The Wa, an autonomous ethnic minority living in the rugged hills of northeastern Myanmar, are open and clear that they have no intention to break away from the national union.

The Wa Self-Administered Division, as their territory is officially known, is a self-governing buffer state between Myanmar and China with its own courts, schools, hospitals and even a modern TV news station.

Besides the native Wa language, many speak Chinese while only a few are fluent in the country’s main Bamar language. The Chinese yuan, not the Myanmar kyat, is the currency of choice in shops and marketplaces. Mobile phones and the internet are linked to Chinese, not Myanmar, networks.

The Wa state’s main city, Panghsang, also known as Pangkham, is a showcase of prosperity in the middle of a region stuck in conflict-ridden underdevelopment and poverty. And it is here that the fate of Myanmar’s hamstrung yet crucial peace process will most likely be decided.

In the 1970s and 1980s, the area was controlled by the insurgent Communist Party of Burma (CPB). But, in 1989, the mostly Wa hill-tribe rank-and-file of its army mutinied and drove their orthodox Maoist Myanmar leaders into exile in China. Communism was purged and local Wa nationalism took its place.

The Wa language, culture and traditions saw a sort of renaissance and have since been cultivated and promoted through the educational institutions that the new Wa-led administration run in the area.

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The 1989 mutiny gave birth to the new United Wa State Army (UWSA), which has over the years acquired modern weaponry from China, though earmarked only to defend its area and not wage war against the Myanmar government.

That same year, the Wa made peace with the Myanmar military, though not through any written accord, as media and academic journals have erroneously reported, but rather through an oral agreement with central authorities.

The outcome, 30 years later, is an isolated area of tranquility and prosperity in a wider region long-wracked by war and blighted by poverty. Dismissed for years by Western officials and other observers as a drug-trafficking cartel, the UWSA has more recently emerged as a central political actor in Myanmar’s pivotal peace process.

It is the leader of the seven-member Federal Political Negotiation and Consultative Committee (FPNCC), comprised of the Kachin Independence Army (KIA), the Ta’ang National Liberation Army among the Palaung, the Myanmar National Democratic Alliance Army in Kokang, the Arakan Army, the Shan State Army of the Shan State Progress Party, and the National Democratic Alliance Army in the hill north of Kengtung, east of the Wa’s area.

Together, the groups represent over 80% of the fighters in Myanmar’s many ethnic resistance armies. Although the UWSA is not in active conflict with Myanmar’s armed forces, or Tatmadaw, it has impacted the battlefield by providing its rebel allies with arms and ammunition.

For historical reasons — the Chinese may even have encouraged the Wa to mutiny in 1989 because they, too, had tired of the CPB’s old, orthodox cadres — the UWSA and its political wing, the United Wa State Party (UWSP), have close ties to China.

UWSA soldiers commemorate 30 years of a ceasefire with the Myanmar military in Panghsang, April 17, 2019. Photo: AFP/Ye Aung Thu

In recent years, Beijing’s interlocutors have managed to outmaneuver all other foreign players in Myanmar’s stillborn peace process, an undertaking launched by then president Thein Sein shortly after he assumed office in 2011 and continued by Aung San Suu Kyi’s administration.

The UWSA, more than any other ethnic armed organization, thus holds the key to any peace progress between ethnic armed groups and the government. It is also provides a potential autonomous model for other ethnic areas that have suffered from decades of debilitating civil war.

The Wa can and do boast of a successful governance and development. Xiao Minlaing, vice chairman of the Wa administration and number two in the UWSP, told this writer that the Wa-administered area adjacent to China measures 13,000 square kilometers with an additional less-defined southern area along the Thai border.

Around 600,000 people live under its administration, of whom 100,000 are migrant workers from China or other parts of Myanmar. Day-to-day affairs are run by 12 ministries and other administrative bodies while the UWSA maintains ten protective brigades, four in the north, five in the south and an additional artillery regiment. Local militia forces also help to protect the territory.

Xiao would not say how many troops the UWSA has under arms — “that is a secret”, he said — but did reveal the Wa police force has 2,500 uniformed officers.

Outside observers often put the UWSA’s strength at anywhere between 20,000-30,000 soldiers, while its arsenal of Chinese surface-to-air missiles, heavy artillery and armored fighting vehicles is the envy of other ethnic armed groups.

The Wa’s top leader, Bao Youxiang, serves concurrently as chairman of the administration, general secretary of the party and commander-in-chief of the army.

UWSA leader Bao Youxiang at a military parade in Panghsang, April 17, 2019. Photo: AFP/Ye Aung Thu

Despite discarding communism for free-for-all capitalism, the UWSP remains very much a party in the old Leninist tradition. It is not a mass movement, but a vanguard party with 10,000 members headed by a nine-member standing committee of the politburo. Needless to say, there is only one party in the Wa-administered area.

This writer trekked the entire length of the Wa Hills, then controlled by the CPB, in 1986-1987 and was struck by the extreme poverty in the villages. There were hardly any schools or clinics in the area and impoverished hill-tribe farmers grew opium as a cash crop to survive.

Panghsang was then a mere village of wooden buildings and a few basic concrete structures for the party’s leadership. Transportation in the region was only on foot or by mule along often treacherous mountain trails.

In Panghsang, where there was a few kilometers of unpaved dirt roads, the only vehicles were a jeep and two old Chinese army trucks. Fast forward to the present, Panghsang has traffic jams and even hints of a lively, if not seamy, nightlife.

According to Xiao, his Wa-run administration now runs 409 schools, compared with only 20 in 1989, and 26 hospitals, up from four at the time of the mutiny. Villages outside Panghsang, which this writer visited in August this year, are still poor but significantly better off than they were in the 1980s. Even remote areas now have electricity and piped water.

Hilltop view of the Wa state capital of Panghsang, August 2019. Photo: Bertil Lintner

The surge in development in the Wa Hills since 1989 would not, of course, have been possible without sources of income. In the beginning, that was opium and its derivative heroin, a trade made possible by the UWSA’s informal peace agreement with the Tatmadaw.

Satellite imagery has revealed that the area under poppy cultivation in Myanmar increased from 92,3090 hectares in 1987 to 154,000 in 1992. By the mid-1990s, Myanmar’s opium production reached 2,000 tons, up from between 350 and 600 tons annually before the CPB mutiny.

Those figures apply to the whole of Myanmar, but at that time the main opium growing areas were located east of the Salween river, including — but not confined to — the Wa Hills. In the 1990s, methamphetamines were added to the mix of illicit drugs produced in northern and northeastern Myanmar.

Those trades suffered a blow in January 2005, when the US announced indictments against eight high-ranking UWSA leaders, including Bao and his three brothers, on heroin and methamphetamine trafficking charges. The Wa’s response came in June that same year: a total ban on all opium cultivation in their controlled areas.

There is no doubt that many farmers suffered from the edict, but today rubber and tea plantations have largely replaced the old poppy fields. It is unclear if any methamphetamine production prevails in the Wa’s northern area along the Chinese border, but that appears to be different in its southern controlled area, where methamphetamine pills are still pouring across the border into Thailand.

At the same time, there are strong indications that much of the drug trade has been taken over by government-recognized militia groups and Tatmadaw-controlled Border Guard Forces. John Buchanan, a US academic specializing in Myanmar’s militias, wrote in a 2016 Asia Foundation report that those Border Guard Forces are alleged to be involved in narcotics trafficking.

The International Crisis Group, a Brussels-based think tank, went even further in a January 2019 report, stating that “the status of the militias and Border Guard Forces as Tatmadaw-aligned armed units gives them considerable impunity, but also gives the Tatmadaw a degree of deniability about their actions.”

Myanmar’s soldiers in a parade to mark the country’s 74th Armed Forces Day in Naypyidaw, March 27, 2019. Photo: AFP/Thet Aung

If the Wa leadership is to be believed, their organization’s main income today derives from mining, primarily tin but also zinc, lead and small quantities of gold.

When asked if rare earth metals are also being mined in Wa areas, Xiao said only that “the potential is being explored.” Eye-witnesses report seeing two rare earth mines in areas controlled by the KIA in the north, and there could be more in the Wa Hills, although the reports are unconfirmed.

While fighting rages in other parts of Myanmar, the Wa seem content with what they have: a huge de facto autonomous area with minimal interference from the central government and armed forces strong enough to keep the Tatmadaw at bay.

Although the UWSA may not be engaged in open warfare, many of its FPNCC allies are, and that gives the Wa as leaders and arms supplier of their rebel alliance a pivotal position in Myanmar’s peace process.

There is thus a growing realization among many seasoned observers that the UWSA can no longer be dismissed as a mere “drug-trafficking cartel.” Indeed, the Wa – and the autonomous success story they have come to represent – in many ways hold the key between war and peace in Myanmar.