Diana Kim on the Opium Industry in Colonial Southeast Asia

Diana Kim is Assistant Professor in the Edmund A. Walsh School of Foreign Service and a core faculty member of the Asian Studies Program. Her scholarship is animated by concerns with how modern states develop capacity to define people at the edges of respectable society, constructing what it means to be illicit, marginal, and deviant. She received her Ph.D. in Political Science from the University of Chicago and held a Postdoctoral Prize Fellowship in Economics, History, and Politics at Harvard University. In addition to teaching comparative politics, public policy, and transnational histories of colonialism and empire in Southeast and East Asia, Diana co-curates the Invisible Histories project, a digital platform for researchers to share photographs in context and explore the hidden narratives behind them.
Genevieve Collins CMC '22 interviewed Diana Kim on April 17, 2020.
Photograph and biography courtesy of Dr. Diana Kim.

Your recent book Empires of Vice explores the history of opium prohibition across colonial Southeast Asia. Previous scholarship largely attributes the gradual move toward opium prohibition in Southeast Asia to moralizing pressure from the League of Nations and United States. By contrast, you argue that prohibition was instead a process of transformation from within the colonial state, catalyzed and carried out by local colonial administrators. Could you elaborate on the impact of local colonial administrators?  

Typically, when we think of the historical origins of anti-opium reforms in Asia, we focus on major events relating to the end of the opium trade between India and China. For instance, a familiar starting point is 1874, when the Society for the Suppression of the Opium Trade first emerged. This was a major British lobbying group that played an enormous role in global moral crusades. Another important date is 1909, when the world’s first multilateral conference to discuss drug problems took place in Shanghai and laid the foundations for the Hague Opium Convention in 1912, a major international drug treaty.

Empires of Vice tells a different story about opium prohibition, focusing on the experience of Southeast Asia under European colonial rule. For this region, 1874 or 1909 as starting points are not so much incorrect starting points as they miss out on a crucially important yet often overlooked aspect of opium’s history in Asia. And that is how in Southeast Asia, vice taxes levied on opium consumption were fundamental to the building of colonial states under British, French, and Dutch rule since much earlier in the 19th century. Also, this region’s colonial opium economy was organized differently compared to the economies of India and China, as it was heavily import-dependent. Additionally, foreign rulers approached popular opium smoking among colonized subjects as a source of revenue. 

As a result, anti-opium reforms for this region happened differently and at different times than the decline of the India-China opium trade and the rise of global narcotic control regimes. For instance, Southeast Asia was still importing opium from India at least 20 years after India exported its last legal chest of opium to China in 1913. Throughout colonial rule until the 1940s, in territories that became today’s Myanmar, Singapore, and Malaysia (under British rule), Cambodia, Laos and Vietnam (under French rule), as well as Indonesia (under Dutch rule), opium continued to be a quasi-commercial commodity, which was slowly and incrementally restricted. 

A key argument of my book is that local colonial administrators help us understand how and when such anti-opium reforms were possible. The rise of opium prohibition across Southeast Asia was a dramatic process of state transformation that involved reversing the very fiscal foundations and official defenses of European rule built on opium. It was the bureaucratic actors most intimately involved in operating these opium-entangled states who were also uniquely able to change them from within. 

Prior to this era of prohibition, what was the state of the opium industry in the region? And what changed after?

For most of the 19th century, Southeast Asia did not have large scale poppy cultivation, but relied largely on imported opium from India, as well as Persia, Turkey, and China. This opium was shipped to major ports in Southeast Asia, transported to manufacturing opium factories—the largest ones were in Singapore, Batavia, and Saigon—and then distributed to local retail opium shops for popular consumption. Prior to the 1890s, European colonial states decentralized control over this opium economy to private entrepreneurs. This was a tax farming system, which served as an indirect mode of revenue collection for the state. The majority of tax farmers were ethnic Chinese, although there were also non-Chinese tax farmers, including Burmese entrepreneurs in British Burma and French nationals in Indochina. 

Opium prohibition began during the 1890s, as institutions called opium monopolies were established across Southeast Asia. The monopolies effectively centralized state control over every aspect of opium’s commercial life, including importation, manufacturing, distribution, and retail. The first opium monopoly was introduced in British Burma in 1894; by the 1920s, all European colonies as well as independent Thailand had this institution. In 1943, they were officially abolished. These were complex arrangements and very controversial throughout the nearly half-century long period during which they operated. The main reason is because states were still collecting a large amount of revenue and had not fully eradicated opium consumption. Prohibition was the term that local administrators themselves used to describe the state’s more interventionist approach. 

Much of my analysis aimed to take this bureaucratic language about prohibition seriously and figure out what it revealed but also masked about the way the colonial state actually operated. I believe that two important findings give reason to approach the era of the opium monopolies as an era of prohibition. One, the colonial state became directly involved in regulating the sumptuary practices of individuals relating to opium. Whereas it previously deferred the management of opium consumption to religious authorities, local elites, and market forces, after the 1890s, the state adopted an interventionist approach. Second, the state’s official language regarding opium consumption and broader discourses about the legitimacy of colonial rule changed. Initially, European rulers justified taxing opium consumption in Southeast Asia as a means of regulating a peculiar colonial vice. But they had vague conceptions of what exactly defined a vice among their so-called Asiatic subjects, what made it peculiar (i.e., different from the harms to European people), as well as why vices were an object of fiscal control. There was also a general administrative idea that the proper role of the colonial state involved minimizing harm while maximizing benefits, which included opium revenue that could be used for the colony’s governance and development. Between the 1890s and 1940s, however, official rationales shifted as administrators turned away from such utilitarian ways of reasoning and redefined the boundaries of legitimate commercial opium activity in much narrower ways. Under the opium monopoly, a once legal opium smoker might have found himself called an illegal addict. In this regard, it ushered in a new era of prohibition.   

How crucial was the revenue from opium taxation to colonial rule? How did colonial governments collect revenue from opium, both directly and indirectly?

Opium revenue was essential to colonial rule. During the opium tax farming era, the Straits Settlements, which include today’s Singapore, reported over 60% of its locally collected revenue from opium taxes, while in French Cochinchina, the southern portion of today’s Vietnam, about 50% of revenue came from opium. During the prohibition era, the official numbers were lowered, with the most opium-reliant colonies reporting around 20-30% of colonial tax revenue collected from opium sales and consumption. Considering that this was coming from a single commodity, these revenues were quite large. 

I’d like to emphasize how it is important to take these numbers with a grain of salt. One of the most interesting findings of my book comes from archival research regarding the bookkeeping practices and record-making processes of colonial bureaucracies. I spent a total of 22 months in multiple repositories in Britain and France, as well as Myanmar, Vietnam, and Cambodia. In general, the opium revenue numbers are quite imprecise, because methods for calculating expenditures, net revenues, gross revenues, and making other estimates shifted over time. For instance, in French Indochina, the numbers were inflated to signal to external investors that the colony was much more solvent than it actually was in order to attract private investment, which was also true of alcohol revenue, as the historian Gerard Sasges has shown brilliantly. Different bureaucratic practices that similarly altered or misrepresented the veracity of opium revenue and levels of fiscal dependency occurred in other colonies across the region.  

In your research, how did you determine when those calculations were distorted? 

It involved a lot of sleuthing around in the archives. I worked backwards from numbers in annual financial and fiscal records that looked odd to me, for instance, because they were inconsistent with how much revenue was being collected from other types of commodities. I also compared official statistics that colonial administrators reported to metropolitan authorities or external organizations such as the League of Nations with the original records for producing those numbers. I looked for who did the actual calculations and tried to ascertain what information was omitted and why. An especially interesting example is the reports of the French Missions of Inspection (Inspection des colonies), which were effectively metropolitan auditors. I read through their reports, which included detailed investigations of the opium monopoly of Indochina and efforts to calculate its actual net revenue. I tried to replicate their process of inquiry, while also trying to counterbalance the biases of these auditors, who suspected the local administrators of corruption or total incompetence. This involved identifying the individuals who were doing the nitty-gritty paperwork, preparing budgets, and transmitting information relating to opium revenue, as well as exploring their correspondence, public and internal statements, and personal papers when available. First, I imagined that everyone was telling the truth and determined what that picture would look like in terms of the numbers. Then, I imagined that everyone was lying and determined the difference between those two scenarios. 

One of the main payoffs of this type of approach—paying attention to local administrators, their everyday bureaucratic practices, as well as their own explanations for their fiscal actions— was excavating a hidden story behind the numbers that tells us something bigger about how the colonial state actually operated and the meaning of bureaucratic discretion. In the case of French Indochina, if you just take the opium revenue numbers at face value, it might look like the state was losing revenue steadily during the interwar period and Great Depression. But once we see what was happening inside the bureaucracy, the story is quite different: the opium monopoly had run itself into total bankruptcy and was misreporting its expenditure numbers to conceal the fact that too much opium had been purchased in the past from India and China that it could not sell quickly enough. From the outside, it might look like the French colonial state during the 1920s and 1930s was reducing its reliance on opium. The reality was that there was an excessive abundance of opium at the time, so much that it was overflowing from the Saigon opium factory’s warehouses and was stashed and rotting in the basement of the Bank of Indochina. And this was not because the local administrators were terribly incompetent or corrupt. Indeed, there was hardly any money to skim from the top. Instead, they had overestimated how well opium would sell and temporarily drew funds from an emergency spending account, with a plan to rebalance the books the next year. This small decision launched a spiral of overdrawn accounts and precarious accounting over the course of ten years that culminated in the monopoly’s bankruptcy and bailout. This is my book’s chapter six, entitled “A Disastrous Abundance.” 

In the final chapter of Empires of Vice, you discuss how the opium monopolies of Southeast Asia survived World War II and continued to exist in postcolonial states. What was the legacy of these colonial monopolies in the latter half of the twentieth century?

The opium monopoly infrastructures remained intact during World War II. Into the early 20th century, European powers in Southeast Asia continued to control opium factories, distribution networks, and retail shops. In addition to allowing within-region poppy cultivation, they also established purchasing contracts and transportation arrangements with opium producers in the northern Shan states of Burma and Hmong growers in northern Vietnam and Laos. Opium was used by both the Allied forces and Japanese forces to deal with the exigencies of war in occupied territories. In addition, opium served as a form of wartime currency used to hire laborers to work on the famous “death railway” linking Thailand to Burma and to mobilize the support of local populations. 

Opium further became part of the postwar reconstruction process and decolonization. In the midst of the war in 1943, the European powers officially declared that they would abolish their opium monopolies when the war ended. However, immediately after 1945, the monopoly infrastructures were temporarily revived by returning European powers and new independence-seeking nationalists alike. They cited exceptional needs, including military necessity, the value of selling stockpiled opium for much-needed foreign currency, as well as fears that a complete ban on opium would risk unrest among groups accustomed to cultivating poppy. 

It was very hard to simply halt the commercial life of a commodity that had been a part of colonial economies and societies for so long and had been further exploited during the war. As such, post-colonial states across Southeast Asia inherited a landscape in which opium was an already entrenched means of financing to establish social stability and political order. In Vietnam for instance, during the First Indochina War, opium helped both the Viet Minh build support among the Hmong for counterinsurgency campaigns and the French intelligence services working against the Viet Minh, as the historian Alfred McCoy has shown. British Malaya also saw the continuity of its opium revenue reserve replacement fund (first introduced in the mid-1920s) ultimately absorbed into the general budget for Malaysia and Singapore and become hidden fiscal sinew of their independent states. And perhaps one of the most striking legacies of the colonial opium monopolies, as I argue in my book (Chapter Seven), is that they influenced the introduction of Southeast Asia’s infamously draconian drug laws in the 1970s that included capital punishment. 

What is the current state of opium production in Southeast Asia? How does the region’s colonial experience with opium inform its current opium industry?

Until the early 1990s, Southeast Asia, specifically the northern parts of Burma that share borders with Thailand and Laos, known popularly as “the Golden Triangle region,” was the world’s largest producer of illicit opium. This is a downstream effect of two intertwined processes: colonial state-building reliant on opium and the imperfect way that prohibition occurred. 

If opium prohibition across Southeast Asia was a radical process of state transformation, then it was also a tragically incomplete one. Upon independence, the builders of new nation-states faced a postwar reality that linked opium to key state-building tasks. These tasks included securing territorial borders in poppy growing areas that overlapped with efforts to quell social unrest and separatist movements, as well as dealing with political alliances with groups and criminal organizations already linked through lingering funds from and distribution networks for opium. Blurred lines abound, often rendering crude corruption indistinguishable from reasonable patronage and illegal corruption indistinguishable from necessary corruption. Put simply, most Southeast Asian states today never started from a blank slate when it comes to drugs. They have inherited an incredibly complex colonial legacy that has rendered efforts to police, regulate, or manage drug-related problems a matter of compromises, tightly entwined with concerns over the security, stability, and legitimacy of the state. The region’s history helps us understand why zero-tolerance approaches to drugs in Southeast Asia do not work today. 

Genevieve Collins CMC '22Student Journalist

Kyle David James / CC BY-SA (https://creativecommons.org/licenses/by-sa/4.0)

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