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Why did you decide to look at China’s opium substitution programme in your recent report, “Financing Dispossession”?

Tom Kramer – I was doing research with others in the northern part of Burma, affected by conflict for many decades and where ceasefires are currently in operation, and noticed a huge expansion of rubber plantations in the region particularly in opium growing areas. At first I thought it was simply private investment, but after further research discovered it was mainly driven by China’s opium substitution programme. China has promoted and supported Chinese private companies to invest in large-scale agricultural concessions – mainly rubber but also sugarcane and other cash crops – as an alternative to opium cultivation

Many Burmese local NGOS in Kachin State don’t even know about the reasons for the growth of these plantations even though they are dealing with the consequences of working with local communities deprived of access to land by these plantations. In the past the main threat to access to land for smallholder farmers in these regions came from unsustainable mining and logging; now it is very much rubber.

Tell us about the regions that you looked at. Why are these regions important for understanding Burma?

Northern Burma consists of two states Kachin and Shan state, and they are the biggest opium producing areas in the ‘Golden Triangle’ (The opium producing area in Southeast Asia consisting of northern Burma, Thaioland and Laos). They are also regions dominated by ethnic groups that have been in almost constant state of conflict with the central government in Rangoon. In fact Burma now has the dubious record of hosting the longest running civil war in the world as fighting started back in 1948.

So the TNI-BCN project has always believed that unless we resolve these conflicts, the prospects for peace, democracy and development in Burma is grim. Without peace, the regions won’t develop. A state of continued war also creates the excuse for authoritarian regimes to maintain big armies. Ordinary people invariably suffer as it is difficult to deliver aid and development in crisis situations.

Yet there is an unprecedented opportunity now for changes as the Burmese government has become increasingly concerned that the country is falling behind other neighbouring countries. These Northern areas are strategically located at the crossroads of China, India, and ASEAN countries. If you look at regional infrastructure plans there are lots of roads being built, but the Burmese connection is constantly missing. There are big plans to change that. The Burmese regime realises that if they want development and trade, they will need to bring about peace in border areas.

What were the main findings of your report?

We saw three key inter-related developments in the region:

1. Increase in opium production since 2006 after a decade of decline

2. Increase in Chinese agricultural investment since 2006

3. Increase in dispossession of communities of land and livelihoods during the same period (so since 2006)

These developments are all connected. In China there has been a big concern over heroin use, most of which is coming from Burma, so they are trying to tackle consumption and production by investing in agriculture in Burma’s border areas, to reduce opium cultivation there. They also hope to increase border security this way. Their way of doing this though is through “blanket economic development”, in other words the belief that if money is invested in the border regions and there is economic growth then everyone will benefit from development. They do not have a vision based on working with local communities and local farmers.

The Chinese have also failed to pick up on the lessons from alternative development programmes that have been tried in other regions of the world to try and reduce drug production. Looking at Burma, we saw considerable similarities between the Chinese opium substitution programme and the Colombian experience of Alternative Development. The end result is that nearly all the major benefits have gone to agro-industrial companies, and the former opium farmers in Burma are losing access to land which has been seized for rubber farming.

These dispossessed farmers are left with the only alternative of finding labour on these agricultural concessions where often payment is very low. We saw this vividly in the Wa region in Shan State, where former poppy farmers had become forced labour on plantations doing the hard work of tapping the rubber and planting trees. They had no other options and were working for a pittance.

So we could see that this investment is actually creating the opposite of what China wants. It is creating instability and resentment against China and merely benefiting a small business elite. There is a growing resentment in Burma against China and this could further fuel that. The land confiscation in Burma, combined with lack of rural credit, and increasing landlessness and land-poor households has led to severe food insecurity,

How is landgrabbing in Burma similar to the global phenomenon?

The way landgrabbing is done and the impacts this has are very similar worldwide. The appropriation of land by governmental authorities that is considered “waste” or “unused” land and prioritisation of agro-industries over smallholder farmers is typical of the global land grab. And the impacts on a developing country where 70% of the economy is based on rural agriculture is of course significant. The difference in Burma is there is even less knowledge of these issues than many other countries with, for example, almost no participants in the FAO’s Voluntary Guidelines’ process.

There are currently two land laws that are being finalised that could consolidate the Burmese land grab. The first is the Wasteland Bill which gives the government legal rights to allocate ’waste land’ (any lands without a formal title even if it is farmed by local communities). The second is the Farmland Bill. Both laws convert land into a commodity for big companies and undermine smallholder farmers. The Farmland Bill could potentially make land a tradeable commodity and the Wasteland Bill could further support industrial agricultural development. The Wasteland Bill allows businessmen to obtain tens of thousands of hectares of land, and the Farmland Bill could potentially allow them to then turn that into cash by selling their land use titles. They have been introduced by the ruling USDP party, which has some officials who have a strong personal financial interest in some of the companies doing the land grabbing. These laws represent a change in policy, as Burma under the military regime still inherited many socialist policies developed between 1962 and 1988 that protected smallholder farmers.

However since 2000, there has been a big shift in Burma towards an open market economy, where land is seen very differently as an asset to invest in and produce commodities. Within Burma, there seems to be a feeling that big is better: big plantations, big companies. After years of isolation, there is also not much knowledge of technical models or learning from what happens elsewhere. Instead it tends to be a few military backed companies and their cronies benefiting from large land concessions. For example the military-tied corporation Yuzana in Kachin State got an enormous concession for cassava production which forced lots of farmers off their land.

There has been a debate in Parliament of these laws, and this will be followed by extensive discussions about the associated by-laws that are currently being developed. A number of opposition parties and some NGOs have realised that these laws are mainly benefiting big private firms and not smallholder farmers. They argue that the latter are very productive and not a threat to development. Even within the ruling party and government ,there are some individuals who are willing to listen about land rights. They won’t necessarily change policy, but at least are listening. These debates are very important in terms of Burma deciding what development model it is going to choose.

What does the Burmese case reveal about patterns of Chinese investment within the region and other neighbouring countries?

What is similar to other foreign direct investment is the business approach, where rubber is seen by the Chinese as a strategic good. The difference in Burma’s border regions is you are dealing with a region that because of the civil war is a bit like the ’wild west’, where the patchwork of local border commanders and prevailing insecurity and instability allows for greater exploitation and lack of regulation. Whereas if you look at Laos, which also suffers the same problems with Chinese opium substitution programmes, farmers at least have a little more protection and rights and the exploitation is less severe.

What impact has your report had?

We found out recently that our report was unofficially translated by Yunnan university in China and that the Yunnan Provincial Government was looking for advice on how to reform the opium substitution programme. So it would appear there is an opportunity for engagement, although we don’t know what will come of it.

China is increasingly concerned about Burma – due to the likely competition with other investors as Burma repairs diplomatic relations with the US and also from their experience over the project of the Chinese-built Myitsone dam that was stopped by the Burmese government after it became a lightning rod for anti-Chinese sentiments in Burma and growing concerns over the environment. So the Chinese are keen to understand how they can maintain their presence and strategic interests in Burma and conflict areas.

Within Burma, there were a number of politicians and NGOs who responded very positively to the report. They appreciated how it linked the themes of opium cultivation, ethnic conflict and land rights in a way that hadn’t been done before. For some people in central Burma, it also raised their awareness of what is happening in border regions, which can be overlooked. At the same time we saw the counter-reaction of some Burman political parties showing lack of interest, because they considered it only an ’ethnic’ issue even though it has implications for the whole country.

What are the implications of the National League for Democracy (NLD) and Aung San Suu Kyi’s recent electoral victories?

What we are seeing in the country is that the President Thein Sein and some ministers are pushing for reform in four key areas: 1 Improving relationships with NLD; 2. Improving relationships with ethnic groups; 3. Improving the Economy; and 4. Improving the relationship with West. They are holding seminars and engaging in policy debates on these issues. This is real change, but the impact so far on ordinary people on the ground has been limited. We are dealing with the same bureaucracy and there is resistance too to this agenda from some ministers, so the challenges are enormous.

It was important that NLD participated in the recent by-elections in March 2012, which came about when 48 seats were made vacant by representatives who had become government ministers. The elections were limited in scope, as electoral fraud in the last general election and the reservation of seats for the army means the parliament is still dominated by the representatives from the old regime. And there are still unresolved issues, such as the state’s conflict with ethnic groups, which remains a very live issue as fighting restarted in Kachin state between the Burmese army and the Kachin Independence Organisation (KIO), an armed ethnic opposition group. We don’t know in general where the army leadership and former hardliners or even the former dictator Thann Shwe stand on the reform process and whether they will block it. There are definitely differences of opinion on how quick the reforms are going.

There are also questions about how NLD will respond to changing circumstances, and what their policy will be on the ethnic issue. In recent weeks there has been a debate by NLD representatives on the oath swearing as they don’t agree with the current constitution, but in the end they backed down and are now in Parliament. We also don’t know how well they will work with other ethnic and democratic opposition parties who didn’t boycott the former elections.

What do you think is the best way for countries outside Burma to support deepening democratic reforms?

Reforms are definitely taking place, but a lot still needs to happen before we are talking about change for ordinary people in Burma. I don’t believe sanctions have been a very good tool for policy influence, and have had negative impacts. I think it is good to engage with government and not rely on isolation particularly around technical issues. It is also important to realise that the ethnic issues is a key concern. Without solving ethnic conflict, the prospects for democracy, peace and development are grim. However we also can not be naïve about the political situation, particularly the ongoing conflicts with ethnic groups in Kachin state. It is vital that the process towards ethnic peace and justice is sustained by political dialogue at the national level, and that key ethnic grievances and aspirations are addressed.

Longer-term there is also an issue that goes beyond political reforms and that is how the economy will change and how it will affect ordinary people. The question is open as to who will benefit and lose from the economic changes in the next 20 years. And that is why it is crucial that this debate is opened up now.

Tom Kramer, Researcher for TNI’s Drugs & Democracy Programme

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