Regional Outlook : Golden Triangle’s Blooming Threat : U.S. officials report a huge increase in opium and heroin production from Thailand, Laos and Myanmar. And the narcotics are headed this way.

MAE HONG SON, Thailand--Despite its location in the remote northwestern corner of Thailand, there is a sheen of new money about Mae Hong Son, with five-star hotels rising incongruously in rice paddies, new banks opening monthly and land prices soaring so fast that farmers have been driven into the surrounding hills.

While the town of 20,000 inhabitants has undoubtedly profited from a countrywide tourism boom, it also boasts an advantage available to few other vacation spots: visits by men in pickup trucks whose suitcases are stuffed with money instead of resort clothes.

“All of our rice and goods goes across the border to the drug dealers,” noted a banker in the town. “All transactions are in cash. We don’t ask questions, and they don’t make trouble.”

Mae Hong Son is a key outpost in the Golden Triangle, a wedge of land straddling Thailand, Laos and Myanmar (formerly Burma) whose tropical soil is ideal for growing opium. Although the area has long been a source of the raw material for making heroin, U.S. officials are alarmed that the stream of Golden Triangle drugs reaching the West has recently turned into a flood.

According to the U.S. government’s International Narcotics Control Strategy Report issued in March, the Golden Triangle produced 3,050 tons of opium in 1989, a staggering 100% increase over the previous year’s crop. The refining process reduces one metric ton of opium into 100 kilograms, about 220 pounds, of pure heroin.

“We are seriously concerned with the potential for heroin to again become a major drug of abuse in the United States, especially if and when the crack phenomenon begins to abate,” Melvyn Levitsky, assistant secretary of state for international narcotics matters, recently told Congress. Levitsky said that, according to the latest U.S. estimates, “Southeast Asia has replaced Southwest Asia as the major source region for heroin entering the U.S. market.”

Felix Jimenez, chief of the U.S. Drug Enforcement Administration’s heroin task force, said in an interview with The Times last month in Washington that chemical analysis of heroin seizures made on American streets in the last two years indicated that 46% of the drugs was so-called Heroin No. 4, the pure white powder that originates in the Golden Triangle. As recently as 1987, the figure was just 18%.

Drug shipments from the region to Europe and Australia are reportedly also on the increase.

Assuming that only half of the Golden Triangle’s opium is refined, the output of the region would still top about 330,000 pounds of pure heroin. In contrast, U.S. drug authorities seized just over 1,700 pounds in 1989, a decline from the 1,824 pounds confiscated in 1988, according to Jimenez.

“We’re not even intercepting 1%,” lamented a Western narcotics officer based in Bangkok.

In addition to the huge increase in Golden Triangle production, narcotics officials note two other disturbing trends.

* Refining of opium into heroin, a delicate task once limited to sophisticated illegal laboratories in places like Marseilles, France, and Hong Kong, has now been mastered by local experts so that nearly all processing takes place within the Golden Triangle, making interception that much harder.

* The Mafia and Corsican gangs that once specialized in bringing heroin into America--as depicted in “The French Connection” and other popular films--have been largely replaced by Chinese business people. Ethnic Chinese in Thailand now buy the drugs, connect with Hong Kong Chinese who bankroll the shipments, and sell exclusively to Chinese criminals in cities such as Los Angeles, London, New York and San Francisco. The Chinese groups, linked by family ties and speaking arcane Chinese dialects, are almost impossible for Western law enforcement agencies to infiltrate.

Back in the 1960s, when heroin from the Golden Triangle first reached American GIs serving in Vietnam, the business of growing opium was fairly evenly divided among Thailand, Laos and Burma. But recent studies suggest that Myanmar now has far outpaced Thailand and Laos, alone producing half of the world’s opium.

The opium-growing areas of Myanmar are primarily in the remote Shan states, which lie adjacent to the borders with Thailand, Laos and China. Since the time of Burmese independence from Britain in 1948, the Shan states have been in rebellion against the government in Yangon, the capital formerly known as Rangoon, and have been under the rule of a collection of warlords reminiscent of China at the turn of the century.

The dominant warlord in the area is now Chang Chi-Fu, who is half Chinese and half Shan. He heads a rebel group called the Shan United Army. Chang’s men call him Khun Sa, a local title which translates as “Prince Prosperous,” an appropriate nom de guerre considering that he claims to control 60% of the opium in the region.

U.S. officials have described Khun Sa as the world’s largest drug dealer, surpassing even the kingpins of the Colombian and Mexican cartels. Unlike the Latin drug dealers, however, the 57-year-old Khun Sa eschews a flamboyant lifestyle and prefers the military fatigues of his political movement.

Khun Sa was indicted in the United States last Dec. 20, accused of smuggling hundreds of kilograms of heroin into New York.

Khun Sa does not deny his involvement with opium, telling reporters whom he summons to his mountain base camp at Ho-mong in Myanmar that the drugs are sold solely for the survival of his 8,000-man army and the independence struggle. He has repeatedly offered to sell the drugs directly to the U.S. government for $500 million over six years, an offer the United States has rejected on the grounds that it would merely increase the demand for heroin.

“Why does the West call me a criminal?” Khun Sa asked in a recent briefing for reporters. “You people come here to buy my opium. If I had the choice, I would not grow it.”

Levitsky, the assistant secretary for international narcotics matters, said during a visit to Bangkok this year that there is “evidence that indicates that the government of Burma also has a sort of collusive relationship with some of the traffickers and is allowing them, in some kind of a bargained way, to go ahead unfettered.”

Western diplomats have suggested that the government in Myanmar now fears Khun Sa is getting too strong and is providing assistance to his warlord rivals.

Near-perfect weather during the past two growing seasons has helped boost Myanmar opium production, and so, paradoxically, may have U.S. aid that was supposed to help the Myanmar authorities wipe out the opium crop.

The $18-million program, suspended in 1988 following a government crackdown on human rights campaigners, financed the spraying of opium crops. But instead of curbing production, narcotics officials believe, the program only inspired farmers in the opium areas to increase their planting in hopes of compensating for expected spraying losses.

“We sprayed them into overproduction,” said a narcotics expert in Bangkok.

Just to account for last year’s growth in output would have required about 125,000 acres of new poppy fields, according to narcotics experts. Estimates of the size of opium production are derived by examining satellite photos.

Opium grown in the northeastern Shan states is taken to crude local refineries to be reduced into morphine base. The morphine is then usually moved to chemical laboratories near the borders with Thailand or China for the final, complicated step: mixing with acetic anhydride and heating carefully to form basic heroin. The mixture produces gases that can cause a massive explosion if handled improperly.

The finished No. 4 heroin--nicknamed “China White” by addicts--is water soluble and thus preferred by American heroin users who inject it. No. 3 heroin from such Southwest Asian countries as Iran, Pakistan and Afghanistan is made primarily to be smoked.

The refined Golden Triangle heroin is pressed into blocks for export and sent out of Myanmar in backpacks of human “mules.” A backpacker can easily slip across a border with 10 kilos.

According to narcotics officers in Washington and Bangkok, the majority of the refined drugs are still moved south through Thailand. The Myanmar-Thai border is open and virtually unpoliced, and many of the drug deals are carried out in northern towns, which one narcotics officer likened to “the Wild West.”

Thailand boasts a modern road network running south, and the port of Bangkok now handles more than 1 million containers a year, making concealment easy and discovery rare.

The heroin is stashed in plaster Buddhas, bundles of clothes, even stuffed into goldfish. A one-ton consignment of heroin was discovered in 1988 only because an unseasonal February downpour caused white puddles to seep out of a rubber shipment, arousing the suspicions of dock workers.

From Bangkok the drug is shipped to the United States, Europe and Australia.

One recently opened export route runs through the Chinese province of Yunnan, through the city of Kunming to Hong Kong. David Tong, assistant commissioner of Hong Kong customs, said in an interview that as much as 30% of the heroin entering the British colony is believed to come through the China route.

“I believe the Golden Triangle could soon become a Quadrangle with the participation of China,” said a Bangkok-based official.

Narcotics officials also believe substantial quantities of heroin cross Myanmar, reportedly in army trucks, for loading on boats to Singapore and Malaysia. There is also an export route northwest through India, where the clandestine labs in Myanmar obtain necessary chemicals.

U.S. officials have been quietly expressing concern for some time about official corruption in Thailand playing a role, albeit passive, in moving such huge quantities of drugs through the country.

The Thai military actually built a paved road from northern Thailand into Khun Sa’s headquarters, a mistake which it blamed on a low-ranking officer who was transferred. But Khun Sa continues to maintain offices in both Chiang Mai and Mae Hong Son in northern Thailand, and officials of his group move freely across the border to buy goods and bring in wounded soldiers.

Khun Sa himself reportedly has not entered Thailand since the U.S. indictment was announced.

“Trying to prove corruption cases involving negligence is almost impossible,” said police Lt. Gen. Chavalit Yodmani, the head of Thailand’s Office of the Narcotics Control Board.

Nonetheless, U.S. officials were infuriated last month when Maj. Gen. Veth Petborom, one of the top officers of the Thai police department who is under indictment in the United States for drug trafficking, was “punished” by being allowed to retire with full pension.

Chavalit said that equally difficult as stamping out corruption is trying to seal Thailand’s border, which is almost 2,000 miles long. In recent months, Thai firms have been bringing hundreds of tons of teak logs across the border from Myanmar, in addition to the normal flow of jade and cows, making detection even harder.

“We just don’t have the means to patrol all the entries and exits in northern Thailand,” said Chavalit, whose office has just 200 enforcement agents.

U.S. narcotics officials are now hoping that the recent elections in Myanmar may bring about a shift in alliances between the Yangon government and the rebel groups, which will help end the civil war and allow the Shan states greater access to the outside world. Then, Western aid could help build roads and offer crop substitution programs such as the ones which have been so successful in cutting back opium production in Thailand.

One official said that Laos, for example, has recently performed a 180-degree turn in its attitude toward opium production after 15 years of stonewalling. The government in Vientiane is now calling for U.S. assistance to help opium-growing areas climb out of the economic rut that makes drug production so attractive.

“There still is heavy official involvement in narcotics, particularly in the Ministry of Defense,” said the official. “But slowly we are building an anti-narcotics constituency in other ministries. It’s a long, slow battle.”