By Andrew R.C. Marshall
TAMU, Myanmar (Reuters) - Five years ago, when cold pills first trickled across Myanmar's untamed border with India, many local officials were baffled. Where was this medicine going, and why were smugglers so interested in it?
Today, the cross-border trickle has become a torrent and everyone knows why the Indian-made pills are so valuable: they are bound for secret laboratories in lawless eastern Myanmar that churn out most of mainland Southeast Asia's methamphetamine, or "meth".
Cold pills contain pseudoephedrine, the main ingredient of meth, a highly addictive drug whose ever-soaring popularity is rattling governments across Asia.
In recent months the Philippines has elected a president on a platform of harsh action against drug dealers, Indonesia has resumed executions of drug traffickers after a year-long hiatus and Thailand is wrestling with a soaring prison population.
Myanmar's current boom in meth production would be impossible without a recent surge in pseudoephedrine smuggled from India's huge and ill-regulated pharmaceuticals sector, say police and narcotics experts.
The uninterrupted flow of the drug is highlighting a disconnect between countries in tackling a meth epidemic that the United Nations Office on Drugs and Crime (UNODC) calls Asia's "number one drug threat".
"It's big, big business," said Ye Htut, a former advisor to Myanmar's ex-President Thein Sein. He attributed a property boom in Kalay, the largest town in this otherwise impoverished region, to the profits made from smuggling pseudoephedrine.
Meth is sold in pill form as "ya ba", a Thai name meaning "crazy medicine", or as a more potent, crystalline substance known as "crystal meth", "ice" or "shabu".
Each Indian cold pill can make one "ya ba" and costs only a few cents to produce. By the time it has crossed the border and reached Mandalay - Myanmar's northern capital and a major smuggling hub - the pill's value has increased roughly tenfold.
Across mainland Southeast Asia, the UNODC estimates the meth trade was worth about $15 billion in 2013.
The rugged and ethnically diverse region straddling the Indian border ranks among Myanmar's poorest, with no industry and modest infrastructure. Its main road is a two-lane highway linked by rickety bridges and plied by ox carts.
It is here that Myanmar police have been finding thousands of the cold pills, hidden in rice sacks, packed into truck chassis or spilling from the luggage of cross-border bus passengers.
In one bust here in mid-June, police intercepted a car carrying more than 60 kg (130 lbs) of Indian pseudoephedrine - enough to make more than a million "ya ba" pills.
Global demand for methamphetamine has created "new precursor chemical entrepreneurs in India", said the U.S. State Department in a 2015 report. Experts believe many criminals who once smuggled drugs now prefer precursors, which offer high profits but much lighter penalties.
Myanmar police say China is also a major supplier of pseudoephedrine. But with tighter controls there, and with greater demand for the chemical as meth use booms, drug producers have increasingly turned to India.
Pseudoephedrine is a controlled substance in India requiring all handlers to register with the authorities. In practice, the trade is poorly monitored, with Indian officials complaining of weak intelligence-sharing between government agencies and rare prosecutions of offenders.
Raw pseudoephedrine is made in a handful of Indian factories, then moved through a network of wholesalers, drug makers, distributors and drugstores. It gets pilfered at every point along the way, say experts.
In a statement to Reuters, India's Narcotics Control Bureau (NCB) said seizures had dropped after the country's narcotics laws were changed in 2013 to define pseudoephedrine as controlled.
And indeed, police in Kalay and Tamu, Myanmar's two main districts bordering India, seized only 400 kg of pseudoephedrine last year, down from more than 3.5 tons in 2013.
But that may well be because smugglers have found novel ways to avoid detection.
"It's highly likely that traffickers have just shifted approach," said Jeremy Douglas, the UNODC's Asia-Pacific head.
Tamu district alone had more than 80 unofficial crossing points along its 125-km (80-mile) border with India, said Douglas, making it almost impossible to monitor.
The Indian Embassy in Yangon did not respond to a request for comment on the problem.
Already the world's second-largest producer, after Afghanistan, of opium and its derivative heroin, Myanmar is now also reporting record-breaking seizures of meth. In May, police intercepted a truck in northern Myanmar carrying 21 million ya ba pills worth an estimated $35 million.
The booming drugs trade poses a challenge to the fledgling government of Nobel laureate Aung San Suu Kyi.
Rapid urbanization in the commercial capital Yangon is creating the kind of slums that have fueled the increase in meth abuse in countries such as Thailand and the Philippines. Health experts are braced for an explosion in domestic meth use.
Meanwhile, police in Mandalay, a transit point between the western frontier with India and the rebel-dominated eastern borderlands, say they are still making record seizures of Indian-made pseudoephedrine.
Greater regional integration, aided by Indian and Myanmar road-building programs, promised to boost both trade and trafficking, said the UNODC's Douglas.
"India and Myanmar are cooperating to some extent but they're not doing a lot of joint operations or intelligence-sharing," he said.
Myanmar police said most large drug and precursor shipments were smuggled through Moreh, the Indian border town opposite Tamu. They have arrested scores of couriers or "mules", but said they needed India's help to arrest the ringleaders.
An Indian man suspected of arranging a large pseudoephedrine shipment in 2013 sought refuge on the other side of the border, said Tamu police chief Major Soe Naing.
"Cooperation with India is quite weak so we haven't been able to catch him," he said.
The NCB said Myanmar had not presented evidence that smuggling kingpins were hiding in India, or even that the pseudoephedrine it had seized was Indian-made.
"It is coming from other countries too," said a top NCB official, who asked not to be named because he wasn't authorized to speak to journalists.
(Additional reporting by Tommy Wilkes and Krista Mahr in New Delhi; Editing by Alex Richardson)