Over the last decade and a half, a vibrant criminal economy has arisen in the Mekong sub-region, based on illegal drug production, unregistered casinos, online gambling and money laundering, and most recently, sophisticated online scamming operations, according to the International Crisis Group (ICG).
In an in-depth report entitled “Transnational Crime and Geopolitical Contestation along the Mekong” and released on 18 August, ICG looks at the worsening situation in Myanmar and Laos in which tens of billions of dollars in illicit profits have driven criminal syndicates to make huge casino and infrastructure investments, which have flowed into poorly governed jurisdictions with weak regulatory enforcement or into semiautonomous enclaves beyond the state’s reach.
This is the heart of the notorious Golden Triangle where “anything goes” due in large part to the bribery and other corruption that allows these criminal activities to flourish, money that oils the wheels and further corrodes already corrupt state institutions in both countries.
Two areas have emerged as hotspots: Laos’s Bokeo province, home to the Golden Triangle Special Economic Zone, and Myanmar’s Shan State, particularly the district to the east of the Salween River bordering China, Laos and Thailand, known in British colonial times as Trans-Salween. Together, these form a transnational zone of criminality straddling the geopolitically important Mekong River.
What is important to keep in mind is how the 2021 coup in Myanmar has unleashed centrifugal forces that have eroded Naypyitaw’s influence over trans-Salween Shan State. Non-state armed groups have subsequently tightened their grip in the area, resulting in a surge of illicit activity.
The report examines the political and economic dynamics at play and the associated security and governance risks. It also explores the geopolitical context, looking in particular at how insecurity and piracy along this stretch of the Mekong has prompted extraterritorial Chinese projection of force downstream, at the same time that the United States is increasing its security cooperation with Thailand just to the south.
Myanmar’s Shan State and Laos’s Bokeo province, which straddle the Mekong River, have emerged as a contiguous zone of vibrant criminality, much of which is beyond the reach of national authorities. Unregulated casinos, money laundering, drug production and trafficking, online scamming operations, and illegal wildlife trade all thrive, entrenching corruption, weakening governance and damaging the bonds that create community. The criminal networks involved have regional – in some cases, global – reach and can rapidly shift from one jurisdiction to another to minimize risks to their operations.
What the ICG argues in its report is that a coordinated regional approach is vital in order to tackle these challenges.
But the report recognizes that geopolitical competition between China and the US complicates coordination. Regional states continue to rely heavily on unilateral criminal justice responses, but collaborative law enforcement is needed, as are multi-state efforts to ameliorate the governance and socio-economic problems that allow these criminal syndicates to prosper. Ideally, these efforts would involve agencies with migration, development and other relevant expertise.
Countries need to work together to deal with the challenge.
Parts of the Mekong, particularly the 100km section that forms the Myanmar-Lao border, have long been a frontier of unregulated and illicit trade, far from centres of power and commerce. Given its importance as a conduit between China and South East Asia, in recent decades governments have aspired for the Mekong to become a major transport route. But along with physical obstacles – sandbanks, shoals and rapids – insecurity has impeded riverborne trade, most commonly in the form of piracy and extortion of boats plying the route. The situation came to a head in October 2011, when thirteen Chinese merchant mariners were murdered – the deadliest attack on Chinese nationals abroad since World War II. China pinned the blame on Myanmar pirates, whose leader it captured in Laos and executed following a complex extra-territorial police operation. (It later emerged that others may have been primarily responsible.) Beijing then initiated joint gunboat patrols with neighbouring countries, allowing it to project force down the Mekong.
While these actions put an end to piracy on this key stretch of river, they did not deter other forms of crime. Since 2011, the territories on the Myanmar and Lao sides of the Mekong have emerged as
hotbeds of illegal activity, from drug production and trafficking to online gambling, money laundering and cyber-scam operations that often use captive workers from around the world.
Not only do transnational criminal organisations operating in this zone benefit from lax or non-existent regulations, but they also take advantage of its multi-jurisdictional character, quickly shifting operations from one place to another to evade crackdowns.
Coordinated law enforcement across the region is crucial if governments want any chance of tackling these expanding criminal activities, but other capabilities must also be brought to bear. Authorities in the region need to acknowledge that any solution to this transnational problem will involve government agencies from several jurisdictions – as opposed to the typical security or police approach that treats immediate symptoms, but not the fundamental causes of the problem, including weak governance and rampant corruption, not to mention a willingness or desire of some jurisdictions to court illicit investments.
So far, however, a coordinated response is lacking, in large part due to geopolitical considerations. The Mekong is a locus of big-power rivalry, where longstanding US ties with Thailand and other countries are being tested by China’s rising power and regional ambitions. The contestation has greatly limited cooperation between Western governments and China on transnational crime in the Mekong, while making it difficult for other countries to balance their relations with the two.
China is by far the most influential actor and could play a critical role if it chose to. China could adopt a more consistent approach to criminality in the Mekong subregion, using its influence over regional governments and non-state actors to curtail illicit activities. But Beijing is also guided by strategic considerations, including its inclination to view economic investment, even if it is partly illicit, as something that can help build peace along its borders, and its desire to leverage enclaves in its neighbourhood controlled by pliant entities in order to project its power.
China has thus far tended to focus on law enforcement only selectively, responding only when it considers its national interests under direct threat, including with crackdowns on online gambling and efforts to shut down online scam operations – some involving their nationals - across South East Asia. At the same time, it has ignored much of the crime in locations controlled by entities and enterprises friendly to China.
Ideally, the US and China should set aside their geopolitical rivalry when it comes to cooperating on combating transnational crime in the Mekong. Doing so could encourage greater Chinese cooperation with initiatives such as the US-led Global Coalition to Address Synthetic Drug Threats, as well as the Thai operations and intelligence centre on transnational organised crime in the Mekong. Although this scenario is more aspirational than likely, the two powers could also bring about enhanced regional collaboration by focusing on ways in which their respective Mekong cooperation platforms (the Mekong-US partnership and the Lancang-Mekong Cooperation) could support initiatives to tackle the governance and socio-economic factors that allow organised crime to flourish, with programmes designed to foster good governance, fight corruption, alleviate poverty and create jobs.
It is equally important to address the human cost of transnational crime. States should provide more assistance to secure the release of, and support, the thousands of people from countries across the world being held against their will and often severely abused in online scam centres where they are forced to carry out criminal activities in Myanmar, Laos and elsewhere in the region. Too often, these people, even if they are rescued or able to escape, are held on immigration offences or charged for the crimes they were forced to commit. A more proactive approach from their embassies in the relevant countries is needed, as is a “victim-centred approach” from the countries where they were held or fled to.
Reining in the sprawling illegality that has grown along the Mekong in Myanmar and Laos will not be easy. But the consequences of permitting the region’s illicit businesses to keep booming are too great for governments not to try their best. Better coordination is the place to start.
