Burma in the Global Drug Market

17 November 2005

The potential humanitarian costs should lead the international community to take a precautionary approach on the issue of drugs prohibition in Burma and its neighbouring countries.


Burma in the Global Drug Market
Causes and Consequences of the Opium Production Decline

Chapter from book: Trouble in the Triangle

"The global illicit production of opium (from which heroin is processed) has remained stable, at around 4,000 to 5,000 metric tons, since the early 1990s, but has become increasingly concentrated in Afghanistan." (1) Burma's role in the world market of opium and heroin is on the decline. What are the causes behind this and what are the possible impacts if the trend is sustained, for Burma itself, for the region and for the global market? Will the Wa opium ban, announced for 2005, go into history as an ill-fated attempt like the Taleban ban in Afghanistan in 2000/2001, or are we witness to the closure of a 100-year chapter in the history of drug control?

A Consistent Decline

After Afghanistan, Burma is the world's second largest producer of opium, the raw material from which heroin is produced. According to the opium survey of the United Nations Office on Drugs and Crime (UNODC) for Burma in 2003, "the potential opium production was estimated to range between 560 and 1,060 tons, with a mean value of 810 tons. This represented a decrease of 4% compared to last year." (2) Measured in hectares cultivated, the survey claimed a decrease of 24%, from a mean estimate of 81,400 poppy hectares in 2002 to 62,200 in 2003. About 90% of the opium poppy is grown in the Shan State, with the Wa and Kokang Special Regions alone accounting for about 40-50 per cent.

The US State Department, using other methods and reaching quite different figures, confirmed the pattern that "opium production declined in Burma for the seventh straight year. The survey found that the maximum potential yield for opium in Burma in 2003 totaled 484 metric tons, down 146 metric tons (or approximately 23 percent) from 2002. Over the past seven years, opium production in Burma has declined by more than 81 percent, from an estimated 2,560 metric tons in the peak year of 1996 to 484 metric tons in 2003. The area under cultivation has dropped by almost two-thirds, from 163,100 hectares in 1996 to approximately 47,130 hectares in 2003." (3)

The consistent decline in opium statistics for Burma over the past years has led to optimistic statements at Vienna UNODC headquarters. "The vicious linkage between opium and poverty is being broken. Until recently the elimination of opium cultivation in the "Golden Triangle" would have been considered impossible. It is now within reach. However, countries need assistance to sustain legal activities and alternative crops. With the support of the international community, an important and painful chapter of world drug history is coming to an end " Executive Director Antonio Maria Costa said at the launch of the 2003 opium surveys for Laos and Myanmar. (4) "If helped to sustain the current momentum, South-East Asia could well become a minor source of illicit opium by the year 2008. Such a tremendous achievement would close a 100-year chapter in the history of drug control." (5)

Best Guesstimates

Measuring opium production figures is not an exact science. The UNODC International Crop Monitoring Programme (ICMP) now covers Afghanistan, Burma, Laos, Colombia, Peru and Bolivia. The methodology combines data from satellite remote sensing and ground surveys. In the case of Burma, the survey was conducted for the second year. The broad range used in the figures for 2003 (49,500-71,900 hectares; 560-1,060 tons) indicate that error margins are recognized to be substantial. Four major factors contribute to the uncertainties. Firstly, the aerial and ground survey was only done for the Shan State and the final national figure was based on a random percentage for poppy cultivation taking place elsewhere in the country. "Based on eradication reports, it was estimated that about 8% of the cultivation took place outside of the Shan State in 2002. To establish a national figure, the survey analysts assumed that the proportion remained the same in 2003." Secondly, because the Shan State itself is already a huge area with limited accessibility, a sampling approach was chosen in which about 13% of all villages was surveyed and the findings were then extrapolated to the entire State. Thirdly, since poppy fields in Shan State are small (83% of the fields measured in the 2003 survey were smaller than 0.15 hectare per household) and the resolution of most of the satellite pictures used quite low, clear distinctions between poppy fields and for example bean fields are almost impossible to make. In part, the extrapolations are for that reason based on estimated high or low 'potential for poppy cultivation' rather then ground-truthed actual poppy cultivation. Finally, calculations of yield of opium gum per hectare are still unreliable and can differ hugely from year to year and from township to township. For this year, differences in yield have been reported ranging as wide as from 4 to 37 kg/ha, with the average set at 13 kg/ha. Considering all these factors, several observers suspect that the UNODC production figures for the Shan State may well be too high, while expanding poppy growing in other areas of the country not covered by the survey may be underestimated.

The Yaba Market

Often the argument is heard that the Wa authorities and the SPDC military government are willing now to phase out opium/heroin production because they have shifted their illegal income sources to the more profitable methamphetamine production. In south-east Asia amphetamine-type stimulants (ATS) are the first drug of choice, before opiates. Especially Thailand is living through an exceptional epidemic of the local methamphetamine tablets called Yaba ('crazy medicine'), containing usually a high percentage (up to 70%) of caffeine. In East Asia the high-purity crystal methamphetamine (ice or shabu) is the more popular form available. Worldwide, production and consumption of ATS is the fastest growing illicit market. UNODC estimates global ATS production -including ecstasy- very roughly around 500 tons a year, with more than 40 million people having used them in the past 12 months. "Almost all of the ATS market value is profit. Equipment and, in most locations, labour are inexpensive. Less than one kilogram of drug, sold on the illicit market, typically pays easily for the initial investment of setting-up a small-scale clandestine laboratory." The greatest running cost is that of the chemical precursors required in manufacturing. For methamphetamine the main precursors are ephedrine or pseudoephedrine, mainly produced in China and India, normally priced about 65-100 USD/kg but on the illicit market traded for prices up to 2,000-3,000 USD/kg.

Unlike cocaine and heroin, whose production is limited by geography and climate, synthetic drugs can be produced anywhere. In 2001, for example in the United States some 8,000 kitchen-style small methamphetamine laboratories were estimated to be in production. Labs have mushroomed in Burma, especially near the Thai border, to service the huge demand there. Up until 1996/97, large-scale manufacturing sites existed in central Thailand and the move to Burma seems in part a response to enhanced Thai law enforcement. Yaba labs continue to exist in Thailand on a smaller scale, as evidenced by seizures of mixing and tabletting machines with dies and punches for the typical 'WY' logo seen in South-East Asia, often erroneously described as being the brand name for Wa produced Yaba. Similarly, the "development coincides with the crackdown on methamphetamine manufacture in China since 1998, when a number of high-capacity methamphetamine laboratories were seized in that country." According to the authorities this also caused the sharp rise in methamphetamine production in The Philippines at the end of the nineties.

There is no doubt that several labs do function in Wa controlled territory and examples have been documented of Wa military and SPDC military involved in protection of labs and trans-shipments. About 700 million tablets are thought to be shipped from Burma nowadays across the border into Thailand, corresponding to about 20 tons of methamphetamine or 7.5% of global manufacture. Huge profits are earned in the process corrupting many local authorities, police, custom and military officers on both sides of the border. ATS production is a highly competitive and volatile market, the mainly ethnic Chinese trafficking networks easily move production elsewhere and new groups enter the market constantly. The dynamics of the trade are quite different compared to the opium economy. As UNODC country representative Jean-Luc Lemahieu stated "Opium in essence is about poverty, whereas Yaba is about greed".

The Deadlines

On the global, the regional, the national and the local level target dates have been set for phasing out opium production. On a global scale, in 1998, the UN General Assembly Special Session (UNGASS) on drugs set a ten-year target: to eliminate or significantly reduce the cultivation of opium poppy by the year 2008. (6)The South-East Asia region has jointly committed to making the area drug-free by 2015, but in the case of opium cultivation, they adhere to the tight UN target, saying: "The growing of illicit opium poppy should be eliminated in the region by year 2008 as referred to by UNGASS. Accordingly, 33% reduction of all illicit production will be achieved by 2003, and 66% by the year 2005." (7)

The anti-drugs strategy of the military government, the State Peace and Development Council (SPDC) in Rangoon follows the regional aim to achieve a drug-free country by 2014. In 1999, the 15-Year Plan for Elimination of Narcotic Drugs was adopted, divided into three 5-year phases, covering production and consumption of all illicit drugs. Regarding poppy cultivation, the rollout-plan foresees Kachin State and the Northern and Eastern Shan State, fully opium- free by 2009, the Southern Shan State for two-thirds free, and the final 5-year phase dealing with remaining illicit crops in Southern Shan, Kayah and Chin States. The government stresses that if adequate international assistance is made available, "the drugs elimination plan could well be implemented in a shorter period than it has been originally planned." (8)

On the local level several cease-fire groups have issued opium bans for the special regions under their control. In Special Regions 4 (Eastern Shan State) and 1 (Kokang) such bans have come into effect already and the Wa authorities have announced a ban for July 2005, prohibiting opium cultivation for the whole Special Region 2.

Historical Market Shifts

The global opium/heroin market has always been marked by significant changes. Geographical shifts in opium production have been the rule rather than the exception. The largest rise and decline recorded in opium history took place in China, where an opium epidemic in the 19th century spiraled to still unchallenged historical records after the Opium Wars enforced the opening of the Chinese market. When the first international narcotics conference was convened in Shanghai in 1909 -marking the birth of a global drug control regime- the number of opium users in China alone was estimated at 25 million. Nowadays, the world total of illicit use of opiates (opium, morphine and heroin) is roughly calculated to be 15 million persons. A century ago, when European colonial powers in Asia promoted opium production and consumption wherever they could, at least three times as much opium was produced in the world compared with today. The epidemic in China only came to an end after the 1949 victory of the maoist revolution that considered opium to be a heritance of the former regime and of British Colonialism and Japanese imperialism in the region. "The Chinese Communist leadership was successful in its anti-narcotics campaign because it could link opium and heroin to a larger political program. In the early 1950s a war-weary Chinese population had been willing to give the new regime the benefit of the doubt, and so it could be inspired by a new vision." (9)The almost total elimination of the opium economy in China in that period also provides the background to the rise in Burma, spilling over the border from Yunnan province into Shan State.

Other major shifts in production have taken place from Turkey to Iran and Pakistan in the 1970s, and later to Afghanistan; the booms in Mexico and Colombia; the virtual disappearance from Thailand, etcetera. In looking at the last decade, one feature stands out, the relatively stable combined world production figures, averaging around 4,500 metric tons of illicit opium a year. Twice, in 1994 and 1999, bumper harvests in Afghanistan made the graph soar; and once, in 2001, the Taleban opium ban caused a precipitous drop. However, these were one-year deviations, with the market quickly re-finding its level.

Burma pushed off the Global Market

The consistent decline in Burmese output since 1996 - after almost a decade of remarkably stable output of between 1600-1800 tons - cannot simply be attributed to policy interventions by local authorities, the military government, or UNODC. Apart from some years of unfavorable weather conditions, global market trends played an important role in facilitating the gradual decline. A key factor has been that heroin of Burmese origin has been almost completely pushed off the U.S. and European markets. In the United States, the Drug Enforcement Administration's (DEA) heroin signature program has been monitoring this gradual replacement. Samples from seizures and undercover purchases tested to establish the source country, show that "there has been a marked trend for the Nation as a whole to substitute South American heroin for South East Asian heroin".

In the course of the 1990s, the US market came to be dominated by heroin of predominantly Colombian origin. According to the DEA, this trend was confirmed nation-wide. "Sixty percent of the heroin analyzed under the HSP [heroin signature program] in 1999 was from South America. Not only did South American heroin have the highest average purity of all source areas, but this was the fifth consecutive year in which it accounted for the majority of the heroin analyzed under the program. Previously, SEA [Southeast Asian] heroin was the most predominant; it reached its zenith in 1993 when it accounted for 68 percent of the heroin analyzed that year." (10) By 1999, heroin from the Golden Triangle accounted for only 10 percent of the analyzed heroin samples. Data for 2001 showed that 56% originated from Colombia, followed by Mexico (30%), Southwest Asia (7%), and Southeast Asian (7%). (11) Most recent data available from the DEA heroin signature program mention a source figure for Southeast Asia as low as 1%, with Colombia now dominating 80% of the US market. (12) It seems that nowadays no more then a few hundred kilo's of Burmese heroin makes it to the US market - probably less then one per cent of Burmese production. Most of this enters the US via Canada where Golden Triangle 'Number 4' heroin still seems to maintain a relatively stronger position on the market, though also there the Colombian share is on the rise.

The European market, meanwhile, became saturated with heroin originating from the Afghan opium economy, rapidly expanding from below 2000 tons in 1990 to 3,400 tons in 2002 and 3,600 tons in 2003, after production recovered from the Taleban ban. (13) The gradual decline in Burmese opium production can thus partly be explained by market adaptation, going from the position of accommodating international demand to only that of the region. Virtually all Burmese opium and derived heroin is nowadays consumed in Southeast Asia, China, India, Australia and Japan.

Opium Ban and Eradication

To a smaller extent, and only quite recently, the decline can be attributed to policy interventions, especially to the opium bans in Special Regions 4 (Eastern Shan State) and 1 (Kokang) and some townships in Special Region 2 (Wa) where the ban has been enforced ahead of the announced deadline. As the full impact of the Kokang ban becomes apparent this year, and especially after the enforcement of the Wa ban in 2005, the decline is expected to continue even more dramatically.

Both the Wa and the Kokang authorities have issued a ban prohibiting and severely penalizing all drug-related activities: from cultivation and production, to trafficking and consumption. The Kokang ban was agreed to in mid-1997, with the original aim of declaring the region an opium-free zone by the 2000/2001 poppy season. (14) Forced eradication started early in 1998, reducing the cultivated area by one-third. The elimination target date was then extended to the 2002/2003 season. The impact of last year's enforcement of the ban appears to be confirmed by comparing figures from the 2002 and 2003 opium surveys. The three townships largely falling under the Kokang Special Region saw a 60% reduction in hectares under cultivation. (15) Overall, for the whole Northern Shan State a 50% decrease was reported. According to UNODC the "reason for this decrease is attributed to farmers' compliance with the Government's request not to plant opium poppy." (16) Non-Kokang townships in the Northern Shan State that showed steep reductions were the ones short-listed on the SPDC township priority targets for the first 5-year phase. The largest increases in poppy cultivation this year have been reported from the Northern Wa Special Region and Central Shan State, which suggests a displacement of crops because of the increased pressure in the upper Shan State.

Forced eradication in the sense of physical destruction of poppy fields, last year only played a minor role in the reduction of area harvested. According to the U.S. State Department: "The government eradicated more than 21,000 hectares (..) of opium poppy over the past three crop years. However, only 683 hectares were destroyed during the 2002/03 crop year, a mere fraction of the 10,466 hectares (..) destroyed during the 2001/02 crop year and the 10,568 hectares (..) destroyed during the 2000/01 crop year. Nonetheless, overall eradication accounts for almost one-third of the reduction in area under poppy cultivation since 2001." (17) The effectiveness of the prohibition thus largely depends on the ability of authorities to instill enough fear among potential poppy growers of the risks of destruction and punishment to make them decide not to plant.

Market impacts of the ban

Even if adhered to massively, as anticipated, the bans will not have any significant impact on the market outside of the region. The big question is how the regional market will adjust to a potential shortage. Since the bulk of the Shan State production crosses the border into China (18), there will most certainly be pressure towards a resumption of poppy cultivation inside China to service the domestic market. Several sources indicate this is already happening, but no reliable figures are available to estimate the extent to which this trend may counter-balance the impact of the Burmese decline.

Displacement of cultivation and/or changes in consumption patterns to re-establish the balance between production and demand within the region may take some time. Meanwhile, cross-regional trafficking connections are likely to be able to ensure heroin availability at least for high-priced markets formerly dependent on Burmese production such as Australia, at least as long as there is no shortage on the global market, which depends largely on developments in Afghanistan. Until now, according to the DEA, the "lack of fluctuation in the street price of heroin in the United States suggests that the supply of heroin on the world market far exceeds demand." (19)The Chinese market is already in part serviced from the Afghan 'over-production'. (20) For China, being the only country that shares a border with both major production centers, increased imports from Afghanistan may well be the short-term answer to declining imports from Burma.

The Taleban opium ban represents the most recent moment of profound impact on the opium/heroin market and several lessons about market responses may be drawn from it. In the United Kingdom, the Forensic Science Service, monitoring heroin-purity trends in the country registered the impact. Average purity figures showed a remarkable decline, from 55% in the first quarter of 2001, down to 34% in the second quarter of 2002. (21) "In the short term especially, the drug markets often react to changes in supply by adjusting the purity rather than the price." (22) Sudden changes in availability and purity can have dramatic consequences for certain consumer groups. An assessment of the impacts of the Taleban ban made in November 2001 by the UNODC Research Section, pointed out that "the indirect effects of a sudden supply shortage on the health of opiate addicts can be negative if treatment capacities cannot cope with the situation. The series of death now recorded among heroin addicts in Iran, possibly because of the increasing impurity of heroin (the exact causes are still unknown), could be a warning sign of such a risk." (23)

The overall number of people dying from heroin use in Iran rose to 384 cases between 21 March and 21 July 2001, an increase by 60% as compared to the same period a year earlier. The use of poisonous substances in the adulteration could have played a role, as well as increased heroin abuse as substitute of even less easily available and more expensive opium. In Iran by October 2001, at $1,575 per kg, opium prices were almost six-times higher than in December 2000, with a speculative peak of $2,750 per kg in March. Another example was mentioned from Estonia, where "a deteriorating quality of heroin prompted a number of heroin users to revert to injecting a brew of local poppy straw, known in the region as 'kompot'." (24) Declining heroin purity more in general risks to lead to increased use of injection as the means of administration, with all the added risks of the spread of HIV/AIDS and other blood-borne diseases. Heroin can be smoked, snorted or dissolved in water and injected, the latter giving the most direct effect. The lower the purity, the more addicts are tempted to choose the needle, simply to get 'more bang for the buck'.

Drugs & HIV/AIDS

Burma has one of the most severe HIV epidemics in Asia due to the high prevalence of injecting drug use and HIV among drug users. There are approximately 150,000 to 250,000 injecting heroin users in the country. HIV prevalence among them had risen in 2000 to 63%, in some areas up to 96%, among the highest rates in the world. At the end of 1999, it was estimated 530,000 adults and children are infected with HIV. The annual number of adult AIDS cases has been calculated by UNAIDS to be 46,000 in 2000 and is projected to reach 55,000 in 2005. High risk behaviours are still widespread in the drug injecting tea shops or 'shooting galleries' where for a fee, a drug user is administered with heroin. Sterilisation of the various injecting paraphernalia is rarely a consideration. One study showed that 61% of injecting heroin users shared their needles and syringes.

In 2001 the government recognized that HIV was of national concern but scant resources and the legal constraints of narcotic laws pose major obstacles. Drug treatment is orientated completely towards total abstinence and substitution therapy has only recently been considered on a pilot basis. The penalties for drug use in Myanmar are strict as the government has criminalized addiction. An addict must register with the authorities and undertake inpatient drug treatment. Failure to register, or being unsuccessful in treatment, can result in a three to five year prison sentence. It is estimated that drug offenders make up 70% of the prison population where transmission of HIV contributes significantly to the epidemic.

Current anti-drug law prohibits the making, selling, possessing or use of a hypodermic needle without a licence, punishable with a fine and/or six months in prison. This contributed directly to the practice of needle sharing and therefore, in April 2001, the Myanmar Police Force commander issued instructions to no longer enforce these stipulations, but it is not yet clear how this new instruction will be followed.

Revisiting "The Hidden Epidemic", A Situation Assessment of Drug Use in Asia in the context of HIV/AIDS, The Centre for Harm Reduction, The Burnet Institute, Australia, January 2002, www.chr.asn.au

Unintended Consequences

A dramatic example of changed consumer behavior in response to reduced heroin availability can be found in North-East India, especially in the states of Mizoram and Manipur, bordering Burma. Large amount of users have switched to injecting Spasmo Proxyvon ("SP"), a "composition of dextropropoxyphene, a non-soluble opioid that tends to stick to the walls of the veins and blocks it most of the time. [..] Risks associated with SP injection include abscess, gangrene and sometimes amputation of limbs. [..] Many are of the view that the injection of non-injectable SP is a new trend brought on by drives against drug use in neighbouring Myanmar that led to the scarcity and increase in the price of heroin". (25)

A recent national survey on drug abuse confirmed the trend. "In Imphal and Dimapur abuse of propoxyphene via injections was reported as significant. The abuse of pharmaceutical products as a recent development was reported from many sites like Amritsar, Ahmedabad, Imphal, Dimapur, Mumbai and Kolkata. The reasons for switching to injecting of pharmaceutical substances were reported to be due to non-availability and increasing street price of heroin." (26)

"Mizoram, which witnessed the maximum number of drug related deaths in the northeast, is now leading a campaign against drug abuse and AIDS. At least 130 drug users in the 16-35 age group, mainly Proxyvon addicts, died in the state last year." (27) The North East India Harm Reduction Network estimates the number of SP injectors in Manipur alone already to be about 5000 and says there are many undocumented cases of deaths and amputation in that state. This is an alarming example of the fact that in absence of existing infrastructure of health care and treatment options, simply reducing supply may actually have a deteriorating impact on demand side. Such implications are rarely taken into account by drug law enforcers working on the basis of an erroneous assumption that reducing supply automatically reduces problems related to drug consumption.

The Australian 'heroin drought' is regularly used as a -rare- case to prove that assumption. The Burmese decline has been pointed to as one of the possible reasons behind the heroin shortage that occurred in Australia in 2001. Others claimed it to rather be the success of law enforcement operations in Australia. Another reason might be an indirect effect of the Afghan opium ban. Whatever the direct causes, the effects were indeed quite different from the drama in north-east India. Though many users mentioned increased use of other substances (cocaine, amphetamines, pharmaceuticals) as their immediate answer, there was also a marked increase of those who entered methadone treatment programs and lucky for them Australia does offer a range of options not readily available to most people in South-East Asia. After two years, the Australian 'heroin drought' was largely 'resolved' and the market had stabilized. (28)

The Licit Opiates Market

The Proxyvon case has also drawn the attention of the International Narcotics Control Board (INCB), who wrote in its annual report for 2000 that "a synthetic opioid used as an analgesic, continues to be used in India as a substitute for heroin (due to its lower price) and has led to a number of deaths in the state of Mizoram". The INCB was established after the 1961 UN Single Convention on Narcotic Drugs entered into force, including a number of articles outlining a specific international control system for opium production. The INCB's mandate is primarily to ensure that adequate supplies of drugs are available for medical and scientific uses, and that leakages from licit sources to illicit traffic do not occur. The very delicate balance between the licit and illicit markets offers a range of additional options for market adaptations and consumer choices in response to a decline of illicit production as in the case of Burma.

One has to keep in mind that the licit opiates market is comparable in size or even bigger then the illicit one. The opium poppy contains a variety of natural alkaloids, especially morphine, codeine and thebaine (29), all used widely by the pharmaceutical industry for the production of medicines, and all belonging to the family of 'opiates', which includes also the semi-synthetic substances produced from those alkaloids such as heroin or oxycodone. The more inclusive term of 'opioids' is used to also include morphine-like but purely synthetical preparations such as methadone and dextropropoxyphene. In order to put the size of the licit versus illicit market in perspective, for the year 2002 a total of 583 tons in morphine and thebaine equivalent was produced legally (on 115,500 hectares), while illicit production was estimated at 449 tons of heroin equivalent (on 180,000 hectares) (30). Australia is with distance the largest licit producer, followed by India, France, Spain, Turkey and Hungary. (31)

A fundamental contradiction arises when looking at recent developments in the licit versus illicit market. The licit production is expanding rapidly, Australia more then doubled its production in the past four years and Spanish production tripled. At the same time the international community desperately tries to find alternative income opportunities for illicit farmers in countries like Burma, Colombia and Afghanistan. Unable to find developmental solutions, illicit poppy fields are eradicated by force causing humanitarian dramas, while licit demand for opiates increases and production expands in countries like Australia, France and Spain.

India has taken a particular approach worthwhile to consider in some more detail. In 2002, India produced and exported almost exactly the same amount of opium legally under state monopoly as Burma did illegally: in India 821 tons of opium (or 90 tons of morphine equivalent), and Burma 828 tons (or 83 tons of heroin equivalent). According to the INCB, "The extent of opium production in India has been dependent not only on considerations of an economic nature, such as the demand for opium, but also on considerations of a social nature, since the production of opium provides subsistence for a significant number of families of farmers. The quantities of opium produced that were not used in India or exported have been added to stocks." (32) So, even if production exceeds the estimated requirements, the state buys the opium from the farmers and adds it to the stock (in 2002 standing at 1,700 tons of opium) awaiting export opportunities. Also, in India poppy cultivation and opium production have not become a highly industrialized process. In 2002 a total of 115,000 farmers were licensed, still using hand labor to harvest the opium. India is the only country that actually exports most of its opiate production (70%) in the form of raw opium. (33)

India protects its particular position on the world opiates market on the basis of the '80:20 Rule'. Its Department of Revenues explains: "According to the UN convention of 1961, traditional opium cultivating countries, namely, India and Turkey, should be permitted to licitly cultivate opium, and, member countries importing opium, should import 80% of their opium requirements from these two countries." The US -by far the largest importer of licit opiates- entered into a bilateral agreement with India, where the US indeed committed to this rule: "The Government of USA shall continue to support the concept of traditional suppliers and make maximum efforts to ensure imports of at least 80% of their opiate raw material requirements from the traditional supplier countries like India." (34) The Revenue Department expresses concern over pressure to change the rule from 80:20 to 60:40 and particularly about "rumours in the USA that some individuals have been pursuing with the authorities that 80:20 rules may be relaxed to accommodate Afghanistan to reconstruct and help the war torn economy." (35)

Indeed, at the March 2004 session of the UN Commission on Narcotic Drugs in Vienna, Afghanistan raised the question about the possibility to obtain permission to turn part of its illicit opium production into a licit one, placing it under state control supervised by the INCB. The proposal was for obvious reasons strongly opposed to from the sides of India and Australia. (36) The protectionist attitude from the side of India is of course understandable, even though the reasoning becomes less 'WTO-compatible' by the day. The consistent limitation to only India and Turkey in the category of 'traditional opium cultivating countries' with special privileges in the licit market, is however a dubious interpretation. Already at the time of the negotiations of the 1961 Convention, there was controversy about whether the right to continue to export opium -for medicinal purposes- should apply only to India and Turkey or if a broader group of countries could apply to that status. According to the Commentary to the treaty, "the second of these two interpretations was the view held by the authors of the Single Convention", mentioning Afghanistan and Burma by name. (37)

The INCB tends to prefer to keep new countries out of the regulatory system and especially countries like Afghanistan or Burma where implementing whatever control system under current circumstances is viewed as a nightmare mission for UN administrators. The system is difficult enough to administer and is subject to enough doubts already about the risks of leakage to the illicit market, given the figure of a 40% licit over-production in 2003: 156 tons more of morphine equivalent was produced worldwide than the estimated licit demand for such raw materials. (38)

The OxyContin (39)Effect

Adding to this, there is another type of shadowy diversion from the licit to the illicit opiates market approaching crisis proportions, which should worry the UN and US drug control agencies even more than current stockpiles of licit opium in India or speculations about the impacts of the opium bans in Shan State, and which might nullify at some point the euphoria about the elimination at hand of illicit crops in South-East Asia. More and more powerful morphine-like pharmaceutical substances appear on the prescription market. The clearest example at the moment is OxyContin, introduced by Purdue Pharma company in 1995. Being a thebaine-derived preparation, containing a high amount of the active ingredient oxycodone, the connection with the illicit heroin market is rarely made. But on the streets the distinction between the two seemingly separate markets easily fades and OxyContin on the US market already obtained street names like 'poor man's heroin' or 'hillbilly heroin'.

As the DEA testified in 2001 to US Congress, "From the first full year of sales in 1996, the number of OxyContin prescriptions has risen 18 fold, to approximately 5.8 million prescriptions in 2000. [..] During the last two years, DEA has noted a dramatic increase in the illicit availability and abuse of OxyContin. [..] Simply crushing the tablet can negate the controlled release effect of the drug, enabling abusers to swallow or snort the drug for a powerful morphine-like high. The tablet can also be crushed, mixed with water and injected." (40)

The DEA Action Plan to deal with OxyContin characterizes the problem as "a national epidemic in the making. [..] Some jurisdictions report as much as a 75% increase in property and other crimes that they specifically attribute to the abuse of OxyContin. Tazewell County, VA estimates that OxyContin addiction is behind 80 to 95% of all crimes committed there. Criminal activities resulting from the abuse of OxyContin are quickly depleting the resources, financial as well as human, of local law enforcement. [..] In a little over four years, sales have reached $1 billion." (41) Also problems related to its consumption were recorded in the US: "The number of emergency episodes reporting use of oxycodone more than tripled from 1996 to 2000" amounting to more than 10,000 cases in 2000. (42)

Conversations are taking place with Purdue Pharma company to try to resolve these alarming developments (43), but in 2002 almost 2 million people in the U.S. were estimated to have used OxyContin for non-medical purposes. (44) Though such numbers are difficult to compare with regard to their relevance to heroin prevalence patterns, it is obvious that the dynamics of the licit and illicit markets are somehow connected on the demand side. The examples of Proxyvon in India and OxyContin in the US demonstrate that unless those inter-relationships are well understood and addressed, any gains on demand side potentially obtained by reducing illicit opium production in Burma or Afghanistan, may easily be nullified by diversion of licit opioids production by the pharmaceutical industry.


With regards to the desirability, sustainability, likely impacts and possible side-effects of pursuing a policy approach to push the ongoing decline of opium production in Burma (and Laos), to full elimination through repressive ban-like measures, a series of concluding comments can be made.

Humanitarian Consequences and Sustainability

The UN World Food Programme (WFP) already started distributing emergency aid in Northern Shan State in response to the unfolding crisis caused by the opium bans implemented in the area. It suffices to recall the comments made by an FAO/WFP assessment team made shortly after the impact of the Taleban ban in Afghanistan. "With the abandonment of poppy cultivation in 2001, the world is rid of 3 000-4 000 tonnes of opium and derivatives this year. This exceptionally positive development, however, comes at a time when intensifying economic problems provide little opportunities for alternative income sources for poppy farmers and workers, or for support measures by the Authorities. The people of Afghanistan can sustain the negative economic implications only if immediate, commensurate international support is provided. [..] Unless people get assistance to have access to food and to find viable alternative economic opportunities, which are becoming increasingly scarce, they may be forced to revert to poppy cultivation. The international community has a major opportunity in ensuring that this very positive development is not reversed. [..] Clearly, as these various groups have suffered serious economic consequences as a result of the abandonment of poppy cultivation, the country's already tenuous economy has experienced a significant setback. The pertinent question is whether and for how long this ban can be sustained." (45) It lasted one year, in the case of Afghanistan.

Displacement of Production

In the event that the opium bans in Shan State, and especially the Wa ban in 2005, will be sustained in spite of the humanitarian crisis they trigger and in spite of the absence of major international alternative development interventions, there are several possibilities in the region for displacement of the illicit cultivation, either within the country or in China, which provides the most likely scenario to accommodate regional demand and trafficking interests. The only consolation to comment about in that scenario -the one that has occurred many times in the history of the opium market- is that the humanitarian drama for hundreds of thousands in Burma at least will have offered better subsistence opportunities for many farmers elsewhere.

Unintended Consequences

In case the ban is sustained at the local level and displacement of production is not taking place rapidly enough to accommodate regional demand, the burden of finding short-term solutions to their craving will fall upon opium and heroin user groups in the region. Given the current state of health support systems and treatment programs across the region, the risk is that many will opt for diverted 'licit' pharmaceutical or methamphetamine ('ya-ba') type replacements, in terms of health-risks not likely leading to an improvement of the situation. The potential consequences of such shifts (increased injection and related HIV/AIDS risks, Proxyvon-type epidemics, etc.) should be analyzed carefully to prepare for adequate health assistance programs. The prevailing assumption that reducing supply automatically reduces problems related to drug consumption will have to be challenged to create political space for maneuver to deal with such consequences in the most pragmatic way possible. Some recent developments regarding political acceptance and implementation of harm reduction programs in Burma, Thailand, Vietnam and China (needle exchange, methadone treatment) are small signs of hope, taking place on a small scale but deserving any support they can get.

Dynamics between the Licit-Illicit Opiate Markets

The Proxyvon and OxyContin examples should be looked at carefully, not just in order to design effective strategies to deal with such new epidemics, but also to re-think the merits of simplistic supply-side interventions and deadline-thinking around the 'elimination' of the traditional opium/heroin market. At the same time, the discussion about the well-intended arguments in the 1960s behind the '80:20 rule' and the privileges for 'traditional opium cultivating countries' regarding their position in the licit opiates market should be re-opened in view of the developments that have taken place since then. Possibilities for countries like Afghanistan, Laos and Burma to acquire a place in the expanding market of licit opiates demand should be discussed openly in the context of considerate attempts to reduce their role in the illicit market.

Precautionary Principle

The pertinent question that stands out is whether a cost-benefit analysis based on these combined doubts about the potential gains, sustainability and consequences of pushing for the established deadlines, should not lead to a more moderate, better thought-through and more humane policy approach. The precautionary principle might provide a guideline: if the consequences of an action are to some extent unknown but are under substantiated doubt to have a high risk of being negative, then it is better not to carry out the action rather than risk the uncertain, but possibly very negative, consequences.

Chapter from book: Martin Jelsma, Trouble
in the Triangle. Opium and Conflict in Burma

Silkworm Books,
Chang Mai, Thailand, July 2005


1. UNODC, 2004 World Drug Report, Volume 1: analysis, Vienna, June 2004.
2. Myanmar Opium Poppy Survey 2003, UNODC 2003.
3. International Narcotics Control Strategy Report 2003, US Department of State, Washington, March 2004.
4. Decline of Opium Cultivation in the "Golden Triangle", Press Release, United Nations Information Service, UNIS/NAR/801, 18 June 2003.
5. Encouraging Progress towards still distant goals, Progress Report by the Executive Director as a contribution to the Mid-term (2003) Review of UNGASS, UNODC/ED/2, 8 April 2003.
6. A/RES/S-20/2, Political Declaration, General Assembly 20th Special Session, 9th Plenary Meeting, 10 June 1998, Article 19.
7. ACCORD (ASEAN and China Cooperative Operations in Response to Dangerous Drugs) Plan of Action "In pursuit of a drug-free ASEAN 2015".
8. For a description of the 15-Year Plan for Elimination of Narcotic Drugs and details about the breakdown into three phases, see: www.myanmar-narcotic.net/eradication/anti3.htm.
9. Kathryn Meyer, From British India to the Taleban: Lessons from the History of the Heroin Market; in: David Musto (ed.), "One Hundred Years of Heroin", Auburn House 2002, p. 221.
10. DEA, Heroin Signature Program: 1999, Drug Intelligence Brief, August 2001.
11. National Drug Threat Assessment 2003, U.S. Department of Justice, National Drug Intelligence Center, Washington DC, January 2003.
12. DEA, Heroin Signature Program: 2002, Drug Intelligence Brief, March 2004.
13. UNODC, Afghanistan Opium Poppy Survey 2003, October 2003.
14. The opium poppy season in Burma is from September-March, with sowing mainly taking place in the months September/October and harvesting in February/March.
15. For the three townships Kunglong, Lawkai and Konkyan in 2002 together an amount of 12,672 hectares was reported, down to 5,081 in 2003. Though township boundaries do not exactly coincide with those of the Special Administrative Region, these figures do give a good indication of developments in the Kokang region.
16. UNODC, Myanmar Opium Poppy Survey 2003, op. cit.
17. International Narcotics Control Strategy Report 2003, US Department of State, Washington, March 2004.
18. The Regional Dublin Group estimates that 80% of Golden Triangle opium production is destined for China. Regional Dublin Group Report for South-East Asia, June 2004, Prepared by Japan; Central Dublin Group Meeting, Brussels, 22 June 2004.
19. DEA, The Price Dynamics of Southeast Asian Heroin, Drug Intelligence Brief, February 2001.
20. See chapter by Guilhem Fabre, The Black Hole of China White.
21. UNODC, Global Illicit Drug Trends 2003, p 56.
22. UNDCP, Global Impact of the Ban on Opium Production in Afghanistan, November 2001.
23. Ibid.
24. Ibid.
25. Namaram Kishalaya Dodo, Injection Impossible, Injecting non-injectable drugs, in: AHRNewsletter, Issue No 34, Asian Harm Reduction Network, Chiang Mai, April 2004.
26. National Survey on Extent, Pattern and Trends of Drug Abuse in India; Ministry of Social Justice and Empowerment, Government of India & UNODC Regional Office for South Asia, 2004.
27. Surajit Talukdar, Getting High on Medicines in India's Northeast, OneWorld South Asia, 02 June 2004.
28. Australian Illicit Drug Report 2001 - 2002, Australian Crime Commission (ACC).
29. Thebaine, chemically similar to morphine and codeine, is not used directly for pharmaceutical preparations, but first converted into substances such as oxycodone, oxymorphone, nalbuphine, naloxone, naltrexone, and buprenorphine (the latter used in heroin treatment programmes similar to the use of methadone, a synthetical opioid).
30. The licit market sector has become highly sophisticated and most of the production now skips the labour-intensive process of opium tapping. Instead the whole poppy plant is harvested, pulverized and a poppy straw extract with a high alkoloid content is used as the raw material for the isolation of morphine and thebaine. Yields per hectare are thus much higher compared with the illicit cultivation.
31. For detailed licit production figures, see: INCB, Narcotic Drugs, Estimated World Requirements for 2004 - Statistics for 2002.http://www.incb.org/e/ind_tr.htm
32. INCB, Narcotic Drugs, Estimated World Requirements for 2004 - Statistics for 2002, Part four "Comments on the Reported Statistics on Narcotic Drugs".
33. See website of the Indian Central Bureau of Narcotics.
34. Article II of Mutual Co-operation Agreement between Government of India and Government of USA of 1990, quoted on Department of Revenues' website under section "Joint Licit Opium Poppy Survey" (consulted 22 July 2004).
35. Department of Revenues' website under section "Joint Licit Opium Poppy Survey" (consulted 22 July 2004).
36. Personal observations of the author, present at the meeting on the basis of TNI's ECOSOC Consultative Status; no mention of this issue is made in the summarized official records of the meeting.
37. United Nations, Commentary on the Single Convention on Narcotic Drugs, 1961, E.73.XI.1, p. 294.
38. INCB, Narcotic Drugs, Estimated World Requirements for 2004 - Statistics for 2002, Part four "Comments on the Reported Statistics on Narcotic Drugs".
39. The author apologizes to Purdue Pharma company for his failure to find the correct 'r' symbol on his computer to indicate that the product name 'OxyContin' is a registered trademark protected by patent rights, while noting that this fact also symbolizes the commercial interests at stake in the marketing of these types of substances which is in fact part of the controversy described in the article.
40. DEA Congressional Testimony, Statement by: Terrance W. Woodworth, Deputy Director Officer of Diversion Control, Drug Enforcement Administration; Before the: House Committee on Energy and Commerce, Subcommittee on Oversight and Investigations; Date: August 28, 2001.
41. DEA, Drugs and Chemicals of Concern - Action Plan to Prevent the Diversion and Abuse of OxyContin, June 22, 2001.
42. Substance Abuse and mental health Serivices Administration (SAMHSA), Drug Abuse Warning Network (DAWN), quoted at www.streetdrugs.org/oxycodone.htm.
43. In 2001, U.S. autorities and Purdue Pharma already reached an agreement on labeling changes, which now warns that "OxyContin is an opioid agonist and a Schedule II controlled substance with an abuse liability similar to morphine. Oxycodone can be abused in a manner similar to other opioid agonists, legal or illicit. This should be considered when prescribing or dispensing OxyContin in situations where the physician or pharmacist is concerned about an increased risk of misuse, abuse, or diversion."
44. 2002 National Survey on Drug Use and Health (NSDUH), mentioned in: OxyContin, Diversion and Abuse, Drug Enforcement Administration, Office of Diversion Control, October 2003.
45. FAO/WFP, Crop and Food Supply Assessment Mission to Afghanistan, Special Alert No. 315, 8 June 2001.


About the authors

Martin Jelsma

Martin Jelsma is a political scientist who has specialised in Latin America and international drugs policy.  In 2005, he received the Alfred R. Lindesmith Award for Achievement in the Field of Scholarship, which stated that Jelsma "is increasingly recognized as one of, if not the, outstanding strategists in terms of how international institutions deal with drugs and drug policy."

In 1995 he initiated and has since co-oordinated TNI's Drugs & Democracy Programme which focuses on drugs and conflict studies with a focus on the Andean/Amazon region, Burma/Myanmar and Afghanistan, and on the analysis and dialogues around international drug policy making processes (with a special focus on the UN drug control system). Martin is a regular speaker at international policy conferences and advises various NGOs and government officials on developments in the drugs field. He is co-editor of the TNI Drugs & Conflict debate papers and the Drug Policy Briefing series.

Recent publications from Drugs and Democracy

Human rights and drug policy

An accessible but comprehensive primer on why TNI believes that human rights must be at the heart of any debate on drug control.

The Current State of Counternarcotics Policy and Drug Reform Debates in Myanmar

Are Myanmar's current drug policies effective? How do they impact important issues such as human rights, sustainable development, ethnic conflict, and the peace process?

Prospects for Treaty Reform and UN Coherence on Drug Policy

Can UNGASS 2016 realistically initiate a process of modernizing the global drug control system and breathe oxygen into a system risking asphyxiation?

Towards a Healthier Legal Environment

The decision of the Myanmar Government to review drug laws is not only timely, but also offers a prospect to improve the drugs legislation and to ensure that the laws address drug-related problems in the country more effectively.