NARCOTICS REVIEW

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 06769111
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 8
• Document Creation Date: March 8, 2023
• Document Release Date: May 31, 2019
• Case Number: F-2018-01306
• Publication Date: August 1, 1986

Approved for Release: 2019/05/21 C06769111
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Directorate of
Intelligence
Narcotics Review (u)
August 1986
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FILE COPY/SOURU CQPY
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DI NR 86-004
August 1986
Copy 425
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Narcotics Review (u)
August 1986
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19 Golden Triangle: Border Trafficking Monopoly Under Fire
The Shan United Army (SUA) remains the dominant narcotics trafficking group
in the Golden Triangle but is under attack by a coalition of competing trafficking
groups. The conflict has altered trafficking patterns in the region and may cut the
SUA share of the heroin trade.
This review is published bimonthly by the Directorate of Intelligence and
examines international, regional, and functional issues related to the worldwide
drug problem. Appropriate articles produced by other elements of the CIA as well
as other US Government agencies will be considered for publication. Comments
and queries are welcome and may be directed to the Chief, Strategic Narcotics
Division (u)
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Golden Triangle: Triangle: Border Trafficking
Monopoly Under Fire
Introduction
The Shan United Army (SUA) remains in control of
the narcotics trade on the Thai-Burmese border but is
entangled in a conflict with a coalition of competing
trafficking groups that has the potential to cut its
market share of regional heroin production and is
already altering trafficking patterns in the Golden
Triangle. If the coalition succeeds in breaking the
SUA's monopoly, heroin exports from the Golden
Triangle will likely rise as these competitors enter the
market.
The Shan United Army's (SUA) drive to control the
heroin trade along the Thai-Burmese border began in
1982 after a series of Thai military operations drove
the SUA out of its strongholds in the northern border
area. SUA forces regrouped in Burma, and its leaders
opted to expand their control westward into areas
controlled by its chief rival, the 3rd Chinese Irregular
Force (CIF). Working with its ally the Tai
Revolutionary Army (TRA), the SUA achieved its
objective in September 1984 following a series of
assaults against CIF positions near Piang Luang that
resulted in the capture of the last of the CIF's border
refineries.
Forming Coalitions
Financially maimed by the defeat at Piang Luang,
CIF leaders set out immediately to build a coalition of
trafficking and insurgent groups strong enough to
dislodge the SUA and reopen its own trafficking
routes. The CIF solidified ties to the Wa National
Army (WNA), an ethnic group that has long opposed
the SUA, and recruited the Lahu National Army and
leading members of the National Democratic Front,
an umbrella organization of anti-Rangoon groups.
The Burmese Communist Party (BCP) has backed the
CIF-WNA campaign against the SUA for several
months but did not commit troops to the fighting until
April. BCP participation mainly has been limited to
logistic support, increased use of the Shan State
Army/North faction (SSA/N), a BCP ally, to harass
SUA caravans, and a steady stream of its own opium
caravans to the CIF.
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Currently, fighting among the coalitions is at a
stalemate, mainly because CIF-WNA tactics have
negated superior SUA firepower. The SUA is
stronger man for man, more cohesive militarily, and
has better leadership. But CIF-WNA aggressive hit-
and-run tactics have kept the SUA offguard and on
the defensive.
Earlier this year, the CIF-WNA used a lull in the
fighting to start its first large-scale refining operation
on the border since losing its Piang Luang outposts in
1984.
, the CIF has built several small
refineries at Ang Khan. The BCP and SSA/N have
agreed to supply the refineries with raw narcotics.
The BCP has also dispatched several hundred troops
to the border to defend southbound caravans and
harass local SUA units. There have been several small
skirmishes between BCP and SUA troops in recent
weeks.
Prospects for Peace
We judge it likely that fighting will continue for at
least several more months:
� The CIF-WNA alliance appears solid by Golden
Triangle standards and is unlikely to end its attacks
on the SUA any time soon. The CIF leadership
views the current conflict as essential in regaining
the group's share of the narcotics trade, and WNA
leaders want to reopen their opium and jade routes
to the border.
� Friction between the SUA and TRA leadership has
made this alliance more shaky, but the SUA could
probably hold its territory even if the TRA broke
away. TRA units are not directly responsible for
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Shan United Army (SUA) Clashes with Opposition Coalition (CIF and TRA)
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protecting coalition strongpoints, and a TRA
defection will not leave large gaps in the SUA's
defenses.
� Thai Army support has been crucial in allowing the
CIF-WNA to battle the SUA to a stalemate.
Embassy reporting indicates the Thai Army allows
the CIF easy access to Thai sources of weapons and
ammunition and has assisted WNA leaders in
planning operations against the SUA. We expect
this pro-CIF bias to continue as long as the SUA
remains dominant and the CIF does not regain its
former position as a major heroin producer.
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� Both sides have been conserving their resources and
avoiding protracted setpiece battles. The coalitions
let months pass between engagements, using the
time to bolster their coalitions and fortify positions.
� A recent series of assassinations of SUA and CIF-
WNA officials has raised the level of tension in
border communities and is likely to prolong the
conflict. Following a failed attempt on the life of
CIF leader Gen. Li Wen-Huan in 1984, the CIF
assassinated a number of SUA brokers and
operatives. Both sides have now deployed hit teams
to eliminate key enemy personnel.
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Accommodation Likely
SUA reaction to establishment of the CIF refinery
complex at Ang Khan will indicate the longer term
course of the conflict. The refinery represents a major
step toward rebuilding the CIF cross-border
marketing chain. SUA
leaders have intensified efforts to attack caravans
supplying the refineries but have yet to attack the
complex. Attacking the complex would demonstrate
that SUA leaders still believe they can maintain their
monopoly over border trafficking. SUA inaction,
however, would indicate tacit acceptance of the CIF
network and signal a change to more competitive
border trafficking characteristic of the 1970s.
In our judgment, the SUA ultimately will seek some
sort of an accommodation�perhaps losing some
narcotics income while maintaining control over
pricing. Prolonged fighting has drained SUA
resources and increased costs of acquiring opium from
the northern Shan State and moving heroin to the
Thai market. The CIF-WNA alliance has shown
more staying power than SUA leaders expected, and
CIF strategy is one of patience, designed to prolong
the conflict and force such a favorable compromise. If
the CIF-WNA is able to intensify its military
pressure and retake some key border positions, the
SUA may be unable to prevent competitors from
resuming full-scale trafficking along the border
lacked the marketing infrastructure to become a
major force in the regional heroin market. During the
last two years, it has increased, its processing capacity
in the northern Shan State and has worked to expand
its marketing networks out of the Golden Triangle.
Fighting also has spurred the use of smuggling
routes�particularly through Burma and India�that
bypass the Thai-Burmese border. Increased use of
these routes will complicate interdiction efforts in the
region and contribute to the involvement of Indian
and Nepalese networks, which have better
connections in Great Britain, Canada, and the United
States than do ethnic Chinese.
Impact on the Heroin Trade
In our judgment, if the SUA is forced to open
trafficking routes to its competitors, regional heroin
availability will increase and wholesale prices in
Thailand will drop. The SUA has been using its
monopoly to hold back narcotics from the market to
drive up prices. With more groups operating on the
border, it will be forced to compete as a supplier to
Thai middlemen. Increased competition will reduce
the profitability of wholesale border trafficking and
probably push traffickers to increase their control
further along the marketing chain, where profits are
greater.
The BCP may be the big winner in the conflict. For
several years, the BCP has controlled much of the
opium moving to border refineries but has always
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