Lao and Chinese authorities have detained 771 individuals in a crackdown on illegal activities within the Golden Triangle Special Economic Zone (GTSEZ) in northwest Laos, near the borders of Myanmar and Thailand. Among those detained were 275 Lao, 231 Burmese, 108 Chinese, and individuals from several other countries, including the Philippines, India, Indonesia, Ethiopia, and Vietnam.

The GTSEZ is one of several Chinese-dominated enclaves in Southeast Asia that operate with minimal state interference, providing a haven for a range of criminal activities. The zone’s infrastructure, designed to support such operations, has allowed online scamming to flourish, particularly in Myanmar, Cambodia, and the Philippines. A recent Bloomberg investigation highlighted the rapid growth of online fraud within the GTSEZ, where trafficked workers are forced to lure victims into fraudulent cryptocurrency schemes.

Deadline for shutdown

The joint operation, which began earlier this month, comes as part of a broader effort to eliminate online scam operations that have long plagued the area. The GTSEZ, notorious for its association with various illicit activities, have to shut down unauthorised call centres by the end of today (25 August).

The GTSEZ has gained infamy as a hub for online fraud, human trafficking, and other criminal enterprises. The zone is controlled by Zhao Wei, a Chinese-born businessman sanctioned by the U.S. government in 2018 for involvement in drug and human trafficking, money laundering, and wildlife trafficking. Despite these sanctions, the zone has continued to thrive as a base for online scams, often involving trafficked labour.

Deceptive front for human trafficking

While the recent raids and government ultimatum suggest a heightened commitment to tackling these issues, the deep-rooted nature of criminal activities in the GTSEZ casts doubt on whether this crackdown will have a lasting impact. As the International Crisis Group notes, the GTSEZ’s business model and governance structure have created an environment where illegal activities can thrive with impunity. The zone’s autonomy and Zhao Wei’s control make it a persistent challenge for Lao authorities to enforce meaningful change.

Many of those detained were workers lured under false pretences to the GTSEZ, only to be coerced into participating in scam operations. According to a Lao Ministry of Public Security official, “It’s a form of human trafficking because they were lured to come to the SEZ to work at stores or restaurants, but later they were forced to work as scammers.” Chinese nationals were handed over to their authorities, while other foreign nationals were sent to their respective embassies.

The Lao government’s directive to cease all scam operations by the end of today signals a stronger stance against the criminal activities in the GTSEZ. Local media reported that a special task force would lead the crackdown, with the authority to arrest operators who defy the shutdown order. This marks the latest effort in a series of raids aimed at curbing illegal activities in the zone. In recent weeks, nine raids have resulted in the arrest and deportation of 1,389 individuals, including 1,211 Chinese nationals.

Overview of South East Asia’s Golden Triangle

The term “Golden Triangle” was coined in the 1970s to describe the area’s significant role in the global opium trade. The region, where the borders of Thailand, Laos, and Myanmar meet, is a region steeped in history and cultural richness. Its strategic location at the confluence of the Mekong and Ruak rivers has made it a crucial hub for trade throughout history. Indigenous communities, such as the Akha, Lisu, Karen, and Lahu, have lived in this area for centuries, practicing sustainable farming and maintaining a deep connection with the land. The arrival of Chinese traders, drawn by the region’s wealth of natural resources like tea, jade, and silver, marked the beginning of its prominence in trade.

In the 19th century, European colonial powers expanded their influence in Southeast Asia, and the Golden Triangle became infamous for its opium production, which dominated the local economy for many years. Today, the region still faces challenges related to drug trafficking, particularly methamphetamines. However, efforts are being made to transform the Golden Triangle through tourism and sustainable development initiatives. Attractions like the House of Opium Museum and the Golden Triangle Park draw visitors interested in its complex history, while ongoing projects aim to reduce reliance on illicit activities.

Governance in the Golden Triangle is complex, involving multiple layers of local, national, and international authorities. Each country within the region—Thailand, Laos, and Myanmar—has its own governance structures and policies, which can sometimes lead to challenges in coordination and enforcement. Efforts to combat drug trafficking and promote sustainable development often require collaboration between these governments, as well as support from international organisations. This multifaceted governance framework is crucial for addressing the unique challenges towards geopolitical stability in the region.

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