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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.

they are only one of a dozen armed factions in Myanmar drawn along ethnic lines.

To the north of their terrain, the Shan, the nation’s second-largest ethnicity, have long patrolled lands blanketed in lavender poppy fields. Farther north, the Wa, once infamous as headhunters, man a 30,000-strong army friendly with China. Farther north still, war simmers between state troops and the Kachin, whose forces roam turf replete with jade and exquisite timber.

The ruling Burmese have used brute force to suppress these groups and prevent the nation’s splintering into multiple Balkanized states. In areas too defiant to conquer, central reign competes with warlordism. Marginalizing minorities has driven many groups toward classic revenue sources for irregular armies around the world: narcotics, such as opium and cheap speed, as well as resource concessions with powerful foreign interests, namely from China.

Cease-fires with ethnic armies, some of which agreed years ago to act as state-sanctioned “border guard forces,” have paved the way for Burmese firms to set up industrial projects, logging zones and mines generating cash for tycoons with military connections.

Even in Karen State, business-minded KNLA commanders sign off on logging and mining enterprises for a fee. According to watchdog groups, such as the Burma Environmental Working Group, these projects can be just as destructive as their government-backed counterparts.

Along rivers where peasants once panned for gold flecks, larger mining operators blast the soil with industrial water hoses and spill toxins into the waters. One of the most lucrative extraction zones, called Shwegyin, has been a flash point for conflict between state and guerrilla forces.

“Our side gets a lot of tax money from these mines. But it destroys land that people depend on for rice and fish,” said Eha Thoo Lay Soe, a 19-year-old student whose village sits near a gold mine. “People that don’t understand politics and strategy get corrupted by payoffs. In the end, they have nothing.”

But the KNLA, unlike the government, at least offers villagers a channel to complain when projects grow too harmful, said General Baw Kyaw Heh. “It’s a calculation based on benefit and harm. We try to figure out an outsider’s motives and whether we can trust them. If we’re confident in their plans, we might let them in,” he said. “But when people complain, we stop.”

Prior to 2007, when the Thai and Myanmar governments hoped to start construction on a Salween River hydro-power dam, the general built a camp overlooking the site and posted soldiers to fend off surveyors. It worked. The roughly $3 billion dam project titled Wei Gyi — translation: big whirlpool — was halted.

“The Burmese government will sell a piece of paper to allow business here. They don’t give a damn what the KNLA thinks,” said May Oo Mutraw, a member of a Karen National Union peace negotiation team in government talks. “But business people have learned quite well that they need our approval too.”

Baby-faced Cynics

As the Karen National Union’s leadership ages, the group is training young Karen to navigate future challenges. But like their elders, the best and brightest at the union’s “New Generation” school are shaped by childhood experiences steeped in raw violence.

“I was born in a Burmese jail,” said Poe Taung, whose name translates as “Mr. Prison.” His mother, he said, was too weighed down with his fetus to escape army intruders that shot his father dead. “In prison, my mom was too malnourished to give me milk. She was forced to give me away to a relative.”

Each of his schoolmates has an equally troubling backstory: one born in a jungle clearing, another with memories of huts set aflame, yet another who witnessed troops shooting his family’s pigs. Several were conscripted by the KNLA, which requests one healthy male or female from each Karen family.

As young men, they are not indifferent to the fruits of development: mobile phones, electricity and jobs. “What I want most is transportation,” said Htaw Gay Soe, a 22-year-old student at the New Generation school. “Look at how we have to climb a mountain just to get anywhere!”

“Cars, phones, of course we want all that,” he said. “But first we need an educated class. Without that, it’s useless, because everything will just be run by someone else. Investors can be scary to us.”

That Karen leaders are attempting a cease-fire suggests that, however cynical, they are aspiring toward change. If the war ends, some senior leaders contend the KNLA could be transformed into a regional force modeled on the US National Guard.

But when asked to describe the future, the young Karen chosen to guide their people to prosperity sound much like their elders: world weary and dry on faith.

“I will be a grandfather one day,” said Eh Htoo, a 22-year-old guerrilla cadet. “And we’ll still be fighting. Maybe between now and then I can help drive them farther back.”