BURMA SEEKS THAI HELP FOR CROP SUBSTITUTION IN

C O N F I D E N T I A L SECTION 01 OF 03 CHIANG MAI 000030

SIPDIS

SIPDIS

E.O. 12958: DECL: 2/28/2018
TAGS: PREL SNAR TH BM PHUM PREF
SUBJECT: BURMA SEEKS THAI HELP FOR CROP SUBSTITUTION IN
DRUG-PRODUCING AREAS OF SHAN STATE

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CLASSIFIED BY: Michael Morrow, CG, ConGen, Chiang Mai.
REASON: 1.4 (b),(d)



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Summary
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1. (C) Thai and Burmese officials are exploring Thai assistance
to northeastern Burma's Shan State in the form of crop
substitution and poverty alleviation in drug-producing areas.
This would mirror a previous program that had some success in
Shan State from 2002-05 before abruptly ending shortly after
former Burmese Prime Minister Khin Nyunt was ousted in 2004.
Thai officials see resumption of the program as a good way to
build useful relations with Burmese drug and security agencies,
and to reduce the flow of drugs, crime and illegal migrants from
Burma into Thailand. Prime Minister Samak will visit Rangoon in
early March and will raise this project with his Burmese
counterpart. Whether Thailand's success in developing
economically viable alternatives to opium cultivation can be
exported to Shan State will depend on Rangoon being committed to
the program and refraining from using it as a political tool to
manipulate (or relocate) ethnic groups there. End Summary.

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Burmese Visit Thailand to Talk Crop Substitution
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2. (C) A Burmese Government delegation headed by the Deputy
Secretary General of the Ministry of Progress of the Border

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Areas and National Races and Development Affairs recently
visited Thailand to explore alternative crop substitution
cooperation in drug-producing areas near the Thai-Burma border.
The GOB delegation also included officials from the Ministry of
Home Affairs and Central Committee for Drug Abuse and Control.
On February 13 they met in Chiang Rai province with officials
from Thailand's Office of Narcotics Control Board (ONCB) and the
non-profit Mae Fah Luang Foundation, an alternative crop
substitution and poverty alleviation program established in 1985
under royal patronage. The delegation then traveled to Bangkok
to meet with Foreign Ministry officials.


3. (C) According to ONCB Deputy Secretary General Pithaya
Jinawat, who participated in the February 13 meeting and briefed
CG the following day, the Burmese are interested in launching a
rural development initiative modeled on the Mae Fah Luang
project at Doi Tung, in Chiang Rai province. The Doi Tung
Development Project, inspired and backed by the late Princess
Mother, has transformed a former opium cultivation area into a
showcase center where the resident minority hill tribe
communities produce fruits, vegetables, flowers, coffee, and
handicrafts as a sustainable livelihood. In 2003 the Project
was formally recognized by the UN Office of Drugs and Crime for
its exceptional contribution to sustainable alternative
development to eradicate opium and provide alternative
livelihoods in the Golden Triangle.


4. (C) MFA Burma Desk Officer Jirusaya Birananda told Emboff on
February 27 that the GOB wishes to locate this project in Shan
State, likely in areas south of Taunngyi. The RTG will send a
survey team to the region to assess the viability of the
project, including the likelihood of success and of meeting the
real needs of the Burmese who would benefit. While there are no
fixed dates yet, Jirusaya was confident the project could be
rolled out in a relatively short period of time. She said the
RTG was ready to send a fact-finding team as soon as it received
a complete project proposal from the Burmese, which could be as
early as April. The MFA's foreign assistance agency and the
ONCB would provide the bulk of the funding, with the Mae Fah
Luang Foundation acting as the implementing agency. Also, the
GOB has requested that, while waiting for the terms of the
bilateral agreement to be finalized, the RTG provide technical
training to help prepare for eventual implementation, in areas
such as goat breeding, coffee cultivation, and irrigation
techniques.

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Prior Cooperation Successful, But . . .
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5. (U) The Mae Fah Luang Foundation has previous experience
inside Burma. In 2002, in cooperation with the Burmese
Government and local leaders, it launched an alternative
sustainable development project in the Yong Kha area of Shan
State, populated mainly by ethnic Wa. Over a three-year period,
the Foundation's team assisted the local community in reducing

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opium cultivation and replacing it with alternative crops such
as tea, coffee, fruit, vegetables, and rice. It also built a
16-bed medical clinic as well as a 500-pupil school, to address
the 6,000-resident community's health and education needs. By
2005, the Yong Kha project was reporting that opium cultivation
was markedly down, household incomes significantly up, and
health statistics vastly improved


6. (C) However, this cooperative project ended abruptly soon
after former PM Khin Nyunt was ousted by Senior General Than
Shwe. According to Mae Fah Luang Foundation Director of
Operations Dispanadda Diskul, the Than Shwe regime halted the
project out of distrust over its origins and linkages to Khin
Nyunt. Diskul said the Foundation is willing to return to
Burma, but this time wants to have "cover" under the umbrella of
a GOB-RTG agreement, which was not the case the first time
around. The Foundation has 30 field staff available to launch
the new project, he added.


7. (C) The ONCB's Jinawat explained that, when the Burmese
reached out directly to the Mae Fah Luang Foundation a few
months ago to explore a resumption of cooperation, the
Foundation asked the ONCB and Thai Foreign Ministry into the
process because of "lessons learned" from the earlier project.
He said he expected the two governments to sign an MOU governing
any cooperation this time. The MFA's Jirusaya echoed this
assessment. She said the Foundation's previous project was
vulnerable to abrupt dismissal by Rangoon because it lacked RTG
official backing. This time around the project would be carried
out government-to-government, and the GOB would be unable to
break an official agreement so easily.

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Cutting Out the Wa?
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8. (C) It is unclear what scale of project the GOB is seeking,
our sources told us. The project would likely be located in
areas south of Taunngyi in Shan State, where increased opium
growth is reportedly a GOB concern. Additionally, our ONCB and
Mae Fah Luang contacts believe Rangoon has chosen this new
location over the prior Yong Kha site because the regime does
not want to involve the Wa this time, given current tensions
between Rangoon and the United Wa State Army.

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PM Samak to Visit Burma in Early March
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9. (C) Our MFA and ONCB sources told us Prime Minister Samak
would travel soon to Burma, likely in early March. He will
raise the crop substitution project with his Burmese
counterpart, and possibly sign a bilateral MOU on
counternarcotics cooperation that would include mention of the
project.

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Joint Field Trip to Australia?
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10. (C) The Mae Fah Luang Foundation currently operates abroad
in two locations, establishing a sheep bank alternative to opium
production in Afghanistan, and conducting preliminary work aimed
at reducing cannabis production in Indonesia's Aceh province.
In March the Foundation plans to take its Afghan partners to
Australia to study goat-breeding techniques. The Foundation has
invited the GOB to send representatives to tag along; the
Burmese have replied favorably.

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What's in it for Thailand?
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11. (C) The RTG's interest in pursuing Burma's proposal for
crop substitution cooperation has several aspects, according to
the ONCB's Jinawat:

-- alternative crop substitution in northeastern Burma could
mean less opium would be produced and transshipped into Thailand;

-- the economic benefits to the local ethnic groups would
presumably disincentivize criminal activity;

-- the project would help build useful relations between Thai
and Burmese drug and security agencies; and

-- the development of Burma's rural areas would get at a root
cause of economic migrant, crime, and human trafficking problems

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that flow across the border into Thailand.

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Comment
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12. (C) The royal family, utilizing the Mae Fah Luang
Foundation and the separate Royal Projects Foundation sponsored
by the King, has played a major role for over four decades in
the country's success in developing economically viable and
sustainable alternatives to opium cultivation in Thailand's
portion of the Golden Triangle. Variations of these models are
now being put to use in Afghanistan and Aceh. Resumption of the
Mae Fah Luang Foundation's previous work in Burma could, even on
a small scale, contribute to the dual goals of reducing illegal
narcotics production and providing some relief to destitute
ethnic groups in northeastern Burma. But real success will
depend on the Burma regime being committed to the program and
refraining from using the development project as a political
tool to manipulate (or relocate) the ethnic groups.


13. (U) This cable was co-drafted with Embassy Bangkok and
coordinated with Embassy Rangoon.
MORROW