[Audie Cornish:] An update now on fighting in Myanmar that's been going on for decades. Several thousand people in Shan State have been displaced as ethnic minority insurgents fight for greater autonomy from the central government. Now, as Michael Sullivan reports, Myanmar's lucrative drug trade is increasingly fueling the conflict.
[Michael Sullivan, Byline:] This month, rebels of the so-called Northern Alliance staged a daring series of surprise attacks against Myanmar's military in Shan State and beyond, one of them against a highly symbolic target uncomfortably close to Myanmar's heartland, says David Mathieson, an independent analyst based in Yangon.
[David Mathieson:] This was in Mandalay region when they rocketed basically Myanmar's version of West Point. This is really quite unprecedented. We haven't seen anything like this in decades of civil war in Myanmar.
[Michael Sullivan, Byline:] The Northern Alliance, which includes the newly resurgent Arakan Army, also targeted a bridge on a major trade route with neighboring China. At least a dozen members of Myanmar's military were killed in the attacks along with several civilians. They come at a time when Myanmar's military has been involved in fierce fighting with the Arakan Army in Rakhine State for months, Mathieson says.
[David Mathieson:] This is a truly national insurgency with multiple allies, and there's very little understanding of this. And then you have the United Wa State Army, the Shan State Progressive Party, all of these groups that have been around for a very long time and are barely understood outside of Myanmar. And they need to be understood better, otherwise this conflict won't be resolved.
[Michael Sullivan, Byline:] But there are a number of factors working against an end to Myanmar's long-running civil war, understanding is just one of them. The government's refusal to budge on the ethnic groups' demands for greater autonomy is another. And then there's money.
[Jeremy Douglas:] The biggest source of finance for conflict is clearly drugs.
[Michael Sullivan, Byline:] Jeremy Douglas is regional director for the United Nations Office on Drugs and Crime in Bangkok. He says the trade is much bigger now than it was decades ago, when the area was better known for its opium and heroin production. Now it's mostly synthetics like crystal methamphetamine, or ice, destined for markets in Australia, Japan, South Korea and beyond, a business the UNODC reckons is worth a staggering $60 billion a year.
[Richard Horsey:] If you're a conflict actor in Shan State and you've got to get income to support your fight, what do you turn to?
[Michael Sullivan, Byline:] Richard Horsey is one of the authors of the recent International Crisis Group report, "Fire And Ice: Conflict And Drugs In Myanmar's Shan State."
[Richard Horsey:] There isn't a thriving licit economy that will make you the kinds of money that you need to sustain fighters. So you turn to illicit resource extraction, logging, money laundering and, of course, illicit narcotics.
[Michael Sullivan, Byline:] And that's a problem because..
[Richard Horsey:] Pretty soon, the profits from this became so large that they are the dominant the largest part of the Shan State economy. And so at that point, people start to be incentivized by the money and not just by politics.
[Michael Sullivan, Byline:] Which makes it easier for transnational criminal organizations to operate in the area under the protection of or in partnership with local militias, and not just militias from the rebel side. The UNODC's Jeremy Douglas.
[Jeremy Douglas:] There's militias up there in North Shan State, for example, that are allied with the government. And we know, and there have been very, very strong evidence through cases seizures of drugs coming out of their territory. So it's clear.
[Michael Sullivan, Byline:] It's also clear that all that money will make it hard to end the conflict and bring lasting peace, stability and the rule of law.
[Richard Horsey:] You'd have to say that the ordinary person living in Shan State pays the highest price for all of this.
[Michael Sullivan, Byline:] Richard Horsey.
[Richard Horsey:] They live with conflict. They live with insecurity. They live with bad governance. They live with poor services. And they don't have very much else to show for it.
[Michael Sullivan, Byline:] And likely won't for a long time to come. For NPR News, I'm Michael Sullivan in Chiang Rai, Thailand.