The Burma-Singapore Axis:
Globalizing the Heroin Trade
by Leslie Kean and Dennis Bernstein
Covert Action Quarterly, Spring 1998
Singapore's economic linkage with Burma is one of the most
vital factors for the survival of Burma's military regime,"
says Professor Mya Maung, a Burmese economist based in Boston.
This link, he continues, is also central to "the expansion
of the heroin trade.") Singapore has achieved the distinction
of being the Burmese junta's number one business partner -both
largest trading partner and largest foreign investor. More than
half these investments, totaling upwards of $1.3 billion, are
in partnership with Burma's infamous heroin kingpin Lo Hsing Han,
who now controls a substantial portion of the world's opium trade.
The close political, economic, and military relationship between
the two countries facilitates the weaving of millions of narco-dollars
into the legitimate world economy
Singapore has also become a major player in Asian commerce.
According to Steven Green, llS Ambassador to Singapore, that city-states
free market policies have "allowed this small country to
develop one of the world's most successful trading and investment
economies." Singapore also has a strong role in the powerful
132-member country World Trade Organization. Indeed, the tiny
China Sea island of three and a half million people is known far
and wide as the blue chip of the region-a financial trading base
and a route for the vast sums of money that flow in and out of
If the brutal Burmese dictatorship's international pariah
status is of any concern to its more powerful partner, Singapore
shows no sign of it. Following the March 24 visit of Singapore's
Prime Minister Goh Chok Tong to Rangoon, a Singapore spokesperson
proclaimed, "Singapore and Myanmar should continue to explore
areas where they can complement each other." As both countries
continue to celebrate their "complementary" relationship,
the international community must take note of the powerful support
this relationship provides both to Burma's illegitimate regime
and to its booming billion dollar drug trade.
Drugs 'R' Us
The Burmese military dictatorship- known by the acronym SLORC
for State Law and Order Restoration Council until it changed its
name to the State Peace and Development Council (SPDC) last November-depends
on the resources of Burma's drug barons for its financial survival.
Since it seized power in 1988, opium production has doubled, equaling
all legal exports and making the country the world's biggest heroin
supplier. Burma now supplies the US with 60 percent of its heroin
imports and has recently become a major regional producer of methamphetamines.
With 50 percent of the economy unaccounted for, drug traffickers,
businessmen and government officials are able to integrate spectacular
profits throughout Burma's permanent economy.
Both the Burmese generals and drug lords have been able to
take advantage of Singapore's liberal banking laws and money laundering
opportunities. In 1991, for example, the SLORC laundered $400
million through a Singapore bank which it used as a down payment
for Chinese arms. Despite the large sum, Burma's foreign exchange
reserves registered no change either before or after the sale.
With no laws to prevent money laundering, Singapore is widely
reported to be a financial haven for Burma's elite, including
its two most notorious traffickers, Lo Hsing Han and Khun Sa (also
known by his Chinese name Chang Qifu).
SLORC cut a deal with Khun Sa for his "surrender"
in early 1996, allowing him protection and business opportunities
in exchange for retirement from the drug trade. Khun Sa now bills
himself as "a commercial real estate agent who also has a
foot in the Burmese construction industry. Already in control
of a bus route into the northern poppy growing region where the
military is actively involved in the drug business, he is now
investing $250 million in a new highway between Rangoon and Mandalay,
an SPDC cabinet member confirmed. "The Burmese government
says one thing but does another," according to Banphot Piamdi,
director of Thailand's Northern Region's Narcotics Suppression
Center. "It claims to have subdued Khun Sa's group. ... However
the fact is that the group under the supervision of...Khun Sa's
son has received permission from Rangoon to produce narcotics
in the areas along the Thai-Burmese border.
Khun Sa's son is not the only trafficker reaping benefits
in the Shan State area which borders Thailand and China and serves
as Burma's primary poppy growing area. Field intelligence and
ethnic militia sources consistently report a pattern of Singapore's
investments in Burma are opening doors for the drug traffickers,
giving them access to banks and financial systems."
Burmese military involvement with drug production in these
remote areas. Government troops offer protection to the heroin
and amphetamine refineries in the area in exchange for payoffs
and gifts, such as Toyota sedans, pistols and army uniforms. The
only access to the refineries is through permits issued by Burmese
military intelligence - without this, the heavily guarded areas
surrounding the refineries are too dangerous to approach. The
military is also involved in protecting the transport of narcotics
throughout the region, which the authorities have sealed off from
the outside world.
"There are persistent and reliable reports that officials,
particularly army personnel posted in outlying areas, are involved
in the drug business," confirms the March 1998 US government
narcotics report. "Army personnel wield considerable political
clout locally, and their involvement in trafficking is a significant
problem." Intelligence sources, working for ethnic leaders
combating both the drug trade and the military dictatorship, report
that the pattern of government involvement extends all the way
to the top. The central government in Rangoon demands funds on
a regular basis from regional commanders who, in turn, expect
payoffs from the rank and file. The soldiers get the money any
way they can-through smuggling, gambling or selling jade-with
drugs being the most accessible source of revenue in Shan State.
The officers in the field also "tax" refineries, drug
transporters, and opium farmers.
At great risk, the intelligence sources- who go undercover
to infiltrate troops in the field-collect painstakingly detailed
data including names, dates and places, such as these delivered
in March 1998 from Shan State: "On 10th Jan. 98, SPDC army
no. 65 stationed at Mong Ton sent 40 troops to Nam Hkek village.
Pon Pa Khem village tract, collected 0.16 kilo of opium per household
or [collected payment of] Baht 600. Then the troops sold the collected
opium to the drug business men at the rate of Baht 6000 for 1.6
kilos." Another report states: "Troops from SPDC Battalion
nos. 277 & 65 stationed at Mong Ton are still protecting heroin
refineries situated at Hkai ion, Pay lon & Ho Ya areas, Mong
Ton township. Those who can pay B.200,00 per month are allowed
to run the heroin refineries." And: "On 3rd of Jan.
98, Burma Army no.99 collected opium tax in Lashio township. They
charged 0.32 kilo per household. They arrested and beat seriously
those who failed to give.
These sources also report that Ko Tat, Pnvate 90900 from SPDC
battalion no.525 stationed in Lin Kay, recently defected from
the Burmese army and said that his company had been giving protection
to the opium fields around Ho Mong. While the lower ranked officers
struggle to meet their quotas in the field, the highest levels
of the government in the capital city strike deals with Burma's
two top traffickers, one of whom is the prosperous partner of
Lo Hsing Han: At Home in Singapore
With massive financial ties to Singapore, Lo Hsing Han is
now one of Burma's top investors. He, along with Khun Sa, the
former "king of opium," is a major player in the Burmese
In the early l990s, Lo Hsing Han controlled the most heavily
armed drug trafficking organization in Southeast Asia. He was
arrested in 1973 and sentenced to death, but was freed under a
general amnesty in 1980. Now, like Khun Sa, he wears the public
persona of a successful businessman in Rangoon-where no one does
business without close government cooperation. Although he still
oversees rural drug operations with the status of a godfather,
according to US narcotics officials, the notorious Lo currently
serves as an adviser on ethnic affairs to Lt. Gen. Khin Nyunt,
the military intelligence chief and the junta's powerful "Secretary
Lo Hsing Han is the chair of Burma's biggest conglomerate,
Asia World, founded in 1992. His son, Steven Law, is managing
director and also runs three companies in Singapore which are
"overseas branches" of Asia World. Although Singapore
is proud of its mandatory death penalty for smalltime narcotics
smugglers and heroin addicts, both father and son travel freely
in and out of the friendly island-nation. "The family money
is offshore," said a high-level US narcotics official. "The
old man is a convicted drug trafficker, so his kid is handling
the financial activities."
In 1996, when Law married his Singaporean business partner
in a lavish, well-publicized Rangoon wedding, guests from Singapore
were flown in on two chartered planes. According to a high-level
US government official familiar with the situation, Law's wife
Cecilia Ng operates an underground banking system, and "is
a contact for people in Burma to get their drug money into Singapore,
because she has a connection to the government." According
to the official, Ng spends half her time in Rangoon, half in Singapore;
when in Rangoon, she is headquartered at Asia Lite, a subsidiary
of Asia World. The husband-wife team are also the sole officers
and shareholders of Asia World subsidiary, Kokang Singapore Pte
Ltd. Founded in Singapore in 1993 with $4.6 million, the company
"engages in general trading activities in goods/products
of all kinds/descriptions. "
Singapore's ventures with Asia World include both government
and private investments. Kuok Singapore Ltd., a partner with Asia
World in many ventures, was Burma's largest single real estate
investor as of late 1996, with over $650 million invested 20 Other
Singaporean companies are mentioned in Asia Worlds company reports.
Sinmardev, another major Singaporean project linked to Lo's company,
is a $207 million industrial park and port on the outskirts of
Rangoon, which broke ground in 1997. Singaporean entrepreneur
Albert Hong, head of Sinmardev, described the project as the largest
foreign investment in Burma outside the energy field. The Singaporean
consortium leads the joint venture along with the Burmese junta,
Lo's Asia World, and a slew of international shareholders
Kuok Singapore Ltd., Lo Hsing Han's Asia World, and the Burmese
junta are also partners in the luxury Traders Hotel. The hotel's
November 1996 opening ceremony was attended by the Singapore ambassador,
the president of Kuok Singapore, and briefly by Lo Hsing Han himself.
The presiding Burmese minister publicly thanked Steven Law and
the government of Singapore "without whose support and encouragement
there would be very few Singaporean businessmen in our country."
While government and business connections in Burma and Singapore
have boosted Asia World's prospects, other factors have contributed
to the company's extraordinary growth. In the last six years,
Asia World has expanded from a modest trading company to become
Burma's largest and fastest-growing private sector enterprise
with interests in trading, manufacturing, property, industrial
investment, development, construction, transportation, import
and distribution, and infrastructure. "How is it that a company
that has a humble beginning trading beans and pulses is suddenly
involved in $200 million projects?" said a US government
official, requesting anonymity "Where did all that start-up
capital come from?"
The US government ventured a guess in 1996: It denied Asia
World's CEO Steven Law a visa to the US "on suspicion of
drug trafficking." Asia Worlds operations now include a deep-water
port in Rangoon, the Leo Express bus line into Northern Burma,
and a $33 million toll highway from the heart of Burma's poppy-growing
region to the China border 24 On December 20, the conglomerate
opened a wharf with freight handling, storage, and a customs yard
for ships carrying up to 15,000 tons 25 "If you're in the
dope business, these are the types of things that you've got to
have to be able to move your product," said a high-level
US narcotics official. "They have set up institutions to
facilitate the movement of drugs. And in all probability, they
are using laundered drug proceeds, or funds generated from investments
of drug trafficking proceeds, to build this infrastructure,"
The activities of Lo's company Asia World have triggered an
international narcotics investigation led by Washington. US investigators
allege that Asia World's relationship to Singapore paves the way
for the narcotics trade to be woven into all legitimate investments
between the two countries. "Singapore's investments in Burma
are opening doors for the drug traffickers, giving them access
to banks and financial systems," said one government official
familiar with the situation.
One Stop Shopping: Intelligence to Repression
The Burmese junta's control of its impoverished population
through crude methods such as torture, forced labor, and mass
killings leaves it open to international condemnation. In contrast,
Singapore takes a more sophisticated approach to repression, both
at home and abroad. While the island-nations citizens have material
benefits and the appearance of rule of law, they live in fear
of an Orwellian government that closely monitors every aspect
of their lives. The ruling party often sues those who dare to
oppose it on trumped up defamation charges, forcing many into
bankruptcy or exile.
The FBI is investigating complaints by US citizens of harassment
by Singapore's Internal Security Department (ISD). One California
academic, a widely respected specialist on Southeast Asian affairs
who asked not to be identified, said ISD agents broke into his
home because he was working to bring leading Singaporean opposition
figure Tang Liang Hong to an American university The operatives
tore out his door handle to get in, then searched his computer
and desk. A week later, an Asian man, waiting in a tree, photographed
and videotaped the academic while he walked in the park. After
temporarily blinding the academic with his bright flash, the man
jumped from the tree and made a getaway in his car. Tang -who
is facing a $4.5 million defamation lawsuit by Singaporean senior
ministers-was not surprised by the burglary. "I've been followed
everywhere, whether I was in Hong Kong, Malaysia, Australia or
in London," he said in a phone interview from Australia.
Singapore has been more than willing to share its expertise
in intelligence with its Burmese counterparts. The Singapore-Myanmar
Ministerial-Level Work Committee was set up in 1993 in Rangoon
to "forge mutual benefits in investment, trade and economic
sectors." The committee includes intelligence chief Lt. Gen.
Khin Nyunt, other top Burmese ministers, and high level Singapore
an officials. At the December 23 meeting, Khin Nyunt urged his
ministers to give priority to projects arranged by the Singaporean
government. "Pilot projects are being implemented to transfer
know-how to Myanmar," said Khin Nyunt in his address.
One such project is a state-of-the-art cyber-war center in
Rangoon. Burma's military leaders can now intercept a range of
incoming communications-including telephone calls, faxes, e-mails
and computer data transmissions-from 20 other countries.
The high-tech cyber-war center was built by Singapore Technologies,
the city-state's largest industrial and technology conglomerate,
comprising more than 100 companies. This government-owned company
also provides on-site training at Burma's Defense Ministry complex,
and reportedly passes on its "sophisticated capability"
to hundreds of Burmese "secret police" at an institution
Burma has no external enemies, but the ruling junta goes to
extremes to terrorize the population through its elaborate intelligence
network. Intelligence officials have already used their newly-acquired
talents from the cyber-war center to arrest pro-democracy activists,
and it is well known that Burma's feared military intelligence
often tortures its victims during lengthy interrogations.
Singaporean companies have also helped suppress dissent in
Burma by supplying the military with arms to use against its own
I people. The first shipment of guns | and ammunition was delivered
on October 6, 1988.35 Throughout that month, hundreds of boxes
of mortars, ammunition, and other supplies marked "Allied
Ordnance, Singapore" were unloaded from vessels in Rangoon.
Allied I Ordnance is a subsidiary of Chartered Industries of Singapore,
the arms branch of Singapore Technologies-the same govemment-owned
company which built the cyber-war center. The shipments also included
rockets made by Chartered Industries of Singapore under license
from a Swedish company and sold in violation of an agreement with
Sweden require authorization for re-exports.
These shipments from Singapore arrived only weeks after the
September 1988 military takeover in Rangoon, in which the new
leaders of the SLORC massacred hundreds of peaceful, pro-democracy
demonstrators in the streets. These killings followed another
wave of government massacres earlier that summer, when longtime
dictator Ne Win struggled to keep power in the face of nationwide
strikes and demonstrations for democracy He eventually stepped
down but, operating behind the scenes, installed the puppet SLORC.
As the killings continued, thousands of civilians fled the country
fearing for their lives. When numerous countries responded by
suspending aid and Burma's traditional suppliers cut shipments,
the SLORC became desperate. Singapore was the first country to
come to its rescue.
Singapore companies have continued to supply Burma's military,
sometimes acting as middlemen for arms from other countries. In
1989, Israel and Belgium delivered grenade launchers and anti-tank
guns via Singapore. In 1992, Singapore violated the European Commission
arms embargo against the Burmese regime by acting as a broker
and arranging for a $1.5 million shipment of mortars from Portugal.
"It is highly unlikely that any of these shipments to
Burma could have been made without the knowledge and support of
the Singapore Government," wrote William Ashton in Jane's
Intelligence Review. "By assisting with weapons sales, defense
technology transfers, military training and intelligence cooperation,
Singapore has been able to win a sympathetic hearing at the very
heart of Burma's official councils."
Last November, Singapore deployed its diplomatic arsenal to
defend Rangoon at the UN. Singaporean UN representatives made
an effort to water down the General Assembly resolution which
castigated the Burmese government for its harsh treatment of pro-democracy
activists, widespread human rights violations, and nullification
of free and fair elections that had voted it out of power. In
an "urgent" letter to the Swedish mission, which was
drafting the resolution, Singapore representative Bilahan Kausikan
cited "progress" in Burma and said that "the majority
of your co-sponsors have little or no substantive interests in
Myanmar.... Our position is different. We have concrete and immediate
Objecting to parts of the resolution and attempting to soften
the language, Singapore's representative circulated the letter
to key members of the UN's Third Committee on Human Rights. "The
driving force was definitely business connections," according
to Dr. Thaung Htun, Representative for UN Affairs of Burma's government-in-exile.
"Singapore is defending its investments at the diplomatic
level, using its efforts at the UN level to promote its business
The protection of Singapore's "concrete and immediate
stakes" is essential to the ruling party s success in maintaining
power and the basis of its support for Burma, said Case Western
Reserve University economist Christopher Lingle. "Singapore
depends heavily upon its symbiotic relationship with crony capitalists
and upon accommodating a high enough rate of return to keep the
citizenry in line. Therefore its very survival is tied up with
business and government investments.,
William Ashton, writing in Jane's Intelligence Review, suggested
an additional incentive for Singapore's alliance with Burma. As
Rangoon's major regional backer and strategic ally, China has
provided much of the weaponry, training, and financial assistance
for the junta. China's expanding commercial and strategic interests
in the Asia-Pacific region, coupled with its alliance with neighboring
Burma, is a source of great concern in Singapore. The desire to
keep Burma from becoming Beijing's stalking horse in the region
may provide another motivation for Singapore's wooing of Rangoon.
Turning a Blind Eye
The Singapore government has consistently disregarded the
gross human rights violations perpetrated by its allies in Burma.
The UN Special Rapporteur, appointed to report to the United Nations
on the situation in Burma, has been barred entry into Burma since
1995.44 The new US State Department Country Report on Burma for
1997 states that its "longstanding severe repression of human
rights continued during the year. Citizens continued to live subject
at any time and without appeal to the arbitrary and sometimes
brutal dictates of the military dictatorship." Amnesty International
reports that there are well over 1,200 political prisoners languishing
in Burmese dungeons, where torture is commonplace.
Singapore has issued no urgent letters about a recent report
by Danish Doctors for Human Rights which noted that "sixty-six
percent of the over 120,000] refugees from Burma now living in
Thailand have been tortured" and subjected to "forced
labor, deportation, pillaging, destruction of villages, and various
forms of torture and rape." The doctors reported that refugees
witnessed the junta's military forces murder members of their
Singaporean leaders also seem unconcerned about the fact that
the Burmese government shut down almost all of Burma's colleges
and universities following student protests in December 1996 and
imprisoned hundreds of students. At a February ceremony of the
Singapore Association in Myanmar, the Ambassador to Singapore
presented a large check to Gen. Khin Nyunt-who is also Chairman
of the government Education Committee-for the "Myanmar education
development fund." While depriving young Burmese of higher
education, the junta's "Secretary 1" Khin Nyunt responded
that "Uplifting the educational standards of our people is
one of the social objectives of our Government." He then
went on at length to extol the "firm foundation of growing
economic and trade ties" between Singapore and Burma.
The Burmese government has also kept computers and communication
technology away from students and others in opposition to the
regime. All computers, software, e-mail services and other telecommunication
devices-which hardly anyone can afford anyway-must be licensed,
but licenses are almost impossible to obtain. Yet Singapore has
made the best computer technology available to the ruling elite
and their business partners. Singapore Telecom, the largest company
in Asia outside of Japan, was the first to provide Burmese businesses
and government offices with the ability to set up inter- and intra-corporate
communications in more than 90 countries.
Complementary Relations Singapore's concerns are dramatically
different from those of countries sharing a border with Burma.
Thailand has to deal with the deadly narcotics trade and an overwhelming
number of refugees arriving on a daily basis. Banphot Piamdi,
the Thai counter-narcotics official, believes Thailand made a
big mistake when it voted for Burma's entry into the Association
of Southeast Asian Nations (ASEAN), given Burma's lack of cooperation
in fighting drugs. Not surprisingly, the Singapore government
lobbied hard for Burma's 1997 acceptance into the powerful regional
Ironically, Burma's inclusion in ASEAN may force member nations,
including Singapore, to address the havoc that their newest ally
is imposing on the region- especially since Burma provides approximately
90 percent of the total production of Southeast Asian opium. China
and India, Burma's other neighbors, now face severe AIDS epidemics
related to increased heroin use in their bordering provinces.
Most of the heroin exported from Burma to the West passes through
China's Yunnan province, which now has more than half a million
addicts. And even Singapore-whose heroin supply comes mostly from
Burma-had a 41 percent rise in HIV cases in 1997.
As we head into the "Asian century," Singapore has
become Washington's forward partner in the unfolding era of East-West
trade. Ambassador Green called the country "a major entry
port and a natural gateway to Asia for American firms." US
companies exported $16 billion worth of goods to Singapore in
1996 and more than 1,300 US firms now operate in the country Singapore's
strategic and economic importance to the US cannot be overstated.
The two nations just reached an agreement allowing the US Navy
to use a Singapore base even though the deal violates ASEAN's
1997 nuclear weapons-free zone agreement.
The US has condemned the Burmese junta's record of human rights
abuses and support for the drug trade, but has turned a blind
eye when it comes to Singapore's dealings with the regime. Although
President Clinton imposed economic sanctions on Burma partly for
its role in providing pure and cheap heroin to America's youth,
he has not commented on Singapore's willingness to play ball with
the world's biggest heroin traffickers. Ambassador Green told
Congress last year that the US "has an important role in
working with the Singapore government to deal with illegal drug
and weapons proliferation issues," but most US officials
have remained silent about Singapore's investments with Lo Hsing
Han and Burma's narco-dictatorship. It's unlikely Clinton made
any mention of this issue last fall while golfing with Singapore
an Prime Minister Goh Chok Tong during the APEC summit in Vancouver.
Unless the financial crisis in Asia limits profits, Singapore
will probably continue to expand its investments in Burma. "Our
two economies are complementary and although we can derive satisfaction
from the progress made, I believe that there still remains a great
potential that is yet to be exploited," said the junta's
Gen. Khin Nyunt last February, Aided by Singapore's support, Burma's
thriving heroin trade has plagued the majority of countries around
the globe. While these countries blithely pour money into drug-connected
companies based in Burma and thereby help them to expand into
foreign markets, an abundance of the world's finest heroin continues
to plague their citizens. At the same time, the line between legitimate
and illegitimate investments grows dimmer in the global economy.
Leslie Kean is co-author of Burma's Revolution of the Spirit
The Straggle for Democratic Freedom and Dignity and director of
the Burma Project USA.
Dennis Bernstein, associate editor at Pacific News Service,
is producer of KPFA radio's "Flashpoints."
Secrets and Lies