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USIP calls Myanmar, Cambodia and Laos a growing global threat

World-wide, scam compounds steal almost US$64 billion a year
One of a group of six Malaysian men (right) rescued from a human trafficking syndicate in Myanmar is given a hug upon arrival at Kuala Lumpur International Airport in Sepang in this December 21, 2022 photo. The men said they were duped by the syndicate to work in Myanmar with promises of high salaries through job advertisements on social media.

One of a group of six Malaysian men (right) rescued from a human trafficking syndicate in Myanmar is given a hug upon arrival at Kuala Lumpur International Airport in Sepang in this December 21, 2022 photo. The men said they were duped by the syndicate to work in Myanmar with promises of high salaries through job advertisements on social media. (Photo: AFP)

Published: May 15, 2024 03:44 AM GMT
Updated: May 15, 2024 03:46 AM GMT

Myanmar, Cambodia and Laos have been named in the latest report by the United States Institute for Peace (USIP) as the epicenter of human trafficking and organized crime “that is rapidly evolving into the most powerful criminal network of the modern era.”

The report, released late May 13, was scathing of all three countries which are synonymous with human trafficking, slave labor, scam compounds and illegal gambling as Southeast Asian countries stole almost US$64 billion a year from around the world.

“The scamming operations are powered by hundreds of thousands of people, many duped by fraudulent online ads for lucrative high-tech jobs and trafficked illegally into scam compounds, where they are held by armed gangs in prison like conditions and forced to run online scams.

“These victims of forced labor [along with a small number of workers who willingly participate] come from more than 60 countries around the world,” it said.

It said ample evidence suggested that protection of the scamming industry is now of strategic interest “to the ruling elites in Myanmar, Cambodia, and other countries” in the region due to the industry’s profitability and the nature of state involvement.

“In Cambodia, the return on cyber scamming is estimated to exceed $12.5 billion annually — half the country’s formal GDP, with many compounds owned by local elites.

"A significant share of these profits is reported to flow to the Myanmar military and to ruling elites in Cambodia and Laos"

“More broadly, the study group calculates that the funds stolen by these criminal syndicates based in Mekong countries likely exceeds $43.8 billion a year — nearly 40 percent of the combined formal GDP of Laos, Cambodia, and Myanmar,” it said.

Cambodia’s GDP growth forecasts of above six percent are among the highest in the world and the International Monetary Fund (IMF) recently revised Cambodia GDP figures upwards by 35 percent to an estimated $41.9 billion, according to the government-friendly Khmer Times.

IMF economic outlooks are based on figures collated by its member countries’ central banks.

“A significant share of these profits is reported to flow to the Myanmar military and to ruling elites in Cambodia and Laos,” the USIP report, "Transnational Crime in Southeast Asia: A Growing Threat to Global Peace and Security," said.

It’s a scourge that was blamed on a range of forces including the Covid-19 pandemic, resulting in the closure of casinos and special economic zones and the dispersal of criminal syndicates who took up residence in “fortified” abandoned properties.

“The melding of these groups with corrupt local elites has generated a malign ecosystem that is rapidly evolving into the most powerful criminal network of the modern era,” it said.

"Scam compounds in Myanmar have an additional perimeter of armed protection"

It said all three countries were interconnected enabling networks to evade occasional crackdowns by transferring scamming operations between countries.

Importantly, it also said those operations in Myanmar, along the Chinese and Thai borders, were a key driver of Myanmar’s “internal conflict”, a civil war which erupted after the military ousted an elected government in early 2021.

But a move by Chinese law enforcement in late 2023 to shut down the border compounds inside Myanmar led many to relocate to the south in Karen State, on the border with Thailand near Mae Sot, as well as back to Cambodia and into Laos.

“The scam compounds in Myanmar have an additional perimeter of armed protection provided by Border Guard Forces under the authority of the Myanmar military or its proxies,” the report said.

USIP gave a mixed response to China where strict laws against gambling had pushed organized crime groups into Southeast Asia allowing them to tap “this lucrative market from a safe distance and align with local elites to protect themselves” from Chinese law enforcement.

While Chinese police tried to crack down on the networks, crime groups maintained close relations with members of the Chinese Communist Party and other state actors, USIP said.

“Meanwhile, rampant corruption in China also poses a major challenge to any Chinese crackdown, with anti-corruption agencies struggling with countless cases of police accepting bribes or favors to ignore illicit activity or undermine enforcement,” it said.

USIP also noted that while “Myanmar, Cambodia, and Laos form the epicenter of the regional scamming industry, most countries in the region contribute in some form to the operations of the criminal networks facilitating illegal trafficking of forced labor into scam centers.”

It said this provided a financial base for laundering the proceeds from the illicit activity, and assisting the development of advanced digital technology essential to sophisticated gambling, scamming, and financial fraud carried out by the criminal networks.

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Trafficking is one of the largest criminal industries in the world, only outdone by drugs and arms trafficking, and is the fastest-growing crime today.
Victims come from every continent and are trafficked within and to every continent. Asia is notorious as a hotbed of trafficking.
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