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In two short years, a reform movement led by ex-generals has transformed a junta-run backwater into Asia’s new investment attraction. But there's a catch. Yangon is no ready-made Shanghai. Long neglected, the country's infrastructure leaves much to be desired. And many of the resources that make Myanmar so compelling in the first place lie in the jungle under the careful watch of guerrilla fighters. Still, the companies have come, and the money is flowing. Cue the gold rush. GlobalPost's Patrick Winn investigates.

Guerrilla economics in Myanmar’s 'black zone'

In resource-rich Myanmar, militias guard the goods.

Karen have had little opportunity to create a savvy business class, he said. Ten Der is up front about his population’s lack of education — many are illiterate — and he fears they will be outmatched in negotiations.

“Of course we know about all the timber, jade and gold we have here. We’ve known since olden times,” Ten Der said. “But at this point, we don’t even have the skills to run our own surveys.”

“Even if we achieved peace,” he said, “we’d have to turn our attention to all the land mines here. It’s not safe for development.” And what of the guerrillas’ own mines, which draw condemnation from international watchdogs?

Ten Der and others defend their DIY mines as more humane and eco-friendly than the government’s Chinese-made explosives. “After four or five months, the batteries in our mines fail and the bamboo shell is eaten by birds,” he said. “Theirs last forever.”

Though much-celebrated on the international stage, the cease-fire is seen by many guerrillas as a government ploy to expand their commercial interests. “It’s illegitimate,” said Gler Doh, commander of the KNLA’s officer training camp. “It’s a trick to get businessmen in here so they can make money.”

In the KNLA’s Brigade Five, the heart of the black zone, there are 19 state battalions to the guerrillas’ four. Instead of withdrawing, government forces are fortifying and resupplying their camps, General Baw Kyaw Heh said.

“Just because we’re not actively fighting doesn’t stop them from preparing for future attacks,” he said. “I constantly intercept their messages and I can tell you: they’re not planning to leave.”

Jungle Conflict, American Guns

The practice of subterfuge on both sides has eliminated mutual trust. “They’re tricky,” said Lay Poe, a 24-year-old KNLA soldier. Last year, in his village, the state army invited two KNLA guards to tea in a gesture of friendship, he said. “Instead, they were tortured for information. They peeled off their skin and chopped at their arms, legs and dicks,” he said. “Then they gouged them in the chest and pulled out their guts.”

Horror tales such as this, however accurate, circulate among the guerrilla ranks. “They’re good at being sneaky,” said Kaw Mo Byar, a 27-year-old KNLA soldier. “We are sneaky too but we have fewer bullets, so ambushes are our specialty. They’ll sometimes circulate false intel and ambush our ambush.”

Kaw Mo Byar relishes in his favorite war story, an account of his platoon’s raid on an army satellite uplink tower that left five government soldiers dead in close fighting. Ten others fled into the jungle, he said. But even this moment of glory speaks to the KNLA’s lack of powerful weaponry: Their explosives were too weak to topple the tower.

Many KNLA recruits carry aging M-16s stamped with “PROPERTY OF THE U.S. GOVT” and serial numbers suggesting the guns were left behind by Americans in the Vietnam War. One M-16 spotted by GlobalPost was produced in the early 1970s by General Motors’ “Hydramatic Division,” which specialized in car transmissions. According to one KNLA major, an M-16’s black market value ranges between $1,000 and $1,600.

To cut costs, cadets in training are given M-16 facsimiles carved from wood. Sympathetic ex-officers retired from the world’s elite militaries — American, Australian and British among them — are also invited in for pro bono tactics instruction. “We’re supported by friends of the revolution,” Baw Kyaw Heh said. “I was trained by a French commando.”

But, for the time being, the guerrillas fear their combat skills may atrophy. “Change? There’s no change here,” Kaw Mo Byar said. “I can only tell you about one change and we’re not too fond of it. We no longer get to shoot at the other side.”

Guarded Treasures

Money is a core driver of Myanmar’s great experiment with democracy, a movement that has seen political prisoners freed, oppression relaxed and a transition of junta power to an army-managed parliament. These are the reforms that recently convinced Western governments to peel away sanctions. The global competition to extract Myanmar’s natural treasures has commenced.

But most of those treasures — oil and gas, gems and trees — happen to lie within areas controlled at least in part by militias opposing outright central rule. Though the Karen guerrillas stand out for their defiance,

http://www.globalpost.com/dispatch/news/regions/asia-pacific/myanmar/120809/economy-karen-state-burma