Ethnic groups likely to suffer
The ruling junta is trying to crack down on ethnically distinct territories to reconcile Burmese and Chinese relations.
The maps say the town of Mong La is in Burma but to the casual observer it could be China. The shop names are in Chinese and the shopkeepers only accept the Chinese yuan. A suggestion of a meeting at 4 o'clock is met with a question: "Burma time or China time?"
Mong La is the capital of Shan Special Region number 4, one of 13 autonomous enclaves that have been carved out of Burma's mountainous east over the past 20 years as part of ceasefire deals signed between the generals who run the country and armed ethnic groups.
Now the military want to regain control over the ceasefire zones. They have offered a deal to the ethnic groups. However, they have also shown that they are willing to use force.
The stakes for Burma and China are high. China, the Burmese junta's most significant ally and largest investor, wants to build pipelines through Burma to import oil and gas from the Andaman Sea to the populous but relatively poor province of Yunnan and to open trade routes to feed exports to the lucrative markets of India. There are increasing signs that the groups China once regarded as a strategic buffer against Burma's aggressively anti-communist military are now seen as a barrier to trade. But if the volatile militias are mishandled, both Burma's desire for reunification and China's ambitions in the region risk being thwarted and the generals who run Burma cannot afford to anger Beijing.
While central Burma has been driven into penury by economic mismanagement and sanctions, areas such as Mong La, which lies at the heart of the Golden Triangle, have profited from drug trafficking and, more latterly, gambling.
But the border militias' days could be coming to an end. In August, a few hours to the north of Mong La, Burmese government troops attacked Special Region number 1, which was run by the so-called Kokang militia, driving some 37,000 refugees over the border into China. Today, 80 per cent of the shops in Mong La are boarded up, their owners safe across the border in China waiting to see if Special Region 4 could be the next target.
Areas like Mong La underscore the strategic conundrum for Burma. "Without a political settlement that addresses ethnic minority needs and goals, it is extremely unlikely there will be peace and democracy in Burma," the Transnational Institute, an Amsterdam-based think-tank, said in a recent report.
For the past 15 years, the UN has advocated a tripartite dialogue between the military government, the democratic opposition and the country's ethnic minorities. But given the history of drug involvement by many of the groups, it has been a hard policy to promote in western capitals.
The world has become fixated on the role of Aung San Suu Kyi, the imprisoned opposition leader and Nobel Laureate. While she is a key figure, however, her freedom is unlikely to solve the country's long-standing political problems on its own.
Burma's ethnic minorities make up some 40 per cent of the 60m population. The minorities resent the Burmese domination of the country's politics and are sceptical of the government's good faith. Several young Shan professionals used the same word - "tricky" - to describe the Burmese. The Burmese government has been trying to unify the country since it gained independence from Britain in 1948. This crusade has taken precedence over all other concerns, including democracy, and remains the driving force behind the current government led by Than Shwe, the country's senior general.
"When Than Shwe wakes up at night, he isn't worrying about democracy or international pressure," says a western diplomat who did not want to be identified. "He's worrying about the ethnic groups."
The Burmese authorities have called on the ceasefire groups to put their militias under government control and take part in the elections next year but the groups are loath to give up the leverage that their arms provide. However, with their move against the Kokang militia, the generals have significantly increased the pressure on the other militias to declare their intentions. Many residents of the border areas, such as the Chinese traders in Mong La, believe the generals could move against other groups, picking them off one by one.
But, as the Transnational Institute report points out, if they fail to defeat the ceasefire groups decisively, they will drive them into the mountainous border territory where they are likely to return to wholesale narcotics trading to fund a guerrilla campaign, increasing regional instability.
© 2009 The Financial Times