O 070128Z MAY 02
FM AMEMBASSY RANGOON
TO SECSTATE WASHDC IMMEDIATE 7997
INFO ASSOCIATION OF SOUTHEAST ASIAN NATIONS
AMEMBASSY BEIJING 
AMEMBASSY BRUSSELS 
AMEMBASSY CANBERRA 
AMEMBASSY DHAKA 
AMEMBASSY LONDON 
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AMEMBASSY SEOUL 
AMEMBASSY TOKYO 
AMCONSUL CHIANG MAI 
AMCONSUL SAO PAULO 
USMISSION GENEVA 
USMISSION USUN NEW YORK 
USCINCPAC HONOLULU HI
USMISSION UNVIE VIENNA

C O N F I D E N T I A L SECTION 01 OF 03 RANGOON 000576 
 
STATE FOR EAP/BCLTV 
BRUSSELS FOR USEU 
USCINCPAC FOR FPA 
 
E.O. 12958: DECL: 05/02/2012 
TAGS: PREL TH BM
SUBJECT: THAI/BURMESE RELATIONS - MAUNG AYE'S VISIT AND 
OTHER ISSUES 
 
REF: (A) BANGKOK 2907 (B) BANGKOK 3147 (C) RANGOON 574 
 
CLASSIFIED BY: CDA PRISCILLA CLAPP. REASON: 1.5 (D). 
 
¶1. (C) SUMMARY: THE THAI GOVERNMENT WAS PLEASED WITH BURMESE 
ARMY COMMANDER MAUNG AYE'S VISIT. ACCORDING TO THE THAI 
EMBASSY'S POLITICAL COUNSELOR, THE THAI GOVERNMENT NOW SEES 
HIM AS A "PRAGMATIC" MAN OF RISING INFLUENCE IN BURMA WITH 
WHOM THEY MAY BE ABLE TO WORK SUCCESSFULLY. WHILE IN 
THAILAND, MAUNG AYE MET WITH THE KING, PRIME MINISTER THAKSIN 
AND DEFENSE MINISTER CHAVALIT.  HE ALSO PROMISED TO IMPROVE 
COUNTER-NARCOTICS COOPERATION, TO RESTRICT THE ACTIVITIES OF 
THE UNITED WA STATE ARMY'S HONG PANG COMPANY AND TO ESTABLISH 
TWO NEW TOWNSHIP BORDER COMMITTEES.  IN ADDITION, HE PUT THE 
FINAL TOUCHES ON A NEW FISHERIES JOINT VENTURE AGREEMENT 
WHICH WILL REPORTEDLY BE SIGNED IN RANGOON THIS WEEK.  ON THE 
OTHER HAND, MAUNG AYE DID NOT RESPOND TO THE MESSAGE CONVEYED 
BY THAI FOREIGN MINISTER SURARKIART TO SECRETARY 1 KHIN NYUNT 
IN EARLY APRIL REGARDING PROPOSALS FROM THE SHAN STATE ARMY 
FOR TALKS, THOUGH THE CURRENT QUIET ON THE BORDER HAS 
SUGGESTED TO SOME WITHIN THE THAI GOVERNMENT THAT TALKS MAY 
HAVE ALREADY STARTED. END SUMMARY. 
 
¶2. (C) MAUNG AYE AND KHIN NYUNT: THE THAI EMBASSY'S POLITICAL 
COUNSELOR, KALLAYANA VIPATTIPUMIPRATES, TOLD POLOFF MAY 2 
THAT THE RECENT VISIT BY BURMESE ARMY COMMANDER MAUNG AYE TO 
THAILAND HAD GONE WELL. MAUNG AYE, HE SAID, WAS NOW A FIGURE 
OF MAJOR INTEREST TO THE THAIS. MANY FELT THAT MAUNG AYE'S 
POSITION WITHIN THE GOB WAS ENHANCED AND KHIN NYUNT'S 
DIMINISHED BY EVENTS IN MARCH, INCLUDING THE ARREST OF THE 
FAMILY OF KHIN NYUNT'S MENTOR AND PATRON.  KHIN NYUNT, HE 
SAID, STILL SEEMED TO BE FIRMLY IN CONTROL OF FOREIGN POLICY 
AND THE MILITARY'S INTELLIGENCE NETWORK.  HOWEVER, THERE WERE 
SIGNS THAT HE NO LONGER HAD A FREE HAND IN DEALING WITH 
BORDER ISSUES AND BURMA'S MANY ETHNIC GROUPS.  SEVERAL GROUPS 
CLOSELY ASSOCIATED WITH KHIN NYUNT, INCLUDING SOME CEASEFIRE 
GROUPS AND SOME ETHNIC CHURCH GROUPS (THE KACHIN BAPTIST 
CONVENTION), HAD RECENTLY COME UNDER PRESSURE, KALLAYANA SAID. 
 
¶3. (C) MAUNG AYE, MEANWHILE, WAS A MYSTERY MAN FOR THE THAIS 
-- THE SUBJECT OF MANY CONTRADICTORY REPORTS REGARDING HIS 
FEELINGS TOWARDS THAILAND AND HIS PROFESSIONAL COMPETENCE. 
AFTER MEETINGS BETWEEN MAUNG AYE AND THE KING, THE PRIME 
MINISTER (ON FOUR SEPARATE OCCASIONS) AND DEFENSE MINISTER 
CHAVALIT, HOWEVER, THE THAIS HAD COME AWAY WITH THE 
IMPRESSION THAT MAUNG AYE WAS "A PRAGMATIC MAN" WHO WAS "NOT 
NECESSARILY HOSTILE TO THAILAND." 
 
¶4. (C) ETHNIC GROUPS: KALLAYANA SAID THAT THE THAIS HAD 
EXPECTED MAUNG AYE TO RESPOND TO THE MESSAGE REGARDING TALKS 
WITH THE SHAN STATE ARMY WHICH THAI FOREIGN MINISTER 
SURAKIART HAD RELAYED TO KHIN NYUNT IN EARLY APRIL (REFTEL 
A).  THAT MESSAGE BASICALLY STATED THAT THE SHAN STATE ARMY 
WAS READY FOR TALKS, BUT WOULD ONLY ACCEPT TERMS COMPARABLE 
TO THOSE GIVEN THE WA, WHICH WOULD LEAVE THEM IN CONTROL OF 
THEIR OWN CEASEFIRE AREA.  MAUNG AYE, HOWEVER,  SAID NOTHING 
ABOUT THE MATTER AT ALL.  THIS LED THE THAIS TO CONCLUDE, 
KALLAYANA SAID, THAT THE BURMESE HAD EITHER DISMISSED THE 
SHAN STATE ARMY'S PROPOSED TERMS AS COMPLETELY UNACCEPTABLE, 
OR HAD ALREADY ESTABLISHED A BASIS FOR TALKS WITH THE SHAN 
STATE ARMY WITHOUT THAI HELP.  IN ANY CASE, KALLAYANA NOTED, 
THE NORTHERN BORDER THIS YEAR WAS FAR QUIETER THAN IT HAD 
BEEN FOR SOME TIME. 
 
¶5. (C) KALLAYANA ALSO SAID THAT THE THAI GOVERNMENT HAD BEEN 
IN TOUCH WITH THE KAREN NATIONAL UNION'S FORMER CHAIRMAN BO 
MYA WHILE HE WAS HOSPITALIZED IN BANGKOK. THE KNU, HE SAID, 
WAS GROWING WEAKER AND WEAKER, AND BO MYA BELIEVED THAT IT 
WAS TIME TO STRIKE A DEAL WITH THE BURMESE. 
 
¶6. (C) BORDER INCIDENTS: KALLAYANA SAID THAT THE MOST RECENT 
BORDER INCIDENT, WHICH ERUPTED LAST WEEK WHEN UNITS FROM THE 
THAI THIRD ARMY TOOK PRISONER THE SON OF THE COMMANDER OF THE 
WA'S 171ST BRIGADE, WOULD PROBABLY BE RESOLVED WITHIN DAYS. 
THIRD ARMY COMMANDER UDOMCHAI, HE SAID, WAS JUST TRYING TO 
TEACH THE WA A LESSON.  UDOMCHAI HAD BEEN PERSONALLY 
EMBARASSED BY A WA ATTACK THAT HAD FORCED CANCELLATION OF A 
VISIT BY THE THAI QUEEN TO HIS AREA, AND HAD BEEN LOOKING FOR 
WAYS EVER SINCE TO PAY THE WA BACK. KALLAYANA SAID THAT HE 
EXPECTED BORDER INCIDENTS LIKE THIS MOST RECENT ONE TO 
CONTINUE, GIVEN UDOMCHAI'S ANGER, BUT EMPHASIZED THAT THEY 
DID NOT REFLECT THAI GOVERNMENT POLCIY AND WOULD NOT 
INTERRUPT THE GENERAL IMPROVEMENT IN THAI/BURMESE RELATIONS. 
 
¶7. (C) NARCOTICS COOPERATION: PM THAKSIN TOLD MAUNG AYE THAT 
THERE NEEDED TO BE GREATER COOPERATION BETWEEN THE THAI 
OFFICE OF THE NARCOTICS CONTROL BOARD AND THE BURMESE CENTRAL 
COMMITTEE FOR DRUG ABUSE CONTROL IN SHARING INTELLIGENCE AND 
CARRYING OUT JOINT OPERATIONS.  MAUNG AYE AND BURMESE HOME 
MINISTER TIN HLAING, WHO SAT IN ON THE MEETING, AGREED. 
THAKSIN ALSO COMPLAINED ABOUT THE ACTIVITIES OF THE HONG PANG 
COMPANY, WHICH IS THE HOLDING COMPANY FOR MOST OF THE WA 
COMMERCIAL INVESTMENTS, AND RECEIVED A COMMITMENT FROM MAUNG 
AYE THAT THE HONG PANG COMPANY WOULD BE SHUT DOWN "WITHIN TWO 
WEEKS."  MOREOVER, ACCORDING TO KALLAYANA, THAI INTELLIGENCE 
REPORTS INDICATE THAT THE COMPANY'S BRANCHES ON THE BORDER 
ARE INDEED BEING SHUT DOWN. 
 
¶8. (C) ILLEGAL IMMIGRANTS: KALLAYANA SAID THAT 2,860 ILLEGAL 
BURMESE IMMIGRANTS HAD BEEN RETURNED TO BURMA AS OF APRIL 30. 
 ANOTHER 20,000 WERE IN HOLDING CAMPS IN THAILAND.  HE NOTED 
THAT THE THAIS WERE PRESSING FOR QUICKER REPATRIATIONS AND 
HAD ASKED THE BURMESE TO OPEN TWO ADDITIONAL RECEIVING 
CENTERS AT KAWTHOUNG AND TACHILEIK, IN ADDITION TO MYAWADDY. 
HE ALSO SAID THAT THE THAIS HAD AGREED TO SCREEN RETURNEES 
FOR HIV/AIDS, BUT HAD MADE NO COMMITMENTS REGARDING SHARING 
THE TREATMENT COSTS FOR THE MANY BURMESE WHO MAY HAVE 
CONTRACTED AIDS IN THAILAND.  HE ALSO SAID THAT THAILAND HAD 
RAISED WITH THE BURMESE THE POSSIBILITY OF INVOLVING THE 
INTERNATIONAL ORGANIZATION FOR MIGRATION (IOM) IN THE 
REPATRIATION EXERCISE, BUT SAID THAT THE BURMESE HAD NOT YET 
REPLIED TO THAT PROPOSAL. 
 
¶9. (C) BORDER DEMARKATION AND CONTROL:  THERE HAD BEEN NO 
FURTHER PROGRESS ON BORDER DEMARKATION, KALLAYANA SAID, BUT 
PM THAKSIN HAD ASKED MAUNG AYE TO OPEN TWO NEW TOWNSHIP 
BORDER COMMITTEES IN THE KANCHANBURI AND THREE PAGODAS PASS 
AREAS.  HE ALSO PROPOSED THAT THE TOWNSHIP BORDER COMMITTEES 
REMAIN PERMANENTLY IN SESSION TO HANDLE ANY DISPUTES THAT DID 
EMERGE.  MAUNG AYE REPORTEDLY AGREED TO BOTH PROPOSALS. 
 
¶10. (C) FISHERIES: THE FINAL DETAILS OF THE GIANT FISHERIES 
JOINT VENTURE WHICH THE THAIS AND THE BURMESE HAVE BEEN 
NEGOTIATING SINCE THAKSIN'S JUNE 2001 VISIT WERE REPORTEDLY 
WORKED OUT DURING MAUNG AYE'S VISIT.  THE AGREEMENT WILL 
REPORTEDLY BE SIGNED THIS WEEK IN RANGOON AND THE FIRST 
OPERATIONS SHOULD START SHORTLY THEREAFTER. 
 
COMMENT 
 
¶11. (C) THREE POINTS ARE WORTH NOTING HERE.  FIRST, THE 
THAI/BURMESE RECONCILIATION THAT BEGAN LAST SPRING IS STILL 
MOVING FORWARD.  THE TWO COUNTRIES SEEM AS DETERMINED NOW AS 
THEN TO ROOT OUT THE PROBLEMS -- FROM ILLEGAL MIGRATION TO 
NARCOTICS TRAFFICKING AND SUPPORT FOR INSURGENT GROUPS -- 
THAT HAVE PLAGUED THEIR RELATIONS FOR THE PAST SEVERAL 
DECADES.  MUCH MORE NEEDS TO BE DONE, BUT THEY ARE STILL 
WORKING ON THE ISSUES. 
 
¶12. (C) SECONDLY, THE THAIS ARE PROBABLY RIGHT TO PAY MORE 
ATTENTION TO MAUNG AYE, THOUGH THEY MAY BE OVER-EMPHASIZING 
THE DEGREE TO WHICH MAUNG AYE'S STAR HAS RISEN IN RECENT 
WEEKS. CERTAINLY MAUNG AYE APPEARS TO HAVE GAINED FROM THE 
NOVEMBER RE-ORGANIZATION OF THE REGIONAL COMMANDS, WHICH 
ALLOWED HIM TO PLACE OFFICERS HE TRUSTED IN MAJOR COMMAND 
POSITIONS.  HOWEVER, HIS GREATER INFLUENCE ON BORDER ISSUES, 
PARTICULARLY ISSUES AFFECTING THE ETHNIC AND CEASEFIRE 
GROUPS, MAY SIMPLY REFLECT A GROWING FEELING WITHIN THE 
GOVERNMENT THAT RELATIONS WITH THESE GROUPS ON THE BORDER ARE 
A SECURITY MATTER FOR THE ARMY. AS SUCH, THEY MAY NOW BE 
CONSIDERED MORE PART OF MAUNG AYE'S PORTFOLIO, RATHER THAN 
KHIN NYUNT'S. 
 
¶13. (C) FINALLY, MAUNG AYE'S COMMITMENT REGARDING THE 
SHUTDOWN OF THE HONG PANG COMPANY WILL HAVE TO BE WATCHED 
CLOSELY. THAT COMPANY NOW HOLDS MOST OF THE UNITED WA STATE 
ARMY'S COMMERCIAL INVESTMENTS, AND IS HEAVILY INVOLVED IN A 
NUMBER OF LARGE CAPITAL PROJECTS.  IT IS HARD TO BELIEVE THAT 
THE WA WOULD SIMPLY WRAP IT UP ON ORDERS FROM THE BURMESE. 
MORE LIKELY, THEY WILL SIMPLY MOVE ITS OPERATIONS OFF THE 
BORDER. IN FACT, LABOR MINISTER TIN WINN CONFIRMED TO THE 
CHARGE' ON MAY 6 (REFTEL C) THAT SOME HONG PANG BRANCH 
OFFICES IN TACHILEIK AND AND OTHER BORDER TOWNS WERE BEING 
CLOSED.  FURTHERMORE, EVEN IF THE COMPANY IS LQUIDATED, IT 
COULD RE-EMERGE UNDER ANOTHER NAME.  THE WA NEED SOME VEHICLE 
TO HOLD THEIR INVESTMENTS AND LIKELY WILL RESPOND TO ANY 
PRESSURE FROM THE BURMESE WITH CHANGES THAT ARE AT BEST 
COSMETIC. END SUMMARY. 
 
CLAPP