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The Rise of Myanmar’s Methamphetamine

When the eyes of the world fall upon Myanmar, they see the Rohingya crisis occurring in the western part of the Southeast Asian country, but rarely do they look at another insidious situation occurring to the east. In the lawless Shan state in Eastern Myanmar, methamphetamine production flourishes, making Myanmar the top methamphetamine producer and exporter in the world. In spite of current geopolitical conflicts and drug use crises (among other concerns), Myanmar has sought ways to bolster its economy, increase foreign investments, and integrate itself into the global economy. Most recently, Myanmar has opted into numerous projects under China’s Belt and Road Initiative (BRI). These investment ventures would improve infrastructure in the country and create new trade entry and exit points with neighboring countries. However investment in China’s Belt and Road Initiative projects in an effort to become more globalized runs the risk of exacerbating the methamphetamine trade by facilitating the production and distribution of the drug as well as bolstering the illegal economy.

The methamphetamine-producing Shan state in Northwest Myanmar borders China, Thailand, and Laos, providing multiple points of entry for importers of the chemicals needed to manufacture the drug and allowing easy export of methamphetamine to other countries once manufactured. Meth production in the region thrives due to the lack of state control stemming from cease-fire agreements between the Myanmar military and ethnic armed groups which allow for territorial control by different groups. This prevents government oversight in the region and provides an avenue for organized crime rings, militias, and rebel groups to engage in the illicit drug trade with little fear of government retaliation or crackdown. Once the drug is produced, it can be simply walked across the border at places with limited surveillance or entry checkpoints, concealed in vehicles crossing the border, or illegally transported at maritime ports and by commercial air.

The BRI project most relevant to the methamphetamine trade is the China-Myanmar Economic Corridor(CMEC), which crosses from China’s Yunnan Province on the Myanmar-China border to Mandalay in central Myanmar. It then splits in half with one route continuing south to Yangon on the Andaman Sea and the other route continuing westward to Kyaukpu, situated on the Bay of Bengal. Within this initiative are plans for a high-speed railway and improved roads linking key cities. In theory, the BRI projects could boost Myanmar’s economy and provide the infrastructure necessary for Myanmar to become a crucial link in regional trade, but the political relationships at the border between the Shan state and China pose the threat that methamphetamine production will actually increase as a result of BRI projects. Proposed CMEC railways and infrastructure run through the Shan state, entwining the complicated politics of various separatist ethnic and militia groups with Chinese investment interests. With no state control in the region, there is no official guarantee that infrastructure projects will not be subjected to obstruction or physical damage by separatist groups. As a result, China has developed pragmatic relationships with separatist groups, allowing the shipment of chemicals used in methamphetamine production to pass from China into Myanmar without being intercepted. In exchange, separatist groups do not damage China’s infrastructure projects.

These types of agreements have multiple implications for methamphetamine production. First, if CMEC improves transportation and infrastructure, routes of transportation between China and Myanmar will expand, requiring further negotiations or ceasefires with militia groups in order to protect Chinese construction interests and prevent any hindrance of CMEC. Authorities in the region are often corrupt, and improved relationships with China could allow an even greater amount of precursor chemicals from China into Myanmar. With the lack of Chinese border control at entry points to Myanmar, precursor chemicals can already easily cross into the Shan state. If roads and infrastructure are expanded and improved upon, transportation of both legal and illegal goods will increase, which, in conjunction with lax border security, will bring increased amounts of chemicals to methamphetamine labs. Already, the amount of manufactured methamphetamine seized by authorities has multiplied tenfold over a two-year period, indicating a steady supply of Chinese chemicals. However, the government has not reported seizures of chemicals, indicating that there are seemingly no measures to stop the illicit drug trade.

Not only do BRI projects aid the creation of methamphetamine, but they may also augment the drug’s dissemination. Currently, most of Myanmar’s methamphetamine is transported directly into Thailand and is subsequently distributed eastward, particularly impacting  Malaysia, Indonesia, and Australia. However, with CMEC running through key areas of Myanmar, there now exists the risk that methamphetamine could be distributed further westward. Seizures of methamphetamine at the Myanmar-Bangladesh border are increasing, indicating a developing market and trafficking transit point in Bangladesh. Augmenting this, CMEC’s route through the Rakhine state towards Kyaukpyu would mean more methamphetamine flowing towards Bangladesh. Another BRI project is the Kyaukpu seaport, a $1.3 Billion USD project aimed at capitalizing upon its strategic location in the Bay of Bengal for expanded trade. With the CMEC running from eastern to western Myanmar, drug operations in the Shan state could access western maritime routes to ship their product to farther corners of the world.

Although Myanmar is hoping to bolster its economy, the Belt and Road Initiative may very well backfire at the hands of the methamphetamine trade. Illegal methamphetamine trade in the region generates approximately $40 Billion USD annually. The value of the trade, compared with Myanmar’s nominal GDP of $69 billion, provides little incentive for engagement in the formal economy. Additionally, other BRI project plans have already been scrapped over debt concerns, including infrastructure plans which could have provided employment for Burmese citizens. Because of this lack of employment opportunities, the drug trade yields even greater economic promise for those seeking employment. In the short term, improved infrastructure could benefit the illegal methamphetamine trade, both increasing the import of precursor chemicals from China and allowing for wider export of the drug.

The money generated in this black market trade may outweigh incentives for participation in the formal economy, which would deal a harsh blow to Myanmar. Additionally, domestic methamphetamine usage has recently escalated into a public health crisis, leading to drug addiction for children as young as age nine and pulling individuals into cycles of dependency and poverty throughout Myanmar. An increased methamphetamine supply to other parts of the country as a result of CMEC could hinder efforts to address this public health crisis, in addition to damaging worker productivity through absenteeism and addiction.

This places Myanmar in a bind, weighing its desire to grow economically through BRI investments while simultaneously dealing with a methamphetamine problem that could escalate as a result of BRI. To mitigate BRI’s side-effects, Myanmar must begin with a cooperative effort with China in the Shan state in order to stop the incoming flow of precursor chemicals. However, in order for this to be successful, Myanmar’s government must negotiate political settlements with the various groups in the Shan state. The deeply entrenched illegal economy in Myanmar thus proves challenging to uproot, and unless the government can work towards stability in the Shan state and generate economic opportunities to move individuals towards the formal economy, methamphetamine may continue to obstruct Myanmar’s economic development.

Photo: “Illegal Pills