Mourning the “Godfather of Heroin” – The Edge Review

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Myanmar’s Lo Hsing Han leaves behind a checkered legacy

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Heroin confiscated by the Kachin Independence Army (KIA) at a KIA-run drug rehab center in Laiza, on the Myanmar-China border (Photo: Simon Roughneen)

Heroin confiscated by the Kachin Independence Army (KIA) at a KIA-run drug rehab center in Laiza, on the Myanmar-China border (Photo: Simon Roughneen)

By SIMON ROUGHNEEN / Yangon

The elaborate candelabras hanging from the high ceilings of Yangon’s Traders Hotel, a popular meeting point for suited foreign businessmen and Burmese officials wearing white shirts and longyi, aren’t exactly evocative of an opium den, but the death last weekend of the so-called “Godfather of Heroin” – Chinese-Burmese trafficker, warlord and business magnate Lo Hsing Han – came as a timely reminder of the ties between hard drugs and gilded commerce in Myanmar.

A leaked U.S. Embassy cable from 2007 recommending that Lo Hsing Han, then in his mid-70’s, be sanctioned along with son and heir Steven Law for his longtime close ties to Myanmar’s military rulers, outlined some of the more upscale family business interests.

“In 1996, Steven Law partnered with Kuok Singapore Ltd., owned by Malaysian billionaire Robert Kuok, to build several hotels in Rangoon, including Traders (owned and operated by Shangri-la Hotels), Shangri-la (a separate hotel which is not yet in operation despite completion of construction), and the Sedona Hotels in Rangoon and Mandalay,” the cable said.

Traders is a Yangon landmark that until recently served as the headquarters for United Nations agencies based in the city. That ended when the hotel realized it was shortchanging itself by letting out floors to the U.N. when it could instead rent rooms at more that US$200 a night to the surge of tourists and business travellers flooding into the city in search of opportunities in the newly-opening country.

But all of the glitter surrounding the Traders Hotel hardly obscures Lo Hsing Han’s former place at the apex of the Golden Triangle drug trade, a position that both made him rich and the target of U.S.-led anti-drug smuggling efforts.

Previously given the go-ahead by Myanmar’s first military dictator Ne Win to sell drugs in exchange for assisting the Myanmar Armed Force’s war with the Communist Party of Burma, he later provoked the regime’s ire by audaciously switching sides – an act of perceived treachery that saw Lo on death row in Yangon in the 1970’s, after being sent back by Thailand after his arrest there in 1973.

Another American diplomatic dispatch, this one four decades old, described his 1973 arrest at the time as “probably [the] most important single action yet in the campaign against illicit drug trafficking in Southeast Asia.”

For Myanmar, though, his crime was not drug-related, but rather “rebellion against the state.” A decade after an army coup, which was justified in part by concerns among the generals that some of the ethnic minorities in Myanmar’s wild borderlands wanted to secede from the 15-year-old independent Burma, Lo Hsing Han’s decision to fight with the rebel Shan State Army was viewed by Ne Win as betrayal.

A reprieve came in 1980, when Lo Hsing Han was granted amnesty – something that is now being granted by Myanmar’s reformist government to political prisoners and dissenters, men and women who opposed the corrupt army rule that allowed drug barons such as Lo to launder their ill-gotten fortune through cozy deals with the government and legitimate private sector ventures.

Freed, Lo returned to selling drugs and making money, although another drug lord, Khun Sa, had since taken over much of Lo’s old hold over the trade. Lo later made himself useful to the junta once again on familiar terrain – the war-torn borderlands. But this time, not as a drug-funded warlord, but as a moneyed, connected liaison between the army and the myriad militias fighting for autonomy, or a bigger slice of the local trade and racketeering in areas that have played host to the world’s longest-running civil wars.

His son Steven Law took over the running of Asia World, the family’s front business, in the early 1990’s. Asia World later picked off prime junta handouts in the form of construction projects such as Yangon’s port and airport, highways in the country’s north, and much of the work building the country’s Ozymandian capital, Naypyidaw, where multi-lane highways, mostly empty of traffic, link far-flung government offices and an improbable spread of hotels.

The family’s Chinese heritage also made Lo Hsing Han and kin valuable intermediaries between Beijing and Myanmar’s generals – links that might not be as lucrative now, with Western and Japanese businesses vying with Chinese competitors for markets and manufacturing bases in Myanmar. In late 2011, the Myanmar government took the surprising step of suspending construction of the mammoth Myitsone dam – a Chinese-backed venture in which Asia World is a partner – in war-wracked Kachin State in Myanmar’s north. The US$3.6 billion dam would have walled off waters on Myanmar’s main river, The Irrawaddy, flooding an area the size of Singapore, but sending 90 per cent of the power generated across the border into China’s Yunnan Province, even though barely a quarter of Myanmar’s population is connected to the electricity grid.

Nonetheless, despite the rift over Myitsone, Myanmar’s agriculture minister, Myint Hlaing, published an anguished epitaph in state media after hearing of Lo Hsing Han’s passing, lamenting that “our sorrow is as great as that of the bereaved family and we wish him peace.”

Peace could be a long way off for the drug-producing borderlands, however, despite an array of ceasefires between the army and some of the alphabet soup of ethnic militias, many of which have sustained themselves by selling narcotics, though these days it is more likely to be methamphetamines rather than opium.

And even as crowds lined up to pay respects to Lo Hsing Han’s family in Yangon, Thai police announced a 5 million baht bounty for Yi Sae, “The Godfather of Methamphetamines,” based in Myanmar’s Shan State – showing that even in reforming Myanmar, the drug trade predominates in some of the old Golden Triangle borderlands.

In 2010, the U.S. Congressional Research Service estimated Myanmar’s drugs exports to be worth between US$1 billion and US$2 billion per year, and while Myanmar has long lost its spot as the world’s biggest opium grower to Afghanistan, it remains a clear second, accounting for 23 per cent of the land used for illicit poppy cultivation and 10 per cent of global opium production, according to the latest UNODC World Drug Report.

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