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My NCE
Ay S. DEPARTMENT OF STATE A |
DIRECTOR OF INTELLIGENCE AND RESEARCH - Nelo ~ 162

February 29, 1968

To : The Secretary
Through: S/S ath)
From : INR - Thomas L. Hughes

FL

Subject: KMT's in Thailand--Unwanted Guests Now Welcome

Over the past four months, the so-called, Kuomintang (her) irregular forces
operating in the Burma-Thailand~Laos border area have gained a new resnectahility
Following a series of three-cornered opium battles among the KMT forces, Burmese
insurgents, and Royal Laotian Army forces in September 1967, the KMT's were

regarded as an intolerable nuisance by the governments of all three countries.

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The Thai government was particularly incensed since its inability to control os
the KMT's reflected more broadly its lack of control over its northern border —
regions. Accordingly in October, the government demanded that the KMT's leave i
Thailand. By mid-January 1968, however, it was reported that Bangkok had f
decided not to enforce the expulsion order, and in February, the issue had tad
come full circle with reports that both the Thai and Burmese governments were |
attempting to enlist the KMT's as counterinsurgency forces, Cap
Insurgency Worries Benefit KMT's SS
The KMT's owe their new-found popularity to a fortunate (for them) —

coincidence of events: a dramatic upsurge of insurgent activity in two

provirces of North Thailand, and successful insurgent attacks on posts near cas

the Burma-China border which greatly increased Rangoon's apprehensions over

nee Chinese Communist intentions an the area, pace ene
a

Posed

o/ SHCRET/NO FOREIGN DISSEM
port was produced by the Bureau ,

of Intelligence and Research. Aside
from normal substantive exchange with
other agencies at the working level,
it has not been coordinated elsewhere.

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CHINA
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Prouince

Chien
THAILAND

Areas inhabited by hill tribes (Meo, Yao, Khm)

[ ] Area where KMT's presently concentrated
Sin ten

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It is likely that the original orcer to expel the KMT's, based on con-
siderations of national sovereignty and prestige, originated in Bangkok and had
little support from local officials in North Thailand, who have always regarded
the KMI's as a useful buffer against Communist infiltration, After the December
upsurge of insurgent activity in the area, Jovennane of several northern
provinces petitioned the government to reconsider the eaten order, At the
same time, it was reported that the Thai army believed it could not spare the
troops required to expel the KMT's and that some elements of the army, as well
as the chief of the Counter Subversion Operations Command (CSOC), were interested
in incorporating the KM?'s into the Thai army for use in border guarding and
counterinsurgency operations, Reportedly, the local army commander had
already asked KMT irregulars to replace some Thai troops being withdrawn from
the Laos border in Chiang Rai province for counterinsurgence duty. More recently,
it was reported that the governor of Chiang Rai requested that KMT troops settle
in the tribal areas of the province to help maintein security.* While apperently
receptive to these overtures, the KMT's have so far not committed themselves and
are probably hoping to obtain concessions in return foie the Thais,
Burma Also Interested?

At the same time, there have been reports that the Burmese government has
been inyane to enlist the cooperation of the KMT's for its counterinsurgency

cperations. In view of the Burmese government's long, deeply ingrained

* Prior to 1965, when they were expelled by the Border Police, many KMT members
lived among the tribal people in Chiang Rai, serving as middlemen in the
opium trade, ,

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dislike of the KMT's, these reports seem almost incredible. Most of these reports
seek to originate with KMT sources, and it may be that the KMI's are simply fabri-
cating them to increase their bargaining power with the Thais. However, the
Burmese government's intensified concern over Chinese Communist support for
insurgents in northern Burma may have Saicba aes antipathy for the KMT's., Given
recent GUB policy of inducing a few maverick insurgent bands in Shan State to
cooperate with the government under the designation of "home guards", it is also
conceivable that local Burmese commanders may have made some tentative approaches
to KMT elements, The KMT's, however, doubtless have more trust in the long-term
intentions of the Thai government and are more likely to opt for cooperation with
the Thais (although it is possitle some could cooperate with both governments).
Whatever the eventual outcome, it at least seems certain that the Burmese govern-
ment will not view Thai~KMT collaboration with the suspicion it would have shown
in past years,

For the moment, this latest turn in KMT fortunes seems likely to have some
useful effects. Many observers have commented that the KMT's are an effective
curb on Communist subversion in the areas where they operate, and collaboration
with the Thai army might aiseek more of their energies--now largely consumed by
smuggling operations--into counterinsurgency. Their return to Chiang Rai
province suggests that Hiey Will also resume their former role there as purchasers
of the Meos' opium crop, a development which might also reduce Meo dissidence,

whatever its consequences for the opium trade. In the longer run, if the KMT's

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continue to collaborate with the Thai army their assimilation into the local
population may be hastened somewhat. If the Burmese Government in fact becomes
reconciled to their presence in the area, the policy problems the KMT's pose

for the US will also tend to diminish,

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