This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L SECTION 01 OF 06 RANGOON 000031 
 
SIPDIS 
 
STATE FOR EAP, INL, AND DRL 
USCINCPAC FOR FPA 
 
E.O. 12958: DECL: 01/06/2013 
TAGS: PINS SNAR PHUM PREL MOPS BM
SUBJECT: END GAME IN BURMA'S ETHNIC WARS 
 
Classified By: COM Carmen Martinez.  Reason: 1.5 (d). 
 
¶1. (C) Summary: Burma has basically won its ethnic wars. 
While some small-scale operations continue, the situation now 
is nothing like it was in the late 1980s.  Then, 20 separate 
insurgent groups could put more than 60,000 troops in the 
field in Burma.  Now, the five or six groups that remain 
active can muster at most 5,000 troops.  All, moreover, have 
been reduced to guerrilla operations; none are any longer 
capable of holding territory in Burma. 
 
¶2. (C) Behind these developments lie an integrated GOB 
political, military, economic, and diplomatic strategy that, 
in many ways, was the exact opposite of Ne Win's approach. 
Led by Secretary 1 Khin Nyunt, the GOB has mixed political 
negotiations with military force, economic inducements, and 
diplomatic initiatives to isolate, defeat, co-opt, and slowly 
re-integrate its armed opponents within the Burmese Union. 
The entire 14-year campaign is an excellent example of the 
political skills the SPDC can display when issues of high 
interest to them are at stake. 
 
¶3. (C) Problems remain, however.  It is still not clear how 
the government plans to integrate these former insurgent 
groups and their special regions into an enduring 
constitutional order.  International appreciation of the 
government's victory has also been strictly limited. 
Regional states like China, India, and Thailand have accepted 
the GOB's victory.  In the West, however, the view is 
decidedly more negative.  While some Western governments have 
welcomed the re-establishment of order in areas previously 
governed by criminal elements, for most, the allegations of 
human rights abuses that accompanied the GOB's campaign have 
only solidified their view of the GOB as a brutal 
dictatorship.  Finally, but perhaps most seriously, there is 
no guarantee that the government's work will last.  For 
whatever success the GOB has had in ending the ethnic wars 
and reconstructing the Union of Burma, it has failed 
miserably as a government -- to the point of never even 
laying a secure fiscal basis for continued rule.  If that is 
not corrected, then all of the GOB's work in reconstructing 
the Union, through war, diplomacy, and political 
negotiations, could well be washed away.  End Summary. 
 
¶4. (C) For all intents and purposes, the GOB has won its 
ethnic wars.  While low intensity operations continue on both 
the eastern and western borders, the situation now is nowhere 
near what it was when the State Law and Order Restoration 
Council (SLORC) seized power in 1988.  Then, the GOB was 
faced with over 20 active insurgent groups capable of putting 
a combined total of over 60,000 soldiers in the field.  The 
Kachin Independence Organization controlled the largest 
portion of Kachin State; the Burmese Communist Party held 
most of northern Shan State east of the Salween river; Khun 
Sa's Mong Tai Army was ensconced in southern and western Shan 
State; and the Karen National Union held broad swathes of 
Karen State.  Now, virtually none of this remains.  The only 
armed opposition still in the field -- the Karen National 
Union (KNU), the Karenni National Progressive Party (KNPP), 
the Shan State Army (South), the Chin National Front (CNF), 
and the Arakan Rohingya National Organization (ARNO) -- taken 
altogether, can perhaps put 5,000 troops in the field.  All, 
moreover, have largely been reduced to guerrilla operations. 
None are capable any longer of holding territory in Burma. 
 
National Defense and Counter-insurgency Strategy 
 
¶5. (C) Behind this change lies an integrated GOB political, 
military, and economic strategy that has matured as the GOB 
has moved away from the simple-minded defense strategies of 
the Ne Win and U Nu years.  Ne Win basically believed that 
the greatest threats to Burma would arise from its nearest 
neighbors (China, India, and Thailand) and that its greatest 
strength lay in its natural defenses -- the mountains and 
forests that surround the Burman heartland.  Burma, he 
believed, could rely on natural obstacles to hold up any 
attacker and on a lightly armed people's army to cut the 
enemy to pieces in the forests.  It became, as a consequence, 
policy under both the U Nu and Ne Win governments to leave 
the wilderness areas intact -- in effect, to sacrifice the 
development of those border areas to Burma's national defense 
priorities. 
 
¶6. (C) That approach, however, had disastrous side-effects, 
providing both the motive and the opportunity for ethnic 
rebellions.  It antagonized the ethnic inhabitants of the 
outlying regions, who found themselves cut off from any hope 
of development.  It also limited the government's writ in 
those areas, as the wilderness that the Burmese created 
proved equally impenetrable from the Burmese side.  The 
Burmese Army could mount dry season sweeps through these 
regions, but it could not maintain a presence in the face of 
popular resistance.  As a result, the GOB rapidly found 
itself surrounded not by buffers to invasion, but by 
safe-havens from which bandits and insurgents could operate 
with impunity.  Law and order broke down and ethnic 
insurgencies spread to the point where, by the mid-1980s, 
virtually all of Burma's inland borders were in the hands of 
insurgents. 
 
The Turning Point 
 
¶7. (C) Fortunately for the government, the insurgents had 
their own problems.  Factionalism was rife and foreign 
support uncertain.  China, in particular, backed off from 
support of the Burmese Communist Party (BCP) after the rise 
of Deng Xiao Ping in the late 1970s.  Thailand, similarly, 
swung back and forth between support for ethnic rights in 
Burma and concern about the refugee, crime, and public health 
problems generated by the insurgencies in Burma.  As a 
result, neither the GOB nor the insurgents could gain the 
upper hand until events brought in new leadership, both in 
Rangoon and among the major insurgents during the late 1980s. 
 In Rangoon, the military established a new military council 
(the State Law and Order Restoration Council) in place of Ne 
Win's failed dictatorship.  Six months later (in March and 
April 1989) a series of mutinies tore the BCP into a set of 
smaller ethnic armies whose first priority was not national 
revolution, but peace and development for their own regions. 
 
¶8. (C) Recognizing the opportunity (and the necessity for 
change), the GOB, led by Secretary 1 Khin Nyunt, basically 
turned government policy on its head.  Within months, the GOB 
negotiated  political agreements with four factions of the 
BCP -- the Kokang Chinese under Peng Kya Shin, the Wa under 
Kyauk Ni Lai and Pauk Yu Chan, the Shan, Akha, and Lahu under 
Sai Lin, and the BCP's Kachin under Ting Ling.  Active 
hostilities were brought to a close, while the former 
insurgents were allowed to keep their arms and to administer 
the territories they occupied.  Khin Nyunt described the 
approach as giving the ethnic groups what they wanted -- 
peace and an opportunity for development.  The final 
agreements, however, also solidified splits among the ethnic 
factions and helped ensure that the GOB would never again 
have to face the combined strength of the BCP in the field. 
 
¶9. (C) Over the next half-decade, the GOB offered the same 
basic political deal to all other insurgent groups.  It also 
added military, economic, and diplomatic elements to its 
strategy.  On the military side, the Burmese Army ditched the 
idea of fighting a "people's war" -- a doctrine which had 
kept its own lightly armed forces on a par with the 
insurgents -- and began to add manpower, heavy weapons, and a 
logistic tail that would allow it to sustain operations 
year-round in insurgent areas.  It also concentrated against 
the most recalcitrant groups -- the KNU and Khun Sa's Mong 
Tai Army -- eventually forcing the Mong Tai Army into 
surrender and the KNU out of Burma entirely.  On the economic 
side, it sweetened the deal.  Originally, the GOB offered the 
former insurgents only control of the economic resources 
within the territories they administered.  Basically, this 
amounted to border trade, logging and mineral rights, and the 
illicit traffic in narcotics.  Beginning in 1990, however, 
the GOB added a borderlands development program, which has 
since contributed more than 20 billion kyat (according to 
government figures) to development in areas controlled by the 
former insurgents.  It also passed out mineral rights within 
Burma proper and opened up the Burmese economy to investments 
by the insurgent groups, allowing the Wa, for instance, to 
make investments in banks, airlines, plantations, ranches, 
and factories throughout Burma.  While this has been 
controversial, with many Burmese accusing the government of 
selling off the economy's crown jewels to criminal elements, 
it has also given the former insurgents a stake in the Union 
and opened development opportunities for them that go beyond 
crime. 
 
¶10. (C) This promise of peace, development, and self-rule, 
when combined with the threat of increased military action 
and the lure of economic benefits, proved irresistible to 
most insurgent groups.  Between 1990 and 1995, seventeen 
separate groups reached agreements with the government, 
including the Kachin Independence Organization, the Kayan New 
Land Party, the New Mon State Party, the Pa'O National 
Organization, the Palaung State Liberation Party, and a 
variety of other smaller groups.  One year later, the Mong 
Tai Army surrendered, leaving the KNU as the only significant 
insurgent group still in the field.  Even the KNU, however, 
was only a shadow of its former self.  Split into two rival 
religious factions (the KNU proper and the Democratic Karen 
Buddhist Army, which has since allied itself with the GOB), 
the KNU has not been able to carry out any significant 
military operations in Burma since 1996. 
 
Finishing the Job 
 
¶11. (C) Since then, the GOB has focused on reducing the 
remaining centers of resistance and re-incorporating the 
former insurgent territories within the Burmese Union. 
Neither problem has been solved, but the outlines of the 
government's plans are clear.  In the case of the remaining 
active insurgencies, the GOB will continue to combine offers 
of negotiation with military and diplomatic pressure.  For 
the KNU, the KNPP, and other groups that the GOB recognizes 
as legitimate representatives of national races in Burma, the 
GOB has basically left the terms of the 1988-95 agreements on 
the table.  As then, it is prepared to offer peace, amnesty, 
self-administered areas, and the right to keep their arms and 
private armies in return for pledges of loyalty to the Union 
and a renunciation of armed struggle.  In contrast, it has 
offered the Shan State Army-South only the surrender terms 
originally accepted in 1996 by their original leader, Khun 
Sa, and his Mong Tai Army. 
 
¶12. (C) Meanwhile, the GOB has maintained the military 
pressure on these armed groups, extending its operations 
right up to the Thai border, while relocating villages in 
Shan, Karen, and Kayah States on which the Shan State Army 
(South), the KNU, and the KNPP depend for support and 
shelter.  For the insurgents, the effect of these operations 
has been devastating.  Without the protection of a sheltering 
population and faced with a serious enemy, most have 
abandoned significant military operations.  The SSA now 
almost never operates anywhere outside the range of covering 
fire from Thai guns, while the KNU and KNPP have slowly 
drifted towards banditry. 
 
¶13. (C) Finally, on the diplomatic front, the GOB has taken 
advantage of Thai Prime Minister Thaksin Shinawatra's 
interest in stability, legality, and economic development in 
northeast Thailand, and in securing Burmese cooperation in 
pursuing those aims, to reduce Thai support for insurgent 
groups.  This effort came to a head during the summer of 
2002, following clashes on the Thai/Burmese border.  Since 
then, it has become increasingly clear that the days of 
launching insurgent attacks on Burma from Thai soil may 
finally be over.  The remaining Burmese insurgent groups in 
Thailand may be able to continue their political activities; 
cross-border military action, however, will likely become 
increasingly difficult. 
 
¶14. (C) This new Thai government approach has, in turn, put 
the insurgents in a difficult position, forcing many to 
seriously consider negotiations.  The KNPP, in fact, has 
already split, with one fairly large group under Richard Htoo 
having accepted the government's terms -- essentially 
resuming the cease-fire agreement originally negotiated in 
¶1995.  The KNU is also deep in negotiations with the GOB, 
although it remains to be seen whether KNU strongman Bo Mya 
will ever be able to bring himself to accept a cease-fire. 
Even the SSA has asked for terms, though the difference 
between what they are asking for (essentially autonomy within 
their own self-administered region) and what the government 
will give (basically an amnesty plus a new start in life for 
individuals) is huge. 
 
Re-integration 
¶15. (C) The GOB has coupled its continuing counter-insurgency 
operations with efforts to re-incorporate former insurgents 
in the Union.  Its approach has basically been to maintain 
the spirit of the original cease-fire agreements -- at least 
while the GOB was negotiating similar agreements with others 
-- but to make clear that 1) everything depends on the 
capacity of the former insurgent groups to maintain order in 
their territories and 2) that nothing in those agreements 
gives anyone the right to violate the law, or ignore other 
political and administrative arrangements prevailing in the 
Union.  The Kokang Chinese, in particular, have felt the bite 
of the first condition.  When a coup by the Yang family (the 
traditional rulers of the Kokang) and a counter-coup by Peng 
Kya Shin split the Myanmar National Democratic Alliance Army 
in to three separate groups during the mid-1990s, the GOB 
picked a favorite (Peng Kya Shin) and moved in to 
re-establish a Burmese Army presence (and now dominance) in 
the previously sacrosanct cease-fire area.  Similarly, when a 
mutiny split Mon Sa La's Mong Ko Defense Army in 2000, the 
Burmese Army moved in, occupied Mong Ko and wiped both 
competing bands off the map. 
 
¶16. (U) The GOB has also slowly extended its administrative 
reach into the former insurgent territories through subsidies 
and aid programs, the re-establishment of education and 
health services, and introduction of Burmese police and 
military operations.  In 2001, for the first time, the GOB 
established a Burmese police presence in the Wa territories 
and a Burmese military intelligence office in the Wa capital 
of Pang Sang.  Requests for permission for government visits 
to cease-fire areas or Burmese military transit through these 
areas have also become largely perfunctory.  Where once it 
really did ask permission, the GOB now merely notifies the 
cease-fire groups that it is coming, and then goes, 
regardless of whether it receives an answer or not. 
 
¶17. (C) On the legal front, the GOB has conditioned its 
support for former insurgent groups on pledges by the groups 
to make their regions opium-free.  Sai Lin of Shan State 
Special region No. 2 around Mong La pledged to make his 
region opium-free by 1997, and has apparently done so, albeit 
while building Mong La into a flourishing center for gambling 
and prostitution.  Peng Kya Shin of the Kokang Chinese, 
similarly, pledged to be out of opium by 2000, but failed, 
and is now paying the price for that failure through an 
extended joint Burmese/Chinese police crackdown on Kokang 
narcotics operations.  As for the Wa, they are due to be out 
of opium by 2005 and are apparently on track. 
 
¶18. (C) Finally, by some well-managed diplomacy, the GOB has 
earned China's support for both its law enforcement and its 
political efforts.  Aroused by the growth of narcotics 
trafficking from Burma into and through Yunnan Province, 
China has changed from the historic ally of the BCP remnants 
that now form many of these cease-fire groups into one of 
their most resolute opponents, regularly demanding (and 
getting) cease-fire group cooperation in the suppression of 
narcotics production and trafficking all along its border 
with Burma.  As nothing else could, these aggressive Chinese 
law enforcement operations have illustrated for the 
cease-fire groups the potential political consequences of 
continued involvement with narcotics.  In simplest terms, the 
Chinese and the Burmese together have made it known that 
these  groups have no political future, if they stay with 
drugs. 
 
Conclusions 
 
¶19. (C) A few basic points stand out from this history. 
First, Burma's ethnic wars are all but over.  While a few 
peace agreements have yet to be negotiated, all of those that 
matter (with the KNU, the KNPP, and the SSA) could be 
completed within the next few months, i.e., by the close of 
the coming dry season. 
 
¶20. (C) Secondly, the SPDC is anything but a simple extension 
of Ne Win's previous dictatorship, at least in its dealings 
with the ethnic insurgents.  Where Ne Win was content to 
neglect and exploit the border areas for the sake of security 
in the Burman heartland, the SPDC has made defense of the 
Union -- the entire Union -- a national priority.  That 
approach has had its own consequences for ethnic minorities 
-- the wars the SPDC has waged in the ethnic areas have been 
real wars, not the trivial sweeps once orchestrated by Ne 
Win.  However, the peace, autonomy, and opportunity for 
development that the SPDC has offered these groups have been 
equally real.  There has been no false dealing, a la Ne Win. 
 
¶21. (C) Thirdly, the political skills the SPDC has 
demonstrated in dealing with these insurgencies belies their 
image in the West as political buffoons.  While the SPDC has 
generally responded ineptly when asked to perform in 
accordance with the Western agenda on political and economic 
liberalization, on issues of vital concern to themselves 
(like these internal wars), they have acted with skills that 
many other states (think of Russia with the Chechens) can 
only envy.  The difference is in part a matter of priorities. 
 For the GOB, issues affecting the integrity of the union 
come first; nothing else really gets as much high-level 
attention. 
 
¶22. (C) That said, it is also worth noting that whatever 
success the GOB has had in dealing with the insurgencies, 
there are still major unresolved problems.  To start with, it 
is still not clear how the government plans to integrate ad 
hoc structures like the special regions into an enduring 
constitutional order.  While it has been willing to allow the 
cease-fire group leaders a voice in Burma's constitutional 
debates, inviting several to its now suspended National 
Conference, there is a large group of Burmans (and Burmese 
Army officers), who would just as soon see these groups and 
their special regions disappear entirely.  For the 
government, keeping faith with the cease-fire leaders while 
responding to the interests of these other influential groups 
will be a challenge. 
 
¶23. (C) There has also been little international recognition 
of the government's victory.  Regional states, such as 
Thailand, China, and India, which were the countries most 
affected by Burma's ethnic wars, have generally accepted the 
GOB's success. In their view, the resulting stability was 
far, far better than the lawlessness and anarchy that 
prevailed for so many years.  In the West, the view is more 
jaundiced.  Like regional states, some Western governments 
have welcomed the re-establishment of order in areas 
previously dominated by criminal elements.  However, others 
were horrified by the human rights abuses that accompanied 
the government's campaign in ethnic areas, solidifying their 
view of the GOB as a brutal dictatorship. 
 
¶24. (C) Finally, but perhaps most seriously, there is really 
no guarantee that the government's work will last.  For 
whatever success the GOB has had over the past fourteen years 
in ending the ethnic wars and reconstructing the Union of 
Burma, it has failed miserably in dealing with its own 
problems as a government.  Even setting aside the deep 
resentment that it has engendered among the Burmese 
themselves through the long denial of their basic human and 
political rights, and its failure to deliver any semblance of 
prosperity, it has also failed to establish a fiscal basis 
for continued government.  Having tried, like many before 
them, to run a government on the surpluses of state-owned 
enterprises, the  SPDC has been left high and dry as those 
surpluses have disappeared.  None of these problems are easy 
to deal with, but, if the government does not deal with them 
effectively, then all of its work in reconstructing the 
Burmese Union, through war, diplomacy, and political 
negotiations, could well be washed away. 
Martinez