US embassy cable - 02RANGOON1644

UNCLAS SECTION 01 OF 04 RANGOON 001644 
 
SIPDIS 
 
STATE FOR EAP/BCLTV AND INL/AAE 
TREASURY FOR OASIA AND FINCEN 
DEA FOR OF, OFF 
USCINCPAC FOR FPA 
JUSTICE FOR MARY LEE WARREN 
MANILA ALSO FOR USED/ADB 
 
E.O. 12958: N/A 
TAGS: SNAR, KCRM, BM, Ethnics 
SUBJECT: A WA SELF-PORTRAIT 
 
 
1.  Summary: A paper prepared by the Wa for international 
visitors to their territories portrays their region as a 
relatively poor, but developing part of Myanmar that is 
struggling to rid itself of opium.  The Wa describe their 
Special Region as an indivisible part of Burma, though they 
also underline their continued interest in autonomy.  Some of 
the points ring true; others; e.g., regarding the Wa 
commitment to democratic principles, are simply hilarious. 
End Summary. 
 
2.  In paragraph 8 below is a lightly editted paper that was 
drafted by the United Wa State Party last Spring for 
distribution to international visitors.  While it is 
obviously meant to present the Wa in the best light, it does 
make some interesting points.  First, in a telling comment on 
the real state of power relationships between the GOB and the 
Wa, the very first line commits the Wa flatly to the Union of 
Burma.  It states that "Wa State is an indivisible part of 
the Union of Myanmar."  Autonomy is still an issue of 
interest to them, but, at least according to this paper, 
independence is not. 
 
3. The paper also provides a purported breakdown of revenue 
for Wa State (as the UWSA calls its territories along Shan 
State's borders with China and Thailand), at least in 
percentage terms.  The interesting lines are the "allocation 
from the Union government," which represents the development 
and food subsidies provided by the GOB; the tax, which, 
according to Wa Chairman Pauk Yu Chan, mostly represents a 
tax on opium; and the "partner's share fund," which probably 
represents the whole variety of kickbacks which the Wa 
receive from criminal gangs operating in and through their 
teritories. 
 
4.  There are no numbers for the value of the revenue, but it 
is not hard to do some calculations from numbers which Pauk 
Yu Chan provided to Poloff and representatives from the 
German and British embassies on November 27.  According to 
Pauk Yu Chan, about half the UWSP's revenue goes to pay the 
salaries of members of the United Wa State Army and the 
United Wa State Party, all of whom are paid at a rate of one 
Chinese Yuan per day.  Assuming 25,000 personnel total in 
both the UWSA and the UWSP, that works out to total 
expenditures on salaries of less than $10 million and total 
Wa revenues of less than $20 million. 
 
5.  That $20 million number for revenues is also roughly 
compatible with figures Pauk Yu Chan provided for the Wa 
opium tax.  According to Pauk Yu Chan, the opium tax, levied 
at a rate of about 7 percent of the value of the crop, brings 
in about 12 percent of the UWSP's total revenue.  Given 
UNDCP's estimate of opium production in Wa territories (22 
percent of Burma's total crop; i.e., the equivalent of 120 to 
160 metric tons), and a farmgate price of between $125 and 
$150 per kilogram for raw opium gum in Wa State, the overall 
value of the Wa opium crop would be somewhere between $15 
million and $20 million, and the take to the UWSP from the 
opium tax somewhere between $1 million and $1.4 million. 
While there are ways to move this number up or down (e.g., if 
the Wa convert some of the opium to heroin, or tax only a 
portion of the opium crop), the final total for the UWSP's 
annual revenues will still probably come out somewhere in the 
range of $20 million.  There is, of course, no way to know 
whether the accounts in the paper are complete or if the 
figures provided by Pauk Yu Chan are correct.  If they are, 
however, then Wa financial resources may be a good deal less 
than many assume. 
 
6. The list of public works completed by the UWSP over the 
past 14 years is also fairly remarkable.  It is also probably 
accurate.  Every visitor to the Wa territories is struck by 
the sharp contrast between the state of development in the 
territories controlled by the Wa as opposed to conditions in 
GOB-controlled areas of Shan State.  Working phones, 
hard-paved roads, and 24-hour per day electricity from 
hydropower plants that are still only working at one-third of 
capacity suggest that at least some of the Wa revenues (and 
probably a large portion) have been invested in the 
development of the region. 
 
7.  Finally, the Wa claim to have eliminated about half the 
opium cultivation in their territories over the past 12 
years.  That proportion may be correct, but no one can really 
tell since there were no international observers in the area 
in 1990.  However, the Wa are wildly wrong regarding their 
estimate of current production.  According to the Wa, their 
territories now produce only 30 metric tons of opium per 
year.  According to UNDCP, the total is probably somewhere 
between 120 and 160 metric tons. 
 
8. Begin text: 
 
I.  Brief Introduction of Wa State 
 
Wa State is an indivisible part of Union of Myanmar, as a 
minority autonomous region (People's Government of Wa State), 
we only ask the Union Government to grant us more power in 
self-administration. 
 
In the past history of Wa Region, it was a territory of 
anarchy without organization and leadership.  In the period 
of Communist Party of Myanmar, as the second stage in the 
history of Wa region, there were mainly wars and few 
constructions in the region, which brought only disaster to 
Wa people.  Therefore, we seceded from the Communist Party of 
Myanmar in 1989, established Special Region (Wa State) 
Government, Myanmar.  The People's Government of Wa State has 
subdivisions with different levels as follows:  County 
Government, Town Government, Township Government.  There is 
also a chief and secretary in every village.  We use these 
governing entities to administer Wa territory.  Our principle 
is governing with democratic means and laws. 
 
We mainly use persuasion and education in our administration, 
and executive methods as a supplement. 
 
In past years, the Union Government has created a peaceful 
and stable environment for our construction, supplied us with 
great support in finance, materials, techniques, etc.  For 
instance, the Union Government has given us hundreds of sites 
in Mengsuk, Mohkuk and Phakant to exploit ruby and jade 
mines, and permitted us to establish trading companies in 
many cities in Myanmar.  We sincerely thank the Union 
Government for its concerns and supports. 
 
WADP (Wa Alternative Development Project) and other 
international charities have made great efforts to help us 
with drug control in recent years; they have developed many 
projects in Wa State and made some achievements.  The Wa 
people express their sincere thanks. 
 
The Wa people have already understood that opium poppy cannot 
bring them fortune but disasters, and opium has damaged their 
health and mind, blocked Wa's development of productivity. 
Therefore, the Wa State has made up its mind to eradicate 
opium poppy growing, change its poor economic structure, 
rebuild new communities, and increase the pace of social 
modernization. 
 
II.  Revenue Resource 
 
1.  From the allocation of the Union Government     20% 
2.  Incomes from trading business                   21% 
3.  Tax                                             14% 
4.  Partner's share fund                            21% 
5.  Mine products                                   20% 
6.  Tourism industry                                 4% 
 
III.  Development and Construction plan 
 
A.  Education: Thirteen years ago, there were only 20 primary 
schools with 480 students in Wa region.  There are 289 
schools with 20,754 students now, including 5 middle schools. 
 
B.  Health Care: There were only 4 hospitals and 8 clinics 
with 150 persons as medicine staff in Wa region 13 years ago. 
 There are 20 hospitals and 160 clinics with 590 persons as 
medicine team in Wa State now. 
 
C.  Energy Resource Construction: Wa people used oil pine 
wood and oil lamp for lighting in the long history.  There 
was only a hydro power station with 40 kilowatts capacity in 
the Wa region 13 years ago, which was not sufficient for 
lighting in Pangkham.  In period of peaceful construction, we 
have built 7 hydro power stations with 13,900 kilowatts 
capacity in the past 10 years. 
 
D.  Road Construction: There were a few raw roads with a 
total length of only 300 km in Wa region 13 years ago; the 
total length of roads is now 3,000 km.  There are main roads 
with 730 km in the northern part of Wa State, most of them 
are paved with cubic stones, and more than 30 bridges have 
been built with the roads.  Now all the counties are 
connected with roads paved with cubic stone; all towns are 
connected with raw roads.  We have achieved our Ten Years 
Plan in road construction; the road system can basically 
supply transportation in Wa State. 
 
There are standard roads paved with sand and rubble for 505 
km in the southern part of Wa State, with 47 bridges. 
 
E.  Local industry: Wa State has developed its local industry 
in some sectors, such as Hongpang Distillery, Cigarette 
Factory (40,000 cases per year as product capacity), 
Goodhealth Jewelry, Longtan Tin Smelter (1,000-1,500 tons of 
fine tin per year as its scale), and Pangkham Peace Beer 
Factory. 
 
F.  Agriculture: We have invested more than (RMB)Y10 millions 
in agriculture sectors, constructed Mengkar conduit and 
Wanleng Dam as agricultural infrastructures, which can supply 
irrigation to 23,000 mu (1 acre=6.66 mu) of paddy rice fields 
 (However, because of insufficient funds, few paddy rice 
fields have actually been irrigated).  These agricultural 
projects have been funded by Wa State Government, not 
including local government's funds. Moreover, since the truce 
and entering peaceful construction period, each division, 
regiment of our troop can supply food for about 4 months by 
itself.  The real action of troop's taking part in 
agricultural and local construction encourage people's 
activities; as a result, people's income increased 30% on 
average. 
 
Alternative projects as follows: Wa State has developed 
rubber plantations on 53,660 mu, tea on 8,000 mu, various 
fruits on 6,600 acres and 160,000 teak trees.  It also 
developed a breeding industry, establishing a pig farm in 
Kyaing Teng and two chicken farms in Tachileik. 
 
Other alternative projects are under development. 
 
IV.  Drug control works 
 
The history of opium poppy growing in Wa region is more than 
a hundred years.  It is impossible to eradicate poppy growing 
in a short time.  Therefore, the Wa State Government made a 
plan in November 1990 to reduce the poppy growing area 
year-by-year, and to completely eliminate poppy growing 
within 10-15 years.' 
 
In the past ten years, the Wa State Government has done a lot 
of propaganda about drug control among its cadres, solders 
and common people.  The intention of eliminating drugs in Wa 
State has been fully understood by every Wa person. 
 
In 1997, Wa State Government proclaimed the complete 
elimination of poppy growing in the whole Wa region by the 
end of 2005. 
 
In 1990, the estimated poppy growing area was 10,000 acres 
with total opium production of about 60 tons.  In 1994, the 
area was 8,000 acres and production was about 48 tons, and 
5,000 acres in 2000 with about 30 tons of total opium 
production. 
Wa State had destroyed great deal of drugs and processing 
mills in Namteng, Nawi, Hotao and Yawnting, etc, the value of 
drugs and equipment is more than a hundred million USD. 
 
Reported by:  Pu Yu Chen (Bao Youxiang) 
Chairman of Wa State Government 
April 02, 2002 
 
End text 
Martinez