Transnational Crime Dominates in the Greater Golden Triangle

In the winter of 1890-1891, Lt. L.E. Eliott, a young assistant commissioner of British-ruled Upper Burma, embarked on an expedition into the borderlands of what is now northern Myanmar. Accompanied by officials from the Indian Survey Department and the 60th Rifles, as well as 70 military police, Eliott traveled northward from Bhamo, a city in Kachin State around 65 kilometers from the present-day border with China, along the banks of the Irrawaddy River.

The purpose of the trip was to gather information about the “tribes of independent races,” including the Kachins, who populated the areas bordering Upper Burma, which the British had annexed after the Third Anglo-Burmese War in 1885. This information would then be used “to facilitate the administration of the British provinces.”

One of the things noted by Eliott, whose reports were summarized by Gen. J.T. Walker and published in the Proceedings of the Royal Geographical Society in 1892, was the lack of any firm border between Upper Burma and the Chinese Empire to the north. 

Indeed, Eliott noted, the Qing dynasty’s attempts to delineate a border had apparently been opposed by a number of Chinese traders who had “acquired a preponderating influence” and were apparently profiting quite handsomely from smuggling operations in the region.

“These Chinese traders belong to large and powerful syndicates and are generally wealthy men,” Walker wrote, paraphrasing Elliott’s reports. “They are most lawless in their ideas and snap their fingers at all authority.” He added, “The Chinese officials just over the frontier either play into their hands or are treated as mere dummies."

More than 130 years on, Eliott’s observations retain surprisingly applicable to the current situation in the borderlands of southern China, Laos, and Myanmar. 

Last month, the International Crisis Group (ICG) released a report about the surge in transnational crime along the middle stretches of the Mekong River. Over the past 15 years, the report states, Shan State in eastern Myanmar and Bokeo province in northern Laos have come to form “a contiguous zone of vibrant criminality, much of it beyond the reach of state authorities.” 

The two regions, separated by the waters of the Mekong River, are now centers of criminality that run the gamut from unregulated casinos, agglomerations of neon in the tropical hills, to money laundering, drug production and trafficking, online scamming operations, and the illegal wildlife trade. 

One of the primary nodes of this criminality is the Golden Triangle Special Economic Zone (GTSEZ), which sits on the left bank of the Mekong in Bokeo province, Laos. The GTSEZ is run by the sanctioned Chinese-born gangster-tycoon Zhao Wei, originally from China’s Heilongjiang province. In 2007, the Lao government granted Zhao a 99-year lease over a stretch of prime paddy land fronting the Mekong, at the point where the borders of Laos, Myanmar, and Thailand converge. 

The GTSEZ, which is centered around the Kings Romans casino, has since grown into a hotspot for all manner of corrupt and criminal enterprises. In January 2018, the U.S. Treasury Department sanctioned Zhao and a number of his associates for facilitating “drug trafficking, money laundering, bribery, and human and wildlife trafficking.” 

The designation has done little to stem the GTSEZ’s growth. As of March of this year, the ICG reported, the zone had evolved into “a city-scale development, featuring more than twenty hotels, dozens of high-rise office buildings, schools and hospitals, water treatment and sanitation facilities, and an international airport nearing completion.”

As one analyst noted last year, Lao government officials are largely powerless to stem the criminality within the zone, noting that “local authorities are barred from entering and international inspectors are routinely turned away.”

The other center of criminality identified by the ICG is in Myanmar’s Shan State, a Balkanized region that is divided between the control of the central government, non-state armed groups like the 20,000-strong United Wa State Army (UWSA), and dozens of militias aligned with the Myanmar military, which enjoy de facto autonomy in the slivers of territory under their control. In particular, the report points to  the region to the east of the Salween River bordering China, Laos, and Thailand.

Here, too, the economy is characterized by a unregulated casinos – there are almost 60 in Shan State, many in close proximity to the Chinese border – but these garish developments are just the most visible manifestation of the region’s primary economy: narcotics. Shan State “is one of the largest global production centers of crystal methamphetamine, as well as amphetamine tablets and heroin – a drug trade so large and profitable that it dwarfs the state’s formal economy,” the ICG report states. “Drugs lie at the heart of Shan State’s political economy, fueling both criminality and conflict.”

While parts of Shan State have long been a regional epicenter of illicit activities, the situation has only worsened since the February 2021 coup in Myanmar, which “unleashed centrifugal forces that have eroded Naypyidaw’s influence over trans-Salween Shan State” and allowed armed groups like the UWSA and its junior partner, the National Democratic Alliance Army, to consolidate their control over their territories.

As the ICG notes, and as Lt. Eliott’s late-19th-century expedition made clear, the border region’s rugged terrain and de facto autonomy from lowland centers of power has long allowed illegal activities to flourish there. The hilly borderlands between China and mainland Southeast Asia have been a center of opium cultivation since the early 19th century, and by the 1960s, the “Golden Triangle” had earned its present reputation as a realm of drug-runners and bandits. 

Illicit commerce has similarly flourished in Shan State since the collapse off the Communist Party of Burma in 1989, and its subsequent fracturing into four smaller rebel groups, based in eastern Shan State, that immediately signed ceasefires with the Myanmar military and embarked on a range of criminal activities.

What is new is the amplifying impact of China’s rapid economic growth, and the sudden economic integration – through border-spanning infrastructure networks such as highways, rail lines, and power grids – that has brought the two regions into closer contact than at any previous point in history. Instead of encouraging the final enclosure of these lawless regions, however, China’s growth and integration with its southern neighbors has simply supercharged the criminal activities that take place therein.

To take one example cited by the ICG report, improved infrastructure links have given criminal syndicates easy access to the Chinese-made precursor chemicals necessary to produce massive amounts of synthetic drugs, as well as proximity to global drug markets. Whether the reverse is true – whether the improved integration will facilitate the efforts of the region’s law enforcement agencies – remains for the moment much less clear. 

As the ICG shows, the criminal syndicates of the region have demonstrated an ability to shift jurisdictions quickly in response to government crackdowns, melting across borders at will. The only way to address this is a coordinated response between the region’s governments, including China and the United States. So far, the ICG notes that any such effort has been ruled out by the geopolitical tensions between Beijing, which sees strategic benefit in growing Chinese economic activity in the region, licit or otherwise, and Washington, which is attempting to curb China’s growing influence in mainland Southeast Asia.

“The Mekong is a locus of big-power rivalry, where longstanding U.S. ties with Thailand and other countries are being tested by China’s rising power and regional ambitions,” the report states. “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.”

Whether the U.S. and China would be willing to put aside their rivalry in the interests of jointly combating the new criminals of the Greater Golden Triangle remains doubtful. Even if they did, however, the region’s long history of autonomy from central state control suggests that they would face an uphill challenge.