Choking points: Opium flows, roadblocks and Illicit finance in Burma's Shan State

Starting in the 1950s, the growing cultivation and circulation of opium across Burma’s Shan State offered armed groups opportunities for revenue generation. While there were several methods for profiting from the opium trade, Shan State’s opium sector displayed two significant features during the early post-World War II period: firstly, one armed group - the remnants of Chiang Kai Shek’s defeated Kuomintang forces - received the majority of the profits, rather than the dozens of local armed groups operating in the area. Secondly, taxation by roadblocking was limited to a few chokepoints rather than being more widespread. What accounts for this pattern of revenue generation in which roadblocking was limited to chokepoints and opium wealth was concentrated? This study explores Shan State’s opium sector and argues that the structure of the opium sector, shaped by the properties of opium, physical terrain and varying state capacities, created opportunities and constraints for armed groups to profit from the opium trade. The first section lays out the structure of Shan State’s opium sector. The following section discusses the forces shaping the configuration of opium flows. The third section assesses the various opportunities and challenges for armed groups to generate revenue from the opium trade. The final section explores a logic of opium predation, which involves the influence of time horizons on armed groups’ use of violence. The study shows a need for moving beyond a focus on the presence of valuable resources and opportunities for revenue generation. Instead, it considers on-the-ground dynamics and the importance of the properties of the poppy, the physical features of Shan State and limited state capacities in accounting for pathways in which opium moves from fields to markets and the strategies pursued by actors in profiting from its taxation and sale.