Investing in Myanmar: What about the poppy economy?

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poppy_field_myanmarWith investors queuing up and pouring billions of dollars into the Myanmar economy prompting a radical socio-economic transition, the question has to be raised: What is the Myanmar government planning to do to address the poppy problem in the country where opium production accounts for an estimated 4 per cent of the GDP and $2 billion in annual exports?

Despite initiatives to ban poppy planting in Myanmar’s Shan State – which accounts for 90 per cent of the opium output in the country – the drug business has been on a steady rise over the past six years, growing by 17 per cent in 2012 alone. according to the UN Office on Drugs and Crime (UNODC).

In its recent report, the UNODC said that  Myanmar opium poppy cultivation in 2012 jumped to 51,000 hectares from 43,000 hectares  in 2011 despite government claims to have eradicated 23,717 hectares of opium poppy – more than three times the 7,058 hectares it eradicated in 2011.

Myanmar is Southeast Asia’s largest opium poppy-growing country and the world’s second largest after Afghanistan. It currently accounts for 25 per cent of global illicit poppy cultivation, and – together with Laos – a full 10 per cent of global opium production, according to UNODC, whose experts estimate that Myanmar’s total 2012 opium production was 690 tonnes, a 13 per cent increase from 2011, and the highest level of production since 2003.

The UNODC also estimates that 300,000 Myanmar households engage in opium cultivation in the Shan and Kachin States, where also large quantities of methamphetamine pills are produced in hidden jungle laboratories. Both states are impoverished and the government has little control, instead local paramilitary organisations have the power and oversee the drug trade to China and Thailand.

Myanmar opium
Myanmar’s opium production (Click to enlarge)

The Myanmar government acknowledged that a sustainable long-term solution to poppy cultivation can only come through “significant investment in peace, the rule of law and alternative development.” A recent peace initiative in Shan State could now play a key role in poppy eradication.

In a multimillion dollar plan backed by the UNODC and slated for 2014 to 2017, the Myanmar government aims to improve the state’s infrastructure, health, education and crop substitution. The main problem is that insufficient alternative livelihoods, plus the fact that the opium market value is 19 times more than rice per hectare, drives many farmers to maintain poppy cultivation. The rugged Shan State, which covers almost a quarter of the country and shares porous borders with China, Thailand and Laos, offers drug-traffickers enough routes into foreign markets.

Maybe Myanmar should take Thailand as a leading example. The country’s farmers in the northern Golden Triangle region were heavy growers over centuries, but starting from the 1970s the Thai government seriously cracked down on growing opium.

The story of Thailand’s success was  a combination of sometimes heavy-handed military force and years of persuading people to grow something other than opium. The fields may have been remote, but were relatively easy to spot from satellite images and aerial photographs, and heavily armed troops simply followed the maps and destroyed the crops. Furthermore, there was little resistance from local people as there were no arrests. The government launched programmes for alternative farming and the Princess Mother initiated a public-education campaign in the late 1980s.

Though it has taken many years for the villagers in northern Thailand to be weaned off opium, the new opportunities given to them and the sometimes very heavy hand of the military did eventually tackle the problem. This is what Myanmar will have to follow, though with international support.

 

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Reading Time: 2 minutes

With investors queuing up and pouring billions of dollars into the Myanmar economy prompting a radical socio-economic transition, the question has to be raised: What is the Myanmar government planning to do to address the poppy problem in the country where opium production accounts for an estimated 4 per cent of the GDP and $2 billion in annual exports?

Reading Time: 2 minutes

poppy_field_myanmarWith investors queuing up and pouring billions of dollars into the Myanmar economy prompting a radical socio-economic transition, the question has to be raised: What is the Myanmar government planning to do to address the poppy problem in the country where opium production accounts for an estimated 4 per cent of the GDP and $2 billion in annual exports?

Despite initiatives to ban poppy planting in Myanmar’s Shan State – which accounts for 90 per cent of the opium output in the country – the drug business has been on a steady rise over the past six years, growing by 17 per cent in 2012 alone. according to the UN Office on Drugs and Crime (UNODC).

In its recent report, the UNODC said that  Myanmar opium poppy cultivation in 2012 jumped to 51,000 hectares from 43,000 hectares  in 2011 despite government claims to have eradicated 23,717 hectares of opium poppy – more than three times the 7,058 hectares it eradicated in 2011.

Myanmar is Southeast Asia’s largest opium poppy-growing country and the world’s second largest after Afghanistan. It currently accounts for 25 per cent of global illicit poppy cultivation, and – together with Laos – a full 10 per cent of global opium production, according to UNODC, whose experts estimate that Myanmar’s total 2012 opium production was 690 tonnes, a 13 per cent increase from 2011, and the highest level of production since 2003.

The UNODC also estimates that 300,000 Myanmar households engage in opium cultivation in the Shan and Kachin States, where also large quantities of methamphetamine pills are produced in hidden jungle laboratories. Both states are impoverished and the government has little control, instead local paramilitary organisations have the power and oversee the drug trade to China and Thailand.

Myanmar opium
Myanmar’s opium production (Click to enlarge)

The Myanmar government acknowledged that a sustainable long-term solution to poppy cultivation can only come through “significant investment in peace, the rule of law and alternative development.” A recent peace initiative in Shan State could now play a key role in poppy eradication.

In a multimillion dollar plan backed by the UNODC and slated for 2014 to 2017, the Myanmar government aims to improve the state’s infrastructure, health, education and crop substitution. The main problem is that insufficient alternative livelihoods, plus the fact that the opium market value is 19 times more than rice per hectare, drives many farmers to maintain poppy cultivation. The rugged Shan State, which covers almost a quarter of the country and shares porous borders with China, Thailand and Laos, offers drug-traffickers enough routes into foreign markets.

Maybe Myanmar should take Thailand as a leading example. The country’s farmers in the northern Golden Triangle region were heavy growers over centuries, but starting from the 1970s the Thai government seriously cracked down on growing opium.

The story of Thailand’s success was  a combination of sometimes heavy-handed military force and years of persuading people to grow something other than opium. The fields may have been remote, but were relatively easy to spot from satellite images and aerial photographs, and heavily armed troops simply followed the maps and destroyed the crops. Furthermore, there was little resistance from local people as there were no arrests. The government launched programmes for alternative farming and the Princess Mother initiated a public-education campaign in the late 1980s.

Though it has taken many years for the villagers in northern Thailand to be weaned off opium, the new opportunities given to them and the sometimes very heavy hand of the military did eventually tackle the problem. This is what Myanmar will have to follow, though with international support.

 

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