In Myanmar, a new ‘criminal’ State is rising. And China is paying to build it

Myanmar’s narcotics warlords are finally becoming the arbiters of the State. While China quietly moves in, India will have to make tough choices.

File photo of Gen Min Aung Hlaing, head of Myanmar's military junta | Wikimedia Commons

Miss Hairy Legs—soldiers disrespectfully called the cross-dressing, colourfully bisexual General Olive Yang, who had once terrified classmates by carrying guns into Lashio’s Guardian Angel’s Convent School in Myanmar and thrown a urine pot at her husband, Twan Sao Wen, when he attempted to forcibly consummate their marriage. For all the grumbling, though, the 10,000 soldiers in her ranks proved willing to follow her to the gates of hell, fighting savage battles to set up the opium trade lines laboratories that funnelled heroin to Southeast Asia and beyond.

While international sanctions have walled off Myanmar from the world economy, the People’s Republic of China has been quietly moving to cash in. The door is open again for work on the gargantuan Mong Tong dam on the Salween River in Shan—a project that was stalled earlier due to environmental protests under the democratic government. A multi-billion effort to grow trade along with the road and rail links from Kunming in southern China to the Kyaukphyu deep seaport in Rakhine is on again.

There is even going to be a cross-border Special Economic Zone, linking Lincang in China’s Yunnan to the town of Laukkai in the Kokang region, the infamous home to some 30 casinos set up to help launder profits coming from the region’s powerful ethnic Chinese-organised crime cartels.

The ghost of Olive Yang would be smiling right now: Myanmar’s narcotics warlords are finally becoming the arbiters of the fate of her nation, becoming indistinguishable from the structure of the State itself.

Chinese empire and the warlords

Last month, more than 3,000 people lined up on an athletics track in Mong La in the Kokang region for the three-day funeral rites of the 91-year-old international warlord, gun-runner, narcotics trafficker, and money-launderer Peng Jiasheng. Friends, as well as enemies, came to pay homage. It was hard to tell which was which: representatives of the Arakan Army, the Shan State Army, the Karenni Nationalities Defense Force, the Ta’ang National Liberation Army, and the Kachin Independence Army were all there.

Min Aung Hlaing, the commander-in-chief of the Myanmar military’s Kengtung-based Golden Triangle Command—and most important of all, diplomatic representatives of the People’s Republic of China were present as well.

In essence, China is paying the Konkang cartels to ensure work goes forward despite the disruptions and pressures of the democratic government. The main proxy it has cultivated in the region is the United Wa State Army with an estimated 30,000 fighters, whom it supplies weapons from across the border.

The Kokang cartels, in turn, fund counter-insurgency groups by Myanmar’s Border Guard Forces, keeping open logistics corridors like Chinshwehaw and Kunlong, which are adjacent to the special autonomous zone.

The funding model is simple: in return for the security of Chinese projects, the insurgents, the United Nations Office on Drugs and Organised Crime says, produce and run staggering quantities of methamphetamine and other opioids.

Following the 2021 military coup, the rival ethnic insurgent groups did not fight the army but helped other expand the territories from which warlords could extract resources.

Even though there were large-scale anti-coup rallies in Taunggyi, the Shan capital, only the Ta’ang National Liberation Army was somewhat supportive of the anti-coup People’s Defense Forces.

Environmental activist Sai Khur Hseng offered journalist Tom Fawthorp this simple explanation for why this development is being welcomed even if it comes with drugs and crime: “People at all levels of Shan society are suffering from the economic crisis. They are hungry for money.”

The Generals’ drug-runner friends

Late one night in 1962, soon after he left an opera performance in Yangon, General Ne Win began to paint Myanmar—the land of jade and rubies—grey. Horse races, beauty contests and dance competitions were banned by the new military dispensation, author Bertil Lintner has recorded. The beer came from the people’s brewery, cakes from their patisseries, and toothpaste from the toilet industry. The students who protested were massacred.

From their Kokang bastions, warlords like Yang fed the world’s growing demand for heroin—and, in the process, brought cash into an economy bankrupted by General Ne’s “Burmese way to socialism.” Even though the Kokang cartels controlled territory, they enjoyed a comfortable relationship with the military-state: Yang’s brother, Jimmy Yang, became a member of parliament.

Similarly, Lo Hsing Han received permission to run opium convoys without military interference in return for providing troops to fight ethnic insurgents. His brother, Lo Hsing-Ko, was conveniently appointed chief of the Kokang police.

From time to time, the system frayed. In the mid-1970s, Peng Jiasheng allied with the Communist Party of Burma (CPB) to beat out competitors in the drug trade. In the 1980s, though, when the party got split, its remnants signed a ceasefire deal with the government. Peng signed a deal as well, but conflicts with the army for territory and shares, for a time, forced him across the border into Yunnan.

There were others to pick up the slack, though—the Myanmar National Democratic Alliance Army, led by Peng’s brother Peng Jiafu, the National Democratic Alliance Army led by Peng’s son-in-law Lin Mingxian, and the United Wa State Army led by Bao Youxiang.

Faced with threats to its legitimacy from the democracy movement, the Myanmar military has rebuilt relationships with many warlords. General Min Aung Hlaing, the head of Myanmar’s military junta, and the officer responsible for attacking Peng in 2009, even sent a special condolence message.

The empires built by the drug lords are visible all over Yangon: heroin earnings have been laundered, according to the United States Drug Enforcement Administration, like Kyaw Win’s Mayflower banking group, Yang Maoling’s Peace Myanmar Group, and surrendered druglord Khun Sa’s Good Shan Brothers.

The challenge for India

The case for India maintaining a deep relationship with Myanmar’s military is obvious: it holds the key to peace in the troubled Northeast. In 1988, following the pro-democracy protests, New Delhi paid a heavy price for severing links with Myanmar’s military. Later, though, India repaired relations. In 1995, the Indian Army targeted a column that was taking arms from Cox’s Bazar in Bangladesh through the Mizoram forests. The Army’s 57 Division, working together with the Myanmar Army, killed 38 insurgents.

In 2010, India and Myanmar signed an agreement stating that Indian forces could pursue insurgents across the border. Four years later, the two countries signed an agreement on coordinated patrolling and intelligence sharing. Naga and Manipuri insurgent bases across the border were shut down. In return, India provided economic and military aid to Myanmar, helping the Generals avoid the trap of excessive dependence on China.

There’s no telling, though, just where this might lead. The massive investments China is making in Myanmar will inexorably give it a growing leverage; there’s just no way India can compete dollar for dollar. The People’s Liberation Army has also begun developing its relationships with groups once seen as close to Indian interests—like the Arakan Army in Rakhine—supplying them with weapons and cash. In essence, China seeks to emerge as the hegemon in Myanmar, the patron of both the military-run State and the warlords who oppose it.

India, then, is at some risk of losing influence with the Myanmar military and its collaborators—and, at once, shedding whatever moral capital it had among pro-democracy groups. Tough choices, it seems probable, will have to be made in the not-too-distant future.

The author is National Security Editor, ThePrint. He tweets @praveenswami. Views are personal.

(Edited by Humra Laeeq)