END GAME IN BURMA'S ETHNIC WARS

C O N F I D E N T I A L SECTION 01 OF 06 RANGOON 000031

SIPDIS

STATE FOR EAP, INL, AND DRL
USCINCPAC FOR FPA

E.O. 12958: DECL: 01/06/2013
TAGS: PINS SNAR PHUM PREL MOPS BM
SUBJECT: END GAME IN BURMA'S ETHNIC WARS

Classified By: COM Carmen Martinez. Reason: 1.5 (d).


1. (C) Summary: Burma has basically won its ethnic wars.
While some small-scale operations continue, the situation now
is nothing like it was in the late 1980s. Then, 20 separate
insurgent groups could put more than 60,000 troops in the
field in Burma. Now, the five or six groups that remain
active can muster at most 5,000 troops. All, moreover, have
been reduced to guerrilla operations; none are any longer
capable of holding territory in Burma.


2. (C) Behind these developments lie an integrated GOB
political, military, economic, and diplomatic strategy that,
in many ways, was the exact opposite of Ne Win's approach.
Led by Secretary 1 Khin Nyunt, the GOB has mixed political
negotiations with military force, economic inducements, and
diplomatic initiatives to isolate, defeat, co-opt, and slowly
re-integrate its armed opponents within the Burmese Union.
The entire 14-year campaign is an excellent example of the
political skills the SPDC can display when issues of high
interest to them are at stake.


3. (C) Problems remain, however. It is still not clear how
the government plans to integrate these former insurgent
groups and their special regions into an enduring
constitutional order. International appreciation of the
government's victory has also been strictly limited.
Regional states like China, India, and Thailand have accepted
the GOB's victory. In the West, however, the view is
decidedly more negative. While some Western governments have
welcomed the re-establishment of order in areas previously
governed by criminal elements, for most, the allegations of
human rights abuses that accompanied the GOB's campaign have
only solidified their view of the GOB as a brutal
dictatorship. Finally, but perhaps most seriously, there is
no guarantee that the government's work will last. For
whatever success the GOB has had in ending the ethnic wars
and reconstructing the Union of Burma, it has failed
miserably as a government -- to the point of never even
laying a secure fiscal basis for continued rule. If that is
not corrected, then all of the GOB's work in reconstructing
the Union, through war, diplomacy, and political
negotiations, could well be washed away. End Summary.


4. (C) For all intents and purposes, the GOB has won its
ethnic wars. While low intensity operations continue on both
the eastern and western borders, the situation now is nowhere
near what it was when the State Law and Order Restoration
Council (SLORC) seized power in 1988. Then, the GOB was
faced with over 20 active insurgent groups capable of putting
a combined total of over 60,000 soldiers in the field. The
Kachin Independence Organization controlled the largest
portion of Kachin State; the Burmese Communist Party held
most of northern Shan State east of the Salween river; Khun
Sa's Mong Tai Army was ensconced in southern and western Shan
State; and the Karen National Union held broad swathes of
Karen State. Now, virtually none of this remains. The only
armed opposition still in the field -- the Karen National
Union (KNU),the Karenni National Progressive Party (KNPP),
the Shan State Army (South),the Chin National Front (CNF),
and the Arakan Rohingya National Organization (ARNO) -- taken
altogether, can perhaps put 5,000 troops in the field. All,
moreover, have largely been reduced to guerrilla operations.
None are capable any longer of holding territory in Burma.

National Defense and Counter-insurgency Strategy


5. (C) Behind this change lies an integrated GOB political,
military, and economic strategy that has matured as the GOB
has moved away from the simple-minded defense strategies of
the Ne Win and U Nu years. Ne Win basically believed that
the greatest threats to Burma would arise from its nearest
neighbors (China, India, and Thailand) and that its greatest
strength lay in its natural defenses -- the mountains and
forests that surround the Burman heartland. Burma, he
believed, could rely on natural obstacles to hold up any
attacker and on a lightly armed people's army to cut the
enemy to pieces in the forests. It became, as a consequence,
policy under both the U Nu and Ne Win governments to leave
the wilderness areas intact -- in effect, to sacrifice the
development of those border areas to Burma's national defense
priorities.


6. (C) That approach, however, had disastrous side-effects,
providing both the motive and the opportunity for ethnic
rebellions. It antagonized the ethnic inhabitants of the
outlying regions, who found themselves cut off from any hope
of development. It also limited the government's writ in
those areas, as the wilderness that the Burmese created
proved equally impenetrable from the Burmese side. The
Burmese Army could mount dry season sweeps through these
regions, but it could not maintain a presence in the face of
popular resistance. As a result, the GOB rapidly found
itself surrounded not by buffers to invasion, but by
safe-havens from which bandits and insurgents could operate
with impunity. Law and order broke down and ethnic
insurgencies spread to the point where, by the mid-1980s,
virtually all of Burma's inland borders were in the hands of
insurgents.

The Turning Point


7. (C) Fortunately for the government, the insurgents had
their own problems. Factionalism was rife and foreign
support uncertain. China, in particular, backed off from
support of the Burmese Communist Party (BCP) after the rise
of Deng Xiao Ping in the late 1970s. Thailand, similarly,
swung back and forth between support for ethnic rights in
Burma and concern about the refugee, crime, and public health
problems generated by the insurgencies in Burma. As a
result, neither the GOB nor the insurgents could gain the
upper hand until events brought in new leadership, both in
Rangoon and among the major insurgents during the late 1980s.
In Rangoon, the military established a new military council
(the State Law and Order Restoration Council) in place of Ne
Win's failed dictatorship. Six months later (in March and
April 1989) a series of mutinies tore the BCP into a set of
smaller ethnic armies whose first priority was not national
revolution, but peace and development for their own regions.


8. (C) Recognizing the opportunity (and the necessity for
change),the GOB, led by Secretary 1 Khin Nyunt, basically
turned government policy on its head. Within months, the GOB
negotiated political agreements with four factions of the
BCP -- the Kokang Chinese under Peng Kya Shin, the Wa under
Kyauk Ni Lai and Pauk Yu Chan, the Shan, Akha, and Lahu under
Sai Lin, and the BCP's Kachin under Ting Ling. Active
hostilities were brought to a close, while the former
insurgents were allowed to keep their arms and to administer
the territories they occupied. Khin Nyunt described the
approach as giving the ethnic groups what they wanted --
peace and an opportunity for development. The final
agreements, however, also solidified splits among the ethnic
factions and helped ensure that the GOB would never again
have to face the combined strength of the BCP in the field.


9. (C) Over the next half-decade, the GOB offered the same
basic political deal to all other insurgent groups. It also
added military, economic, and diplomatic elements to its
strategy. On the military side, the Burmese Army ditched the
idea of fighting a "people's war" -- a doctrine which had
kept its own lightly armed forces on a par with the
insurgents -- and began to add manpower, heavy weapons, and a
logistic tail that would allow it to sustain operations
year-round in insurgent areas. It also concentrated against
the most recalcitrant groups -- the KNU and Khun Sa's Mong
Tai Army -- eventually forcing the Mong Tai Army into
surrender and the KNU out of Burma entirely. On the economic
side, it sweetened the deal. Originally, the GOB offered the
former insurgents only control of the economic resources
within the territories they administered. Basically, this
amounted to border trade, logging and mineral rights, and the
illicit traffic in narcotics. Beginning in 1990, however,
the GOB added a borderlands development program, which has
since contributed more than 20 billion kyat (according to
government figures) to development in areas controlled by the
former insurgents. It also passed out mineral rights within
Burma proper and opened up the Burmese economy to investments
by the insurgent groups, allowing the Wa, for instance, to
make investments in banks, airlines, plantations, ranches,
and factories throughout Burma. While this has been
controversial, with many Burmese accusing the government of
selling off the economy's crown jewels to criminal elements,
it has also given the former insurgents a stake in the Union
and opened development opportunities for them that go beyond
crime.


10. (C) This promise of peace, development, and self-rule,
when combined with the threat of increased military action
and the lure of economic benefits, proved irresistible to
most insurgent groups. Between 1990 and 1995, seventeen
separate groups reached agreements with the government,
including the Kachin Independence Organization, the Kayan New
Land Party, the New Mon State Party, the Pa'O National
Organization, the Palaung State Liberation Party, and a
variety of other smaller groups. One year later, the Mong
Tai Army surrendered, leaving the KNU as the only significant
insurgent group still in the field. Even the KNU, however,
was only a shadow of its former self. Split into two rival
religious factions (the KNU proper and the Democratic Karen
Buddhist Army, which has since allied itself with the GOB),
the KNU has not been able to carry out any significant
military operations in Burma since 1996.

Finishing the Job


11. (C) Since then, the GOB has focused on reducing the
remaining centers of resistance and re-incorporating the
former insurgent territories within the Burmese Union.
Neither problem has been solved, but the outlines of the
government's plans are clear. In the case of the remaining
active insurgencies, the GOB will continue to combine offers
of negotiation with military and diplomatic pressure. For
the KNU, the KNPP, and other groups that the GOB recognizes
as legitimate representatives of national races in Burma, the
GOB has basically left the terms of the 1988-95 agreements on
the table. As then, it is prepared to offer peace, amnesty,
self-administered areas, and the right to keep their arms and
private armies in return for pledges of loyalty to the Union
and a renunciation of armed struggle. In contrast, it has
offered the Shan State Army-South only the surrender terms
originally accepted in 1996 by their original leader, Khun
Sa, and his Mong Tai Army.


12. (C) Meanwhile, the GOB has maintained the military
pressure on these armed groups, extending its operations
right up to the Thai border, while relocating villages in
Shan, Karen, and Kayah States on which the Shan State Army
(South),the KNU, and the KNPP depend for support and
shelter. For the insurgents, the effect of these operations
has been devastating. Without the protection of a sheltering
population and faced with a serious enemy, most have
abandoned significant military operations. The SSA now
almost never operates anywhere outside the range of covering
fire from Thai guns, while the KNU and KNPP have slowly
drifted towards banditry.


13. (C) Finally, on the diplomatic front, the GOB has taken
advantage of Thai Prime Minister Thaksin Shinawatra's
interest in stability, legality, and economic development in
northeast Thailand, and in securing Burmese cooperation in
pursuing those aims, to reduce Thai support for insurgent
groups. This effort came to a head during the summer of
2002, following clashes on the Thai/Burmese border. Since
then, it has become increasingly clear that the days of
launching insurgent attacks on Burma from Thai soil may
finally be over. The remaining Burmese insurgent groups in
Thailand may be able to continue their political activities;
cross-border military action, however, will likely become
increasingly difficult.


14. (C) This new Thai government approach has, in turn, put
the insurgents in a difficult position, forcing many to
seriously consider negotiations. The KNPP, in fact, has
already split, with one fairly large group under Richard Htoo
having accepted the government's terms -- essentially
resuming the cease-fire agreement originally negotiated in

1995. The KNU is also deep in negotiations with the GOB,
although it remains to be seen whether KNU strongman Bo Mya
will ever be able to bring himself to accept a cease-fire.
Even the SSA has asked for terms, though the difference
between what they are asking for (essentially autonomy within
their own self-administered region) and what the government
will give (basically an amnesty plus a new start in life for
individuals) is huge.

Re-integration

15. (C) The GOB has coupled its continuing counter-insurgency
operations with efforts to re-incorporate former insurgents
in the Union. Its approach has basically been to maintain
the spirit of the original cease-fire agreements -- at least
while the GOB was negotiating similar agreements with others
-- but to make clear that 1) everything depends on the
capacity of the former insurgent groups to maintain order in
their territories and 2) that nothing in those agreements
gives anyone the right to violate the law, or ignore other
political and administrative arrangements prevailing in the
Union. The Kokang Chinese, in particular, have felt the bite
of the first condition. When a coup by the Yang family (the
traditional rulers of the Kokang) and a counter-coup by Peng
Kya Shin split the Myanmar National Democratic Alliance Army
in to three separate groups during the mid-1990s, the GOB
picked a favorite (Peng Kya Shin) and moved in to
re-establish a Burmese Army presence (and now dominance) in
the previously sacrosanct cease-fire area. Similarly, when a
mutiny split Mon Sa La's Mong Ko Defense Army in 2000, the
Burmese Army moved in, occupied Mong Ko and wiped both
competing bands off the map.


16. (U) The GOB has also slowly extended its administrative
reach into the former insurgent territories through subsidies
and aid programs, the re-establishment of education and
health services, and introduction of Burmese police and
military operations. In 2001, for the first time, the GOB
established a Burmese police presence in the Wa territories
and a Burmese military intelligence office in the Wa capital
of Pang Sang. Requests for permission for government visits
to cease-fire areas or Burmese military transit through these
areas have also become largely perfunctory. Where once it
really did ask permission, the GOB now merely notifies the
cease-fire groups that it is coming, and then goes,
regardless of whether it receives an answer or not.


17. (C) On the legal front, the GOB has conditioned its
support for former insurgent groups on pledges by the groups
to make their regions opium-free. Sai Lin of Shan State
Special region No. 2 around Mong La pledged to make his
region opium-free by 1997, and has apparently done so, albeit
while building Mong La into a flourishing center for gambling
and prostitution. Peng Kya Shin of the Kokang Chinese,
similarly, pledged to be out of opium by 2000, but failed,
and is now paying the price for that failure through an
extended joint Burmese/Chinese police crackdown on Kokang
narcotics operations. As for the Wa, they are due to be out
of opium by 2005 and are apparently on track.


18. (C) Finally, by some well-managed diplomacy, the GOB has
earned China's support for both its law enforcement and its
political efforts. Aroused by the growth of narcotics
trafficking from Burma into and through Yunnan Province,
China has changed from the historic ally of the BCP remnants
that now form many of these cease-fire groups into one of
their most resolute opponents, regularly demanding (and
getting) cease-fire group cooperation in the suppression of
narcotics production and trafficking all along its border
with Burma. As nothing else could, these aggressive Chinese
law enforcement operations have illustrated for the
cease-fire groups the potential political consequences of
continued involvement with narcotics. In simplest terms, the
Chinese and the Burmese together have made it known that
these groups have no political future, if they stay with
drugs.

Conclusions


19. (C) A few basic points stand out from this history.
First, Burma's ethnic wars are all but over. While a few
peace agreements have yet to be negotiated, all of those that
matter (with the KNU, the KNPP, and the SSA) could be
completed within the next few months, i.e., by the close of
the coming dry season.


20. (C) Secondly, the SPDC is anything but a simple extension
of Ne Win's previous dictatorship, at least in its dealings
with the ethnic insurgents. Where Ne Win was content to
neglect and exploit the border areas for the sake of security
in the Burman heartland, the SPDC has made defense of the
Union -- the entire Union -- a national priority. That
approach has had its own consequences for ethnic minorities
-- the wars the SPDC has waged in the ethnic areas have been
real wars, not the trivial sweeps once orchestrated by Ne
Win. However, the peace, autonomy, and opportunity for
development that the SPDC has offered these groups have been
equally real. There has been no false dealing, a la Ne Win.


21. (C) Thirdly, the political skills the SPDC has
demonstrated in dealing with these insurgencies belies their
image in the West as political buffoons. While the SPDC has
generally responded ineptly when asked to perform in
accordance with the Western agenda on political and economic
liberalization, on issues of vital concern to themselves
(like these internal wars),they have acted with skills that
many other states (think of Russia with the Chechens) can
only envy. The difference is in part a matter of priorities.
For the GOB, issues affecting the integrity of the union
come first; nothing else really gets as much high-level
attention.


22. (C) That said, it is also worth noting that whatever
success the GOB has had in dealing with the insurgencies,
there are still major unresolved problems. To start with, it
is still not clear how the government plans to integrate ad
hoc structures like the special regions into an enduring
constitutional order. While it has been willing to allow the
cease-fire group leaders a voice in Burma's constitutional
debates, inviting several to its now suspended National
Conference, there is a large group of Burmans (and Burmese
Army officers),who would just as soon see these groups and
their special regions disappear entirely. For the
government, keeping faith with the cease-fire leaders while
responding to the interests of these other influential groups
will be a challenge.


23. (C) There has also been little international recognition
of the government's victory. Regional states, such as
Thailand, China, and India, which were the countries most
affected by Burma's ethnic wars, have generally accepted the
GOB's success. In their view, the resulting stability was
far, far better than the lawlessness and anarchy that
prevailed for so many years. In the West, the view is more
jaundiced. Like regional states, some Western governments
have welcomed the re-establishment of order in areas
previously dominated by criminal elements. However, others
were horrified by the human rights abuses that accompanied
the government's campaign in ethnic areas, solidifying their
view of the GOB as a brutal dictatorship.


24. (C) Finally, but perhaps most seriously, there is really
no guarantee that the government's work will last. For
whatever success the GOB has had over the past fourteen years
in ending the ethnic wars and reconstructing the Union of
Burma, it has failed miserably in dealing with its own
problems as a government. Even setting aside the deep
resentment that it has engendered among the Burmese
themselves through the long denial of their basic human and
political rights, and its failure to deliver any semblance of
prosperity, it has also failed to establish a fiscal basis
for continued government. Having tried, like many before
them, to run a government on the surpluses of state-owned
enterprises, the SPDC has been left high and dry as those
surpluses have disappeared. None of these problems are easy
to deal with, but, if the government does not deal with them
effectively, then all of its work in reconstructing the
Burmese Union, through war, diplomacy, and political
negotiations, could well be washed away.
Martinez