UWSA SEEKS TO IMPORT PRECURSOR CHEMICALS LEGALLY

C O N F I D E N T I A L SECTION 01 OF 02 RANGOON 000121 SIPDIS E.O. 12958: DECL: 01/28/2014 TAGS: SNAR PGOV BM SUBJECT: UWSA SEEKS TO IMPORT PRECURSOR CHEMICALS LEGALLY Classified By: COM CARMEN M. MARTINEZ FOR REASON 1.5(D). ¶1. (C) SUMMARY: The leadership of the United Wa State Army, while trumpeting the dramatic reduction of opium poppy production in Wa territories, is seeking special dispensation to openly import precursor chemicals, ostensibly for the industrial processing of natural rubber. End Summary. ¶2. (C) POOR EX-POPPY FARMERS: UWSA leader Pu Yu Chen (as he transliterates his name) told a visiting group of GOB officials and diplomats January 24 that the sharp drop in opium poppy cultivation has created severe hardships for former poppy farmers and their families. Half of all people in UWSA territory lacked food security Pu Yu Chen claimed, calling on the GOB and the international community to provide increased assistance. Note: The UWSA territory, known as Special Region #2 in Rangoon, has a population of about half a million, with 400,000 in the northern region bordering China and 100,000 recently transplanted to the southern region bordering Thailand. End Note. ¶3. (C) PRECURSORS, PLEASE: Pu Yu Chen received the visiting delegation in the UWSA capital of Pan San, a prosperous looking Chinese-style city of about 25,000. Discussions and lunch took place in a modern multi-story building situated next to a three-story massage parlor. Chen introduced much of his cabinet, then detailed infrastructure, economic development, and crop-substitution projects undertaken by the UWSA. The rubber industry featured prominently in Chen's economic plans. Indeed, the rugged hills ringing Pan San had been terraced and planted with young rubber trees. Chen then made a special plea. To add value to natural resources and create jobs, the UWSA wanted to process the natural latex into finished rubber products. To do this they needed to import certain chemicals, some of which, he explained, were unfortunately deemed precursor chemicals used in methamphetamine production. Pu Yu Chen said he hoped the UWSA would be allowed to do this, as the Wa's opium-free economic future depended on projects such as this. ¶4. (C) FUNNY BUSINESS: The delegation heard the same pitch by UWSA district leader Lu Shin Kya in Nam Teek, a new town of maybe 10,000 people located where the borders of China, Wa territory, and the Kokang region meet (98-50' N, 23-27' E). Lu Shin Kya said "only 600" families still produced opium poppies in his district, down from 2,800 previously. The UWSA district leader asked the GOB ministers for a soft loan of $100,000 to build a rubber-processing factory, for which they would need to import some "chemical pharmaceuticals." The Italian DCM told us he had visited Nam Teek last year and had seen a rubber factory housed in a new building but with apparently old or unused machinery inside. "There is some funny-business going on here," concluded the Italian. ¶5. (SBU) TRAVEL NOTE: The DCM and DEA country attach traveled January 23 - 26 on the Ministry of Home Affair's "Study Visit to Border Areas and Middle Part of Myanmar." The group, including five GOB cabinet ministers, eight ambassadors, and two dozen other diplomats and UN reps, undertook a tightly scripted tour that entailed eighteen takeoffs and landings in Russian-built and Burmese Air Force maintained MI-17 helicopters. Meanwhile, P/E Chief traveled overland with UNODC to some of the same UWSA border areas and will report his very different ("less scripted") experiences and perspectives septel. ¶6. (C) SOME OBSERVATIONS ON THE WA: -- The UWSA enjoys the highest degree of autonomy and self-administration of any of the 17 cease-fire groups. It often seemed that the UWSA's Special Region #2 was not part of Burma. Even car license plates were unique, beginning with Latin script "SW" in the south and "NW" in the northern zone (for Southern Wa and Northern Wa, respectively). -- While Pan San looked prosperous, many civilians in the southern Wa zone looked poor, bedraggled, and unhealthy. -- The UWSA troops wore green uniforms with a red patch over the left shirt pocket that read, in English, "UWSA Army." Many of the AK-47 toting UWSA troops, especially in the southern zone, were teenagers. -- On many occasions the high-powered delegation (five senior GOB cabinet ministers, eight ambassadors, etc.) was entirely under the control of heavily armed UWSA troops. In security-paranoid Burma, this demonstrates an extremely high level of trust and confidence between the UWSA and the SPDC. ¶7. (C) Comment: Over lunch in Pan San some members of the group rather ungenerously wondered aloud if our host's blatant request to be allowed to import precursor chemicals legally was an indication that the Wa drug producers planned to stay in the same business, only change their product line. End Comment. Martinez