Transcript

Patrick Nguyen (0:00)

Wastate is the world's most powerful narco state, the most powerful drug trafficking organization on planet Earth, and China supports them.

Mark Gagnon (0:08)

This is Patrick Nguyen, and he's gone deep into Myanmar's shadow world, where an entire country exists within a country and the entire economy is based on one thing.

Patrick Nguyen (0:18)

Math.

Mark Gagnon (0:19)

And Myanmar doesn't just have a civil war. It has nestled within the mountains, an entire narco state. For decades, this region has been carved up by warlords, rebel armies, and generals, each funded not by taxes, but by drugs. First opium, and then heroin, and now something far more efficient and far more deadly. And today we talk about forgotten Cold War deals, Chinese alliances, CIA entanglements, and rebel states that outlast governments. And how the modern synthetic drug trade made Myanmar more powerful and more dangerous than ever. This isn't chaos by accident or a story about narcotics. It's about how history, empire, and war created a system that. That no one seems able or willing to shut down. If you want to understand how a country truly becomes ungovernable and why the drug war will never end, well, this is the episode for you. Patrick Nguyen is a brilliant journalist and has all the answers on how the Wa state, deep in the mountains of Myanmar, actually operates. So sit back, relax, and welcome to camp. Patrick Nguyen, thank you so much for joining me.

Patrick Nguyen (1:27)

Glad to be here.

Mark Gagnon (1:28)

I am very excited to chat with you, and there's a lot to get into. You have a fascinating story to tell. You wrote a book called Narcotopia, which really shows a part of sort of geopolitics and, like, the American war on drugs and drug trafficking in a really, really interesting way. And I want to get into all the details, but in short, the thing that I was kind of taking away when my friends were asking me about this interview is I was like, okay, look, I don't have all the details, but basically there's a country with its own borders and its own military inside of a country that you've never heard of that is bigger than some European nations that basically exists on an entire economy built on heroin and meth.

Patrick Nguyen (2:11)

That's pretty crazy close. Heroin is now passe. It's all about meth these days. Everything else you said is. Is correct. And it's quite astonishing that more people don't recognize this fact. If you look at Google Maps or you look at a globe in a classroom, you could look at the country of Burma or Myanmar. Same country, two different names, and it looks like one, you know, unified country, but that's a lie. There is a country inside that country that is totally sovereign. They have their own documentation, they have their own highways, they have their own cell phone towers, hospitals, ministries of finance and health. And I can go on and on. Everything that makes a country a country. And, yeah, the. The economy is really rooted in. It was heroin and now it's meth.

Summary

Camp Gagnon Podcast Summary

Episode: The Cartel That Created a Country | Patrick Winn
Host: Mark Gagnon
Guest: Patrick Winn
Date: December 16, 2025

Overview

This episode features investigative journalist Patrick Winn, author of Narcotopia, who takes listeners deep into the hidden world of Wa State—a de facto country carved out of Myanmar, sustained not by taxes, but by a sophisticated, militarized drug economy. The discussion covers Wa State’s unique place in modern geopolitics as an unrecognized narco-state, the evolution from opium and heroin to methamphetamine, the tangled relationships with the CIA, DEA, and China, and the daily lives and aspirations of the Wa people.

Key Discussion Points

1. Intro to Wa State: The Shadow Country

Wa State: Not just a region, but a self-sustained, sovereign entity inside Myanmar, with its own borders, government, ID system, roads, cell towers, and ministries. “Everything that makes a country a country.” (Patrick Winn, 02:11)
Economy: Rooted first in opium/heroin, now dominated by methamphetamine production.
Size & Scale: Area nearly as large as the Netherlands; population around 500,000.
International Recognition: Officially not acknowledged as independent, but, as Mark puts it, lives as a "country with its own borders and its own military inside of a country you’ve never heard of." (01:28)

2. From Opium Hills to Narco-State

Geography: Located in the mountains between India, China, and Thailand—terrain that fostered isolation and diversity.
Agricultural Roots: Poor soil for staples, but opium poppies thrived in Wa highlands (18:11).
Trade: Opium initially traded with Chinese merchants; developed into a vital local export.

3. Colonialism, Isolation, and Resistance

British Colonial Lies: Wa areas appear on maps as part of Burma (Myanmar), but were "never actually conquered." (16:41)
Cultural Image: Stereotyped and demonized as ‘evil hillbillies’ and ‘headhunting savages’; British attempts to subjugate them were fiercely resisted.
Self-Sufficiency: “We are a wild people, and we want to remain this way.” (15:31)

4. Cold War Power Games: CIA, Anti-Communists, and Heroin

Chinese Civil War Fallout: Defeated anti-communist Chinese forces flee into Burma, supported by the CIA in hopes of infiltrating Communist China. (22:48–24:42)
CIA’s Pragmatism: Weapons are supplied to local anti-communists, who morph into major opium traffickers/corporate cartel (25:00–26:08), in a tacit exchange for intelligence and regional influence.
Transforming the Region: The trade-off cemented the drug trade’s power and supplied remote Wa villages with guns and rice in exchange for opium.

“The CIA had a long-standing relationship with this drug cartel, which it wanted to use to spy on China. And then a drug cartel being a drug cartel in the truest sense of the word. They’re just trying to make money.” – (Patrick Winn, 34:50)

5. Vietnam War Fallout and the U.S. Drug Crisis

Supplying U.S. Troops: Heroin refineries in the region targeted GIs in Vietnam, resulting in a wave of heroin addiction among returning soldiers (34:07–37:00).
Birth of the DEA and U.S. War on Drugs: Public outrage over veterans’ drug use fuels Nixon’s global ‘super police’ approach, giving rise to the DEA and new international enforcement priorities (41:35–43:02).
Interagency Rivalry: Early conflicts between the DEA (anti-drug) and CIA (geopolitical gamesmanship) begin to play out over strategies and priorities, especially with narcotics groups tied to American intelligence.

6. Rise of Khun Sa and Evolution of the Drug Trade

Khun Sa: Charismatic, self-proclaimed freedom fighter and drug lord, replaces earlier CIA-backed Chinese cartels, consolidates control with a nation-building message (46:38–49:12).
Wei Hsueh-Kang: The episode profiles Wei as "the most important and successful drug trafficker in human history," pioneering global trafficking networks, innovative smuggling methods (mixing heroin into legitimate cargo, 52:43), and brand marketing ("China White").
DEA’s Frustrations: Despite high-profile busts, heroin (often relabeled and cut down) continues flooding Western markets under new leadership.

7. The Creation of Modern Wa State

Post-Cold War Uprising: In 1989, Wa leaders break with both Communists and ex-CIA traffickers, establishing Wa State as a new, independently-minded entity with a singular aim: preserve Wa identity and autonomy, financed by narcotics (56:29–57:17).
Military Might: By the early 1990s, Wa State fields tens of thousands of well-armed troops, bigger than armed forces in some European countries.

8. Internal Struggles: The Idealist vs. the Kingpin

Saul "Superstar" Lou: Christianized founder, seeks American legitimacy, aid, and peaceful transition away from drugs—with the dream of U.S. alliance and development (67:49–76:34).
Wei Hsueh-Kang: The pragmatic kingpin, argues for doubling down on narcotics as the lifeblood of the state.
DEA’s “Crazy” Experiment: American agents court Saul, envisioning a “bloodless” win—starving the heroin business with aid and institution-building instead of force.

“They say, ‘We’re going to convince the DEA not to go after us, but be friends with us…’ It’s absolutely a crazy idea, and even crazier still, the agents in the field had to take this idea to DEA headquarters.” – Patrick Winn (76:34)

9. Sabotage, Betrayal, and The Triumph of the Cartel

CIA Intervenes: Alarmed at the DEA’s unorthodox plans (and perceiving a threat to U.S. policy in Myanmar), the CIA sabotages the alliance by informing the Burmese junta and undermining Saul (86:20–94:30).

“The CIA sabotaged it … This fascinating avenue the war on drugs could have gone down, just blew up. And from then on out, Wa State went the drug trafficking route.” – Patrick Winn (93:43)

Wei’s Victory: Saul is discredited, suffers torture and exile, while Wei steers Wa State fully into narco-economy.

10. The Meth Revolution & Globalization

Strategic Shift to Meth (96:53): Wa State transitions from labor-intensive opium/heroin to synthetic methamphetamine to evade U.S. surveillance, reduce risk, and maximize profit.
Meth Ubiquity: Billions of pink, vanilla-scented meth pills are produced; meth becomes an everyday reality for Thai/Burmese working-class people (101:52–103:29).
Modern Smuggling: Synthetic drugs are easier to move, the new “passive landlord” business model brings in outside syndicates to run production, with Wa State taking a cut (144:49–145:13).

11. The China Connection

Client State of China: Wa State enjoys Chinese protection, trade, weapons, telecom infrastructure, and strategic caretaking. (117:10–118:06)
Mutual Deal: “Produce all the meth you want, just don’t bring it into China.” (119:14–120:59)
Strategic Importance: The region is crucial for China’s access to rare earth minerals and serves as a reliable attack dog in Myanmar’s internal strife.

12. Daily Life Inside Wa State

Authoritarianism and Militarization: Every family supplies a soldier; child soldiers are common; army prestige is dominant (115:45–117:09).
Limited Welfare: Despite immense drug profits, little trickles down—illiteracy, poor healthcare, and stark wealth disparities persist.
Criminal Justice: Drug use among natives is harshly punished: “They would just dig a hole and put you in the meth hole.” (146:43)
Culture and Identity: Despite Mandarin’s growing influence, many Wa fiercely maintain their indigenous culture and language (123:05–124:36).

13. Geopolitics & The Future

Myanmar’s Weak Grip: Perpetual internal chaos lets Wa State flourish in semi-official autonomy.
U.S. Frustration: Attempts to indict or extradite Wa leaders routinely fail—protected by geography and Chinese backing.
Long-term Prospects: “Wa State is stable … if anything, I think it will get bigger.” China props it up; Myanmar’s future is uncertain, but Wa sovereignty is likely to endure. (139:02)

Notable Quotes and Memorable Moments

On the nature of a cartel:

"A cartel is a corporation. The purpose of a cartel is to make money. I don’t think they have much of a higher agenda beyond that."
– Patrick Winn (04:31)
On Wa independence and statecraft:

"It’s not easy to start your own state. And they did it."
– Patrick Winn (66:36)
On CIA short-sightedness:

"The history of the CIA is: ‘Whoops, didn’t see that coming.’"
– Patrick Winn (37:41)
On the DEA’s doomed alliance:

"Imagine you can get a drug cartel to stop being a drug cartel simply by cooperating with them... You don’t have to shoot anyone in the head."
– Patrick Winn (78:40)
On Wei Hsueh-Kang, the kingpin:

"He is the most successful, impressive drug lord in human history … He’s the Bezos, in a way."
– Patrick Winn (108:35)
On everyday meth use:

"My Thai friends, my Burmese friends—they’re like, ‘Well, yeah, I’ve tried it.’ So it’s—they’ve tried meth."
– Patrick Winn (103:20)
On enforcement inside Wa State:

"If you do meth in Wa State, they will put you in jail ... Instead of building a prison, they would just dig a hole and put you in the meth hole or the heroin hole."
– Patrick Winn (146:36)

Key Timestamps

00:00–02:55: Setting the stage – What is Wa State?
10:45–16:41: British colonization, Wa independence, headhunter legends
22:19–27:17: Opium trade, CIA involvement, rise of anti-communist Chinese drug cartels
34:07–37:00: Vietnam War & heroin addiction among U.S. troops
46:38–54:00: Rise and fall of Khun Sa; Wei Hsueh-Kang steps in
56:29–59:47: The founding of Wa State and its military might
67:49–76:34: The internal split: Christian idealists vs. narcotics pragmatists
86:20–93:43: CIA sabotages DEA–Wa alliance; triumphant narco-state
96:53–103:29: Rise of meth; impact on Southeast Asia
117:10–120:59: China’s relationship with Wa State; global implications
130:03–133:26: Reporting challenges, life under Wa rule
139:02: The likely stability and endurance of Wa State

Conclusion

Patrick Winn paints a complex, nuanced, and startling portrait of Wa State—a stateless nation whose fate, economy, and very existence are rooted in the narcotics trade, maneuvering adroitly between superpowers, and finding opportunity in perpetual conflict and isolation. This episode demystifies its dark reputation and highlights the intersection of drugs, geopolitics, and identity at the margins of global order.

Further Exploration

Check out Narcotopia by Patrick Winn for a gripping narrative that follows superstar Saul Lou, secret alliances, and all the intrigue of Wa State.
Recommended reading for anyone interested in international crime, the evolution of the drug war, and Southeast Asian geopolitics.