Cash From Opium Helps Prop Up Generals

Yvan Cohen

Thursday, Jan. 29, 1998 | 9:52 a.m.

RANGOON, BURMA -- Drug money helps keep the Burmese junta afloat, providing cash for hotels, discos, and even major infrastructure projects.

"The country runs on opium," says one American businessman in Burma.

Burma's opium output soared from 400 tons in 1968 to more than 2,500 tons in 1996, making it the world's largest producer of opium (the substance used to manufacture heroin).

Recognized drug barons have also used narco-dollars to "buy" the tolerance of the junta in Rangoon, the capital. The former leader of a 10,000-strong rebel army, the notorious drug warlord Khun Sa, used to claim that he only sold opium to fund his struggle against the Burmese government.

But since his surrender in 1996, Khun Sa, who is wanted for extradition by American authorities, has changed his tune. The drug baron now lives discreetly, but opulently, in a villa in Rangoon.

Immune from arrest, Khun Sa has revealed openly that he is investing in real estate and hotel projects. Some intelligence sources say Khun Sa has even offered to provide cash for a road between Rangoon and the central Burmese city of Mandalay.

One of Rangoon's more popular nightspots is also reputedly owned by the drug lord.

In lean economic times, and in the face of American sanctions, illicit drug revenues may prove a trump card for the military junta.

United States government sources estimate the value of Burma's illegal drug exports at $700 million to $1 billion.

"You can tell when the opium has been harvested because there's a flood of dollars onto the black market," explains one Asian businessman in Rangoon.