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Viewing cable 07RANGOON1130, BURMA: INCSR I DRUGS AND CHEMICAL CONTROL

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Reference ID Created Released Classification Origin
07RANGOON1130 2007-11-21 10:31 2011-08-25 00:00 UNCLASSIFIED Embassy Rangoon
VZCZCXRO2176
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGO #1130/01 3251031
ZNR UUUUU ZZH
R 211031Z NOV 07
FM AMEMBASSY RANGOON
TO RUEHC/SECSTATE WASHDC 6872
RUEHBJ/AMEMBASSY BEIJING 1614
RUEHNE/AMEMBASSY NEW DELHI 4268
RUEHVI/AMEMBASSY VIENNA 0097
RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHCHI/AMCONSUL CHIANG MAI 1244
RUEABND/DEA HQS WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAWJA/DEPT OF JUSTICE WASHDC
RUCNDT/USMISSION USUN NEW YORK 1170
RHEHNSC/NSC WASHDC
RUEKJCS/SECDEF WASHDC
RUEKJCS/JOINT STAFF WASHDC
UNCLAS SECTION 01 OF 08 RANGOON 001130 
 
SIPDIS 
 
SIPDIS 
 
DEPT FOR EAP/MLS, INL, SCT 
DEPT OF JUSTICE FOR AFMLS, OIA, OPDAT 
VIENNA FOR UNODC OFFICE 
 
E.O. 12958:N/A 
TAGS: SNAR PGOV PREL BM
SUBJECT: BURMA: INCSR I DRUGS AND CHEMICAL CONTROL 
 
REF:  STATE 136782 
 
RANGOON 00001130  001.2 OF 008 
 
 
This report responds to reftel request for the INCSR I 
Drugs and Chemical Control Report update. 
 
I. Summary 
 
Burma took many wrong turns in 2007, including in the war 
on drugs.  Both UNODC and U.S. surveys of opium poppy 
cultivation indicated a significant increase in cultivation 
and potential production in 2007, while production and 
export of synthetic drugs (amphetamine-type stimulants, 
crystal methamphetamine and ketamine) from Burma continued 
unabated.  The significant downward trend in poppy 
cultivation observed in Burma since 1998 halted in 2007, 
with increased cultivation reported in Eastern, Northern 
and Southern Shan State and Kachin State.  Whether this 
represents a sustained reversal in poppy cultivation in 
Burma, which remains far below levels of 10 years earlier, 
remains to be seen.  It does indicate, however, that 
increases in the value of opium are driving poppy 
cultivation into new regions.  An increased number of 
households in Burma were involved in opium cultivation in 
2007. While Burma remains the second largest opium poppy 
grower in the world after Afghanistan, its share of world 
opium poppy cultivation fell from 55 percent in 1998 to 11 
percent in 2006, and rose slightly to 12 percent in 2007. 
This large proportional decrease is due to both decreased 
opium poppy cultivation in Burma and increased cultivation 
in Afghanistan.  The Golden Triangle region in Southeast 
Asia no longer reigns as the world's largest opium poppy 
cultivating region, now producing 5 percent of the world's 
opium. 
 
Despite increased cultivation in 2007, Burma's opium 
cultivation declined dramatically between 1998 and 2006. 
The UN Office on Drugs and Crime (UNODC) estimates a 
decrease from 130,300 hectares in 1998 to 21,500 hectares 
in 2006, an 83 percent decrease.  Cultivation in 2007 
increased 29 percent, from 21,500 hectares in 2006 to 
27,700 hectares.  The most significant decline over the 
past decade was observed in the Wa region, following the 
United Wa State Army's (UWSA) pledge to end opium poppy 
cultivation in its primary territory, UWSA Region 2. UWSA 
controlled territory accounted for over 30 percent of the 
acreage of national opium poppy cultivation in 2005, but 
almost no poppy cultivation was reported in the Wa region 
in 2006 and 2007.  However, there are indications that 
cultivation has increased in regions closely bordering UWSA 
Region 2. 
 
Burma has not provided most opium farmers with access to 
alternative development opportunities. Recent trends 
indicate that some opium farmers were tempted to increase 
production to take advantage of higher prices generated by 
opium's relative scarcity and continuing strong demand. 
Increased yields in new and remaining poppy fields 
(particularly in Southern Shan State), spurred by favorable 
weather conditions in 2007 and improved cultivation 
practices, have partially offset the affects of decreased 
cultivation. Higher yields in some areas may also signal 
more sophisticated criminal activity, greater cross border 
networking, and the transfer of new and improved 
cultivation technologies. 
 
Burma's overall decline in poppy cultivation since 1998 has 
been accompanied by a sharp increase in the production and 
export of synthetic drugs, turning the Golden Triangle into 
a new "Ice Triangle."  Burma is a significant player in the 
manufacture and regional trafficking of amphetamine-type 
stimulants (ATS).  Drug gangs based in the Burma-China and 
Burma-Thailand border areas, many of whose members are 
ethnic Chinese, produce several hundred million 
methamphetamine tablets annually for markets in Thailand, 
China, and India, as well as for onward distribution beyond 
the region.  There are also indications that groups in 
Burma have increased the production and trafficking of 
 
RANGOON 00001130  002.2 OF 008 
 
 
crystal methamphetamine or "Ice" - a much higher purity and 
more potent form of methamphetamine than the tablets. 
 
Through its Central Committee for Drug Abuse Control 
(CCDAC), the Government of Burma (GOB) cooperates regularly 
and shares information with the U.S. Drug Enforcement 
Administration (DEA) and Australian Federal Police (AFP) on 
narcotics investigations.  In recent years, the GOB has 
also increased its law enforcement cooperation with Thai, 
Chinese and Indian counter-narcotics authorities, 
especially through renditions, deportations, and 
extraditions of suspected drug traffickers. 
 
During the 2007 drug certification process, the U.S. 
determined that Burma was one of only two countries in the 
world that had "failed demonstrably" to meet its 
international counter-narcotics obligations.  Major 
concerns remain: unsatisfactory efforts by Burma to deal 
with the burgeoning ATS production and trafficking problem; 
failure to take concerted action to bring members of the 
United Wa State Army (UWSA) to justice following the 
unsealing of a U.S. indictment against them in January 
2005; failure to investigate and prosecute military 
officials for drug-related corruption; and failure to 
expand demand-reduction, prevention and drug-treatment 
programs to reduce drug-use and control the spread of 
HIV/AIDS.  Burma is a party to 1988 UN Drug Convention. 
 
II. Status of Country 
 
Burma is the world's second largest producer of illicit 
opium.  Eradication efforts and enforcement of poppy-free 
zones combined to reduce cultivation levels between1998 and 
2006, especially in Wa territory.  However, in 2007, a 
significant resurgence of cultivation occurred, 
particularly in eastern and southern Shan State and Kachin 
State, where increased cultivation, favorable weather 
conditions, and new cultivation practices increased opium 
production levels, led to an estimated 29 percent increase 
in overall opium poppy cultivation and a 46 percent 
increase in potential production of dry opium. 
 
According to the UNODC, opium prices in the Golden Triangle 
have increased in recent years, although prices in Burma 
remain much lower than the rest of the region due to easier 
supply.  Burmese village-level opium prices or farm-gate 
prices increased from $153 per kg in 2004 to $187 in 2005, 
to $230 in 2006 and to $265/kg in 2007. Burmese opium sales 
contribute about half of the annual household cash income 
of farmers who cultivate opium, which they use to pay for 
food between harvests.  Forty-five percent of the average 
yearly income ($501) of opium cultivating households in 
Shan State was derived from opium sales in 2007. 
 
In 2007, the UNODC opium yield survey estimated there were 
approximately 27,700 hectares planted with opium poppies, 
with an average yield of 16.6 kg per hectare (significantly 
higher than the 2006 average yield of 14.6 kg per hectare). 
[Independent U.S. opium poppy cultivation surveys also 
indicated increased poppy cultivation and estimated opium 
production to approximately 27, 700 hectares cultivated and 
270 metric tons produced].  The UNODC's opium yield survey 
concluded that cultivation had increased 29 percent in 
Burma from 2006 levels, with a 46 percent increase in 
potential production to 460 metric tons.  This represented 
a 67 percent increase in the total potential value of opium 
production in Burma, from $72 million in 2006 to $120 
million in 2007.  Nonetheless, both surveys indicated that 
opium production is still down 90 percent from its peak 
production in 1996. 
 
The general decline in poppy cultivation in Burma since 
1996 has been accompanied by a sharp increase in the local 
production and export of synthetic drugs.  According to GOB 
figures for 2007, the GOB seized approximately 1.5 million 
methamphetamine tablets, compared to 19.5 million seized in 
2006.  Opium, heroin, and ATS are produced predominantly in 
 
RANGOON 00001130  003.2 OF 008 
 
 
the border regions of Shan State and in areas controlled by 
ethnic minority groups.  Between 1989 and 1997, the Burmese 
government negotiated a series of cease-fire agreements 
with several armed ethnic minorities, offering them limited 
autonomy and continued tolerance of their narcotics 
production and trafficking activities in return for peace. 
In June 2005, the United Wa State Army (UWSA) announced 
implementation in Wa territory of a long-delayed ban on 
opium production and trafficking.  While the cultivation of 
opium poppies decreased in the Wa territory during 2006 and 
2007, according to UNODC and U.S. surveys, there are 
indications from many sources that Wa leaders replaced 
opium cultivation with the manufacture and trafficking of 
ATS pills and "Ice" in their territory, working in close 
collaboration with ethnic Chinese drug gangs. 
 
Although the government has not succeeded in persuading the 
UWSA to stop its illicit drug production and trafficking, 
the GOBQs Anti-Narcotic Task Forces continued to pressure 
Wa traffickers in 2007.  UWSA also undertook limited 
enforcement actions against rivals in Shan State in 2006 
and 2007.  In May 2006, UWSA units found and dismantled two 
clandestine laboratories operating in territory occupied 
and controlled by the UWSA-South in Eastern Shan State. 
When the UWSA units entered the lab sites, a firefight 
ensued, with eight people fatally wounded, four arrested, 
and 25 kg of heroin and 500,000 methamphetamine tablets 
seized by the raiding UWSA units.  In June 2006, the UWSA 
passed custody of the contraband substances to Government 
of Burma (GOB) officials.  The prisoners remained in the 
custody of the UWSA.  These UWSA actions likely were 
motivated more towards eliminating the competition in their 
area than by a desire to stop drug trafficking.  In Burma, 
opium addiction remains high in places of historic or 
current opium production, ranging from 1.27 percent of the 
total adult population in Eastern Shan State to 0.97 
percent in Kachin State and an estimated 0.83 percent in 
the Wa region, the main area of opium production until 
2006. 
 
III. Country Actions Against Drugs in 2007 
 
--Policy Initiatives. Burma's official 15-year counter- 
narcotics plan, launched in 1999, calls for the eradication 
of all narcotics production and trafficking by the year 
2014, one year ahead of an ASEAN-wide plan of action that 
calls for the entire region to be drug-free by 2015.  To 
meet this goal, the GOB initiated its plan in stages, using 
eradication efforts combined with planned alternative 
development programs in individual townships, predominantly 
in Shan State.  The government initiated its second five- 
year phase in 2004. Ground surveys by the Joint GOB-UNODC 
Illicit Crop Monitoring Program indicate a steady decline 
in poppy cultivation and opium production in areas 
receiving focused attention, due to the availability of 
some alternative livelihood measures (including crop 
substitution), the discovery and closure of clandestine 
refineries, stronger interdiction of illicit traffic, and 
annual poppy eradication programs.  The UNODC estimates 
that the GOB eradicated 3,598 hectares of opium poppy 
during the 2007 opium poppy cropping season (ranging 
between July-March is most regions), compared to 3,970 
hectares in 2006. 
 
The most significant multilateral effort in support of 
Burma's counter-narcotics efforts is the UNODC presence in 
Shan State.  The UNODC's "Wa Project" was initially a five- 
year, $12.1 million supply-reduction program designed to 
encourage alternative development in territory controlled 
by the UWSA.  In order to meet basic human needs and ensure 
the sustainability of the UWSA opium ban announced in 2005, 
the UNODC extended the project through 2007, increased the 
total budget to $16.8 million, and broadened the scope from 
16 villages to the entire Wa Special Region No. 2.  Major 
donors that have supported the Wa Project include Japan and 
Germany, with additional contributions from the UK and 
Australia.  The United States previously funded the UNODC 
 
RANGOON 00001130  004.2 OF 008 
 
 
Wa project, but halted funding over issued by UWSA 
leadership against U.S. DEA agents following the January 
2005 indictment of seven UWSA leaders in a U.S. district 
court for their role in producing and smuggling heroin to 
the United States. 
 
As part of its 15-year counter-narcotics plan, in 2002 the 
Burmese Central Committee for Drug Abuse Control (CCDAC) 
initiated the "New Destiny" project, which calls for the 
complete eradication of poppy cultivation nationwide and 
its replacement with substitute crops.  The GOB, under its 
1993 Narcotics Drugs and Psychotropic Substances Law, 
issued notifications controlling 124 narcotic drugs, 113 
psychotropic substances, and 25 precursor chemicals.  Burma 
enacted a "Mutual Assistance in Criminal Matters Law" in 
2004. 
 
--Law Enforcement Measures. The CCDAC, which leads all 
drug-enforcement efforts in Burma, is comprised of 
personnel from the national police, customs, military 
intelligence, and army.  The CCDAC, under the control of 
the Ministry of Home Affairs, coordinates 27 anti-narcotics 
task forces throughout Burma.  Most are located in major 
cities and along key transit routes near Burma's borders 
with China, India, and Thailand.  As is the case with most 
Burmese government entities, the CCDAC suffers from a 
severe lack of adequate funding, equipment, and training to 
support its law-enforcement mission.  The Burmese Army and 
Customs Department support the Police in this role.  In 
2005, CCDAC established two new anti-narcotic task forces 
in Rangoon and Mandalay, supplementing existing task forces 
in both cities. 
 
Burma is actively engaged in drug-abuse control with its 
neighbors China, India, and Thailand.  Since 1997, Burma 
and Thailand have had 11 cross-border law enforcement 
cooperation meetings.  The most significant result of this 
cooperation has been the repatriation by Burmese police of 
drug suspects wanted by Thai authorities: two in 2004, one 
in 2005 and one in 2006.  According to the GOB, Thailand 
has contributed over $1.6 million to support an opium crop 
substitution and infrastructure project in southeastern 
Shan State.  In 2007, Thailand assigned an officer from the 
Office of Narcotics Control Board (ONCB) to its mission in 
Rangoon.   Burma-China cross border law enforcement 
cooperation has increased significantly, resulting in 
several successful operations and the handover of several 
Chinese fugitives who had fled to Burma.  While not 
formally funding alternative development programs, the 
Chinese government has actively encouraged investment in 
many projects in the Wa area and other border regions, 
particularly in commercial enterprises such as tea 
plantations, rubber plantations, and pig farms.  China has 
assisted in marketing those products in China through lower 
duties and taxes.  There are also indications that China 
conducted its own opium cultivation and production surveys 
in 2007 in regions of Burma bordering the PRC, although 
they have not shared data resulting from those surveys with 
other parties. 
 
After Burma and India signed an agreement on drug control 
cooperation in 1993, the two countries have held cross 
border Law Enforcement meetings on a biannual basis, the 
last being held September 11, 2004, in Calcutta. 
The GOB has to date taken no direct action against any of 
the seven UWSA leaders indicted by U.S. federal court in 
January 2005, although authorities have taken action 
against other, lower ranking members of the UWSA syndicate. 
In 2007, one of the indicted leaders, Pao Yu-hua,  died of 
natural causes and another indicted leader, Ho Chun-t'ing, 
was captured by Hong Kong Police.  He is currently 
imprisoned in Hong Kong while U.S. and Hong Kong officials 
discuss his extradition to stand trial in the U.S.  Another 
notorious Burmese drug lord, Khun Sa, who was held under 
house arrest in Rangoon following his surrender to the GOB 
in December 1996, died from natural causes in October 2007. 
 
 
RANGOON 00001130  005.2 OF 008 
 
 
--Narcotics Seizures. Summary statistics provided by 
Burmese drug officials indicate that through September 
2007, Burmese police, army, and the Customs Service 
together seized 1154 kgs of raw opium, 354 kgs of low 
quality opium, 73 kgs of heroin, 91 kgs of marijuana, 
approximately 1.5 million methamphetamine tablets, 455 kgs 
of methamphetamine powder, 395 kgs of methamphetamine ICE, 
238 kgs of ephedrine, 3,116 kgs of powdered precursor 
chemicals, and 8,723 liters of precursor chemicals. 
 
On January 19, 2007, based on DEA and AFP information, the 
Lashio CCDAC ANTF dismantled a heroin refinery in the Man 
Lin Hills near Lashio, Shan State.  This operation resulted 
in the arrest of two defendants and the seizure of 
approximately 20.3 kgs of heroin, 20.3 kgs of brown opium, 
1.02 kgs of opium residue, 1,100 kgs of ammonium chloride, 
770 kgs of sodium chloride, 1,470 liters of ether, 438 
liters of hydrochloric acid, 183 liters of chloroform, and various 
equipment used in the refining of heroin. 
 
On February 14, 2007, based on DEA and AFP information, the 
Muse CCDAC ANTF dismantled a heroin refinery near Khar Li 
Khu Village, Mong Ko Township, Burma.  This operation 
resulted in the arrest of 7 individuals, and the seizure of 
7 kgs of brown opium, 89 kgs of ephedrine, 22.75 liters of 
mineral spirit, 3 kgs of sodium hydroxide, 2 liters of 
hydrochloric acid, 183 liters of chloroform, and various 
equipment used in the refining of heroin. 
 
On April 21, 2007, the Tachilek ANTF seized a total of 
approximately 264,000 methamphetamine tablets. 
 
On April 23, 2007, based on DEA and AFP information, CCDAC 
ANTF seized 224.3 kgs of opium, 300 grams of heroin, opium 
seeds, 7.1 million kyat (approximately $6,000), and 50,000 
Chinese Yuan (approximately $6,250) in Pan Se, Nam Kham 
Township, Burma. 
 
During a May 26, 2007 raid on a heroin refinery in Kokang 
region, the Muse ANTF captured a Kachin Defense Army (KDA) 
major.  Returning from the refinery, ANTF was ambushed by 
approximately 60 armed individuals.  In the ensuing 
firefight, the KDA major was rescued and the opposing force 
escaped with the drugs and money seized at the refinery. 
Four ANTF officers were killed and two were wounded.  The 
attackers were identified as KDA and were believed to be 
primarily interested in recovering the KDA major. 
 
On June 7, 2007, based on DEA information, the Taunggyi 
ANTF seized 195.2 kgs of opium from three locations and 
dismantled a heroin refinery. 
 
--Corruption. Burma signed but has not ratified the UN 
Corruption Convention.  Burma does not have a legislature 
or effective constitution; and has no laws on record 
specifically related to corruption. While there is little 
evidence that senior officials in the Burmese Government 
are directly involved in the drug trade, there are credible 
indications that mid-and-lower level military leaders and 
government officials, particularly those posted in border 
and drug producing areas, are closely involved in 
facilitating the drug trade.   The Burmese regime closely 
monitors travel, communications and activities of its 
citizens to maintain its pervasive control of the 
population, so it strains credibility to believe that 
government officials are not aware of the cultivation, 
production and trafficking of illegal narcotics in areas it 
tightly controls.   A few officials have been prosecuted 
for drug abuse and/or narcotics-related corruption. 
However, Burma has failed to indict any military official 
above the rank of colonel for drug-related corruption. 
 
--Agreements and Treaties. Burma is a party to the 1961 UN 
Single Convention on Narcotic Drugs (and became a member of 
the 1972 Protocol to the Single Convention in 2003), the 
1971 UN Convention on Psychotropic Substances, and the 1988 
UN Drug Convention. 
 
RANGOON 00001130  006.2 OF 008 
 
 
 
--Cultivation and Production. According to the UNODC opium 
yield estimate, in 2007 the total land area under poppy 
cultivation was 27,700 hectares, a 29 percent increase from 
the previous year.  The UNODC also estimated that the 
potential production of opium increased by 46 percent, from 
315 metric tons in 2006 to 460 metric tons in 2007.  The 
significant increase in potential opium production in 2007 
indicated in the UNODC estimates reflect improved 
agricultural methods and an end to several years of 
drought, resulting in more favorable growing weather in 
major opium poppy growing areas, such as Shan State and 
Kachin State. 
 
Burma as yet has failed to establish any reliable mechanism 
for the measurement of ATS production.  Moreover, while the 
UNODC undertakes annual estimates of poppy cultivation and 
production, the U.S. has been unable to conduct its annual 
joint crop survey with Burma since 2004 due to the GOB's 
refusal to cooperate in this important area. 
 
--Drug Flow/Transit. Most ATS and heroin in Burma is 
produced in small, mobile labs located near Burma's borders 
with China and Thailand, primarily in territories 
controlled by active or former insurgent groups.  A growing 
amount of methamphetamine is reportedly produced in labs 
co-located with heroin refineries in areas controlled by 
the United Wa State Army (UWSA), the Shan State Army-South 
(SSA-S), and groups inside the ethnic Chinese Kokang 
autonomous region.  Ethnic Chinese criminal gangs dominate 
the drug syndicates operating in all three of these areas. 
Heroin and methamphetamine produced by these groups is 
trafficked overland and via the Mekong River, primarily 
through China, Thailand, India and Laos and, to a lesser 
extent, via Bangladesh, and within Burma.  There are 
credible indications that drug traffickers are increasingly 
using maritime routes from ports in southern Burma to reach 
trans-shipment points and markets in southern Thailand, 
Malaysia, Indonesia, and beyond.  Heroin seizures in 2005, 
2006 and 2007 and subsequent investigations also revealed 
the increased use by international syndicates of the 
Rangoon International Airport and Rangoon port for 
trafficking of drugs to the global narcotics market. 
 
--Domestic Programs/Demand Reduction. The overall level of 
drug abuse is low in Burma compared with neighboring 
countries, in part because most Burmese are too poor to be 
able to support a drug habit.  Traditionally, some farmers 
used opium as a painkiller and an anti-depressant, in part 
because they lack access to other medicine or adequate 
healthcare.  There has been a growing shift in Burma away 
from opium smoking toward injecting heroin, a habit that 
creates more addicts and poses greater public health risks. 
Deteriorating economic conditions will likely stifle 
substantial growth in overall drug consumption, but the 
trend toward injecting narcotics is of significant concern. 
The GOB maintains that there are only about 65,000 
registered addicts in Burma.  According to several HIV 
Estimation Workshops conducted in 2007 by the National AIDS 
Program and the World Health Organization, there are an 
estimated 60,000 to 90,000 injecting drug users in Burma. 
Surveys conducted by UNODC and other organizations  suggest 
that the addict population could be as high as 300,000. 
According to the UNODC, BurmaQs opium addiction rate is 
high, at 0.75 percent.  NGOs and community leaders report 
increasing use of heroin and synthetic drugs, particularly 
among disaffected youth in urban areas and by workers in 
mining communities in ethnic minority regions.  The UNODC 
estimated that in 2004 there were at least 15,000 regular 
ATS users in Burma. 
 
The growing HIV/AIDS epidemic has been tied to intravenous 
drug use.  According to the National AIDS Program, one 
third of officially reported HIV/AIDS cases are 
attributable to intravenous drug use, one of the highest 
rates in the world.  Information gathered by the National 
AIDS Program showed that HIV prevalence among injecting 
 
RANGOON 00001130  007.2 OF 008 
 
 
drug users was 46.2 percent in 2006 ? a figure that 
remained stable in 2007.   Infection rates are highest in 
Burma's ethnic regions, and specifically among mining 
communities in those areas where opium, heroin, and ATS are 
more readily available. 
 
Burmese demand reduction programs are in part coercive and 
in part voluntary.  Addicts are required to register with 
the GOB and can be prosecuted if they fail to register and 
accept treatment.  Altogether, more than 21,000 addicts 
were prosecuted between 1994 and 2002 for failing to 
register. (The GOB has not provided any data since 2002.) 
Demand reduction programs and facilities are limited, 
however.  There are six major drug treatment centers under 
the Ministry of Health, 49 other smaller detoxification 
centers, and eight rehabilitation centers, which, together, 
have provided treatment to about 70,000 addicts over the 
past decade.  Prior to 2006, the Ministry of Health treated 
heroin addicts with tincture of opium.  However, based on 
high levels of relapse, the Ministry of Health in 2006 
began to treat heroin addicts with Methadone Maintenance 
Therapy (MMT) in four drug treatment centers, found in 
Rangoon, Mandalay, Lashio, and Myitkyina.  The Ministry of 
Health also began dispensing methadone treatment in three 
additional sites, two in Kachin State and one in Rangoon. 
By August 2007, the Ministry of Health had treated more 
than 370 patients using MMT. 
 
As a pilot model, in 2003 UNODC established community-based 
treatment programs in Northern Shan State as an alternative 
to official GOB treatment centers.  UNODC expanded this 
program, opening centers in Kachin State.  In 2007, UNODC 
operated 16 drop-in centers.  Since 2004, more 2,000 
addicts received treatment at UNODC centers.  In 2006 and 
2007, an additional 8,028 addicts have sought medical 
treatment and support from UNODC-sponsored drop-in centers 
and outreach workers who are active throughout northeastern 
Shan State.  The GOB also conducts a variety of narcotics 
awareness programs through the public school system.  In 
addition, the government has established several demand 
reduction programs in cooperation with NGOs.  These include 
programs coordinated with CARE Myanmar, World Concern, and 
Population Services International (PSI), focus on 
addressing injected drug use as a key factor in halting the 
spread of HIV/AIDS. 
 
However, while maintaining these programs at pre-existing 
levels, Burma has failed to expand demand-reduction, 
prevention, and drug-treatment programs to reduce drug use 
and control the spread of HIV/AIDS.  The Global Fund, which 
had a budget of $98.5 million to fight AIDS, TB, and 
Malaria in Burma, withdrew in 2005. In 2006, foreign donors 
established the 3 Diseases Fund (3DF) to provide 
humanitarian assistance for AIDS, TB, and malaria.  The 
3DF, with its budget of $100 million over five years, 
supports the work of local and international NGOs, the 
United Nations, and the Ministry of Health.  In 2007, the 
3DF supported HIV/AIDS programs such as HIV surveillance 
and training on blood safety.  The 3DF also provided funds 
for antiretroviral therapy and the MMT program. 
 
IV. U.S. Policy Initiatives and Programs 
 
--Policy and Programs. As a result of the 1988 suspension 
of direct USG counter-narcotics assistance to Burma, the 
USG has limited engagement with the Burmese government in 
regard to narcotics control.  US DEA, through the U.S. 
Embassy in Rangoon, shares drug-related intelligence with 
the GOB and conducts joint drug-enforcement investigations 
with Burmese counter-narcotics authorities. In 2006 and 
2007, these joint investigations led to several  seizures, 
arrests, and convictions of drug traffickers and producers. 
The U.S. conducted opium yield surveys in the mountainous 
regions of Shan State from 1993 until 2004, with assistance 
provided by Burmese counterparts.  These surveys gave both 
governments a more accurate understanding of the scope, 
magnitude, and changing geographic distribution of Burma's 
 
RANGOON 00001130  008.2 OF 008 
 
 
opium crop.  In 2005, 2006 and again in 2007, the GOB 
refused to allow another joint opium yield survey.  A USG 
remote sensing estimate conducted indicated a slight 
increase in opium cultivation in 2007 and a significant 
increase in potential opium production, mirroring UNODC 
survey results.  Bilateral counter-narcotics projects are 
limited to one small U.S.-supported crop substitution 
project in Shan State. No U.S. counter-narcotics funding 
directly benefits or passes through the GOB. 
 
--The Road Ahead. The Burmese government must reverse the 
negative direction of narcotics production in 2007 to 
restore the significant gains it made over the past decade 
in reducing opium poppy cultivation and opium production. 
This will require greater cooperation with UNODC and major 
regional partners, particularly China and Thailand. 
Large-scale and long-term international aid - including 
increased development assistance and law-enforcement aid - 
could play a major role in reducing drug production and 
trafficking in Burma.  However, the ruling military regime 
remains reluctant to engage in political dialogue within 
Burma and with the international community.  Its barriers 
to those offering outside assistance have limited the 
potential for international support of all kinds, including 
support for Burma's counter-narcotics law enforcement 
efforts.  Furthermore, in order to be sustainable, a true 
opium replacement strategy must combine an extensive range 
of counter-narcotics actions, including crop eradication 
and effective law enforcement, with alternative development 
options, support for former poppy farmers and openness to 
outside assistance.  The GOB must foster closer cooperation 
with the ethnic groups involved in drug production and 
trafficking, especially the Wa, refuse to condone continued 
involvement by ceasefire groups in the narcotics trade, 
tackle corruption effectively, and enforce its counter- 
narcotics laws more consistently to reach its goals of 
eradicating all narcotics production and trafficking by 
2014. 
 
The USG believes that the GOB must further eliminate poppy 
cultivation and opium production; prosecute drug-related 
corruption, especially by corrupt government and military 
officials; take action against high-level drug traffickers 
and their organizations; strictly enforce its money- 
laundering legislation; and expand prevention and drug- 
treatment programs to reduce drug use and control the rapid 
spread of HIV/AIDS.  The GOB must take effective new steps 
to address the explosion of ATS that has flooded the region 
by gaining closer support and cooperation from ethnic 
groups, especially the Wa, who facilitate the manufacture 
and distribution of ATS.  The GOB must close production 
labs and prevent the illicit import of precursor chemicals 
needed to produce synthetic drugs.  Finally, the GOB must 
stem the troubling growth of domestic demand for heroin and 
ATS. 
 
VILLAROSA