Alternative Development or Business as Usual?

China's Opium Substitution Policy in Burma and Laos
15 နိုဝင်ဘာလ 2010
Policy briefing

The Chinese Government's opium substitution programmes in northern Burma and Laos have prompted a booming rubber industry, but the beneficiaries have been a small few with many others losing their lands as a result.

A significant part of opium and its derivative heroin on the market in China originates from the ‘Golden Triangle’ – roughly the area that spans northern Burma, Thailand and Laos. It supplies a large number of injecting drugs users in China, and is considered a major security concern by the Chinese authorities. To counter this threat, the Chinese government have launched opium substitution programmes in northern Burma and Laos. The schemes, promoting agricultural investments by Chinese companies, have seen a dramatic increase in recent years. They include large-scale rubber plantations and other crops such as sugarcane, tea and corn.

Serious concerns arise regarding the longterm economic benefits and costs of rubber development for poor upland villagers. Although some economic benefits are  derived from rubber development, the villagers enjoying these new resource revenue streams are not the poorest. Wealthier farmers with savings and better social networks can more easily tap benefits; hence socio-economic gaps are developing in the communities.

Without access to capital and land to become involved in rubber concessions, upland farmers practicing swidden cultivation (many of whom are (ex-) poppy growers) have few alternatives but to work as wage labourers on agricultural concessions. They are forced to accede to government relocation programmes or to economic  factors, as they have no other means of income.

Conclusions and Recommendations

• The huge increase in Chinese agricultural concessions in Burma and Laos is driven by China’s opium crop substitution programme, offering subsidies and tax waivers for Chinese companies.

• China’s focus is on integrating the local economy of the border regions of Burma and Laos into the regional market through bilateral relations with government and military authorities across the border.

• In Burma large-scale rubber concessions is the only method operating. Initially informal smallholder arrangements were the dominant form of cultivation in Laos, but the topdown coercive model is gaining prevalence.

• The poorest of the poor, including many (ex-) poppy farmers, benefit least from these investments. They are losing access to land and forest, being forcibly relocated to the lowlands, left with few viable options for survival.

• New forms of conflict are arising from Chinese large-scale investments abroad. Related land dispossession has wide implications on drug production and trade, as well as border stability.

• Investments related to opium substitution plans should be carried out in a more sustainable, transparent, accountable and equitable fashion with a community-based approach. They should respect traditional land rights and communities’ customs.