Eastern Shan State, Myanmar: The divide and conquer tactics employed by Myanmar’s ruling military junta to reign in ethnic insurgent militias on the Sino-Myanmar border have further agitated delicate ceasefire agreements with the formerly China-backed rebel groups.

Escalating tensions with the junta, known as the State Peace and Development Council (SPDC), have prompted the largest of these players, the 20,000 strong United Wa State Army (UWSA), to re-supply its forces and bolster defenses in an apparent bid to deter a Myanmar Armed Forces attack on their largely autonomous enclave in Myanmar’s Eastern Shan State, dubbed Special Region 2.

Since the ouster of former SPDC strongman Gen. Khin Nyunt in October 2004 on corruption charges, the regime’s strong-arm measures aimed at either disarming the various ceasefire militias or bringing them into the national fold as an integral part of the Myanmar Armed Forces, known as the Tatmadaw, are causing these formerly allied groups to close ranks internally.

Gen. Nyunt, Myanmar’s former prime minister and chief of military intelligence, was credited with negotiating various ceasefire agreements between formerly China-backed Communist Party of Burma (CPB) militias between 1989 and 1994. In return for halting resistance against the self-appointed junta, the militias were granted semi-autonomous zones known as “Special Regions” in Myanmar’s Eastern Shan State. The largest of these groups, the UWSA, dubbed by the U.S. State Department as “the worlds largest drug trafficking militia,” has further served as a proxy force in the Tatmadaw’s repeated attempts at crushing the estimated 10,000 strong Shan State Army – South (SSA-S), based along Thailand’s northern border. The present-day SSA-S remains the largest armed resistance faction combating Myanmar ‘s authorities in one of the worlds’ longest-running armed conflicts.

UWSA – SPDC Relations

Since January 2005, the SPDC has been increasingly pressing the UWSA to disarm. Most recently, on March 26, 2006, the border crossing connecting the Wa capital of Panghsang and Mong-A in China’s Southwestern Yunnan province has been closed for all outbound timber and mineral exports to China from UWSA-controlled territory. Sources on the ground confirm the closure, which was negotiated between Myanmar’s generals and authorities in the PRC, remains strictly enforced.

During July 2006 negotiations in Panghsang to re-open the border for trade, Lt. Gen Thein Sein, SPDC Secretary 1 of the Ruling Military Council, pressed Panghsang to accept SPDC-run schools teaching the national curriculum as well as junta-controlled customs and immigration offices. These requests were flatly rejected by the Wa leadership. Presently, a Chinese-language curriculum is taught in the Wa Special Region, following the Yunnanese model, with only six Burmese-language teachers in Panghsang.

The UWSA is showing signs of frustration with stepped-up measures targeting it finances, resulting from increased Sino-Myanmar cooperation on border trade issues. In an unexpected move at an emergency meeting on July 4, 2006, UWSA leadership appointed Wei Hsue-gang, commander of the UWSA’s 171 Military Region in southeastern Shan State, as chief financial officer. Wei, an ethnic Sino-Wa fugitive, has proven himself an innovative financier. He was sentenced to death in absentia by a Thai court in 1998 and is wanted by U.S. authorities on drug trafficking charges, with a $2 million dollar bounty for his capture. In the UWSA’s early days, Wei bankrolled the organization on drug proceeds. Until the recent appointment, the UWSA had for several years attempted to distance itself from the image Wei Hsu-gang brought the organization, its leaders systematically claiming to be unaware of his whereabouts.

Speaking with World Politic Watch, Thai intelligence officials confirmed Wei is currently operating out of the towns of Panyang and Panghsang in northeastern Shan State. His southern-based 171 Military Region is comprised of 20 battalions totaling 3,000 combatants, with a 200-strong rapid strike commando unit, intelligence sources confirm. The 171 has repeatedly joined the Tatmadaw in launching dry-season offensives on the SSA headquartered on a ridge at Loi Taileng straddling the Thai border. The last joint offensive took place in April 2005 and saw the UWSA sustain an estimated 560 casualties in a single day of fighting. Much of the carnage resulted from Tatmadaw mortar rounds repeatedly missing their mark, instead landing on allied UWSA troops conducting the uphill offensive.

One of the UWSA’s primary incentives in combating the SSA alongside the Tatmadaw has long been gaining access to lucrative contraband trafficking routs along the Thai border.

Among Wei’s significant accomplishments was the strategic shift from exclusive reliance on poppy cultivation and heroin production to mass-scale manufacture of cheap methamphetamines, which have inundated the Thai marketplace since the mid-nineties and are increasingly penetrating regional markets. Speaking with World Politics Watch at his Loi Taileng headquarters, Col. Yawdserk, commander of the SSA – South, noted that Wei’s motive for assaulting the SSA is in part retaliatory. “Wei attacks us because we raid and destroy his nearby drug labs,” he said.

The UWSA’s recent move to appoint Wei Hsue-gang as the organization’s chief financier can be seen as either a desperate or miscalculated move by UWSA leadership, noted a Thailand-based veteran security analyst.

Speaking with World Politics Watch in November, however, one UWSA insider denied the organization has any interest in fighting the SSA alongside the Tatmadaw. “The UWSA’s fighting force is comprised of various ethnic minorities, Akha, Lahu, Wa and Shan. The SSA is built from the same groups. We don’t want to see brother-on-brother fighting,” he said. While the source admitted that the UWSA had in the past sided with the Tatmadaw in repeated assaults against the SSA, he insisted this was not the policy of UWSA commanders. Reports to that effect are disinformation originating from Myanmari military intelligence, he insisted. “The Myanmar army has repeatedly lied to us. They would motivate certain UWSA field commanders to attack the SSA claiming the Shan army was about to attack our units and that a preemptive strike was necessary,” he said. “We no longer believe them [SPDC intelligence].” Despite this, Thai intelligence sources confirm that meetings were held between UWSA leadership and SPDC officials on Nov. 20 in Panyang, Eastern Shan State, aimed at securing a Wa agreement to launch an SPDC-led dry-season offensive against SSA positions in spring 2007.

Around the time USWA relations began to sour with the SPDC in early 2005, Bangkok based intelligence sources confirm that an elaborate network of fortifications designed to absorb aerial attack were constructed near the Wa capital, Panghsang.

The Chinese Connection

Chinese officials have long been frustrated with UWSA-refined heroin flooding the Chinese marketplace. As such, they stand little to gain from economically isolating the UWSA or discouraging the organization’s engagement in legitimate cross-border trade activities. In October, a Panghsang insider told World Politics Watch that the vast majority of investments in the Wa Special Region are Chinese-based. These include rubber plantations and other crop substitution projects aimed at deterring opium cultivation. Authorities in Yunnan have further provided funding and advisors to assist these projects.

China remains the UWSA’s sole patron and arms supplier, as China has an interest in maintaining the UWSA as a geostrategic buffer along its border with Myanmar and as a source of leverage with the junta’s unpredictable ruling generals. Furthermore, a weakened UWSA would potentially invite a Tatmadaw offensive, which could escalate into an all-out war on the border with Yunnan. Authorities in Beijing are intent on avoiding such a confrontation, as it would risk spilling across the Chinese border and could spark a mass refugee crisis. Intent on maintaining the status quo, Chinese authorities continue to provide the UWSA with arms to serve as a deterrent to Myanmar’s Armed Forces. Thai intelligence sources said that, early on Aug. 1, a convoy of five trucks entered Panghsang from a small border crossing with Yunnan and unloaded a large consignment of munitions at UWSA’s central arsenal. These included 60 mm, 82 mm, and 120 mm mortars. Additionally, the recent arms delivery included 14.5 mm ZPU heavy machine guns, a new weapons system in the UWSA’s arsenal that is effective against low altitude aerial assault. The trucks re-entered Yunnan before dawn, according to the Thai intelligence sources. In addition, in 2001, the UWSA acquired an unspecified number of HN-5N surface-to-air missiles (the Chinese version of the Russian-made SA-7), which are said to remain in good order.

Thai and foreign intelligence sources are convinced that Chinese People’s Liberation Army (PLA) advisers are actively assisting and training the UWSA. PLA advisers are said to be improving the group’s command-and-control and communications capabilities. Moreover, UWSA chairman Bao You-xiang, who has in recent years suffered deteriorating health, repeatedly visits Kunming for medical treatment as well as his hometown of Kuenma in China’s Yunnan province.

Michael Black is a pseudonym for a freelance journalist who has reported extensively from the region. A pseudonym has been used because the author plans to return to the region soon for further reporting, and believes his safety could be at risk if he is identified by name.