Thriving Synthetic-Drug Trade Threatens Governance in SE Asia

Commentary by Zachary Abuza
Thriving Synthetic-Drug Trade Threatens Governance in SE Asia Malaysian Customs officials display 1,187 kilograms of seized methamphetamine, valued at 71 million ringgit ($17.8 million), during a news conference in Nilai, Malaysia, May 28, 2018.

The U.N. Office of Drugs and Crime could not have stated it more clearly in a report released last month: Production of synthetic drugs is surging in Southeast Asia.

Every day somewhere in the region, it seems, authorities are making major seizures of methamphetamines. On June 19 alone, Thai police intercepted 1.2 tons of heroin and methamphetamines destined for Malaysia; two weeks later, they seized 300 kilograms of crystal meth and 140 kilos of heroin.

The long-term economic ripple effects of the COVID-19 pandemic and an intractable crisis caused by the coup d’état in Myanmar on Feb. 1 will exacerbate the threat from the regional production and trade in illicit narcotics. And that will pose an enormous challenge to governance, anti-corruption, and rule of law in even the strongest states in Southeast Asia, let alone the more poorly governed ones.

According to the recent report by the U.N.’s counter-narcotics office (UNODC), seizures of methamphetamines across Southeast Asia went from under 10,000 kilograms in 2011 to over 140,000 kilograms in 2020 – a 14-fold increase.

There’s no sign of this letting up. In the first two months of 2021, Thai officials seized 14 million pills.

Meanwhile, the street price of meth has fallen to its lowest level in a decade. That means only one thing: while more is being seized, even more is getting through.

Golden Triangle

Myanmar’s border region with Thailand has been the epicenter of regional meth production since 2014, after Chinese officials cracked down on domestic meth production.

Since then, there have been fundamental changes. Among these, major criminal groups are setting up shop in Shan and Kachin States.

The labs are also getting larger, churning out millions of pills per production run.

In addition, more precursors are being sourced locally. 

In 2014, UNODC notes, there were only three major varieties of synthetic drugs being produced in the region, but in 2019, there were 28.

Even the arrest of major syndicate heads like Tse Chi Lop, the head of “Sam Gor,” in the Netherlands in January 2021, had no discernible impact; others have quickly filled the vacuum. 

Pandemic’s impact

The COVID-19 pandemic has fueled the sales of illicit drugs, for several reasons.

First, it has helped to develop new markets. With border closures and gummed-up global supply chains resulting in a sharp decrease in shipping and flights, syndicates have had to reduce exports to more lucrative markets in Australia, Japan, and the West. In their stead, they have developed new markets in Southeast Asia.

From May to December 2020, after COVID lockdowns were imposed, 18,651 kilos of crystal meth and 25.5 million meth tablets were seized in Thailand, Myanmar, and Malaysia alone, according to the U.N.

Second, few governments are looking adept at this time because the pandemic has taken a toll on governance in many countries. If nothing else, the governments are consumed with vaccine rollouts, which have been very slow, so that they can restart their economies.

Remember that every economy in the region, except for Vietnam, contracted in 2020. Economic forecasts for 2021 by the Asian Development Bank and other international financial institutions were over confident. They failed to take into account the slow rollout of vaccines and the rapid spread of the highly contagious Delta strain of the coronavirus.

Most governments can usually cope with one or two crises at a time; a third overwhelms them. And they’ll have to do this with a smaller tax base due to the economic contractions. 

Third, for the sake of economic growth, governments will turn a blind eye to the trade in the licit chemical precursors moving across their borders, even though these should be closely scrutinized.

Fourth, we need to consider the long-term economic impacts of the pandemic. In a region known for some of the highest rates of economic disparity, prolonged lockdowns have led to the collapse of the middle class.

Millions of people will fall into poverty. The pandemic has increased the marginalization of groups like migrant workers and ethnic minorities.

Impact of Myanmar coup

The border regions that are contested between the ethnic armed organizations and the Burmese military (the Tatmadaw) is where the vast majority of the region’s methamphetamines are produced. As such, the February 2021 coup will have profound implications for the regional supply of illicit narcotics.

While many of Myanmar’s Ethnic Armed Insurgencies (EAOs) have joined the National Unity Government in exile, and have stepped up attacks on the Tatmadaw, some have not, hoping that the junta, facing multiple fronts, will be more willing to cut autonomy deals.

More important, they expect that the internationally sanctioned and cash-strapped junta will allow them to churn out illegal narcotics; getting their share in the process.

Even EAOs opposed to the junta and supportive of the NUG are also likely to allow the trade to grow within their borders so that they can tax it, in order to support their war efforts. With an influx of civilians from the cities, organizing the People’s Defense Forces requires money. Either way, a surge in production is expected – and not only in the manufacturing of synthetic drugs.

The UNODC is concerned that the coup could result in a reversal of progress in combating opium and heroin production.

The agency estimated that in 2020, only 405 metric tons of opium were produced in Myanmar, half the production in 2013. Recent seizures have included large amounts of heroin. So while production may be down from historic levels, it is not irreversible, especially with the collapse of the Myanmar economy. 

Governance under threat

So what does this mean for regional governance and security?

First of all, the amount of money is breathtaking. UNODC estimates that criminal gangs in the region raked in more than $100 billion in profits in 2020, up from $71 billion in 2019, between drug trafficking, smuggling, money laundering, and other crime.

To put that into perspective, that’s more than the GDP of Myanmar and Laos combined, and one third the gross domestic product of Vietnam’s booming economy. 

That volume of money can have deleterious effects; a corrupting influence on state institutions, law enforcement, customs, and the courts. One only has to look at Honduras or Guatemala to understand the long-term impact of narco-money on state institutions.

And in poorly governed or contested regions, the ability to root out drug syndicates, who thrive on weak governance, is a decades-long effort. The longer syndicates operate in a region, the harder it will be to dislodge them.

Finally, governments under pressure to respond look to easy but performative solutions, which both fail to stem the problem and undermine the rule of law.

The use of security forces as extrajudicial hit squads in Thailand under Prime Minister Thaksin Shinawatra or in the Philippines under President Rodrigo Duterte are cases in point. In neither case did drug trafficking decrease; just the opposite. Instead, it quickly undermined the rule of law, due process, and trust in the government and security forces.

Once political leaders unleash their security forces and turn them into vigilantes, it’s hard to put that genie back in the bottle; and it’s all too easy for them to begin to use those hit squads against political rivals, all in the name of their war on drugs.

Zachary Abuza is a professor at the National War College in Washington and an adjunct at Georgetown University. The views expressed here are his own and do not reflect the position of the U.S. Department of Defense, the National War College, Georgetown University or BenarNews.


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