a better life.

The Shan State Army South is one of the last ethnic groups in Burma to maintain an army, along with the Karen and the Karenni peoples. Rebel leader Col. Yawd Serk, who fought in Khun Sa’s militia, says he commands 10,000 soldiers, but the real figure may be far less.

Serk says his army has no connection to drug traffickers and survives by charging taxes on regional trade of gems and timber. Some analysts, however, speculate that the cash-strapped Shan army may also be taxing the opium trade, a charge Serk vehemently denies. In fact, the Shan leader said, his army destroys opium storehouses and heroin refineries when it finds them.

“Opium is a big problem affecting the Shan,” Serk said, in reference to the growing addiction rate among Shan residents.

Serk says he is also worried about a rising methamphetamine industry, which has sparked State Department concerns that the Golden Triangle could soon become the Ice Triangle. As opium has declined, production and distribution of methamphetamine have increased, most drug experts agree.

But the rebel officer concedes that his army can crack down on drugs only in the shrinking pockets of territory it controls between outposts of the Burmese military and its militia allies, the United Wa State Army in the northern part of Shan state that signed a cease-fire pact with the junta. The U.S. State Department has called the United Wa State Army the world’s “most heavily armed narco-traffickers.”

As for the troops under his command, Serk says he applies a zero-tolerance policy. “If anyone in the Shan State Army gets involved in drugs, we cut their neck immediately,” he said. “How can we have hope if the young are on drugs?”

Serk is also angry at foreign governments, including the United States, for funding anti-drug programs in Burma. He says the junta has duped the West into thinking they are serious about narcotics eradication.

“The government takes the drug money from the U.S. and puts it in their pockets,” he said. “If they want to solve the Golden Triangle drug problem, they can’t support the Burmese government. If they support the government, they support the drugs.”

Susan Pittman, spokeswoman for the State Department’s Bureau of Narcotics and Law Enforcement, said Washington ceased all direct anti-narcotic assistance to the Burmese government after 3,000 monks and students were killed in pro-democracy protests in 1988. But she concedes that the United States may be indirectly funding eradication programs through the U.N. anti-drug program.

Pittman also says the State Department has no direct evidence that the Burmese military is accountable for the increase in opium production, but she concedes the junta “has failed demonstrably in fulfilling its anti-narcotic commitments.”

Whoever is to blame, the biggest losers are the Shan residents who refuse to be part of the drug trade.

“I see opium fields in Burmese areas,” said Shan State Army Sgt. Nan Tha. “And I see empty villages where people have already fled.”

Chronicle Foreign Service reporter Jacob Baynham visited Burma in late December on a grant sponsored by the Pulitzer Center on Crisis Reporting in Washington.

© 2008 Hearst Communications Inc.