MOST of the nations of the Association of Southeast Asian Nations (ASEAN) are engaged in trade with Burma, a politically isolated nation that exports raw materials and imports just about everything else.
In addition to legitimate trade, several of Burma's neighbors are known to participate in, or at least overlook, Burma's black-market narcotics industry.
The United States policy of "disengagement" since 1988 may have actually fed the industry, the growth of which is at least partially responsible for Burma's 27 percent inflation rate.
The heroin industry has expanded in the wake of two important political events in Burma: the military's 1988 crackdown on the pro-democracy movement and a mutiny in 1989 among members of the country's then most powerful insurgent group, the Communist Party of Burma (CPB).
The former led the US to freeze all relations, effectively cutting off a bilateral drug-control program which involved the spraying of opium crops with defoliants. The program's cancellation and several years of good weather have contributed to the escalation of the heroin trade, Asian diplomats say. And now that disunity has rendered the CPB impotent to enforce its hard-line policy against drug production, many poor farmers of different ethnic minorities have returned to their poppy fields.
The Burmese sector of the Golden Triangle - where approximately 80 percent of Southeast Asia's opium is harvested - produces more than 2,000 tons of raw opium a year, twice the amount in the mid-1980s, according to a report in the Far Eastern Economic Review.
In addition, the US cutoff in 1988 came just as the country was moving from a centrally planned, socialist government to a more market-oriented one, a move the US ordinarily would have applauded.
Agriculture is the basis of Burma's economy. It accounts for half the gross national product, employs two-thirds of the country's labor force, and is the major source of export earnings. After three consecutive years of negative growth, the Burmese economy revived in 1989 and moderate growth is expected to continue in 1992 and 1993.
But fundamental economic imbalances exist. Although initial market-oriented reforms went in the right direction, a number of critical policy issues have not been addressed. Reform efforts have been greatly hampered by high inflation and shortages of raw materials and energy.
Before 1988, Burma received military aid from the US to assist it in its fight against communist insurgencies.
Before the cutoff, it is said the Burmese Army never used a gun made in a communist country (with the possible exception of Yugoslavia). Now the Burmese reportedly must buy from China and from black-market sources in Southeast Asia.