Myanmar: From drugs to guns

Michael Black 

Long known for its wheeling and dealing in heroin, methamphetamines and pirated video discs, Myanmar’s United Wa State Army (UWSA), the world’s largest armed narcotics-trafficking group, is dangerously diversifying its business interests into a new type of contraband: newly produced war weapons. 

Intelligence sources inside Myanmar told Asia Times Online that the UWSA has recently established new production lines for assault rifles and light machine-guns inside the country’s Special Region No 2, the UWSA-controlled autonomous enclave in northeastern Shan state. 

The factory became operational in September and occupies a structure inside UWSA chairman Bao You-xiang’s heavily guarded compound in the town of Kunma, 125 kilometers north of the militia’s main headquarters at Pangshang. 

The same sources say the plant is manufacturing replicas of the Chinese-designed M-22 assault rifle - a knock-off of Russia’s AK-47 - and the Chinese M-23 light machine-gun, as well as the 7.62-millimeter ammunition that is used by both weapons. 

Sources close to the facility suggest there are plans to diversify production in the near future to include 9mm handguns and ammunition. According to sources in Pangshang, the weapons manufactured at the new Kunma production line will also go to expand the militia’s supply of weapons to sell to regional insurgent groups, both inside and outside of Myanmar. 

Significantly, the UWSA’s bold move into weapons production comes at a time Myanmar’s ruling military-led State Peace and Development Council (SPDC) has pressured the 20,000-strong militia to disarm permanently and disband its forces. The new supply of locally produced weapons also potentially threatens to reignite or prolong armed conflicts between other armed ethnic insurgent groups and the SPDC in contested border territories. It could also flood underground regional arms markets, which usually deal in used weaponry, with a source of new arms. 

The development lends new credence to the United States’ assertion last week at the United Nations Security Council that the lawless situation in Myanmar’s ethnic territories represents a threat to regional security. China, a longtime ally to the internationally ostracized SPDC, vetoed the resolution on the rationale that Myanmar was not a threat to regional peace and stability. But China has long played a duplicitous game between Myanmar’s military government and the UWSA it has historically heavily armed.

Brothers in arms

The UWSA, which emerged from the collapse of the Communist Party of Burma (CPB) in 1989, has long benefited from China’s substantial military support, which has established the militia as the strongest and best equipped of the various insurgent groups active inside Myanmar. Significantly, the UWSA is the only armed force to have roughly doubled in size since the military-led SPDC (then known as the State Peace and Development Council, or SLORC) took control of the country in 1989. 

China has various strategic and economic interests in maintaining the UWSA’s dominance over Special Region No 2, which runs along its Myanmar border. Beijing fears that a weakened UWSA could invite an SPDC assault, which would risk spilling into China’s adjacent Yunnan province and potentially create a refugee situation similar to that in Thailand. Many of Myanmar’s “special regions” are administered by formerly China-backed CPB commanders, including the drug-dealing Lin Min-xian, alias Sai Leun, leader of National Democratic Army Alliance that oversees Special Region No 4. 

To be sure, China’s policy toward the UWSA cuts two ways, with one set of directives issued from Beijing and another independent set pursued by Yunnan-based authorities who have close ties with the main players across the border. While Beijing clearly sees a strategic benefit from maintaining a buffer zone between its border and Myanmar’s erratic ruling generals, it has also grown frustrated with the heavy flow of narcotics, mainly heroin, manufactured in the special regions and moved through Yunnan. And Beijing has openly expressed its displeasure about the unknown billions of yuan siphoned from government coffers by corrupt local-level officials that have been squandered in the special regions’ jungle casinos. 

The UWSA’s recent move into weapons production, however, does not necessarily indicate a falling-out with China, its traditional patron and until now sole arms supplier. Indeed, on August 1, China arranged for the delivery of a large arms consignment to the UWSA, one month before the Kunma arms factory became operational, according to intelligence sources. Escorted by UWSA troops, a five-truck convoy entered Wa Special Region 2 near the town of Long Tang from Yunnan province and unloaded a sizable shipment of armaments at the UWSA’s central arsenal, the same sources say. 

The consignment included 82mm, 60mm and 120mm mortars as well as 14.5mm ZPU heavy machine-guns, and an anti-aircraft weapons system. The low-level aerial assault battery represented a new addition to the UWSA’s arms cache and was apparently procured to guard against a possible SPDC aerial attack. Before dawn, the Chinese convoy re-entered the Yunnan town of Mong-A directly across from Pangshang, the intelligence sources said. 

More recently, Thai intelligence sources confirmed the continued presence of military advisers from China’s People’s Liberation Army in Wa-controlled territory. The current round of PLA-UWSA training began early last year, and includes basic drill instructions and training in specific weapons systems. In the past, the PLA trained Wa fighters in the use of HN5 surface-to-air missiles, which the UWSA first received from China in 2000 and 2001. Sources inside the UWSA confirm that PLA advisers have in recent months helped to improve the UWSA’s command-and-control and communications systems, strategically significant in a potential future conflict with the SPDC.

Militia-mafia joint venture

Thailand-based military analysts monitoring recent developments in the area contend that the new Kunma arms factory is most likely an export-oriented joint venture between the UWSA and Yunnan-based mafia organizations consisting of ex-PLA personnel. By setting up an arms-production facility in Myanmar’s lawless Special Region 2, the location offers the underground organization’s plausible deniability that they are involved in the illicit production and trade in Chinese-designed weapons. 

“They can sell to whomever they want in [Myanmar], on China’s black market and elsewhere, and can say China has nothing to do with it,” said a Chiang Mai-based analyst with knowledge of the situation. 

Until now, most of the arms the UWSA sold to other regional insurgent groups were procured through Yunnan’s underground markets, where ex-PLA personnel are known to have sold off munitions stockpiles without Beijing’s approval. These activities intensified in Yunnan in the wake of Beijing’s ambitious modernization campaign for its armed forces, which included strict orders for provincial PLA members to abandon their private business interests, including arms trading. 

While various PLA units were reshaped and re-equipped, many others, particularly in far-flung Yunnan, were reluctant to hand in officially retired arms because of their black-market value in conflict-ridden neighboring Myanmar. After years of whittling down those retired stocks, and with still-strong demand for Chinese armaments from many regional insurgent groups, there was strong market incentive for Yunnan’s underworld arms dealers to create a new supply of weapons. 

Details of the Kunma plant’s production capacity and end-product quality have yet to be independently verified. However, with the UWSA’s long-standing and well-established Yunnan-based connections, it is likely that the group has access to both accurate machining tools and the raw materials necessary for arms production, including Chinese-produced hardened steel. The production line was set up and is now managed by recent engineering graduates from Chinese universities, whose studies were sponsored by Pangshang, according to a source close to the facility. 

The UWSA, which has gained international notoriety for its drug-trafficking activities, has long been involved in the lucrative underground regional arms trade, which according to security analysts has surpassed Cambodia’s notorious arms bazaars in trade volume. In recent years, the UWSA is known to have sold assault rifles and explosives to various rebel groups, including the Naga along India’s northeastern border with Myanmar, as well as the Maoist rebels who recently fought their way into government in Nepal, according to a Thai intelligence source and other security analysts. 

The UWSA’s branching out into arms production will no doubt further entrench their position as a volatile regional non-state actor. And there the new Kunma armory will also likely antagonize Myanmar’s ruling SPDC, which is trying to disarm other insurgent groups across the country. Said one Bangkok-based security analyst monitoring the situation: “The UWSA couldn’t care less about the various ideologies of the groups they supply. They will continue to sell [arms] to whoever wants them as long as they don’t expect to face off with the buyers in the near future.”