UNCLAS SECTION 01 OF 04 RANGOON 001644

SIPDIS

STATE FOR EAP/BCLTV AND INL/AAE
TREASURY FOR OASIA AND FINCEN
DEA FOR OF, OFF
USCINCPAC FOR FPA
JUSTICE FOR MARY LEE WARREN
MANILA ALSO FOR USED/ADB

E.O. 12958: N/A
TAGS: SNAR KCRM BM
SUBJECT: A WA SELF-PORTRAIT



1. Summary: A paper prepared by the Wa for international
visitors to their territories portrays their region as a
relatively poor, but developing part of Myanmar that is
struggling to rid itself of opium. The Wa describe their
Special Region as an indivisible part of Burma, though they
also underline their continued interest in autonomy. Some of
the points ring true; others; e.g., regarding the Wa
commitment to democratic principles, are simply hilarious.
End Summary.


2. In paragraph 8 below is a lightly editted paper that was
drafted by the United Wa State Party last Spring for
distribution to international visitors. While it is
obviously meant to present the Wa in the best light, it does
make some interesting points. First, in a telling comment on
the real state of power relationships between the GOB and the
Wa, the very first line commits the Wa flatly to the Union of
Burma. It states that "Wa State is an indivisible part of
the Union of Myanmar." Autonomy is still an issue of
interest to them, but, at least according to this paper,
independence is not.


3. The paper also provides a purported breakdown of revenue
for Wa State (as the UWSA calls its territories along Shan
State's borders with China and Thailand), at least in
percentage terms. The interesting lines are the "allocation
from the Union government," which represents the development
and food subsidies provided by the GOB; the tax, which,
according to Wa Chairman Pauk Yu Chan, mostly represents a
tax on opium; and the "partner's share fund," which probably
represents the whole variety of kickbacks which the Wa
receive from criminal gangs operating in and through their
teritories.


4. There are no numbers for the value of the revenue, but it
is not hard to do some calculations from numbers which Pauk
Yu Chan provided to Poloff and representatives from the
German and British embassies on November 27. According to
Pauk Yu Chan, about half the UWSP's revenue goes to pay the
salaries of members of the United Wa State Army and the
United Wa State Party, all of whom are paid at a rate of one
Chinese Yuan per day. Assuming 25,000 personnel total in
both the UWSA and the UWSP, that works out to total
expenditures on salaries of less than $10 million and total
Wa reven

ues of less than $20 million.


5. That $20 million number for revenues is also roughly
compatible with figures Pauk Yu Chan provided for the Wa
opium tax. According to Pauk Yu Chan, the opium tax, levied
at a rate of about 7 percent of the value of the crop, brings
in about 12 percent of the UWSP's total revenue. Given
UNDCP's estimate of opium production in Wa territories (22
percent of Burma's total crop; i.e., the equivalent of 120 to
160 metric tons), and a farmgate price of between $125 and
$150 per kilogram for raw opium gum in Wa State, the overall
value of the Wa opium crop would be somewhere between $15
million and $20 million, and the take to the UWSP from the
opium tax somewhere between $1 million and $1.4 million.
While there are ways to move this number up or down (e.g., if
the Wa convert some of the opium to heroin, or tax only a
portion of the opium crop), the final total for the UWSP's
annual revenues will still probably come out somewhere in the
range of $20 million. There is, of course, no way to know
whether the accounts in the paper are complete or if the
figures provided by Pauk Yu Chan are correct. If they are,
however, then Wa financial resources may be a good deal less
than many assume.


6. The list of public works completed by the UWSP over the
past 14 years is also fairly remarkable. It is also probably
accurate. Every visitor to the Wa territories is struck by
the sharp contrast between the state of development in the
territories controlled by the Wa as opposed to conditions in
GOB-controlled areas of Shan State. Working phones,
hard-paved roads, and 24-hour per day electricity from
hydropower plants that are still only working at one-third of
capacity suggest that at least some of the Wa revenues (and
probably a large portion) have been invested in the
development of the region.


7. Finally, the Wa claim to have eliminated about half the
opium cultivation in their territories over the past 12
years. That proportion may be correct, but no one can really
tell since there were no international observers in the area
in 1990. However, the Wa are wildly wrong regarding their
estimate of current production. According to the Wa, their
territories now produce only 30 metric tons of opium per
year. According to UNDCP, the total is probably somewhere
between 120 and 160 metric tons.


8. Begin text:


I. Brief Introduction of Wa State

Wa State is an indivisible part of Union of Myanmar, as a
minority autonomous region (People's Government of Wa State),
we only ask the Union Government to grant us more power in
self-administration.

In the past history of Wa Region, it was a territory of
anarchy without organization and leadership. In the period
of Communist Party of Myanmar, as the second stage in the
history of Wa region, there were mainly wars and few
constructions in the region, which brought only disaster to
Wa people. Therefore, we seceded from the Communist Party of
Myanmar in 1989, established Special Region (Wa State)
Government, Myanmar. The People's Government of Wa State has
subdivisions with different levels as follows: County
Government, Town Government, Township Government. There is
also a chief and secretary in every village. We use these
governing entities to administer Wa territory. Our principle
is governing with democratic means and laws.

We mainly use persuasion and education in our administration,
and executive methods as a supplement.

In past years, the Union Government has created a peaceful
and stable environment for our construction, supplied us with
great support in finance, materials, techniques, etc. For
instance, the Union Government has given us hundreds of sites
in Mengsuk, Mohkuk and Phakant to exploit ruby and jade
mines, and permitted us to establish trading companies in
many cities in Myanmar. We sincerely thank the Union
Government for its concerns and supports.

WADP (Wa Alternative Development Project) and other
international charities have made great efforts to help us
with drug control in recent years; they have developed many
projects in Wa State and made some achievements. The Wa
people express their sincere thanks.

The Wa people have already understood that opium poppy cannot
bring them fortune but disasters, and opium has damaged their
health and mind, blocked Wa's development of productivity.
Therefore, the Wa State has made up its mind to eradicate
opium poppy growing, change its poor economic structure,
rebuild new communities, and increase the pace of social
modernization.

II. Revenue Resource


1. From the allocation of the Union Government 20%

2. Incomes from trading business 21%

3. Tax 14%

4. Partner's share fund 21%

5. Mine products 20%

6. Tourism industry 4%

III. Development and Construction plan


A. Education: Thirteen years ago, there were only 20 primary
schools with 480 students in Wa region. There are 289
schools with 20,754 students now, including 5 middle schools.


B. Health Care: There were only 4 hospitals and 8 clinics
with 150 persons as medicine staff in Wa region 13 years ago.
There are 20 hospitals and 160 clinics with 590 persons as
medicine team in Wa State now.


C. Energy Resource Construction: Wa people used oil pine
wood and oil lamp for lighting in the long history. There
was only a hydro power station with 40 kilowatts capacity in
the Wa region 13 years ago, which was not sufficient for
lighting in Pangkham. In period of peaceful construction, we
have built 7 hydro power stations with 13,900 kilowatts
capacity in the past 10 years.


D. Road Construction: There were a few raw roads with a
total length of only 300 km in Wa region 13 years ago; the
total length of roads is now 3,000 km. There are main roads
with 730 km in the northern part of Wa State, most of them
are paved with cubic stones, and more than 30 bridges have
been built with the roads. Now all the counties are
connected with roads paved with cubic stone; all towns are
connected with raw roads. We have achieved our Ten Years
Plan in road construction; the road system can basically
supply transportation in Wa State.

There are standard roads paved with sand and rubble for 505
km in the southern part of Wa State, with 47 bridges.


E. Local industry: Wa State has developed its local industry
in some sectors, such as Hongpang Distillery, Cigarette
Factory (40,000 cases per year as product capacity),
Goodhealth Jewelry, Longtan Tin Smelter (1,000-1,500 tons of
fine tin per year as its scale), and Pangkham Peace Beer
Factory.


F. Agriculture: We have invested more than (RMB)Y10 millions
in agriculture sectors, constructed Mengkar conduit and
Wanleng Dam as agricultural infrastructures, which can supply
irrigation to 23,000 mu (1 acre=6.66 mu) of paddy rice fields
(However, because of insufficient funds, few paddy rice
fields have actually been irrigated). These agricultural
projects have been funded by Wa State Government, not
including local government's funds. Moreover, since the truce
and entering peaceful construction period, each division,
regiment of our troop can supply food for about 4 months by
itself. The real action of troop's taking part in
agricultural and local construction encourage people's
activities; as a result, people's income increased 30% on
average.

Alternative projects as follows: Wa State has developed
rubber plantations on 53,660 mu, tea on 8,000 mu, various
fruits on 6,600 acres and 160,000 teak trees. It also
developed a breeding industry, establishing a pig farm in
Kyaing Teng and two chicken farms in Tachileik.

Other alternative projects are under development.

IV. Drug control works

The history of opium poppy growing in Wa region is more than
a hundred years. It is impossible to eradicate poppy growing
in a short time. Therefore, the Wa State Government made a
plan in November 1990 to reduce the poppy growing area
year-by-year, and to completely eliminate poppy growing
within 10-15 years.'

In the past ten years, the Wa State Government has done a lot
of propaganda about drug control among its cadres, solders
and common people. The intention of eliminating drugs in Wa
State has been fully understood by every Wa person.

In 1997, Wa State Government proclaimed the complete
elimination of poppy growing in the whole Wa region by the
end of 2005.

In 1990, the estimated poppy growing area was 10,000 acres
with total opium production of about 60 tons. In 1994, the
area was 8,000 acres and production was about 48 tons, and
5,000 acres in 2000 with about 30 tons of total opium
production.
Wa State had destroyed great deal of drugs and processing
mills in Namteng, Nawi, Hotao and Yawnting, etc, the value of
drugs and equipment is more than a hundred million USD.

Reported by: Pu Yu Chen (Bao Youxiang)
Chairman of Wa State Government
April 02, 2002

End text
Martinez