Lord of Prosperity


On November 9 last year, officials at the village of Ban Therd Thai, Chiang Rai province, Thailand, organised a ceremony to mourn the death of Khun Sa two weeks earlier in Rangoon. “Everyone here called ‘Khun Sa chao oo’, or ‘father,'” a local official explained.

Decades earlier, when it was known as Ban Hin Taek, Khun Sa built schools and health centres in this remote and impoverished village. But Khun Sa was a not a noble man. He was generous to the inhabitants of Ban Hin Taek because for a few years he used their village as his base for an immensely profitable drug business.

For more than a decade, Khun Sa was one of the key figures in the world trade in heroin. His career depended on his ability to buy the loyalty of local people in places like Ban Hin Taek. But, more than this, his success depended on the patronage of military and political leaders of Southeast Asian states who shared in the profits of the trade. His rise and fall thus provides insight into Southeast Asian politics in the Cold War era.

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Khun Sa was born Chang Chi-fu, the son of a soldier from the southern Chinese province of Yunnan and a woman from the Burmese Shan minority people. At the age of eighteen, he became a soldier in Chiang Kai-Shek’s Kuomintang army. When the Communists won the civil war in China in 1949 most of Chiang Kai-Shek’s forces fled to Taiwan. Others, cut off in the interior of China, retreated across China’s southern border into the upland country where Burma, Thailand and Laos met. Chang Chi-Fu’s unit was among them.

This was a wild, remote area inhabited by hill-tribe people, beyond the effective reach of lowland governments, and resistant to the encroachments of Rangoon, Vientiane and Bangkok alike.  From 1950, with the support of the CIA, the Kuomintang transformed it into a base-area for guerilla war against the new Communist regime in China.  But Mao installed a ruthless security system in southern China, and all efforts to launch anti-Communist uprisings failed miserably.

The area seized by the Kuomintang was part of the belt of uplands stretching from Turkey to Southern China to which the opium poppy is native. Opium had long been used by the local peoples for medicinal and recreational purposes. In an economy which was largely-subsistence oriented, it was one of the few widely traded goods, and came to function as a primitive form of money.

The Kuomintang had been active in the opium trade in China. Chiang Kai-Shek ordered his followers in Burma to take over the local trade, and they did. Kuomintang officers also provided political and business connections with anti-Communist military officers in Laos, Thailand and South Vietnam. They also had excellent contacts in Hong Kong, the world’s greatest market for opiates. Keen to strengthen anti-Communist forces in Asia, the Americans were willing to turn a blind eye to the dubious business activities of their Cold War allies.

In the 1960s, the world drug trade was undergoing a revolution. Opium consumption and addiction had been a problem in Asia and the Middle East for centuries. As these regions came under European and American domination in the age of imperialism, the consumption of opium and its derivates began to spread in the West. Heroin was developed by a German company, Bayer, in the 1890s. It was at first marketed as a wonder-drug, but soon proved to be highly addictive.

By the mid-20th century, many governments were making increasingly vigorous efforts to suppress the use of opiates, especially heroin.  But attempts at prohibition did not suppress the growing demand for these drugs. Instead, they made supplying this market illegal and risky. This pushed prices up, and profits went up with them – making the trade a highly lucrative criminal enterprise. It also shifted the trade from opium to heroin, which was less bulky, easier to smuggle, and had an assured market because so many consumers became addicts.

As US troops poured into South Vietnam, new business opportunities opened up. Vietnamese criminals, police and military officers plied the GIs with cheap heroin. Many of them became addicts. Heroin use also exploded in the United States itself, creating vast opportunities for entrepreneurs able to obtain their heroin from Asia. New criminal networks arise, largely displacing the Sicilian Mafiosi who controlled the previous trans-Atlantic supply routes. Most of the new gangs were obtaining their heroin from the Kuomintang-controlled parts of Burma, Thailand and Laos. This area became famous as the “Golden Triangle” and for a time Khun Sa became its uncrowned king.

In 1963, Chang Chi-fu turned his Kuomintang unit into a private army, and went into the drug business, calling himself Khun Sa (“Lord of Prosperity”). He was a man of vision. His Kuomintang competitors were still content to organise mule-trains carrying raw opium out of the Golden Triangle, to be processed elsewhere. Khun Sa recognized that the lion’s share of the profits went to those who processed the opium and supplied pure heroin, so he hired chemists and built his own laboratories in remote villages. He also sought build up his own business, political and military connections to protect his operations and sell his product. At first, he built up a relationship with officers in the Burmese military. They were mainly keen to use him to undermine the Kuomintang takeover of a large swathe of Burma.

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