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Eastern Shan State Army (ESSA)

Second only to Afghanistan, by 2000 Burma remained one of the world's largest producers of illicit opium. Burmese opium production doubled in 1989, the year after the military regime took power, and remained high throughout the early 1990s. Since 1996, however, opium production declined sharply to levels that were less than half Burma's annual production during the early 1990s. Burma had become a major source of methamphetamines trafficked throughout the region.

As of 2000 Burma accounted for approximately 80 percent of Southeast Asia's opium production, and 20 percent of the world's production. Most of the opium is produced in Burma's Shan State, particularly in areas under the control of former insurgent groups. Since 1989, the government had negotiated cease-fire agreements with most of the former insurgent groups that control these areas, offering them limited autonomy and development assistance in exchange for peace.

In negotiating these agreements, the regime's highest priority had been to end the ethnic conflicts and achieve some measure of national integration. Narcotics control had been a lesser priority, and many of the cease-fire agreements permitted former insurgents to continue their involvement in narcotics cultivation and trafficking activities. The cease-fire agreements also had the practical effect of condoning money laundering.

The government encouraged former insurgent groups to invest in "legitimate" businesses and some have used the opportunity to launder money through investments in banks, hotels and construction companies.

Many of the leaders of these ethnic groups are involved in the heroin and/or amphetamine trade. U Sai Lin (Lin Mingxian) of the Eastern Shan State Army (ESSA) had been listed in the 1990s as a major narco-insurgent leader, but by 2000 he had successfully rid his area of opium cultivation. There are no current, confirmed reports of U Sai Lin or the ESSA still being involved in narcotics trafficking, although it is likely that ESSA territory is a trafficking route because of its location along the border with China.




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