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More ominous than the development of a Rangoon route is the increased activity reported in the Chin Hills in western Burma. Al- though opium poppies have been cultivated traditionally in the Chin Hills, the region's production has always been small compared to the output in the Shan State. Recent reports, however, show that Chin Hills production has doubled and the Chin Hill farmer is receiving twice the price his Shan State counterpart is collecting.
The Chin Hills product is moved westward into the newly named state of Bangladesh. This, for the United States, is a disturbing development. Because there is ample opium production in the Indian subcontinent, it is unlikely that the local consumer would require an external source. Moreover, the lack of purchasing power on the part of a prospective consumer in Bangladesh would appear to make a Chin Hills-to-Bangladesh operation unprofitable. The other option- i.e., a Chin Hills-Bangladesh connection to the international traffic routes seems more credible. Given the existing chaos in Bangladesh, the use of a port area such as Chittagong should pose little problem for a trafficker.
ARMS SMUGGLING AND THE OPIUM TRADE
Inherent in the Burmese opium trade is the illicit traffic in armaments in Southeast Asia. From the inception of U.S. military sales and mili- tary assistance programs in that region, substantial amounts of arms, ammunition, and equipment have fallen into the hands of indigenous insurgent groups in the various countries of the area.
Officials in the Burmese Ministry of Foreign Affairs told the Survey Team that one of their primary concerns was the traffic of contraband arms of U.S. origin into Burma. According to these officials, the abundant availability of modern U.S. arms makes those insurgent forces who obtain them better equipped than the Burmese military forces. As a result, it becomes even more difficult for Rangoon to com- bat the insurgents and the opium traffic flourishes for it provides a principal source of revenue with which to buy these arms.
Although most cases of arms smuggling in the area involve only small lots, there is at least one instance of a large scale operation. According to U.S. sources, Gen. Ouan Rathikoun (former Chief of Staff, Royal Lao Army) had "plane loads" of U.S. arms flown into Laos. These arms subsequently fell into the possession of insurgent forces in Burma during the period 1966–70. These weapons were ac- quired by General Ouan in Taiwan. While the Survey Team has not determined whether these arms came to Taiwan under the U.S. mili- tary assistance program,
it should be noted that, under MAP condi- tions, recipient countries agree not to transfer MAP-supplied equipment to third countries.
Further, the Thai Government was reported to have furnished arms to CIF insurgents on both sides of the Thai-Burmese border with arms procured in Taiwan. Again the Survey Team was unable to deter- mine whether these arms came to Taiwan under the U.S. military assistance program.
The special circumstances surrounding former Burmese President U Nu also contribute to area arms smuggling. Now residing in northern Thailand, he directs the insurgent activities of his followers on both