Banking scare traced to drugs

Banking scare traced to drugs

Drugs / Business

According to a drug control officer in eastern Shan State, the ongoing financial panic that had put the whole banking system in Burma to a standstill began when a key drug operator was arrested last late year. 

Through the "exchange of information process" that was established between Burma and its neighboring countries, Yang Kya Haw, a Kokang Chinese, and 12 of his associates were arrested in Tachilek, opposite Chiangrai, together with 5.1 million speed pills during the 4-8 October 2002 operation, said the officer who requested his identity be withheld. 

Yang later escaped from Kengtung, 160 miles north of Tachilek, where he was detained. The questionable circumstances of his flight had led to a witch hunt that cost many officials, including judges in Kengtung, their jobs and their future, he disclosed. "The next inevitable step was the examination of his assets in the banks," he continued, "and the result was the discovery of his huge funds in the Asia Wealth Bank." 

AWB is said to be the largest private bank in Burma. Its vice chairman, Aik Htun, is reputed to be close to Gen Khin Nyunt and prominent figures in the drug trade. 

"What puzzles me is that why the government is hesitant to announce the seizure of Yang's money," he wondered. "It could have prevented the current hysteria." 

The sudden depletion of funds in the AWB caused by the seizure had brought about frantic withdrawals by other customers, according to him. 

The officer's information, however, could not be confirmed. 

The Burmese economy has become totally dependent on the drug trade, and economic collapse would likely follow any attempt to wipe it out, wrote Burma expert Bertil Lintner in The Golden Triangle Opium Trade: An Overview.