For the past 20 years, China has been the main market for Myanmar’s rich bounty of illegally produced opium and its potent derivative heroin.

But recent declines in both drugs’ prices and production in Myanmar’s section of the opium-growing Golden Triangle region suggest changing consumption patterns in China, including a shift towards more synthetic drugs such as ice, cocaine and potentially the locally made opioid fentanyl.

According to a recent United Nations Office for Drugs and Crime (UNODC) survey, areas under opium cultivation dropped to 37,300 hectares in 2018, down from the 41,000 hectares in 2017.

Total opium production, meanwhile, dropped from 550 to 510 metric tons, the same survey showed. That equates to around 50 tons of heroin, as it takes 10 kilograms of opium plus chemicals to produce a kilogram of the more potent drug.

In the 1990s and early 2000s, Myanmar’s opium production boomed with average annual yields of 1,000 tons or more. Until now, high Chinese demand has driven Myanmar’s illicit bumper crops.

According to statistics compiled by Chin Ko-lin and Sheldon Zhang, two US-based academics and experts on the Golden Triangle drug trade, China had 1,545,000 registered drug addicts in 2010, with 1,065,000 of those addicted to heroin.

The actual figure, as most addicts are not registered with the government, could have been as many as 4-5 million, according to other independent researchers.

An intravenous drug user in an anonymous file photo. Photo: Twitter

China previously marked the United Nations Anti-Drugs Day, June 26, with mass executions of drug offenders. While that symbolic policy has changed in recent years, China still executes annually an unknown high number of drug offenders.

Heroin accounted for 65-75% of all seized narcotics in the late 1990s and early 2000s, while methamphetamines, or ice, and other drugs did not figure prominently in the official statistics.

The number of officially registered drug users is now more than two million, of whom 1.5 million are addicted to synthetic drugs, not heroin.

China has produced significant quantities of ice and fentanyl could be added to drugs that are now being consumed locally, experts suggest.

Fentanyl is manufactured legally in Chinese pharmaceutical factories, and is exported to countries such as the United States, where abuse has reached epidemic proportions.

Experts believe the consumption shift is in line with China’s wider development into a more modern nation, where “old” drugs like opium and heroin are no longer in vogue.

That also apparently includes rising demand for South American-made cocaine. Last year, Chinese police seized more than 1.3 metric tons of cocaine in a raid in Shenzhen, situated opposite to Hong Kong.

The China Daily newspaper reported on September 14, 2018, that cocaine was being smuggled from South America to major ports on China’s east coast before being moved to Guangdong, Hong Kong and Macau by sea.

An old man holds opium poppies, which are grown in poor areas of Shan State in northeast Myanmar. Photo: iStock
An old man holds opium poppies in Myanmar’s Shan state. Photo: iStock

But what does this all mean for Myanmar’s poor opium farmers? Are they facing tougher times than usual because of new market trends in China? And how does the international community view this new evolving situation?

Unfortunately, the UNODC appears to be blaming the wrong people for the menace and protecting others who are benefiting from it. Critics say that is not conducive to understanding the problem and finding the best ways to solve it.

That the area in Myanmar currently under poppy cultivation, the plant that yields opium, is getting smaller is as far as many drug experts are willing to agree with the UNODC’s most recent opium survey.

The UN agency asserted in its report that “the highest density of poppy cultivation took place in areas under the control of influence of the Kachin Independence Army (KIA),” referring to an ethnic armed organization active in northern Kachin state.

It made similar claims about opium cultivation in neighboring Shan state, blaming it on ethnic rebels while deftly side-stepping acknowledgement of any official complicity in the trade.

The KIA’s political wing, the Kachin Independence Organization (KIO), was the first to respond to the report, pointing out in a statement last month that even the UNODC’s own map in the research showed that the state’s poppy cultivation was not in their controlled areas, but rather where government-recognized militias and state-aligned Border Guard Forces hold sway.

Rebel soldiers of the Kachin Independence Army (KIA) manning rifles on a supply route from Laiza, a KIA-controlled stronghold in Myanmar's northern Kachin state on the border with China. Photo: AFP/Patrick Bodenham
Rebel soldiers of the Kachin Independence Army (KIA) on a supply route from Laiza, a KIA-controlled stronghold in Myanmar’s northern Kachin state on the border with China. Photo: AFP/Patrick Bodenham

The Restoration Council of Shan State (RCSS), an ethnic Shan rebel group with thousands of troops, issued a similar announcement on March 18, stating that the UNODC had the groups in the area mixed up.

The RCSS and the Pa-O National Liberation Army, a tiny group without a recognized controlled area, were blamed for poppy production taking place in areas controlled by the Pa-O National Army, a bigger armed outfit which made peace with central authorities in 1991 and has since been operating as an officially recognized local militia.

The Transnational Institute (TNI), an international nongovernmental organization based in the Netherlands and with a presence in Myanmar, said the UNOCD report is “a distortion of reality” in a statement issued on March 5.

TNI said that the KIO “has for several years carried out a strict anti-drugs campaign” and that in Shan state poppy cultivation is carried out “in areas that are controlled by Tatmadaw-backed militias.”

Tatmadaw is the name used for the Myanmar army; TNI also identifies which government aligned militias are involved in the drug trade.

The UNODC has a long history of turning a blind eye to official complicity in Myanmar’s drug trade, mainly because it has no choice but to cooperate with authorities in countries where it operates.

Police officers stand next to seized drugs that will be burned at an event to mark International Day against Drug Abuse and Illicit Trafficking, outside Yangon, Myanmar June 26, 2017. REUTERS/Soe Zeya Tun
Myanmar police officers stand next to seized drugs to be burned at an International Day against Drug Abuse and Illicit Trafficking event outside Yangon, June 26, 2017. Photo: Reuters/Soe Zeya Tun

When UNODC officials are confronted with questions about who really benefits from the illicit trade – well known to be well-connected criminal syndicates, not impoverished opium farmers or ethnic rebels – the answer is usually that those groups are very “secretive.”

Blaming the trade on the wrong players, the TNI says, “serve as a distraction, ignore realities in the field, and allow high levels of corruption and a multi-million dollar drug trade to flourish in the region.”

So what is the reality on the ground? The weight used for measuring raw opium is known as a viss, the equivalent of 1.6 kilograms. As long as Chinese demand was high, so were opium prices.

But today an opium farmer in eastern Kayah state receives around 350,000 Myanmar kyats, or US$230, for a viss, approximately half the price they received on open markets a few years ago.

“Before, the buyers used to come to us,” says a person familiar with the trade. “Now we have to go to them. And they offer us half the price in cash and the rest in methamphetamines, which they say we can sell.”

The buyers, according to the same source, are based in Namsang, a major town on the east-west highway through Shan state. In Lashio, a town in northern Shan state, the price has dropped from a million kyats per viss a few years ago to 600,000 last year.

In Mong Ton near the Thai border, where farmers are paid in Thai currency, the price per viss has dropped from, 40,000-60,000 baht, or $1,255-$1,885, to 20,000 baht or $630 over the same period.

Children walking through an opium plantation in Pekon in southern Shan state.Photo: Hyo Hein Hein Kyaw/ AFP
Children walking through an opium plantation in Pekon in southern Shan state. Photo: Hyo Hein Hein Kyaw/AFP

To be sure, there are price discrepancies by region, for unknown reasons. For instance, prices are still high and rising in Kachin state, where a viss of opium fetched 1.7 million kyat in 2017 and 2.5 million kyat last year.

Kachin state has a huge local market for heroin and busy refineries are located in areas controlled by government-aligned Border Guard Forces, says TNI.

One Myanmar-based opium farmer told Asia Times this year that prices are slightly higher in other parts of Myanmar as well. The reason for this anomaly is not known, but there is little to indicate that slackened Chinese demand is reviving.

In February, US President Donald Trump made the astonishing claim that China doesn’t have a drug problem because it could use the death penalty to punish drug dealers and users.

But it is evident that China’s hardline approach to drug abuse is not working, regardless of what kind of narcotics people are using or Myanmar is producing. According to a 2016 report from the Brookings Institution, a US-based think tank, the number of officially registered drug users in China has increased every year since 1998.

While market dynamics make clear that heroin is no longer China’s drug of choice and that Myanmar’s opium farmers are suffering as a result, it should be easier to find ways to provide them with an alternative source of viable income.

But the only international agency, the UNODC, which could do that is on the wrong track and, by muddling the issue is making it harder to find a way out of the vicious cycle of poverty, insurgency and counterinsurgency that for decades has torn northern and northeastern Myanmar apart.