From Golden Triangle to Economic Quadrangle: Evaluating Economic Development Schemes From A Historical Perspective

C. Patterson Giersch

International Security Studies at Yale University

December, 1997

Introduction

As the economy in the People's Republic of China (PRC) rapidly develops, policymakers in several provinces have recently promoted cross-border trade and investment, most notably between the northeastern provinces and Russia as well as the southwestern provinces and Southeast Asia. By designating special investment regions, lowering tariffs on certain goods, offering tax exemption for transshipments, and generally encouraging commodities and people to cross the national boundaries, the Chinese government is hoping this trade will help alleviate the disparity between interior regions' stagnant growth and the booming coastal economy. A Chinese government policy of supporting investment in the isolated interior provinces, especially those with large minority (non-Han Chinese) populations, runs concurrently to the promotion of cross-border trade.

These two policies intersect in the minority strongholds along Yunnan Province's western and southern periphery. This highland region where China meets Southeast Asia is full of contradictions. Rugged and remote, it has been an important battleground and trade nexus for centuries. Its reputation as the "Golden Triangle" where fortunes are founded on the narcotics trade cloaks a region where most people live in poverty and eke out subsistence livelihoods. Comprising as it does the isolated borderlands of four nations, the region has, in the dreams of many, become the heartland of a potential economic powerhouse uniting Southeast Asia and China.

This paper presents the economic development schemes and increasing international trade in the "Upland Economic Quadrangle" or "Upland EQ" -- a region specifically encompassing Yunnan Province's southwestern border from Tengchong and Baoshan to Simao and Mengla; Northeast Burma's Kayah, Shan, and Kachin States; Laos's Phôngsali, Louang Namtha, Bokeo, Oudômxai, Louangphrabang, and Xaignabouri Provinces; and Thailand's Mae Hong Son, Chiang Mai, Chiang Rai, Phayao, and Nan Provinces -- in order to evaluate the potential effects on the people and economy of the area. The term "Economic Quadrangle" (sometimes called the Golden Quadrangle) has its origins at the Chiang Rai (Thailand) Chamber of Commerce whose members think it a more desirable moniker than the infamous "Golden Triangle" to describe the area of potential economic growth and development including Yunnan, Burma, Laos, and Thailand. ₁ By borrowing and narrowing this term to mean only the Upland EQ, I will combine analysis of three different development schemes and how they might affect the remote upland areas.

The first scheme considered is China's domestic program designed to boost living standards in the underdeveloped and impoverished Yunnan periphery inhabited by many non-Han Chinese. The second scheme refers to bilateral trade and investment agreements in the larger, cross-border region including Yunnan, and the other three nations. Thai proponents of this scheme hope to create international trade and investment networks to help redress national economic imbalances which have favored development in Bangkok but left behind other areas, including the north. PRC and Yunnan Province officials have embraced the regional trade concept as a viable way to promote economic development in landlocked Yunnan. The third and final scheme considered here is the Asian Development Bank's (ADB) program of development in the Greater Mekong Subregion (GMS) and its numerous (almost 100) projects. The GMS includes all nations which share the Mekong River basin -- China, Burma, Laos, Thailand, Cambodia, and Vietnam -- but analysis is restricted here to projects which affect the Upland Economic Quadrangle.

The challenges of promoting balanced, sustainable development in the Upland EQ include overcoming climate and topography, ethnicity and insurgency, drugs and poverty. Despite these problems, a tremendous increase in legal trade flowing among the four nations has already occurred over the past decade. Contributing to this growth may be the fact that trade in this area is not new but a revitalization of intercourse (albeit with changes) in a region historically integrated by common cultures and economy. Until the nineteenth century, China, Siam (Thailand), and Burma shared suzerainty in the region by claiming spheres of influence to be used as buffers between their respective empires. Boundaries between the spheres were neither rigidly drawn nor enforced, and goods and people flowed relatively freely. Even the processes of imperialism and nation-state formation during the late nineteenth and twentieth centuries, which more clearly demarcated the divisions between modern Burma, China, Laos, and Thailand, have not eradicated the earlier forces of local integration in this shared region.

If shared regional history have facilitated the growth of trade in the Economic Quadrangle during the late twentieth century, other factors have impeded or slowed growth. To open the frontiers to trade considered legitimate by the central governments, the four nations have had to face the suspicion and defensiveness bred by centuries of conflict in the region and reinforced by the Cold War which, as recently as the mid-1970s, had firmly divided each nation from the other three. Negotiation of bilateral and multilateral agreements to develop trade and industry represents a fundamental shift from the region's history as a place of confrontation between the Burmese, Siamese, and Chinese empires.

Because the historical background provides a foundation for understanding the challenges of present development in the Upland EQ, this paper carefully introduces historical context before moving on to consider the development schemes themselves. Part I summarizes Chinese, Burmese, Lao, and Thai relations with the region from the eighteenth through late twentieth centuries. Part II then examines the three development schemes from 1984-1996. The study concentrates on China in order to narrow and give depth to the analysis. Although the emphasis is on China, important initiatives by the other nations and major international organizations such as the Asian Development Bank (ADB) and United Nations (UN) are also presented. Finally, Part III hazards some predictions about the effect of increased investment and trade in the Upland EQ. First and foremost, can these ambitious schemes succeed? If they do, will the border regions prosper because of increased economic activity or will outside investors reap the largest rewards? Will economic development be "sustainable" -- as the UN and ADB hope -- or will development capital flow towards extractive industries such as mining and logging without pouring a broad, stable economic foundation? Will the Upland EQ become a transport corridor simply traversed by goods and merchants hurrying to other destinations? What are the political and social implications of building transport networks into a region once so isolated from bureaucratic centers?

 

 

Part I: Background

Region, Climate, and People

An estimate of the Upland EQ's area is 67,500 square miles. Geographically it includes the highlands and valleys (ranging in altitude 600-9000 feet) of northern Thailand, northwestern Laos, northeastern Burma, and southwestern Yunnan. The climate is tropical monsoon with a rainy season from May to October and a dry season from November to April. Despite the rugged landscape and malarial summer weather, human beings have moved about the upland area for centuries. Flowing north to south from the Tibetan Plateau through Yunnan and into Southeast Asia, the Irrawaddy, Salween, and Mekong river systems in particular have carved valley routes which merchants, monks, and soldiers have followed. Paths packed by generations of mule trains climb up and over the mountain ranges which separate the great rivers. From the fifteenth century on there is evidence that the region was linked in a vibrant trade network by the river valleys. ₂

Reflecting a rich melding of Chinese and Indian cultures, a diverse array of peoples inhabit the Upland Economic Quadrangle. Most of these ethnic groups do not occupy geographically discrete territories set neatly in one nation or another, but live scattered in homogenous villages situated amidst the villages of other cultures, an ethnic patchwork quilt of human habitation across the landscape. The different groups include Theravada Buddhist valley dwellers such as the Shan (Tai-Na), Tai-Lue, Thai, Burmans, and Lao. ₃ At higher elevations live traditionally animist tribal groups: Akha (Hani), Hmong (Miao), various Kachin (Jingpo) tribes, Karen, Karenni, Lahu, Lisu, Palaung, Pa-O, and Wa. For centuries, Han Chinese (often called Haw) have drifted across the frontier from Yunnan and settled in the hills of Burma, Laos, and Thailand. Among them are Chinese Muslims (Hui) who have often worked as muleteers and merchants, plying the routes linking the uplands. ₄

Political economy has joined with culture and language [see Table 1] to differentiate the groups. Lowlanders typically live in hierarchically organized villages and practice wet-rice cultivation. Irrigation and good soils have allowed them to settle permanently in their valleys. Highlanders such as the Kachin, studied extensively by Edmund Leach during the late 1940s, typically live in villages less hierarchically stratified. The Kachin, like many of the upland tribes, traditionally have practiced swidden (slash and burn) cultivation on marginal lands where surpluses come hard. They move to new plots every few years as they exhaust old soils. To supplement their income, the upland peoples developed complementary economic strategies: Kachin chiefs frequently extended their control over Shan villages in the valleys and collected rent. Many uplanders, especially the Wa, set up tolls on the mountain paths to demand fees from the trade caravans traveling between China and Burma. ₅ The Palaung of Burma have a reputation for cultivating tea, a crop easily adapted to hilly terrain. ₆

Table 1. The Ethnic Groups of the Upland Economic Quadrangle by Language Classification*
Family	Group	Language/Ethnic Group	Location
Miao-Yao**	---	Hmong (Miao)	Yunnan, Laos
Mon-Khmer	Palaungic	Palaung	Burma's Shan State; SW Yunnan
		Wa	Burma's Shan State; SW Yunnan
Sino-Tibetan	Chinese	Haw (Han Chinese)	Shan State, Thailand, Yunnan
	North Burma	Karen, Karenni	Burma, Thailand, Yunnan
	Tibeto-Burman	Burman	Burma, Yunnan
		Jinghpaw (one of the Kachin tribal languages)	Burma, Thailand, Yunnan
		Kachin (various dialects)	Burma, Thailand, Yunnan
		Akha, Lisu, Lahu	Burma, Thailand, Yunnan
Tai**	Southwestern	Lao	Laos
		Lue	Yunnan's Xishuangbanna, Burma, Laos, Thailand
		Shan (Na)	Yunnan's Dehong, Burma, Thailand
		Southern Thai	Thailand
*This table is a condensed form of tables found in Peter Kunstadter, "Burma: Introduction," in Southeast Asian Tribes, Minorities, and Nations, ed. Peter Kunstadter (Princeton, NJ: Princeton University Press, 1967), 81-88. Information on location of ethnic groups in Burma also comes from Lintner 1994, 77.
**As Kunstadter notes, there is controversy over the Tai and Miao-Yao languages. Some scholars do not consider them to be their own Language Families but classify them as Groups within the Sino-Tibetan Language Family. Kunstadter, "Burma: Introduction," 84.

The tribes have faced more than cyclical economic challenges; the upland groups have also had to adapt to long-term political and environmental changes in order to survive. Many Karen and Kachin men served in British army units after upper Burma fell to Great Britain in 1885. The Hmong of southwest China, Laos, and northern Thailand generally live at about 1000 meter elevations where they have traditionally grown dry rice, maize, and poppy, supplementing this agricultural production with herding, gathering, and hunting. As habitat has decreased over the last century, however, the Hmong have increasingly turned to cultivating their best cash crop -- opium. ₇

Understanding the climate and peoples is important to grasping the challenges of economic development in the Upland Economic Quadrangle. Yet, this information supplies only a static snapshot of a historically dynamic region. The area's political and economic history also provides important context for identifying what opportunities and difficulties await the investors and policymakers intent on transforming a place which has long existed in the seams between the Burmese, Chinese, and Thai states.

 

Political History of the Region, c. 1750-c. 1948

Scholars of premodern Burma, Thailand (Siam), and China such as Herold Wiens have consistently noticed that "[t]here was no real boundary in the modern sense of the term" where the Burmese, Siamese, and Qing (the Sino-Manchu dynasty ruling China from 1644-1911) empires intersected. ₈ Instead, as Thongchai Winichakul has demonstrated, there were separate Tai states governed by indigenous rulers based at Keng Tung, Chiang Mai, Jinghong, and many other sites located between the empires. ₉ These states maintained autonomy in domestic affairs but answered to the supreme kings (Burmese, Siamese, or Qing) in military and foreign matters. Which overlord the states answered to, however, could be confusing, for the suzerainty of Siam, Burma, and China overlapped. "All of the tiny [polities]. . .were also the [territories] of many overlords. . .They were weaker, more fragmented, yet autonomous in their relations to powerful ones." ₁₀ Although the great Asian powers confidently claimed jurisdiction over sectors within the region, there was still a great deal of activity in the Upland EQ over which they had no control. For the most part, the political entities in the Upland Economic Quadrangle were run by people ethnically different from each empire's ruling elite or majority and there was little identification with the central regimes.

The onslaught of European imperialism in the nineteenth century brought with it the demarcation of linear borders between Burma, China, Laos, and Siam. This initiated the integration of frontier territory into the major states.

The early years of the twentieth century were a watershed in the administrative history of Southeast Asia. The last corners of the area were being incorporated into the. . .large states that had been constructed. . .The European and Siamese central administrative services. . .kept a careful eye on the still indirectly ruled outlying areas. ₁₁

The British and French invasions of Burma and Indochina introduced the idea of the sovereign national territory, but there was no political infrastructure or ideology to make the peripheral peoples identify with the emerging states. The result was a quarrelsome cross-cultural marriage of European and Southeast Asian political systems, and the tensions arising from this union still influence the politics and economics of the Upland EQ today.

After invading northern Burma in 1885, for example, the British adopted a different approach towards governing northern Burma than they did in the Burmese heartland, even though the area was considered one colony. In southern Burma they deposed the king and restructured the government entirely. In the north, they signed agreements with traditional rulers, thus perpetuating indigenous authority. ₁₂

This dual ruling system perpetuated the ethnic and political divisions of traditional Burma and has contributed to the splintering of modern Burma. On one hand, the northern minorities have long harbored misgivings about incorporation into Burma. In the 1930s, as part of a movement to gain independence, Shan leaders tried to convince the British to separate the north from Burma. Karen nationalists also lobbied for more independence from Burma, even sending a delegation to Great Britain in 1946 to try (unsuccessfully) to secure a separate Karen state. ₁₃ Burman nationalists, on the other hand, have continuously opposed the secession of northern minority regions. ₁₄

As the date for Burma's independence from Britain (January 4, 1948) approached, an apparent solution to the tensions between ethnic Burmans and the northern minorities was reached. Kachin and Shan approved their incorporation into the proposed Union of Burma in return for a measure of autonomy. ₁₅ Despite this agreement, relations between the new government and ethnic groups was tenuous from the outset of independence. To mollify non-Burman ethnic groups, U Nu, the new leader of Burma, allowed the minority areas more and more autonomy. Neither side was satisfied, and mutual mistrust between Burmans and the northern minority groups has continued to divide the modern Burmese state.

Manchu and Chinese officials of the Qing dynasty (1644-1911), like their Burmese and British counterparts, never gained full authority over the Tai, Shan, and hilltribes of the Upland EQ region. The Qing had inherited claims to southwest Yunnan from their Ming (1368-1644) predecessors, but central government power still consisted of alliances -- backed by the threat of invasion -- with local, indigenous rulers. The indigenous rulers received official seals from Beijing, and, in return they paid tribute and defended the frontiers using their militia troops. During the 1720s, the Qing penchant for expansion and consolidation drove the court to try to increase military control over peripheral Yunnan. The results were mixed as violent warfare accompanied the overthrow of several indigenous rulers. These changes became permanent in some areas, but efforts to place a Qing garrison stationed deep in Tai territory near Jinghong failed twice -- in the 1720s and 1770s. ₁₆ South of Simao, therefore, many Tai leaders retained power, and Qing influence was indirect at best.

Incomplete authority over southwestern Yunnan became part of the imperial legacy to the various regimes of the Republican period (1911-1949). It was not until the 1950s, after civil war, that a Chinese state would try to consolidate fully its hold on the Yunnan frontier. In China as in Burma, there is a long history of incomplete central authority over the Upland EQ.

Premodern modes of political control in the upland region now part of modern Thailand and Laos repeat the pattern established above for Burma and China. Scholars of Southeast Asia agree that,

On the whole, the influence and control of the Burmese and Siamese monarchies in the. . .region were no stronger in 1885 than they had been a century earlier. Although they attempted to strengthen their position, essentially they did so within a traditional framework of suzerainty and vassalage. ₁₇

Even the French did not fully incorporate northern Laos within the rest of its holding in southern Indochina. In 1888-1893, for example, Louangphrabang came under dominion of the French resident. Until 1959, however, the French made few changes in the local political hierarchy, maintaining instead the authority of the ruling family. ₁₈

Nor did the Siamese directly administer the northern states such as Chiang Mai and Chiang Rai. Siam considered these areas to be protectorates but did not seek sovereignty over them. The Chakri dynasty (1782-present) had to confront invading Burmese armies a number of times at the end of the eighteenth century. Each time Siamese troops stabilized Chiang Mai, the local ruler was again able to reclaim authority. According to David Wyatt, this arrangement was typical for the Siamese kingdom:

In looking at Rama I's [r. 1782-1809] empire as a whole, one of its remarkable features is the large number of power centers that existed. Working from the outer layers inward, we encounter first a circle of semi-independent rulers who did little more than pay tribute to Bangkok. . .and who often paid tribute to other states as well. A second tier of states. . .was relatively more integrated into the Siamese system. In addition to paying tribute, they often were required to provide Siam with manpower for warfare or public works. . .and occasionally suffered Siamese interference in their internal affairs. ₁₉

Beginning in 1874, however, Bangkok embarked on a long process of centralization. The people of the northern tributaries did not easily accept this changing political order, and they often resisted. Not until the late 1880s did the Siamese begin to accumulate power in areas such as Chiang Mai, but even at the turn of the century there were often violent anti-tax movements in the north. ₂₀

In some ways, the Siamese were successful in incorporating their northern brethren into the state. They had by 1905, after all, reduced the indigenous leaders of the northern valley peoples to mere figureheads while the central government took over their traditional administrative roles. ₂₁ When Siam became Thailand in 1939, Chiang Mai and Chiang Rai were already part of the newly named state. But the cohesiveness of the new Thailand was illusory in other ways. Even after World War II, Bangkok was not satisfied that northern Tai and hilltribes areas were coherent parts of the state. Cultural differences between north and south were so persistent that in the 1950s, (see below) the government launched a series of nation-building initiatives designed to bind the north more tightly to the southern core.

Thus, by the middle of the twentieth century, none of the four states had succeeded in fully incorporating the upland areas into their modern states. Perhaps a Chinese scholar analyzing the efficacy of government efforts to replace indigenous rulers along the Yunnan frontier sums it up best: Although central government officials had been dispatched to govern border areas, Huang Guozhang wrote that even in 1944, "the indigenous rulers' power has not decreased in the slightest." ₂₂

 

History of the Region 1948-1980s: The Challenge of Domestic Integration, the Problem of Regional Disintegration

Domestic Integration

Despite the persistence of indigenous institutions, the late nineteenth and early twentieth centuries did bring change to the Upland Economic Quadrangle. The traditional Southeast Asian political arrangement of small, autonomous states beholden to large empires had nominally disappeared. Due to French and British influence, the borders between all four states were more clearly drawn. British Burma included the former states of Bhamo and Keng Tung; modern Thailand included Chiang Mai and Chiang Rai; the French had annexed northern Lao areas such as Louangphrabang; China had demarcated boundaries with the French and British so that it ruled the Tai states centered at Jinghong and Ruili. Yet, the old political order survived in modified form. Indigenous rulers still held power in Burma's Shan states, in Jinghong, and in Louangphrabang. In the second half of the twentieth century, the Burmese, Chinese, Lao, and Thai governments still faced the issue of how to incorporate more fully the upland areas into their states.

As independent Burma emerged in 1948, the controversial relationship between the Burman majority and the Kachin, Karen, Shan, and other northern populations remained unsolved. By late 1956, Shan leaders were embracing secession as the best solution to their disaffection with Rangoon. By November 1959, Shan insurgents even had taken military action against the state. ₂₃ During this period of uncertainty, the U Nu government continued to conduct negotiations with the Shan, but a military coup in 1962, led by Ne Win, changed all of this. Coup leaders arrested and executed Shan leaders, thereby contributing to an increase in insurgency in the north. ₂₄

From 1962 to the early 1990s, insurgency has defined the relations between successive Burmese governments and Northeast Burma. The Burmese insurgent groups primarily formed themselves along ethnic lines, though the communist movement and several larger front organizations have been forums in which the diverse ethnic armies could act together. In Northeast Burma, the Shan, Kachin, Chinese, Wa, and Karen all organized political and military structures in opposition to Rangoon [see Table 2].

Table 2. Major Insurgency Groups in the Burmese Sector of the Upland Economic Quadrangle, 1948-1996*
Organization	Primary Ethnic Group	Founded (Disbanded)	Notes
Democratic Alliance of coalition Burma		1988	included all major NDF Burma members plus Burman student and Muslim groups
Communist Party of Burma (CPB)	Chinese, Wa	1939 (1989)	operated with Chinese support Burma (CPB) until early 1980s
Kachin Independence Organization/Army (KIA)	Kachin	1961	signed peace treaty with SLORC in 1991
Karen National Association (KNA)	Karen	1881
Karen National Defense Organization (KNDO)	Karen	1947	name has changed over the years but KNDO is still a military wing of the KNU
Karen National Union (KNU)	Karen	1947	the umbrella organization for Karen resistance since 1949
Möng Tai Army (MTA)	Chinese	1985 (1996)	formed by SUA, SURA, and part of SSA. Its leader, Khun Sa, surrendered in Jan. 1996.
National Democratic Front (NDF)	coalition	1976	Has included KNU, KIO plus Karenni, Lahu, Pa-O, Shan, Mon, Wa and other groups.
Shan State Army (SSA)	Shan	1964	formed from earlier Shan and Kokang Chinese groups; made peace with SLORC in 1989
Shan United Army (SUA)	Chinese	1972 (1985)	Khun Sa's group; joined with part of SSA and SURA in 1985 to form Möng Tai Army
Shan United Revolutionary Army (SURA)	Shan	1969 (1985)	merged with part of SSA and SUA in 1985 to form MTA.
United Wa State Party/Army	Wa	1989	formed by two former CPB leaders
*Table is primarily a condensed version of Bertil Lintner's extremely thorough "Appendix 3: Rebel Armies and Other Anti-Government Groups in Burma." See Lintner 1994, 421-437. Other information comes from Boucaud and Boucaud 1992, 55, 206; Lintner 1994, 185-186, 189-190.

A constant state of warfare between the state and insurgents contributed to the poor performance of the Burmese economy. Ne Win's economic policies also stunted growth. Labeled the "Burmese Way to Socialism," these policies promoted economic centralization. This in turn contributed to a slowdown and inflation which threatened Burmese livelihoods for over a decade. Government attempts to control the economy did create a robust black market. In the north, insurgents exported teak, minerals, jade, and opium and also collected tolls (an ancient practice) on goods coming in from Thailand. ₂₅ Black market trade based on export of raw materials and narcotics, however, did not provide the foundations for a healthy economy. Profits were often channeled into arms purchases.

When the government relented and allowed some market influence back into the economy in 1974, the economy showed good growth. But declining world rice prices crippled Burma's major legal export and caused economic collapse in 1983. Overall, the decades after World War II were disastrous for Burma. A Burmese economy that was 28% larger than Thailand's before the war slipped to one-half the size in 1962 and 1/5 by 1987. ₂₆ Just as the economic crisis deepened in the early 1980s, insurgents in the north revitalized their attacks. ₂₇ Politically and economically, the Union of Burma was a state struggling to maintain itself, especially in the north.

In contrast, the government of the People's Republic of China, established after the communists won the civil war in 1949, has generally proven to be a strong, centralizing authority. More than any prior regime, the Communist Party has been determined to increase control over "minority nationalities" (non-Chinese ethnic groups). During the early 1950s the PRC deposed local leaders in southwestern Yunnan and converted indigenous strongholds into standard administrative regions. Land reform in 1955-1956 further undermined indigenous elites. ₂₈

Despite the government's success in enforcing political changes in peripheral Yunnan, local identification with and support of the regime in Beijing remains questionable. During the Cultural Revolution (1966-early 1970s) many minorities fled across the borders to Burma and Thailand. An obsession with portraying strong minority commitment to the state reveals Beijing's concern. Chinese scholarly and journalistic literature teaching nationalism to or demonstrating the nationalism of minorities, including groups along the Yunnan frontier, flourishes. ₂₉

The PRC government's efforts in peripheral Yunnan, nevertheless, have helped politically to integrate the region more effectively into China. Compared to Tibet or Xinjiang, there are few examples of separatist movements. Economic integration, on the other hand, has remained more tenuous. Throughout China, minority nationality regions have experienced slower economic growth and consistently have lower standards of living than the average for Han Chinese areas. ₃₀ Southwestern Yunnan is one of these impoverished minority areas. ₃₁ The region had historically conducted more trade with Southeast Asia than with China. Since its political incorporation into the PRC, there has not yet been a shift to full economic integration into the Chinese market place.

The pattern of incomplete integration is repeated in Laos and Thailand. When, after 12 years of civil war, the Pathet Lao ("Nation of Laos") movement succeeded in overthrowing the royal government in 1975, they inherited a Laos which was poor and sparsely populated. This was particularly true of the upland north where most of the hilltribes practiced subsistence swidden agriculture. The nation was in no position to address these problems since they entire economy collapsed after the war. Laos survived by relying on goods airlifted from Vietnam and the Soviet Union, but its economy failed to rebound under a new command structure. Collectivization fared poorly, and GNP dropped. ₃₂

As Bangkok began in the nineteenth century to integrate the northern valley areas around Chiang Mai and Chiang Rai, the mountain areas, home to the non-Tai hill tribes, remained apart from these changes. This is not to say that the areas were isolated -- Haw merchants and Thai petty traders often acted the middle men in the tribes' trade relations with the low lands. Tribesmen, however, remained unsurveyed by the government; they paid no taxes, nor served in the armed forces.

This began to change in 1959, when the Thai government, with U.S. support, started reaching out to the hill tribes. The government's goals included promoting economic and social development among the tribes, including reducing their isolation and encouraging nationalistic feeling for Thailand. Efforts to incorporate the hilltribes were not necessarily altruistic in origin. Cold War fervor had sparked Thai and U.S. interests. ₃₃ The governments tried to alleviate poverty and illiteracy, conditions considered to ease communist recruitment. The programs provided propaganda, often newsreels on Thailand as well as American feature films, to help cultivate a sense of "nation-belonging." ₃₄

Success in economic development as well as political incorporation have not come easily. The policies of integrating Northeast Thailand economically, especially through a concentration on irrigation and transportation infrastructure during 1961-71, did not have much success. ₃₅ Political integration of the uplands has also been sporadic. Nicholas Tapp in his fieldwork among Hmong tribes in Chiang Mai province during the 1980s was struck by the lack of a government presence. Tapp's comments mirror those of Michael Moerman who had conducted fieldwork in northern Thailand two decades earlier, during 1959-1960. Deborah Tooker, whose research took her into Akha areas of Chiang Rai from 1982-1985, has even compared "the degree of control that the state exerted [in Akha areas] . . .[as] akin to what the traditional rulers called for when they asked for tribute. . .or corvée," though she also acknowledges that "these conditions are changing as the nation-state expands into these areas. . ." ₃₆ These observations are instructive. Even in Thailand, the most economically developed of the four nations, political and economic integration will be challenges to overcome if the local people of the Upland EQ are to participate fully in the economic schemes being developed for the region.

Regional Relations

The international prominence of Southeast Asia during the post-World War II decades complicated intra-regional relations. Immediately after the Chinese Revolution ended in 1949, defeated Nationalist troops began filtering into northern Burma from Yunnan Province. From the Burmese bases, these troops launched several attacks on Yunnan during 1951 and 1952, but were driven back each time. Nationalist commanders partially supported their soldiers by selling opium, but they also received aide from the CIA. Subsequent withdrawals in 1953-54 failed to repatriate all the Nationalist troops to Taiwan. Finally, in 1961, a joint PRC and Burmese attack managed to dislodge most of the Nationalists from their strongholds in the Shan State.

The CIA did not confine its involvement in Burma to supporting Nationalist troops. Shan insurgent groups also received supplies from the CIA. The CIA even used insurgents to fight against the Pathet Lao. ₃₇ Thailand and China joined the United States and Taiwan as foreign powers actively involved in the crowded arena of northern Burma. The Thai government cultivated ties with Burmese ethnic insurgents, using certain Shan groups as intelligence sources. Bangkok even let Shan fighters live in Thai territory during the 1970s. Not until 1982, under pressure from a U.S. government grown wary of the international drug trade, did Thai troops drive the Shan back into Burma. ₃₈ Meanwhile, the PRC maintained support of communist forces in Burma from the 1960s until the mid-1980s. ₃₉

Cross-border political involvement such as the PRC's and Thailand's in Burma has been the rule rather than the exception in the Upland EQ. Laos's close ties to Vietnam and the Soviet Union after 1974 all but guaranteed it poor relations with Thailand, but the fact that Laos harbored Communist Party Thailand members was a direct insult to Bangkok. To further complicate Laos's intra-regional relations, moreover, it allowed the Vietnamese to station tens of thousands of troops in Laos, most near the Laos-China border. This made both Beijing and Bangkok nervous. ₄₀

During the Vietnam War, Sino-Thai relations were also strained. In the late 1970s, then, the region was fragmented. It is only due to astounding economic changes in the three socialist nations and a gradual warming in intra-regional relations since 1980 that ideas for the EQ have been able to develop. It is important to remember, however, that the actual implementation of these ideas -- the nascent economic and trade development of the 1990s -- is being built on a fragile base.

 

The Region from c. 1978-1993, Laying the Economic and Foreign Relations Groundwork for Cooperation

Deng Xiaoping's institution of "reform and openness" (gaige kaifang ) in China beginning in the mid-1980s urged provincial and local officials to "seek your own supply of goods; seek your own markets; conduct your own negotiations; try to affect your own balance [of trade]; assume the responsibilities." More than just a collection of catchy phrases, the modification of the command economy has loosed a torrent of change within Chinese society. As part of the process, local governments and private citizens have pursued business opportunities outside the state-run industries. The turn away from a centralized economy has affected peripheral Yunnan in two ways. First, overland trade with Burma, Laos, and Thailand has developed from small-time agricultural trade and black market smuggling to a legitimate, high volume international trade. Second, part of the Deng regime's goal in introducing market reforms seems to be a genuine desire to raise Chinese standards of living. This does not always take precedence, but it has helped focus attention in Yunnan on impoverished peripheral areas. Plans to develop the economic infrastructure of these areas are part of the "reform and openness" drive.

Provincial and local administrations began in the 1980s to institute border trade policies to take advantage of Yunnan's location at the edge of Southeast Asia. ₄₁ Provincial authorities designated Ruili and Wanding a "border trade area" in 1985, meaning that people could legally carry on trade with Burma. Through the early 90s, other areas have joined Ruili and Wanding as "Provincial Level Ports shengji kou'an" -- towns from which the provincial government allows trade with Burma.

When Deng Xiaoping visited Guangdong Province in January, 1992, he conferred legitimacy on regional, market-oriented development. The ramifications for Yunnan were immense. During the same period, Minister of Economics Zhu Rongji was in Yunnan -- including Jinghong -- to review economic developments in the Southwest. Like Deng in Guangdong, Zhu was in effect giving central government approval to Yunnan's border trade policies. Later that year, the State Council began to authorize cities in Yunnan to be "National Level Ports guojiaji kou'an," giving central government approval to allow people and goods to cross the frontier with Burma through the ports. Several places, including Kunming, Ruili, and Wanding, were extended the same preferential policies for investment and trade which governed the coastal Special Economic Zones. ₄₂

A Sino-Burmese trade agreement in 1988 boosted the volume of commerce even further. By 1992, over 80% of Yunnan border trade was with Burma, and Yunnan's largest overall export market, comprising 33% of exports, is Burma. ₄₃ A similar relationship with Laos has developed more slowly. The Chinese and Laotians concluded an agreement for border trade in 1989, but did not hold talks on how to implement it until spring 1992 and winter 1993. ₄₄ The Yunnan-Laos border did not have a National Level Port until June 1993 when Mengla was so designated. The trade is, in part, aimed at stimulating growth in Yunnan's minority border areas. Chinese scholars and statesmen officially claim that "the Yunnan minority nationality problem (poverty, underdevelopment) is essentially an economic problem." ₄₅

 

 

Part 2: The Upland Economic Quadrangle, 1984-1996

1. China's Domestic Development Initiatives

Transport, Communications, and Energy Infrastructure

The Upland EQ's greatest economic disadvantage is its limited transport network. The roads, especially in Laos, are scarce and in poor condition. During the rainy season many are impassable. Railroads do not exist in the heart of the Quadrangle. None of the rivers can carry significant traffic during the dry season. An important part of international and PRC efforts to develop Yunnan's border, then, is in the transport sector, primarily by upgrading roads. The roadwork will help improve both trade volume and the speed with which goods and people move.

The Chinese national and Yunnan provincial governments have already invested in roadwork to improve connections from the provincial capital, Kunming, west to Ruili and south to Mengla. In 1994, it took 27 hours by overnight bus to travel the approximately 558 miles from Kunming to Wanding and Ruili, for an extremely slow average speed of just over 20 mph. The national government is subsidizing the improvement of route 320 (which runs from Wanding to Kunming) in order to speed up traffic. The Eighth Five Year Plan (1991-1995) called for the completion of work on six major Yunnan roadways, including Route 320 and the road to Jinghong. ₄₆ Construction on 320 was well underway when I visited in August 1994, though it seemed improbable that they could complete it by 1995. Work on the road to Jinghong (visited in 2/95) was progressing more slowly.

Chinese planners hope to develop other transport networks as well. By 2000, they intend to make the Lancang (the name of the Mekong in China) navigable year-round. The central government and Yunnan are financing the necessary dredging. ₄₇ By the end of the 1995, officials had planned to finish expanding the Kunming, Xishuangbanna (Jinghong), Mangshi, Baoshan, and Simao airports. ₄₈

Although the Chinese government seems capable of funding remarkable portions of the transport infrastructure upgrade, they also have appealed to the Asian Development Bank (ADB) for help. ₄₉ At the third conference on GMS development in 1994, the ADB made "high priority" several road projects that link China to Southeast Asia, including the Chiang Rai-Kunming Road Improvement Project and the Kunming-Lashio Road System Improvement Project (see below). As of May 1996, however, the ADB had just posted a notice requesting proposals for a feasibility study to assess the work on the Jinghong stretch of the Chiang Rai-Kunming Road and to prepare the project for external financing. ₅₀ In other words, these multilateral projects are moving slowly, and the Chinese are funding the present projects on their own.

Local governments also contribute large amounts of revenue to building infrastructure. Dehong zhou (which includes Ruili and Wanding) spent one billion RMB on electricity and road improvements during the early and mid-1990s. Ruili also constructed five city streets in 1991. ₅₁ Besides transport, local and provincial officials have been working on other types of infrastructure, especially communications to connect and electricity to power the growing towns of the Yunnan border. The French company SAT was hired to lay fiber optical cable for a telecommunications network in the Mangshi area. The Post and Telecom Office in Mangshi is charged with oversight and management of this project even though SAT's contract is with the provincial post in Kunming. ₅₂ Wanding city (pop. 9,891 in 1991) had about 400 phones in 1990, but by 1994 the number had grown to 5,000. The city's new digital phone network was installed by a Canadian firm with provincial, zhou, and city funding. ₅₃ The Ruili government has tried to attract investment as it has expanded electricity and water supply capacity to meet shortages arising from the city's growth from 4.2 square kilometers in 1985 to 10 square kilometers in 1992. ₅₄

Hydroelectricity may well become one of the region's most important exports. The Lancang (Mekong) River basin in particular could provide thousands of megawatts (MW) for the quickly expanding economies of South China (especially Guangdong Province) and Thailand. At the moment, Yunnan Province has plans for eight hydropower stations which would need fifteen dams along the upper Mekong basin. These include a 1,000 MW plant (Manwan #3) already on-line; a 1,260 MW plant (Dachaoshan) already being jointly built by Yunnan, Guangdong, and the national government; a planned 1,500 MW plant (Jinghong) to be jointly built by Thailand and Yunnan, beginning in 1998; and a planned 4,200 MW plant (Xiaowan) which would power Guangdong, Yunnan, and Thailand. The projects, however, are highly controversial since they would displace many villages and could drastically affect water flows on the Laotian, Cambodian, and Vietnamese stretches of the Mekong. ₅₅ This controversy is only one of the many challenges facing development in the region.

China's Promotion of Border Trade

Trade between China and Southeast Asia has existed for centuries. A sixteenth-century traveler witnessed border markets along the Irrawaddy, southwest of Tengchong, where tens of thousands of merchants and itinerant Chinese craftsmen sold their goods and skills. ₅₆ Trade in cotton and agricultural goods has continued into the twentieth century despite Cold War friction which slowed, but did not stop, the flow of goods and people across the frontiers. As Deng Xiaoping's regime consolidated its power in post-Mao China, it encouraged economic liberalization including the reestablishment of legal border trade with Burma, Laos, and Thailand. This new border trade has two dimensions -- small-scale local trade between people inhabiting both sides of the frontier and large-scale trade between Kunming-based or China-wide companies and large companies across the border. Only the former is guaranteed to impact local societies.

The small-scale, localized trade has an almost casual air. Wanding residents, for instance, simply sign in at the police station, show their identification, and walk across to Burma. Markets on both sides offer goods for everyday life: bamboo, cotton, food, beans from Burma, Tengchong soap and matches, underwear, milk powder, and household products from Yunnan. From 1985 to 1992, people conducted much of this trade without currency. Money and the finished products which now augment the barter economy and raw materials have appeared slowly. ₅₇

These open borders, however, signal more than the rebirth of trade between Yunnan and Southeast Asia. It is also the lifting of restrictions on culture in a region united by language, religion, and geography. Theravada Buddhism is an important part of that unity. In 1995, I witnessed a Thai monk presiding over a temple opening near Damenglong, south of Jinghong. Cultural exchange aside, there is the important question of how much border trade is really benefitting local populations. Local small-scale trade makes up what percentage of overall border trade? Locals benefit from what percentage of large-scale trade transactions?

The impact is difficult to measure because the trade statistics are incomplete or suspect. In 1992, provincial government estimates placed large-scale border trade at 2.22 billion RMB and total border trade at 2.27 million RMB. ₅₈ If this is correct, then local trade accounted for only 50 million RMB or about 2.2% of the total, not an encouraging figure for local people. The U.S. Consulate in Chengdu, Sichuan, on the other hand, recorded the figure 2.24 billion RMB for Yunnan's 1994 large-scale border trade. At the same time they acknowledged that local leaders had estimated total border trade at 3.5 billion RMB. ₅₉ If these figures are accurate, then small-scale local trade represented over one-third of the total -- again an unconfirmed conclusion due to the uncertainty of the statistics. One last estimate comes from Xishuangbanna zhou (with its governmental seat at Jinghong): In 1993 the total import/export figure for border trade was 312.74 million RMB; local small-scale trade was 77.88 million RMB. Therefore, local small-scale trade constituted about 15.8% of the 490.62 million RMB total. ₆₀ Using these suspect numbers it is possible to estimate that the local people of the Yunnan periphery are generating roughly just under 20% of the total border trade.

Measurements of local involvement in the large-scale trade are even more difficult. Wanding city officials estimate that in 1994 one-third of the 152 border trade firms in Wanding were locally owned, one-third owned by residents of other Yunnan locales, and one-third owned by people from outside the province. ₆₁ This estimate does not differentiate capitalization of the firms and may be overly optimistic. Researchers from the Institute of Foreign Economic Relations (Duiwai jingji guangxi yanjiushi), part of the Yunnan Academy of Social Sciences in Kunming, admit that most Yunnan border trade is carried out by people from outside the peripheries. They believe, however, that outside investment indirectly benefits locals by expanding the regional economy -- something local minority peoples, it is argued, could not do if left to themselves. Like many Han Chinese, some of the researchers question the ability of minorities to participate in the expanding trade, believing that they do not have the cultural habits necessary to immediately exploit market-oriented changes in the economy. ₆₂ It is debatable whether this is true or whether centuries of Chinese machinations have left these cultures politically and economically weakened. From a policy point of view, however, the attitude justifies allowing outside capital to crowd local peoples out.

When commodity flows are considered, it becomes more apparent that the frontier areas are simply conduits for goods originating elsewhere. In the early 1990s, goods and materials exported through Dehong included only 5% originating from within the zhou. Thirty-five percent came from elsewhere in Yunnan, and the remaining 60% came from other Chinese provinces. ₆₃ Much of the expensive goods imported from Burma and Laos -- timber, gem stones, jade, marine products, herbs, used cars -- do not stay in local areas but are transshipped to Kunming and beyond.

Even though it is hard to make a case that many local people benefit directly from the trade boom, a few trade centers are expanding rapidly. Many outside investors have opened offices in Ruili; several Sichuan Province cities and counties have trade offices there, as do the Chinese Police Development and Trade Company (Zhongjing fazhan maoyi gongsi). People from coastal provinces looking for work fill Ruili and Wanding. One Shanghai work unit (danwei) involved in silk production has sent two employees to Wanding to open a restaurant and hotel. Malaysians, Singaporeans, and Burmese are in the two towns and are involved in large and small scale ventures. One Hong Kong businessman has been attracted by the logging industry in northern Burma. He buys Burmese wood from the Wanding city yards and ships via Kunming to destinations throughout Asia. ₆₄

Overall, economic growth in Wanding has exploded with the onslaught of border trade. With about 90% of Wanding's growth relying on border trade, expansion has grown faster than loan facilities can handle, and so the national government has kept tight controls on lending. ₆₅ The frustration with tight credit is evident in conversations with local officials in Wanding who are responsible for development in their own jurisdictions and, thus, not as concerned with nation-wide inflation or over-extension of credit. Judging from the spate of articles in the government-controlled press as well as reports from the State Council admonishing banks and local governments for violating laws on raising capital, tight credit and illegal efforts to get around it are a national phenomenon. ₆₆

It remains to be proven that border trade will be the economic catalyst needed to improve standards of living throughout the Yunnan periphery. At present, only a few towns are enjoying the profits of the trade boom. Provincial government statistics show that Ruili and Wanding have enjoyed average annual income increases from 715 RMB and 1,268 RMB respectively in 1985 to 2,508 and 2,996 in 1992. Other areas within Dehong zhou are not as fortunate. One hundred miles north of Ruili is the Lianghe County seat. It is not situated on routes leading to Burma, nor is it a Provincial Level or National Level Port. During the period 1985-1992, its average income increased from 369 RMB to 514. ₆₇ For places like Lianghe, the PRC does have other programs designed for impoverished minority areas.

Targeting Minority Areas for Development and Investment

Demonstrably more successful in terms of developing border minority areas has been specific targeting of villages for investment. Some of these investment plans are remarkably diversified and thus fundamentally sound. In Cangyuan, a county with a large Wa population located southwest of Gengma, Party and government officials have embarked on programs to develop agricultural, mining, and tourism. By emphasizing production for the market and promoting the cultivation of a wide variety of crops -- tea, grain, sugarcane, rubber, specialty tobaccos, tropical fruits -- the county may have a better chance of weathering downturns in any one market. Mining of precious metals and coal will also help broaden the economic base. The officials have applied to the provincial government for Provincial Level Port status so that they might export goods directly to Burma. Meanwhile, the county has invested over 3.3 million RMB in road improvements and 6 million RMB in a 1.6 MW hydropower project. ₆₈

Other investment programs rely on a single cash crop. The Simao County Supply and Marketing Cooperative (Simaoxian gongxiaoshe) has opened a large coffee plantation and built a bean processing plant in Kaihe Village. The cooperative borrowed money from the World Bank, solicited outside capital, and detailed technicians to help with the project. The land is now producing coffee which is sold to a Guangdong company according to a long-term contract. The farmers working in the fields are earning about 100 RMB per month. ₆₉ In 1992, this put the farmers' annual income just below the average annual income (1,323 RMB) for Simao County, but well above the average annual income (698 RMB) of the nine other counties in Simao Administrative Region (Simao diqu). ₇₀

At the provincial and local levels, this type of development is politically important. Yunnan General Party Secretary Pu Chaozhu has stated that the province aims to have all citizens above the poverty line ("living comfortably xiaokang") by the year 2000. For minority nationality areas, he acknowledges, this will require a lot of work. ₇₁ At the same time, the state claims to have made progress in some areas by teaching minorities to produce tea, sugarcane, coffee, rubber, and fruit for the market. This commodity production has allowed certain areas to fund schools, public health projects, and satellite television dishes. ₇₂ Confirming the extent of this development is difficult from available data, but all signs point to it as the exception rather than the rule. Hiking through a rural valley of south of Jinghong, one sees acres of newly planted rubber plantations which might bring good profits to some farmers. Several miles away in the hills near the Burma border, men and women still clear and burn steep hillsides in the swidden tradition, hoping to produce food which will sustain them in the coming year.

Still, there are success stories. Mengma, a town in Menglian County with a population that is 78% minorities, is one. Originally an area with extremely low productive capacity, over last the few years its rural industry (xiangzhen qiye) productivity has improved at a rate faster than all but Kunming's. In 1978 Mengma farmers combined their land resources and issued each participant shares in the newly created Mengma Rubber Company. The town borrowed 800,000 RMB in start-up capital from the Menglian County Committee for Nationalities (Menglianxian minwei). The cooperative planted 219 hectares in rubber trees and constructed a refining factory. Today, 13,400 people out of 19,400 residents are shareholders in the company and/or work for the company. Sales in 1993 were over 5 million RMB with only half the trees in production. Elsewhere in Menglian county, towns have adopted the Mengma share holding model and begun to produce various cash crops. Already, there is a sugar refinery, and a tea and fruit processing plant. The debts accumulated by the county during this expansion have already been paid off. ₇₃

In Niuluohe village on the Sino-Laos border live 2000 Hani (Akha) and Lahu people. Before 1985, the village planted its 40 hectares of land in grains. Average annual income was subsistence level -- about 120 RMB. In 1985, the village and state farm began a joint-venture tea plantation. The village provided land and labor, the state farm provided supervisors and technical assistants; the ADB provided a start-up loan. By concentrating on improving production on 16 hectares of good land while planting tea bushes on another 60 hectares of poorer and reclaimed land, the village increase its per capita income. Tea revenue has allowed the village to build a road, an elementary school, and satellite dish. ₇₄

These investment projects seem to be successful models for rural development in Yunnan's minority regions. Government institutions provide capital and technical expertise to help villages transform their marginal lands to produce cash crops. There are, however, two important things to note. First, the information about all four of these examples are taken from state-run media which would make only the most optimistic presentation of each case. Second, three of the four projects -- Kaihe, Mengma, and Niuluohe -- presented as models of development rely on single crops. What will happen to these economies if their single cash crop fails or fall in price? How will Mengma, for instance, weather the current (October, 1996) downturn in world rubber prices?

In sum, the Chinese government -- national, provincial, and local -- considers border trade as a way to spur local economic development along the Yunnan periphery. The increasing trade has so far benefitted a few towns and people for other parts of the province and country. A separate project of investing specifically in minority nationality areas has proven more successful in developing the periphery. The extent of this program, however, has also been limited. If a tighter linkage of these two schemes could be effected then economic development might have a broader base and wider coverage throughout the upland region.

 

2. Bilateral Agreements and Cross-boundary Investment

Geopolitical shifts during the 1980s have changed the nature of regional interaction among the nations of the Upland EQ. Hostilities have slowly subsided; trade has exploded. From the Chinese national government's point of view, trade with Southeast Asia, whether by land or sea, is another step in its policy of economic liberalization. For Yunnan officials, it is a way to induce economic development in their land-locked province so that, unlike so many other interior provinces, it does not get left behind as the coastal provinces make Japan-like leaps in industrial production and standard of living levels. For people along the borders, it is a remarkable chance to take advantage of opening markets and to introduce economic expansion into their remote homes.

Good relations between Beijing and the other three nations is the foundation of the growth in legitimate Economic Quadrangle border trade. Relations between China and Burma have only been strengthened during the period 1993-1996. In February 1993, Chinese Foreign Minister Qian Qichen visited Burma, discussing regional problems with the generals of SLORC. It is ties such as these which have drawn Rangoon and Beijing closer and paved the way for trade with Burma. But as early as 1989, Yunnan Governor He Zhiqiang made an official swing through the nations of the EQ, including Burma. The province again sent a representative group to Burma in November 1994. Later that year, when Li Peng departed Beijing for Rangoon, He Zhiqiang accompanied him. This was a critical meeting in which Li held discussion on border, economic, and drug issues. A series of agreements over the use of the Mekong also came out of this visit. In a joint communiqué, China and Burma pledged to cooperate on trade, education, drugs, and security. ₇₅

Strong bilateral political and economic relations between China and the other three nations have relied not only on the national government, but also on provincial and local cross-border initiatives. In fact, in relations with all three nations, it is often difficult to tell which Chinese officials -- provincial or national -- are more important to the détente process. It was He Zhiqiang who initialed an agreement in Vientiane in 1989 calling for cooperation on Mekong shipping. The agreement was officially signed in Kunming in 1990. The Laotian ambassador to China stopped in Kunming in 1992 to visit with He Zhiqiang while their staffs discussed economic cooperation and border trade. The provincial government also sent a delegation to Laos in 1992 to implement a 1989 agreement on border trade. ₇₆

Even local-level officials negotiate with their cross-border peers. In 1992, Simao Administrative Region signed a science and technology exchange agreement with two Laotian provinces. ₇₇ This type of local level involvement with other nations has carried over into the business sector. In 1994, Simao's Lancang River Transport Company signed an agreement to lease three boats to Laos's Bokeo Province Tourism Company. ₇₈ By developing ties with the other nations of the EQ, government officials and businessmen at all levels are becoming involved.

The province is, in fact, planning to increase its investment in Southeast Asia. Scholars at the Yunnan Academy of Social Sciences (YASS) are bullish on trade with Burma, Laos, and Thailand. They are convinced that Yunnan can close the economic development and standard of living gaps with coastal provinces through trade with Southeast Asia and the development of Yunnan's natural resources. Their predictions rely on continued national government capitalization of infrastructure projects and the hope that improved transport links with Thailand will ultimately give Yunnan merchants access to the large Thai markets. ₇₉

YASS scholars do not simply analyze contemporary economic trends. Their institute is closely tied to the provincial government and operates as a government policy think-tank. Several of their number are responsible for developing plans for economic cooperation with Laos. The attraction to Laos for them is two-fold: the natural resources and the untapped consumer market. Northern Laos offers minerals, agricultural products, potential hydropower production, and acres of virgin forest. YASS publications urge Yunnan businessmen to get involved in Lao markets before Laos can close the "commodities gap" (i.e. catch up to Yunnan in production of consumer goods), thus making it more difficult for Yunnan products to claim large market shares.

YASS has developed a variety of strategies to take advantage of new opportunities in Laos. First, of course, is the development of transport routes. The three major roads leading from China into Laos (one via Mengla to Phôngsali, two to Louang Namtha) were constructed in 1970s but have not been well maintained. YASS urges the rebuilding of these roads, but does not stipulate how it might be done. ₈₀ YASS scholar Chen Tiejun not only sees Laos as a potential supplier of raw materials to Yunnan, but as a market for Yunnan goods and technology. He has suggested exporting technology, such as factory equipment, combined with the training of Laotians in its installation and repair. ₈₁ A major problem, however, is how to develop balanced trade when Laos's trade deficit is already enormous. In 1993, Lao exports (mostly hydro-electric power) amounted to US $108 million, but imports reached $250 million. ₈₂ Chen and his colleagues suggest several ways to handle Laos's lack of hard currency. First, Yunnan goods could be exported in exchange for real estate or stock options. Yunnan companies would lose short-term profits but gain on long-term investment and market share. Second, Chen hopes that People's Bank (a Chinese national bank) will consider giving low-interest loans to Laos to fund the development necessary to increase Chinese export trade. ₈₃

Other provincial initiatives serve to initiate bilateral trade and tourism industry ties. The Kunming Trade Fair (Kunjiaohui), begun in 1992 as a way to bring firms from around Southwest China and Southeast Asia together, has proven to be a venue in which border region companies can successfully negotiate agreements. During the 1994 fair, for example, the Simao Shipping Company (Simao diqu hangyun gongsi) signed a contract with Chiang Mai Province to lease six boats beginning in September 1994. ₈₄

Enthusiasm for regional development is not a Chinese monopoly. If the Chiang Rai (Thailand) Chamber of Commerce has its way, Yunnan-Thai business ties will only increase in the future. Like Yunnan Province, Chiang Rai officials hope to redress the economic imbalances within Thailand -- Bangkok has developed rapidly over the past several decades while the north has been left behind -- through overland trade and investment. The Chamber has talked of upgrading transport infrastructure, has lobbied the Thai government to reduce import barriers to Chinese goods, and has organized trips for businessmen to Yunnan. Chamber executives, however, admit that many of these initiatives have not been successful. ₈₅ Because of the many challenges posed by efforts to develop a rural, isolated region stretching across four nations and despite the impressive trade volume gains already recorded, the frustration felt by the Chamber is not unique. Their are several problems facing the Economic Quadrangle concept.

Problems in the Upland EQ

Lingering suspicions between the four nations still hamper the development of the EQ. There is concern over China's military alliance with Burma. Laos also seems to be reluctant to open its borders to unrestricted commerce. This is not to say that Laos does not take part in the development schemes; Vientiane has clearly stated its desire to develop road links between the countries of the region. Ministers hope, moreover, that promoting commerce will help to channel some economic development into the rural north. One of Vientiane's present projects is, in fact, to prepare the north for economic development by weaning swidden agriculturalists from their nomadic lifestyles and thus stabilizing population movement and deforestation rates. ₈₆ Government policies for attracting foreign capital show signs of encouraging cooperation: Taxes for foreign firms investing in important sectors, though still substantial, have been reduced. ₈₇ But even though logging rights and other privileges are dispersed to foreign firms, the Lao government remains wary. Thai citizens coming into Laos, for instance, must leave their cars behind since foreigners may not drive private cars into Laos. ₈₈ Laotians reportedly still regard all Thai with suspicion. ₈₉

Considering the past antagonisms in the region as well as the potential for exploitation of the weak Lao and Burmese economies (during the early 1990s Burma has suffered one of the highest deforestation rates in the world ₉₀ ), Lao caution is warranted. It is not hard, for example, to consider the YASS blueprint for trade with Laos as potentially detrimental to Lao economic interests. If all of the suggestions were implemented -- reliance on Laos for raw materials, trading goods for Lao real estate, and exporting surplus Yunnan labor to Laos -- Chinese economic influence in Laos could be immense. ₉₁ Already Yunnanese construction workers and stall owners as well as Chinese goods are pouring into Muong Sing, a small town northwest of Louang Namtha. And Chinese influence is not only economic; Laos hosts Chinese military advisors and listening posts, and the Lao military imports weapons from China since an agreement in 1993. ₉₂

It is the Burmese, though, who have more directly felt the pressure of the opening border with China. Some Burmese resent the influx of Chinese goods and merchants into their cities. ₉₃ But streams of people go the other way too. Police in Yunnan and Guangxi Provinces (Guangxi borders Vietnam) detained 12,000 illegal immigrants in 1994, most of them Vietnamese, Laotians, and Cambodians. ₉₄ The nations of the Economic Quadrangle, just like nations of the European Union, are encountering the difficulties which arise from international trade regions developing across fixed political boundaries. Porous trade boundaries may not always coexist well with rigid legal and military boundaries. The Southeast Asian drug trade may be the best example of the clash between the free flow of a commodity and differing political policies.

Heroin in the Upland EQ

Introduced to the Upland Economic Quadrangle region from China in the nineteenth century, the opium poppy and the drugs produced from it -- opium and heroin -- became important to the region during World War II. U.S. Army agencies operating in the China-India-Burma theater used opium as currency, a practice which initially boosted cultivation. The opium economy in Burma's Shan State grew larger in the 1950s due to Thai and CIA involvement. Selling opium helped pay for arms and supplies, and as other Burmese insurgents began to trade in opium and heroin, volume grew. ₉₅

In 1977, the U.S. government began pressuring Thailand to staunch the flow of narcotics coming out of the Golden Triangle. ₉₆ Yet production has continued to climb, even in the 1990s. ₉₇ There is, of course another side to the story. Heroin use in North America and Europe has recently become popular again, and insurgent groups in northern Burma have responded to increased demand. Somewhere around 70% of the heroin used in the U.S. comes from the Golden Triangle, and Burma produces about 98% of that total. ₉₈

Although many people hoping to spur on development in the Upland EQ condemn and try to prevent the drug trade, recent efforts at eradication have not succeeded. On the contrary, the cease-fires in Burma and the opening of borders to legitimate trade has, if anything, helped increase the volume of heroin leaving Burma. Preferring peace to interdiction, SLORC does not interfere with heroin production in regions governed by the insurgent groups with which it has concluded cease-fires. ₉₉ Rangoon has allowed UN Drug Control Programme (UNDCP) and UN Development Programme representatives to implement crop substitution programs in the Shan State, but not in areas controlled by major heroin producers such as the UWSA or Kokang Chinese militias. The government has also refused UNDCP requests to conduct aerial surveys which would help them target the major poppy crops. ₁₀₀

The development of trade between Burma and China has benefitted major drug traffickers in two ways. First, as legitimate trade from Burma into Yunnan increases, heroin smugglers have also begun shipping heroin, hidden among legal imports, via Yunnan to Guangdong and then to Hong Kong. The fact that ethnic Chinese (Haw) living in Burma have long been important traffickers makes this process easier. The Yang family of Kokang, despite the execution of Yang Maoxian by Chinese officials in 1994, has built one such heroin empire. Lin Mingxian and Zhang Zhiming, former Red Guards sent to Burma in the 1960s and left behind as intelligence agents in the 1970s, ship heroin through Thailand and Yunnan. ₁₀₁

Developing trade has further abetted drug traffickers by giving them legitimate investment vehicles through which to launder their money. Their legal business deals bring them into contact with government officials, giving them access to power and influence. SLORC members, for example, associate with drug traffickers in legitimate business deals, although there is no evidence that high-level Burmese officials have any connection to the drug trade. ₁₀₂

The development of the Yunnan route for heroin has taken place in spite of vigorous PRC efforts to prevent it. Police vigilance in Yunnan is particularly sharp: about 80% of all PRC heroin seizures are made in the province. Punishment for those caught with over 50 grams of heroin is public execution. Fifteen cities in Yunnan marked 1992 International Drug Prevention Day (June 6) by holding large public trials. Forty thousand people, including Governor He Zhiqiang, attended the trials at Kunming's Tuodong stadium. They watched as the President of the province's Higher People's Court sentenced 21 to death for drug smuggling. The convicts were taken to the execution ground and shot. ₁₀₃ These mass executions have become tradition each year since.

Chinese authorities have adopted the harsh punishments in an escalating war against drug trafficking. They have also implemented education and treatment programs designed to reduce domestic demand; China cooperates with the UNDCP and even the U.S. Drug Enforcement Agency to try to stop trafficking. ₁₀₄ Despite the well publicized executions, careful surveillance of vehicles leaving border areas, and massive campaigns to educate people against drugs and scare people about the consequences of trafficking (photos of smugglers condemned to die appear on bulletin boards outside public buildings in Yunnan cities), the flow continues.

Some Chinese are worried that the violence, addiction, and the Human Immuno-Deficiency Virus (HIV) which have come with the drug trade will adversely affect Yunnan's economic development. He Zhiqiang's remarks at Tuodong Stadium in 1992, in which he called drugs "a destructive element" in the province's economic development, and posters seen at the trials -- one exhorted people to "battle resolutely against the crime of drugs and safeguard the smooth advance of economic construction and [the policy of] 'reform and openness'" -- demonstrate this fear. ₁₀₅ Their fear is well-placed, for the expanding drug trade is helped by the opening of the borders and affects the region in complex ways.

In some areas of Burma, farmers rely on opium cultivation for their livelihood. Other crops or means of development have not yet proven plausible in these areas. ₁₀₆ Economic reliance on the production of powerful narcotics comes at a price. Burma and the UN estimate that as many as 150,000 Burmese in the north are addicted to opium or heroin. Concurrent rises in people infected by HIV have occurred, presumably because of intravenous drug use. Burma as a whole may have as many as 200,000 HIV positive people. ₁₀₇ HIV transmission is also at epidemic levels in Thailand, where the northern areas of Chiang Mai and Chiang Rai have particularly high rates of infection. ₁₀₈ Illness among Chinese is also on the rise. Dali, a major city in western Yunnan, had an estimated 600 heroin users (out of 40,000 inhabitants) in 1994. ₁₀₉ HIV infection rates in Ruili, the heroin-smuggling capital of Yunnan, are consistently the highest in China.

Injecting heroin is not the only way HIV is spreading throughout the highlands of Burma and Yunnan. The Thai sex industry, like the Burmese drug syndicates, has also taken advantage of the decrease in border restrictions. Procurers from the brothels of Chiang Mai and Bangkok comb the impoverished highland areas, bringing girls back from places like the Shan State's Keng Tung and Yunnan's Jinghong. Chinese police estimate that between 1989 and 1993, Thai brothel recruiters enticed as many as 5,000 Chinese women and girls, many of them Tai-Lue (Dai) or Akha (Hani), with false offers of jobs. ₁₁₀ In Thailand they enter an industry in which as many as 72% of the low class prostitutes carry the HIV virus. When they test positive for HIV, they are sent back to their highland homes. ₁₁₁ The deadly combination of prostitution and HIV may be sprouting in Yunnan, too. The allure of Tai and hill tribe women on the streets and in the massage parlors of Jinghong and outdoor brothels in Ruili make prostitution an important industry in areas where HIV has already spread through intravenous drug use.

In Yunnan, violent crime associated with drug trafficking has also increased. ₁₁₂ This is evident in the newspapers reports, in the night clubs of Kunming where bloody fights break out among rival drug gangs, and in the streets of Wanding where residents spread rumors of murders and attacks. Yunnan is earning a reputation in the nation as a whole: far away in Beijing, residents are leery of the Southwest, believing it a violent and lawless place. In this case, the hearsay contains a kernel of truth.

The unforeseen effects of liberalizing trade in the Upland EQ -- narcotics, HIV, and violence -- have affected some local societies severely. Would the Chinese government put greater restriction on trade in order to prevent these problems? Perhaps. Ironically, however, there are many political restriction still slowing trade in the region. Basic bureaucratic related snafus, corruption, and lethargy are all hindrances, too. Peter Hinton learned from the Chiang Rai Chamber of Commerce that Bangkok has not moved quickly to help reduce customs barriers to trade in the EQ. Chinese officials, despite the rhetoric from Kunming and local governments, have not always been helpful to Thai business tours, and Burmese officials have, at times, been downright hostile through their corrupt practices. ₁₁₃ Political uncertainty and insufficient infrastructure have contributed to a recent decline in Thai investment in the other nations of the EQ. ₁₁₄

It is precisely these problems which the ADB addresses at the multilateral level. In particular, infrastructure improvement, environmental protection, and bureaucratic streamlining are important elements in the GMS scheme.

 

3. Multi-lateral Plans and International Participation

The ADB's Attempts to Orchestrate Responsible Development

International involvement in the Mekong basin is not new. In the 1950s the UN established the Mekong Commission, which included Thailand, Laos, and Cambodia, to help spur development along the great river. It was not until 1995, however, that the three nations finally reached their first agreement on sharing the river's water. ₁₁₅ Similarly, the UNDCP first began a series of crop substitution programs in the Upland EQ in 1976. In the two decades since, overall poppy cultivation has expanded rather than contracted. ₁₁₆ Despite this track record, there has been another surge in interest among international organizations since 1992. This time although the UN, the World Bank, and International Monetary Fund are involved, it is an Asian-based organization -- the Asian Development Bank (ADB) -- which is the major proponent of investment in the Mekong basin.

Unlike a commercial bank, the ADB's primary functions are not just economic but socio-economic: 1) it makes loans and equity investments for the "economic and social advancement" of member countries, 2) it gives technical assistance to set up and carry out development projects, 3) it "catalyzes" public and private capital for development, 4) it works with other international groups which also promote development. The ADB's functions are all in service of its five objectives: promotion of economic growth, reduction of poverty, improvement of women's status, development of human resources, and sound management of natural resources. At the same time, the ADB markets itself as a fiscally responsible institution. "The bank adheres to prudent borrowing and lending practices." It monitors credit of borrowers and requires economic justification for each project. Of its several lending funds, only the Asian Development Fund is reserved for the poorest members who borrow interest free for 35-40 year periods, repaying only the principle and 1% annual service fees. ₁₁₇

One of the ADB's highest profile roles to date has been its efforts to bring together the countries of the Greater Mekong Subregion (GMS) -- Burma, Cambodia, China, Laos, Thailand, and Vietnam -- with private developers and government agencies to address the fundamental economic problems of the region. At the first two ministerial level conferences hosted by the ADB in 1992 and 1993, the bank brought the six nations together for consultation. "The role of the Bank in this initiative is largely that of a catalyst: encouraging dialogue, providing forums. . .and assisting, if requested, in. . .project identification and development," stated the ADB. ₁₁₈ From the beginning of ADB involvement in the GMS, however, their vision has been grander than this statement reveals. The goals of the ADB are economic cooperation and sustainable growth along with poverty reduction and environmental protection based on bilateral agreements and private sector involvement across a huge swath of Southeast Asia. ₁₁₉

A third GMS conference in 1994 claimed to move beyond consultation to study the feasibility and implementation of specific projects identified in 1993. The participating nations determined a number of important economic sectors in which to target development: Transport (Road, Water, Rail, Air), Energy, Environment and Natural Resource Management, Human Resource Development, Trade and Investment, Tourism, and Telecommunications [Table 3]. By choosing these sectors, the bank along with the nations involved seem to want to direct resources towards developing the infrastructure for trade (Transport, Energy, Telecommunications), improving education and health care among the local populations so that they might participate in the development (Human Resource Development), decrease the bureaucratic blocks to trade such as irrational customs regulations, etc. (via the Subregional Trade Working Committee to be established under the Trade and Investment Sector), and to do all of this without harming the environment. Meeting all of these goals will be difficult and expensive.

Table 3. Select ADB Projects in the Upland Economic Quadrangle*
Sector	Project Title (Estimated Cost, million US $)	Likely Financiers	Status***
Transport (Road)	Thailand-Lao-Viet Nam East West Corridor (49.7-83.1)		Work has begun; ADB seeking ing bids for environmental and engineering studies.
Yunnan	Chiang Rai-Kunming Road Improvement Project (353.3)	ADB, WB, NDF, UNCDF, UNCDF, J, F, A, UK, S**	Work by Chinese on side; ADB has not yet started feasibility study.
	Kunming-Lashio Road System Improvement (817.4)	ADB, WB, UNCDF, J**
Transport (Rail)	Yunnan-Thailand (1,300-1,800+)	"projected for private finance"**	Preliminary study done by Yunnan Province.
	Yunnan-Myanmar (600-700)		"in early planning stages"
Transport (Water)	Lancang-Mekong River Navigation Improvement (77)	Mekong Secretarial, ADB, A, D, Fi, Fr, J**	Several surveys completed.
Energy	Namtha Hydropower Prefeasibility Study in Lao PDR, Including Transmission Interconnection with Thailand (n.a)		Under study
Energy	Feasibility Study of Transmission Interconnection of the Jinghong		Jinghong dam not scheduled for construction until 1998
Environmental	Training Center for Environment and Resource Management (5)		Bank preparing short list of consultants who will implement project.
	Subregional Environmental Monitoring and Information System (4)	ADB, J*, UNEP***	Approved. Implementation being discussed as of 96/7/30-8/1***
	Sustainable Management of Forest Resources (n.a.)		First discussion of project, 96/7/30-8/1***
Human Resource Development	various projects in Education and Training
	HIV/AIDS prevention project	ADB, UNDP, WHO*
Trade and Investment	Establish Subregional Trade Working Committee
Tourism	Training the Trainers in the Basic Skills of Tourism		Bank has approved funding for training future instructors
*This table includes only select projects from within the area with which this paper is concerned. See Economic Cooperation in the Greater Mekong Subregion: Toward Implementation, 6-25, passim. **National Trade Data Bank, "Southeast Asia -- ADB Development Project," Market Reports 95/4/13. A = Australia; D = Denmark; Fi = Finland; Fr = France; J = Japan; NDF = Nordic Development Fund; S = Sweden; UK = United Kingdom; UNCDF = UN Capital Development Fund; UNDP = UN Development Programme; UNEP = UN Environment Programme; WB = World Bank; WHO = World Health Organization. ***Information from project updates and News Releases posted at the ADB web site, www.asiandevbank.org/.

Although the ADB has already provided US $280 million in financing for GMS projects and helped to raise US $200 million more, ₁₂₀ most of the work lies ahead as few of the projects have progressed very far. The Bank's actions, however, demonstrate its commitment to moving carefully but surely toward carrying out the plans. In July 1996, the Bank approved a US $3 million grant to fund cooperation between the countries as they prepare to implement the priority projects. ₁₂₁

As the ADB makes funds available to the participating countries, it may be hard pressed to enforce all of its stipulations. The Bank's environmental goals in particular will be difficult to achieve. Specifically the ADB considers preventing deforestation in the region a major project. This would include protecting existing forests, replanting deforested areas, and developing controls for the logging industry. At the same time, the "expected impact/benefits" of several railway projects are "resource development. . .primarily mining and timber." ₁₂₂ These two goals are not logically antithetical, but, given the region's recent history of rapid deforestation as well as Rangoon's inability (or unwillingness) to enforce policy in northern Burma (such as anti-drug measures), the improvement of transport infrastructure in areas with valuable timber resources is potentially harmful to the preservation of the forests. As for other projects, the ADB does seem to require careful environmental impact studies before funds are released. But will these same conditions apply to projects undertaken by private development capital solicited by the ADB or projects financed by the nations themselves?

Since few of the GMS projects have made significant progress, the feasibility of the ADB's scheme is still very much in question. Can the ADB-initiated projects work? Can there really be an international framework for development in which nations participate in a spirit of cooperation? Several difficulties are endemic to this type of scheme. First, the ADB -- as its officers themselves acknowledge -- are merely facilitators. The future of the GMS and Upland EQ ultimately lies in the hands of the participant nations and their peoples. What happens when the interests of one nation clash with another? Can the resources of the region be shared equitably? China's plans to build eight hydroelectric stations on the Lancang (Mekong) may reduce water flows to the other Mekong basin countries. How will this be resolved?

The GMS development scheme is so immense and the actors so many, moreover, that the ADB does not plan to maintain complete oversight. What happens when one nation, for instance, decides that economic development is more important than environmental protection or human resource development? What recourse do the other nations have? Will any of these nations, all of which have demonstrated that development is more important to them than the environment, care? Already the ADB has faced criticism from NGOs about the dislocation of people due to hydropower projects along the Mekong. Physical displacement as well as forced cultural change cannot be avoided in some of the projects. In order to help manage Laos's forests, the ADB is considering helping the Lao government contain swidden agriculture (and thus swidden agriculturalists). What will happen as tribal people used to moving from plot to plot are forced to stay put?

Other International Organizations

Besides the ADB, other international organizations are active in the Upland EQ. The UNDCP is implementing a number of crop substitution programs in Burma and Laos. One such program in a Wa area of the Shan State seeks "to improve the living conditions of approximately 80 families in selected villages. . . who presently cultivate opium poppy to supplement their income." To do this the UNDCP plans to help the families diversify their agricultural production to give them an alternative income source. A similar program is ongoing in the eastern Shan State. The UNDCP hopes to improve the living conditions of 400 families in 12 villages, most of whom rely on poppy cultivation. By introducing an agricultural extension program, home-based industries, and livestock improvement techniques, the families may be able to cease their cultivation of opium poppy. ₁₂₃

The UNDCP has not had an easy time in the region. As mentioned above, SLORC has not let them into the Shan State's prime poppy areas. Four Laotians working on crop substitution projects in northern Laos were killed in December 1994. It is not known whether anti-government Hmong guerrillas or drug traffickers committed these homicides. ₁₂₄

Other important agencies are involved in the region. The International Monetary Fund has lent Laos US $17 million to help with the transformation to a market economy. The World Bank is helping Louang Namtha Province upgrade its roads. ₁₂₅

 

 

III. Conclusion: The Past, Present, and Future of the Upland Economic Quadrangle

How development will proceed in the Upland Economic Quadrangle depends on the interface of past and present: those who implement the present schemes will do so in a region shaped by the politics and economics of the past.

Two important factors shaping the region's history have been climate and geography. The tropical weather and malarial summer conditions often prevented the large states from stationing troops in the Upland EQ and governing directly. Climate also dictated the rhythms of the traditional trade cycle. Chinese merchants went into northern Burma during the dry season, returning before the rains came in May. Because of the threat of disease and poor travel conditions, few people traveled from May to October. Modern medicine and engineering can overcome disease and precipitation in the Upland EQ. For the most part, malaria prevention and better sanitation have already made the region safer for travelers. Building reliable transport networks, however, will prove more difficult politically and economically. As Peter Hinton has noted, Wa tribesmen collect tolls on people traveling from Thailand to China which, combined with the conditions of the roads, makes the journey only possible "by four-wheel drive vehicles accompanied by an armed escort in the dry season." ₁₂₆ Merchants trading products between Burma and China also have problems with transport during the rainy season. ₁₂₇

Planners at the local, national, and international levels all recognize the need for all season transportation. The Chinese government has already made progress on its road network in southern and western Yunnan, but Burma and Laos are much further behind. How fast the national governments and the ADB can build adequate transport infrastructure will be critical to success of the development schemes. The fact that capital costs are so high (the ADB estimates that the major transportation projects for the region will cost US $31.9-38.3 billion, Table 3) means that actual completion of the transport projects is not a foregone conclusion. It remains to be seen whether the governments and ADB can raise enough capital to carry out the projects.

The upland region's history of autonomy has prevented outside powers from constructing transport infrastructure in the past. Therefore, the impact of these projects is a major question. Present plans are for building major roads and railways, and dredging river channels. These projects will speed goods traveling through the Upland EQ more than they will provide routes for the marketing of goods by local peoples. Until there is a focus on extending a web of good roads throughout the region, economic development will be concentrated in a few towns.

Relative autonomy and ethnic diversity are historical factors which linger in the Upland EQ. The large states encircling it did not begin to penetrate effectively the local highland and valley cultures until the middle of the twentieth century -- a mere forty years ago; the process is not yet complete. Northern Burma best reflects the political independence of the region's past. Autonomous ethnic enclaves still exist as Wa, Shan, Kachin, and Chinese groups control parts of the Shan and Kachin States.

The present Burmese government has little authority in these enclaves. For example, Rangoon does not enforce drug interdiction laws in areas occupied by insurgent groups with which there is a cease-fire. Any international agreements made by SLORC with regard to economic development in the north might be subject to modification by local power brokers. Therefore, the ADB cannot assure consistent policy implementation throughout the region. As transport in the region improves, some of the nobler ADB goals -- such as environmental protection -- could be threatened by this lack of oversight. If ethnic warfare were to erupt again, moreover, it could destroy any economic gains made in northern Burma.

In the absence of strong, central government oversight, inhabitants of northern Burma have developed other channels of political and economic authority. Because these alternate channels of authority affect areas both inside and outside Burma, they make economic development in the entire Upland EQ unpredictable. The Yang family or other insurgent groups in northern Burma, for example, have trade and influence networks which extend their authority across the borders. Hui merchant networks also extend throughout mainland Southeast Asia. It is through these networks and their connections to outside syndicates (Nigerian gangs, Japanese yakuza, and Chinese triads) that much of the heroin is moved out of Burma. ₁₂₈ Instead of exposing and stanching these networks, the recent opening of the borders has unexpectedly increased the number of heroin export routes.

Having accrued money through the drug trade, moreover, major traffickers may now garner influence on a regional level. Already the State Department has noticed that SLORC members join known drug traffickers in legitimate business deals. ₁₂₉ Bertil Lintner claims that some of the ethnic Chinese traffickers have ties to PRC intelligence. ₁₃₀ As the national governments and international organizations become more involved in the region, they will have to confront these alternate channels of authority, and it is unclear how this may affect development.

One question which goes unasked publicly, but is always just below the surface in the PRC, is whether ethnic nationalism could develop across the borders between the Kachin of Burma and China or the Tai of Burma, China, Laos, and Thailand. This is unlikely. Although the PRC has never successfully severed the ties uniting cross-frontier ethnic groups and the opening of the borders have only strengthened cultural exchange, none of these groups have a history of region-wide political or ethnic identities. The Tai speaking peoples, for example, formerly inhabited numerous separate states. As anthropologist Hsieh Shih-Chung notes,

". . .various northern [Tai] groups, whose dialects were mutually intelligible, nevertheless maintained airtight ethnic boundaries. . .the remembrance of disappeared states to which those peoples belonged. . .still perform a critical function of distinguishing selfness and otherness in daily ethnic interactions." ₁₃₁

The Kachin, for there part, are not one people but a collection of many tribes. For widespread ethnic nationalism to develop among any of the groups, a major change in how individuals identify themselves would have to occur throughout the region. The PRC government, always wary lest one of its minority groups nurture separatist leanings, would do everything possible to prevent this.

In China and Thailand, there are no serious challengers to central government sovereignty, yet the historical political disjunctions between the Upland Economic Quadrangle and these two states still affect the economics of the region. Formerly a buffer zone and area of indirect political control, the Upland EQ has never been fully incorporated into the economy of either China or Thailand. As the economies of both nations have modernized rapidly, the respective governments have devoted little capital to infrastructure along the periphery. Although historically there was commerce in the region, the traditional trade routes relied on foot paths and mule trains. Because of the remote nature of the region and the lack of full political control, there has never been investment to upgrade fully these routes. Good roads service only a few parts of the region. Therefore, both China and Thailand -- not to mention Burma and Laos -- must start from a low base in order to build an infrastructure which can support vital border trade. In a sense, the Upland EQ's people are now economic victims of their own success at maintaining a measure of political autonomy in the past.

Recent history suggests overcoming suspicion between the nations will be difficult. In the late 1970s, intra-regional relations were extremely poor. It is only due to a gradual warming in relations since 1980 that ideas for cooperation have been able to develop. Yet, suspicion between the four nations still lingers. Laos and Thailand are wary of Sino-Burmese military cooperation and Chinese arms sales to Burma. At the same time the Chinese also sell arms to Laos. Military concerns could destabilize the region, making any economic cooperation more difficult.

The amount of capital needed to provide sustainable and uniform development throughout the Upland Economic Quadrangle will be staggering. Because the region is so poor in political and economic infrastructure yet so rich in natural resources, it will be difficult for the four nations and the ADB to deflect outside investment away from extractive industries. Unless, the ADB can successfully implement its plans to develop the region's human resources and tourist industry, raw materials will continue to be the one sector which draws most outside capital. There is already precedent for this. During the early 1990s, Burma has had one of the highest deforestation rates in the world. ₁₃₂ The amount of teak and mahogany coming out of Burma via Wanding and Ruili is incredible. During the period 1992-1994, most foreign investment in Laos was in mining and timber. ₁₃₃ To counter these processes, the ADB will have to funnel private and public capital into rural development or, in the long term, investors could deplete the region's natural resources and leave the area bereft of any sustainable industries.

The challenges to cultivating humane economic development in the Upland EQ are daunting. At the moment, the best hope for economic development which benefits the indigenous peoples of the Upland EQ seem to be projects like the PRC's schemes aimed at village-level agricultural sector development. These projects directly address the local economy, but they are still too few to make a regional impact. The reported success of those underway, moreover, should be considered skeptically since most data come from the Chinese state media. At the same time, the PRC government is trying to extend economic integration (almost two generations after forced political integration) to the minority areas along the Yunnan periphery. Because PRC government institutions now reach the village level, there is potential for success. International agencies such as the ADB are correct to use the government hierarchy to lend money to PRC villages and should continue to do so -- as long as strict oversight is maintained.

It is only on this village level that individuals in the Upland Economic Quadrangle can participate in changing their own lives. Investment and development on a village by village basis would be slow and expensive, but without investment in the agricultural sector and the extension of transport networks into the most remote areas, most places in the Upland EQ will not benefit from the grander schemes being implemented by the four nations and the ADB. There will be no structural integration between a traditional agricultural economy and modern international trade. Merchants might transport commodities across or export raw materials out of the uplands, but little profit would stay in the region.

It is perhaps appropriate at this point to remember that both Edmund Leach and Nicholas Tapp found highland tribal economic practices to be varied and flexible. In the 1940s, Kachin, Wa, and Palaung tribes proved they could adapt to changing economic circumstances. The Hmong have done so into the 1980s. Local peoples do have a history of creative economic participation. The four nations and the ADB should devote a large portion of their capital to local economies so that development progresses at both the grassroots as well as the regional level. Otherwise, the planned economic infrastructure -- and opportunities -- will bypass most upland peoples.

 

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Yunnansheng tongjiju, ed. Yunnan tongji nianjian 1993. Beijing: Zhongguo tongji chubanshe, 1993.

Zhu Depu. "Aiguo zhuyi, Leshi zhong yunxu de guanghua pianzhang (Patriotism, The Shining Part of A History of Le Kingdom )." In Zhu Depu, Leshi yanjiu. Kunming: Yunnan renmin chubanshe, 1993.

Zhu Mengzhen. "Xinanyi fengtuji." Reproduced in Sanbian shiliao v. 28. Taipei: Guangwen shuju, 1969.

On-line

Asian Development Bank Information and News Releases. Www.asiandevbank.org.

Hinton, Peter. "Growth Triangles, Quadrangles, and Circles: Interpreting Some Macro-Models for Regional Trade." Thai-Yunnan Project Newsletter 28 (March 1995).

InterPress Service, via Nexis.

National Trade Data Bank, Market Reports , via Nexis.

Thai-Yunnan Project Newsletter. Ftp://coombs.anu.edu.au/coombspapers/coombsarchives/thai-yunnan-newslette r/

Reuters. Clari.world.asia.indochina.misc.

Reuters Asia-Pacific Business Report, via Nexis.

Reuters Textline, via Nexis.

Sydney Morning Herald, via Nexis.

United Nations, Economic and Social Council, Commission on Narcotic Drugs. Www.undcp.or.at/undcp/ e795_21a/asiapac.htm#CM.

U.S. Department of State, ed., Thailand: 1994 Country Report on Economic Policy and Trade Practices.

U.S. Department of State, Bureau for International Narcotics and Law Enforcement Affairs. International Narcotics Control Strategy Reports. Www.state.gov/text/html.

World Health Organization, Press Releases. Www.who.org.

 

---

Note 1: Peter Hinton, "Growth Triangles, Quadrangles, and Circles: Interpreting Some Macro-Models for Regional Trade," Thai-Yunnan Project Newsletter 28 (March 1995), available on-line at ftp://coombs.anu.edu.au/coombspapers/ coombsarchives/thai-yunnan-project/thai-yunnan-newsletter/thai-yunnan-nws ltr-26.txt. (On-line version has no page numbers.) The Chiang Rai Chamber's EQ is not sharply defined. I have adapted their term to mean the upland border areas shared by the four nations and divided into the administrative regions listed in the text above. The terms "Upland Economic Quadrangle" and "Upland EQ" will be used throughout the paper as a shorthand for the area, even when the terms are clearly anachronistic. Back.

Note 2: Chiranan Prasertkul, Yunnan Trade in the Nineteenth Century: Southwest China's Cross-boundaries Functional System (Bangkok: Chulalongkorn University, 1989), 35-49, 70-75. See his maps, pp. 11-14; Jiang Yingliang, Daizu shi (Chengdu, Sichuan: Sichuan minzu chubanshe, 1983), 336; Sylvie Pasquet, "Entre Chine et Birmanie: Un mineur-diplomate au royaume de Hulu, 1743-1752 (première partie)." Étude chinoises 8.1 (printemps 1989), 51; Zhu Mengzhen, "Xinanyi fengtuji," juan 20, page 8b, reproduced in Sanbian shiliao v. 28 (Taipei: Guangwen shuju, 1969). Back.

Note 3: "Tai" refers to the peoples who speak northern dialects from the Tai Language Family. "Thai" refers to the people who speak southern Tai dialects and make up the majority of Thailand's population. The Thai have historically been more powerful than their northern neighbors. Back.

Note 4: This list has been compiled using Gehan Wijeyewardene, ed., Ethnic Groups Across National Boundaries in Mainland Southeast Asia (Singapore: Institute of Southeast Asian Studies, 1990); Peter Kunstadter, ed., Southeast Asian Tribes, Minorities, and Nations (Princeton, NJ: Princeton University Press, 1967); Edmund R. Leach, Political Systems of Highland Burma: A Study of Kachin Social Structure (London: G. Bell and Sons, Ltd., 1954); Bertil Lintner, Burma in Revolt: Opium and Insurgency since 1948 (Boulder, San Francisco, Oxford: Westview Press, 1994); Nicholas Tapp, Sovereignty and Rebellion: The White Hmong of Northern Thailand (Oxford: Oxford University Press, 1989); Gordon Yang, The Hill Tribes of Northern Thailand, fifth edition (Siam Society, 1974).
For a nineteenth-century description of a Hui-led caravan see Archibald R. Colquhoun, Across Chrysê v. 2 (Sampson Low, Marston, Searle and Rivington, 1883; reprint, Singapore: Graham Brash (PTE) LTD, 1988), 274-275. Lintner reports that Hui are still important merchants in the EQ today, especially in the drug trade. Lintner 1994, 192-194. Back.

Note 5: Leach 1954, 20-21, 184-195. Back.

Note 6: Leach 1954, 30. Back.

Note 7: Tapp, 16-17. Back.

Note 8: Herold J. Wiens, Han Chinese Expansion in South China (Hamden, CT: Shoe String Press, 1967), 225-226. For other presentations of the same idea see Chiranan 1989, 32-33; Edmund R. Leach, "The Frontiers of 'Burma,'" Comparative Studies in Society and History 3.1 (October 1960): 50; Thongchai Winichakul, Siam Mapped: A History of the Geo-Body of a Nation (Honolulu: University of Hawaii Press, 1994), 81-82, 96-97; Constance M. Wilson and Lucien M. Hanks, The Burma-Thailand Frontier Over Sixteen Decades: Three Descriptive Documents (Athens, Ohio: Center for International Studies, Ohio University, 1985), 1. Back.

Note 9: To the Burmese kings, these indigenous rulers were known as saw-bwas. To the Sino-Manchu emperors they were known as tusi. The saw-bwas and tusi (in some cases one man might hold both titles signifying his tributary status to both Burma and China) were formal, hereditary posts. Back.

Note 10: Thongchai, 81-82, 88, 96. Back.

Note 11: David Joel Steinberg, ed., In Search of Southeast Asia, A Modern History, revised edition (Honolulu: University of Hawaii Press, 1985, 1987), 207. Back.

Note 12: Reynaldo Ileto, "Religion and Anti-colonial Movements," Cambridge History of Southeast Asia v. 2 (Cambridge, 1992), 216-219; Carl A. Trocki, "Political Structures in the Nineteenth and Early Twentieth Centuries," Cambridge History of Southeast Asia v. 2 (Cambridge, 1992), 103, 123.
Paul Kratoska and Ben Batson, "Nationalism and Modern Reform," The Cambridge History of Southeast Asia v. 2 (Cambridge: Cambridge University Press, 1992), 305. Back.

Note 13: See Lintner 1994, 338 for information on the Karen delegation to London. Back.

Note 14: "Burman" refers to the Burman ethnic group. "Burmese" refers to the Burmese state. See Kratoska and Batson, 305-306 for a discussion of Burman opposition to secession. Back.

Note 15: Lintner 1994, 339. Back.

Note 16: C. Patterson Giersch, "Qing China's Reluctant Subjects; Power Contested, Power Shared on the Yunnan Frontier" (Ph.D. dissertation, Yale University, forthcoming), chapters 2 and 5. Back.

Note 17: Steinberg, 179-180. Back.

Note 18: Steinberg, 179-180. Back.

Note 19: Wyatt, 158-159. Back.

Note 20: Ileto, 214-215; Tapp, 11, 35-36; Wyatt, 201. Back.

Note 21: Trocki, 123. Back. href="#txt9"> Back.<

Note 22: Huang Guozhang, "Diannan zhi bianjiang qingshi ji jinhou ying zhuyi zhi dian," Bianzheng gonglun 3 (1944), 7. For a similar analysis see Chen Bisheng, Dianbian sanyi, in Minsu congshu, v. 2.19 (Chinese Tribes):19, ed. Lou Tsu-k'uang (1941; reprint, Taibei: Guoli zhongyang yanjiuyuan lishi yuyan yanjiusuo, 1977), 4-5. Back.

Note 23: Lintner 1994, 351-352. Back.

Note 24: André and Louis Boucaud, Burma's Golden Triangle: On the Trail of the Opium Warlords (Bangkok: Asia Books, 1992), 23; Yong Mun Cheong, "The Political Structures of the Independent States," Cambridge History of Southeast Asia v. 2, 447-448; Lintner 1994, 169-170. Back.

Note 25: Lintner 1994, 180; Mya Than and Joseph L. H. Tan, eds., Myanmar Dilemmas and Options: The Challenge of Economic Transition in the 1990s (Singapore: Institute of Southeast Asian Studies, 1990), 2-3. Back.

Note 26: Than and Tan, 3-4, 18. Back.

Note 27: Lintner 1994, 269-271. Back.

Note 28: Richard K. Diao, "The National Minorities of China and Their Relations With the Chinese Communist Regime," in Southeast Asian Tribes, Minorities, and Nations, ed. Peter Kunstadter (Princeton, NJ: Princeton University Press, 1967), 185-188. Back.

Note 29: See for example Xie Benshu, et. al., Minzu diqu aiguo zhuyi jiaoyu (Teaching Nationalism in Nationality Regions) (Kunming: Yunnan renmin chubanshe, 1994); Zhu Depu, "Aiguo zhuyi, Leshi zhong yunxu de guanghua pianzhang (Patriotism, The Shining Part of A History of Le Kingdom)," in Zhu Depu, Leshi yanjiu (Kunming: Yunnan renmin chubanshe, 1993), 142-151. Back.

Note 30: See for example Xie Benshu, et. al., Minzu diqu aiguo zhuyi jiaoyu (Teaching Nationalism in Nationality Regions) (Kunming: Yunnan renmin chubanshe, 1994); Zhu Depu, "Aiguo zhuyi, Leshi zhong yunxu de guanghua pianzhang (Patriotism, The Shining Part of A History of Le Kingdom)," in Zhu Depu, Leshi yanjiu (Kunming: Yunnan renmin chubanshe, 1993), 142-151. Back.

Note 31: "Wujing Simao zhidui yongzheng aimin zhongshi xiao," YNRB 1992/8/15, 3; Pu Chaozhu, "Minzu shanqu kuayueshi fazhan zhi lu," YNRB 1993/3/6, 1. Back.

Note 32: Grant Evans, "Agrarian Change in Communist Laos," Institute of Southeast Asia Occasional Paper #85 (1988), 4, 9, 18-19, 51, 58; Grant Evans and Kelvin Rowley, Red Brotherhood at War: Vietnam, Cambodia and Laos Since 1975, revised edition (London: Verso, 1990), 67-68. Back.

Note 33: Hans Manndorff, "The Hill Tribe Program of The Public Welfare Department, Ministry of Interior, Thailand: Research and Socio-economic Development," in Kunstadter, v. 2, 525, 529-30, 535; Tapp 1989, 31-32, 34. Back.

Note 34: Lee W. Huff, "The Thai Mobile Development Unit Program," in Kunstadter, v. 2, 425-426, 434-5, 437-441. Back.

Note 35: K. V. Sundaram, Geography of Underdevelopment: The Spatial Dynamic of Underdevelopment (New Delhi: Concept Publishing, Co., 1983), 127, 130. Back.

Note 36: Tapp, 15-16. Michael Moerman, "A Minority and Its Government: The Thai-Lue of Northern Thailand," Kunstadter v. 1, 407; Deborah E. Tooker, "Putting the Mandala in its Place: A Practice-based Approach to the Spatialization of Power on the Southeast Asian 'Periphery' -- The Case of the Akha," Journal of Asian Studies 55.2 (May 1996), 326-327. Back.

Note 37: Lintner 1994, 99-110, 181-182, 353-354. Back.

Note 38: Lintner 1994, 181-182; Boucaud, 32, 39-41. Back.

Note 39: Lintner 1994, 270; Boucaud, 195, 201. Back.

Note 40: Evans and Rowley, 64, 71-74, 168-170. Back.

Note 41: Deng Youjiong, "Shilun daxinan yu Dongnanya guojia de jingji hezuo ji Dongnanya, Nanya daluqiao," Dongnanya (1994.1), 2; "Xishuangbanna zhou jiakuai duiwai kaifang bufa," YNRB 92/4/15, 2. Back.

Note 42: "Spring City Blossoms in the Light of a New Era," SCMP Business Review 94/2/9, 4-5. Back.

Note 43: "Business Boosts Ties with Laos, Vietnam," SCMP 94/1/25, p. Business 5; Carrie Lee, "Yunnan Trade to Accelerate," SCMP 94/1/25, p. Business 5. Back.

Note 44: "Sheng zhengfu daibiaotuan fan Kun," YNRB 92/6/6, 1. Back.

Note 45: "nDOgtions, such as the ADB and UN, involved. Many projects, especially the critical infrastructure plans, require large infusions of money. It is unclear whether the investments will be profitable. This section reviews the development schemes by dividing them into three categories: 1) those planned unilaterally by the Chinese national, provincial, and local governments, 2) those initiatives planned by China through bilateral agreements, 3) ADB and UN projects intended to impact economic development through bilateral or multilateral cooperation. Not all of the projects fit neatly into one of the three categories; some are representative of two or even all three. Back.

Note 46: "Zhongguo daxinan zhengzai jiegui," YNRB 92/10/15, 5; Guo Jiaji, "Yunnan minzu diqu shengchanli kuayueshi fazhan de lilun yu shijian," Yunnan shehui kexue 1993.6, 23-31. Back.

Note 47: China Daily cited in "Dredging Plan for River," SCMP 96/3/25, via Nexis. Back.

Note 48: Guo 23-31. Back.

Note 49: "He Zhiqiang huijian Yahang daibiaotuan," YNRB 92/8/20, 1. Back.

Note 50: Economic Cooperation in the Greater Mekong Subregion: Toward Implementation. Proceedings of the Third Conference on Subregional Economic Cooperation among Cambodia, People's Republic of China, Lao People's Democratic Republic, Myanmar, Thailand, and Viet Nam (Manila: Asian Development Bank, 1994), 7-8, 91-92 [hereafter cited as Toward Implementation]; National Trade Data Bank, "Southeast Asia -- ADB Development Project," Market Reports 95/4/13, via Nexis; "Feasibility Study of the Chiang Rai-Kunming Road Improvement Project via Lao PDR" (REG30004), posted May 96 at http://www.asiandevbank.org.adbbo.reta.reg30004.html. Back.

Note 51: Zhang Guangchang and Yang Yunlong, "Angdao zouxiang shijie," YNRB 94/12/22, 1; "Zhao chaju, ding cuoshi, zhua luoshi," YNRB 92/6/22, 1. Back.

Note 52: Interview with Gilles Frenillot of SAT, August 3, 1994. Back.

Note 53: Meeting with Wanding City Domestic and Foreign Trade Bureau (Wandingshi neiwai maoyi guanliju), August 4, 1994. Hereafter cited as WNMG. Back.

Note 54: Zhang and Yang, "Angdao zouxiang shijie;" "Zhao chaju, ding cuoshi, zhua luoshi." Back.

Note 55: National Trade Data Bank, Market Reports, "China -- Hydroelectric Power," 95/3/21, based on report prepared in September 1993 by S. Hendryx, C. Rademan, and J. Madoc-Jones; US Consul-General meeting with Li Huaxiong, 95/10/15; "ADB Warned of Perils of Private Sector Unleashed," The Reuter Asia-Pacific Business Report, 96/4/29, via Nexis; Andrew Nette, "Indochina Development: Sharing the Mekong River Creates Problems," InterPress Service 96/3/8, via Nexis. Back.

Note 56: Jiang, 336; Pasquet, 51; Zhu Mengzhen, "Xinanyi fengtu ji," 20 : 8b. Back.

Note 57: Personal observation; Interviews with local people in Wanding and with WNMG; "Dehong zhou bianbao fazhan taishi xiren," YNRB 92/8/22, 2. Back.

Note 58: "Qunian wosheng bianbao jinchukou zong'e tupo 22yi yuan," YNRB 93/1/22, 1; "Business Boosts Ties with Laos, Vietnam," SCMP 94/1/25, p. Business 5; Provincial government figures, cited in Yunnansheng tongjiju, ed., Yunnan tongji nianjian 1993 (Beijing: Zhongguo tongji chubanshe, 1993), 531. Back.

Note 59: Notes from U.S. consul-General meeting with Li Huaxiong, Deputy Director of Yunnan Foreign Economic Relations and Trade Department, 95/10/15, cited in "China -- Yunnan Economic Trends," National Trade Data Bank, Market Reports, 95/11/6, via Nexis. Back.

Note 60: Yunnan jingji nianjian bianjibu, ed., Yunnan jingji nianjian (Kunming: Yunnan nianjian zazhi she, 1994), 429, 456. Back.

Note 61: Meeting with Wanding city officials, August 5, 1994. Back.

Note 62: Meeting at Institute of Foreign Economic Relations, 95/1/13. Others have directly or indirectly questioned minority preparedness for trade and market economy. See Yang Jianqiang, "Zai shehui zhuyi shichang jingji tiaojianxia jiakuai minzu jingji de fazhan," YNRB 94/1/3, 7; Pu Chaozhu, "Minzu shanqu kuayueshi fazhan zhi lu," YNRB 93/3/6, 1; Long Jianmin, "Fanrong bianjiang de chulu zai tuijin gaigekaifang," YNRB 93/4/26, 2. Back.

Note 63: "Dehong zhou bianbao fazhan taishi xiren," YNRB 92/8/22, 2. Back.

Note 64: Interviews with Barry Yuen, Pan-China International Trading, August 3-7, 1996. Back.

Note 65: Interview with Wanding city officials, August 5, 1994. Back.

Note 66: Xinhua wire, cited in "Jianjue zhizhi luan jizi jiaqiang zhaiquan faxing guanli," YNRB 93/4/16, 1. Back.

Note 67: Yunnan tongji nianjian 1993, 614. Back.

Note 68: Yang Yuji, "Cangyuanxian fazhan minzu jingji mai xinbu," YNRB 93/8/20, 2. Back.

Note 69: Yunnan jingji nianjian 1994, 3. Back.

Note 70: Yunnan tongji nianjian 1993, 613. Back.

Note 71: Pu Chaozhu, "Minzu shanqu kuayueshi fazhan zhi lu," YNRB 93/3/6, 1. Back.

Note 72: Long Jianmin, "Fanrong bianjiang de chulu zai tuijin gaigekaifang," YNRB 93/4/26, 2. Back.

Note 73: He Guozhi and Long Jianmin, "Bianjiang minzu diqu zemmeyang gaoshu fazhan xiangzhen qiye: Menglian diaocha," YNRB 94/1/31, 7; Cao Wenrong, "Cong jiakuai fazhan jingji wei yi ren: ji Menglian xian minwei fuchi shanqu shaoshuminzu fazhan jingji," YNRB 94/2/2, 3. Back.

Note 74: Pu Chaozhu, "Minzu shanqu kuayueshi fazhan zhi lu," YNRB 93/3/6, 1. Back.

Note 75: "Li Peng zongli li jing fu Miandian fangwen," YNRB 94/12/27, 1; "Asia Today," broadcasts on BBC 94/12/28 and 94/12/30; YNRB 94/12/28. Back.

Note 76: Lu Jianhua, "Zhong Lao Tai Mian Meigonghe lianhe kaochatuan qicheng," YNRB 93/2/16, 1; "He Zhiqiang huijian Laowo zhu Hua dashi," YNRB 92/1/4, 1; "Sheng zhengfu daibiaotuan fan Kun," YNRB 92/6/6, 1. Back.

Note 77: "Simao diqu tong Laowo kaizhan keji hezuo," YNRB 92/6/28, 1. Back.

Note 78: "Simao diqu yu Laowo Boqiaosheng lianhe kaizhan guoji hangyun," YNRB, 94/8/29. Back.

Note 79: Meeting at Institute of Foreign Economic Relations, 95/1/13. Back.

Note 80: Chen Tiejun 1994, 9-10, 19, 23; Li Liqing, 46-47. Back.

Note 81: Chen Tiejun, 23. Back.

Note 82: Bertil Lintner, "Open for Business: New Roads, Bridges Could Unlock Country's Wealth," FEER 95/2/9, 22. Back.

Note 83: Chen Tiejun, 21, 33-35. Back.

Note 84: "Qianding zuchuan hetong," YNRB 94/8/12, 1. Back.

Note 85: Hinton, n.p. Back.

Note 86: Bertil Lintner interview with Khamphoni Keoboualapha, Lao Deputy Prime Minister and Chair of the State Committee for Planning and Cooperation, "Economic Tsar: Veteran Communist Courts foreign Capital," FEER 95/2/9, 22. Back.

Note 87: Tax rates for companies involved in road and bridge construction, irrigation, animal husbandry, or other agricultural industries are 20%; profits from extractive industries such as mining and forestry as well as production of medicines, fertilizer, and electricity are 25%; petroleum exploration and production tax rates are 30%. See Chen Tiejun, 8. Back.

Note 88: Bertil Lintner, "Open for Business: New Roads, Bridges Could Unlock Country's Wealth," FEER 95/2/9, 22. Back.

Note 89: Hinton, n.p. Back.

Note 90: Bertil Lintner, "Burmese Plunder," FEER 92/6/4, 63. Back.

Note 91: Chen Tiejun, 23. Back.

Note 92: Lintner, "Ties That Bind," FEER 95/2/9, 18-19. Back.

Note 93: Philip Shenon, "Burmese Cry Intrusion (They Lack a Great Wall)," New York Times 94/3/29, A4. Back.

Note 94: Public Security Ministry statistics, cited in SCMP 95/6/14, 9. Back.

Note 95: Boucaud, 25; Lintner 1994, 53, 61, 99-110, 181-182, 188-191. Lintner is the expert on the drug trade in Southeast Asia. His articles in FEER, his article published by Jane' Intelligence Review (1995), and his monograph (1994) provide the most thorough analysis of the historical and contemporary drug trade. Back.

Note 96: Lintner 1994, 243-244, 249, 256, 259-267. Back.

Note 97: U.S. Department of State, Bureau for International Narcotics and Law Enforcement Affairs, "International Narcotics Control Strategy Report, March 1996, Southeast Asia and the Pacific," available at http://www.state.gov/text/html. Back.

Note 98: Lintner 1995, 3-4. Back.

Note 99: Bertil Lintner, "Fields of Dreams: Heroin Trade Flourishes Along China-Burma Border," FEER 92/2/20, 23-24. Back.

Note 100: U.S. Department of State, Bureau of International Narcotics Matters, "International Narcotics Control Strategy Report, April 1993"; "International Narcotics Control Strategy Report, March 1995"; "International Narcotics Control Strategy Report, March 1996." Back.

Note 101: Lintner, "Fields of Dreams." Back.

Note 102: U.S. Department of State, Bureau of International Narcotics Matters, "International Narcotics Control Strategy Report, April 1993"; "International Narcotics Control Strategy Report, March 1995"; "International Narcotics Control Strategy Report, March 1996." Back.

Note 103: "Wosheng zhaokai jindu cuanpan dahui" and "Dupin bujue, jindu buzhi," YNRB 92/6/27, 1. Information on percentage of heroin seized in Yunnan from U.S. Department of State, Bureau of International Narcotics Matters, "International Narcotics Control Strategy Report, March 1996." Back.

Note 104: U.S. Department of State, Bureau of International Narcotics Matters, "International Narcotics Control Strategy Report, April 1993"; "International Narcotics Control Strategy Report, March 1996." Back.

Note 105: "Wosheng zhaokai jindu cuanpan dahui;" "Dupin bujue, jindu buzhi." Back.

Note 106: U.S. Department of State, Bureau of International Narcotics Matters, "International Narcotics Control Strategy Report, April 1993." Back.

Note 107: U.S. Department of State, Bureau of International Narcotics Matters, "International Narcotics Control Strategy Report, April 1993"; Lintner 1995, 5-6. Back.

Note 108: "60% Increase in Estimated Aids Cases Worldwide Mounting Concern for Epidemic in Asia," World Health Organization Press Release, WHO/53 (1 July 1994). Back.

Note 109: Angus McFadden, "China: The Highs and Lows of Letting Up on Restrictions at the Border -- Dali Postcard," Sydney Morning Herald 94/1/29, via Nexis. Back.

Note 110: Kim Gooi, "Cry of the Innocents," FEER 93/9/9, 36-37. Back.

Note 111: Bertil and Hseng Noung Lintner, "Immigrant Viruses," FEER 92/2/20, 31; Lintner 1995, 5-6. Back.

Note 112: U.S. Department of State, Bureau of International Narcotics Matters, "International Narcotics Control Strategy Report, March 1996." Back.

Note 113: Hinton, n.p. Back.

Note 114: Chatrudee Theparat, "Thailand: Delays, Uncertainty Dip Investment in Mekong," Bangkok Post 96/6/29, cited in Reuters Textline via Nexis. Back.

Note 115: Robert Birsel, "FEATURE -- Asia's Mekong Region Seen Ripe for Funding Flow," Reuters 96/5/22, via clari.world.asia.indochina.misc. Back.

Note 116: Lintner 1994, 317. Back.

Note 117: ADB, "Basic Information," available via its web page at http://www.asiandevbank.org/publ.html. Back.

Note 118: Subregional Economic Cooperation: Initial Possibilities for Cambodia, Lao PDR, Myanmar, Thailand, and Yunnan Province of the People's Republic of China (Manila: Asian Development Bank 1992), 11. Back.

Note 119: Toward Implementation, vii-viii, 5. Back.

Note 120: "Greater Mekong Ministerial Conference in Kunming to Further Strengthen Subregional Ties," ADB New Release #91/96 (26 August 1996), www.asiandevbank.org/ news96/. Back.

Note 121: ADB News Release #83/96 (23 July 1996), www.asiandevbank.org/ news96/. Back.

Note 122: Towards Implementation, 94, 257-259. Back.

Note 123: United Nations, Economic and Social Council, Commission on Narcotic Drugs, Reconvened 38th Session, Vienna, December, 13-14, 1995, "Compendium of On-going Projects," Projects #97 and #122 respectively. Available at http://www.undcp.or.at/undcp/e795_21a/asiapac.htm#CM. Back.

Note 124: "Risky Work," FEER 95/1/12, 12. Back.

Note 125: Bertil Lintner, "Open for Business: New Roads, Bridges Could Unlock Country's Wealth," FEER 95/2/9, 22. Back.

Note 126: Hinton, n.p. Back.

Note 127: Barry Yuen, personal communication. Back.

Note 128: Lintner 1995, 3-4. Back.

Note 129: US Department of State, "International Narcotics Control Strategy Report, March 1994," "International Narcotics Control Strategy Report, March 1996." Back.

Note 130: Lintner, "Fields of Dreams." Back.

Note 131: Hsieh Shih-Chung, "On the Dynamics of the Tai/Dai-Lue Ethnicity: An Ethnohistorical Analysis," in Cultural Encounters on China's Ethnic Frontiers, ed. Stevan Harrell (Seattle: University of Washington Press, 1995), 304. Back.

Note 132: Bertil Lintner, "Burmese Plunder," FEER 92/6/4, 63. Back.

Note 133: Bertil Lintner, "Open for Business: New Roads, Bridges Could Unlock Country's Wealth," FEER 95/2/9, 22. Back.